Our thoughts and prayers are with those living in the path of Hurricane Gustav currently hitting the Louisiana coast.

For those of you in the Las Vegas area, we will be presenting a workshop at the Hard Assets Conference at the Mandalay Hotel, September 9 & 10. See above for the tentative schedule and other speakers. Hope to see you there.

Also we encourage you to listen to our radio interviews on The Opportunity Show, click here for the latest and check back frequently for updates.

Most readers know that I live in Mexico, outside of Guadalajara. I went into GDL twice last week looking for silver coins (Libertads). On the second trip, I helped a friend purchase 100 coins and that was all they had at two different locations of Banco Azteca which normally has the best prices (smallest premiums). We were promised more this week, so we shall see, but the shortage seems to be everywhere.


Following up with the shortage, this week we bring you some comments from Adam Hamilton, Zeal Intelligence:


The Gold Futures and Physical Disconnect

"August's bullion shortage was very exciting! It proves ir-rational gold futures traders, panicking at every little USDX bump, can't cower the true physical market. And the investors buying physical gold coins are not weak hands but true believers committed for the long haul. Compared to selling a stock, it takes a lot of effort to go sell back gold coins.

Obviously a futures/physical disconnect can't persist in-definitely. Although it isn't as easy as it should be in today's world, eventually physical realities bleed into and overwrite futures fictions. There are multiple ways this could happen.

Cutting out the incompetent bureaucrats at the national mints would really help the gold coins shortage. Govern-ment employees (the US Mint is part of the US Treasury) have no business incentives to serve their customers. So it would be nice if private mints started producing 1oz rounds of gold like they have long done with silver. Generic rounds of gold would circumvent the national fabrication bottleneck.

Like silver rounds, gold rounds would have attractive de-signs and look like coins. Major refiners and private mints would certify their content. They would have to be sold high enough over spot to ensure a profit for their producers. In a situation where demand grew large, the mints could simply buy futures, take delivery of the big bars, and melt them to produce new rounds. Investors would grow to accept them.

American investors enamored with national coins could also learn to accept other small-value forms of gold. For ex-ample, in Asia tael bars are popular. A unit of weight out of ancient China, a tael weighs 1.2 troy ounces. Stamped by private mints, they come in countless designs. Producers of these can easily buy big bars and melt them to make tael.

James Turk was recently pondering whether a shortage of big 400oz LBMA bars could develop. If futures prices for gold stay artificially low, large investors (like central banks or big funds) could start buying. They have no problem with 400oz bars. And if the inventory of big bars gets tight, then gold futures prices will skyrocket. The disconnect will close."

This is September 1 and we have the markets closed in the United States and Canada but as I write this we have gold down today at 820.70 and silver down slightly at 13.42 as of 9:31am CST.

Time To Buy

Remember, we are now rapping up 'The Shopping Season' and we expect the markets to begin rising very soon. Look for those undervalued junior mining shares and long-term warrants trading on those shares. For subscribers, we included a list of companies with warrants selling for less than $0.26 and having 3 or more years of remaining life on the Subscriber Login Page.

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A Look Over My Shoulder
Dudley Pierce Baker’s Personal Portfolio

Please take a few minutes and review my write up for this service which literally gives you an inside look at my entire portfolio including my warrant holdings. Let me stress, if you are happy with our current service and database, you are under no obligation to do anything.  We will continue to strive and maintain the best and most comprehensive database in the business.

Dudley and Support Staff
Precious Metals Warrants