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Have Natural Gas Prices Hit Bottom?

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By: David Sterman

It's been a summer of open windows and dormant air conditioners in the Eastern U.S. as the mercury has failed to break 85 degrees on most days and night-time lows fall down to the mid-50s in much of New England.

And that partially explains why natural gas prices are plunging to seven-month lows. Gas-fueled power plants are operating at a low hum as electricity demand has been unusually tepid. When you consider that late July typically represents a turning point for summer temperatures, this may turn out to be a year without any major heat waves. Good news indeed for residents in the Eastern U.S. after enduring an unusually dispiriting frigid winter.

As demand for gas remains subpar, gas storage facilities are re-filling at a rapid rate, turning gas back into a buyer's market. That's a quick change from six months ago when gas was being consumed at a faster-than-normal rate. And the resulting price collapse has left many to wonder: Will gas prices keep plunging, or have they hit bottom?

The answer to that question: Gas prices are likely to keep falling. Continue reading "Have Natural Gas Prices Hit Bottom?" →

Miners Must Control Costs to Improve Share Prices: Byron King

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The Gold Report: Byron, gold is above $1,300/ounce ($1,300/oz)although not by much and silver topped $20/oz. What was holding their prices down, and what are the fundamentals that will move the prices going forward?

Byron King: The short answer is that, for all its faults, the dollar has strengthened, which holds down gold and silver prices. The longer answer is that gold and silver are manipulated metals. That is, the world's central banks have an aversion to things they can't control, and one of the things that they can't control is elemental metals like gold and silver.

Let's ask why the dollar has strengthened. The U.S. is probably in its weakest geopolitical situation in decades. The Wall Street Journal on July 17 had a front-page story about the confluence of crises across the world Ukraine, Middle East, Southeast Asiaall of which are profound challenges to American power militarily, diplomatically and economically. But the dollar is still holding up. Why?

I believe the dramatic recent increase in U.S. energy production is what's behind the stronger dollar. With more oil and natural gas from fracking, the U.S. is the world's largest energy producer. In addition, we're importing far less oil and exporting a lot more refined product. It helps the dollar.

Still, when I look at the big picture for gold, I see a resource whose production is challenged on the best of days. Output is declining in the major traditional sources: South Africa is in decline; Australia is challenged; some of the big plays in Nevada are getting long in the tooth. Continue reading "Miners Must Control Costs to Improve Share Prices: Byron King" →

The Greatest Risk To Investors Today

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By: Jody Chudley of Investing Answers

We've seen this set-up before...

All through 2006 and 2007, I heard some of the smartest minds in the investment game warning about the massive housing bubble that was about to pop. For a long time, these smart folks looked wrong, as housing prices kept going up and up.

Then things changed in a hurry, and we suffered through the worst credit crisis in our country's history and a housing bubble collapse. Anyone that didn't heed the warnings got crushed.

I see the same thing happening today. There have been warnings that we could be in for severe inflation ever since the Federal Reserve rolled out the printing presses back in 2008 with its "quantitative easing" program.

So far, not much has happened. However, similar to the housing bubble, that "nothing" could turn into something very quickly.

After years of easy money policy by countries around the globe, the inflation pump could be primed. Continue reading "The Greatest Risk To Investors Today" →

INO Sponsors 5 Nepalese Students - INO Cares

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Traders,

I wanted to share an incredible story with you in the spirit of our INO Cares campaign. It is amazing how one person can make such a tremendous impact and how a chance encounter can turn into something so wonderful!

INO Cares - Nepal SchoolAfter graduating from college in January of 2005, Maryland resident, Mikey Church, decided to take a bicycle ride with his friends from Amsterdam to Cairo and then from India to China. They day they entered Nepal, the King dissolved the government and declared martial law. This caused Maoist Rebels to declare a strike across the country resulting in a halt in travel and commerce. Mikey and his friends happen to cross paths with local village residents and brothers, Ujjwal and Bol Bhat.

Ujjwal encouraged Mikey and his friends to stay with his family until political tensions eased. During this stay, the American boys spoke often with Ujjwal about the poor access to education in Nepal, especially for girls and the desperately poor, and also about Ujjwal’s dream to open a school. Mikey safely returned home, but did not forget the conversations he had with the Nepalese brothers.

Mikey and Ujjwal kept in touch for a few years. When Mikey married his wife in 2008, he asked his guests to make donations in lieu of wedding gifts. Mikey was able to send this money to Ujjwal to open the doors of the Mikey Medium English School, a three room school house in Bauniyan, Kailali to 40 students, 20 of which were girls.

In a letter sent to family and friends, Mikey said, "I am a firm believer in the parable, 'Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.' The benefits of basic education need not be reiterated here. They are plentiful and convincing. Never the less, here is a refresher. Girls who are educated are better able to protect themselves against HIV/AIDS, marry later in life, have healthier children and have work opportunities beyond the home. Boys who are educated may be able to break a family cycle of hard labor and typically earn more than their non-educated counterparts."

Read the full story about Mikey's journey and the Mikey Medium English School.

Today, the Mikey Medium English School enrolls 100 students and employs 5 teachers. Fifty percent of the students are females and fifty percent are desperately poor. Class size does not exceed 20 students. For only $200, Grassroots Education Nepal provides a student at the Mikey Medium English School year-round education, textbooks and supplies, two student uniforms (including socks and shoes), a backpack and sweater.

For our June INO Cares campaign, we are proud to offer scholarships to 5 students so they can attend the Mikey Medium English School for 1 year!

This is such a wonderful story and we could not be more honored to give the gift of education to a handful of Nepalese youth, as well as continue the dream of an American kid and a pair of Nepalese brothers!

To contribute to Grassroots Education Nepal or sponsor a student of your own, please visit Mikey Medium English School’s page.

I hope you enjoyed this story. If you have any ideas for a future INO Cares campaign, please send them our way!

Best,

The INO Cares Team

Sean Rakhimov: Upward Trend a Silver Investor's Friend

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The Gold Report: The Washington D.C.-based Silver Institute reports that net silver demand has exceeded net silver supply each year since 2004, with a supply deficit of 113 million ounces (113 Moz) reported in 2013. Why hasn't that trend translated into dramatically higher silver prices?

Sean Rakhimov: First, I don't put much faith in these numbers. For instance, CPM Group has somewhat different numbers. Either way, silver supply and demand have been roughly in equilibrium, in my opinion, over the past decade or so. Second, silver manifests itself as a precious metal in times of crisis or uncertainty. When it's business as usual, silver acts more like a base metal and trades more on supply and demand numbers. Silver prices will respond during a crisis as its perception changes from an industrial to precious metal. That's when you will see more of what we saw in 2011 when in the space of about six months silver went up three times. Another period like that is coming.

"Excellon Resources Inc. has a handle on its deposit's cost structure and grade."

TGR: In early June we started to see stronger precious metals prices and that has carried through. Is this a trend?

SR: It is the beginning of a trend. Precious metals characteristically start going up after a prolonged decline, yet early in the reversal they rarely inspire any confidence because the last dozen or so similar moves fizzled after a 1020% move. This could be one of those. Silver is at $21 per ounce ($21/oz) now, maybe next week it will test $18/oz again. It's anybody's guess but I believe that toward the end of the year we'll probably see higher numbersmaybe substantially higher.

TGR: Is there a telltale sign that shows investors that this upturn is real? Continue reading "Sean Rakhimov: Upward Trend a Silver Investor's Friend" →