Hello Readers:  I have included a lot of insight from some of my favorite analysts so please take some time to digest this report. In addition, for those of you in the Toronto, Canada area, I will be presenting at the Cambridge Conference on Oct 4 & 5.  Please check their website for details and times of events.

Hopefully, you did not sell into the bloodbath on 8th, 9th and 10th of the month. Yes, fear was in the streets; but now look at the price of gold and silver, wow.  What a difference a few days can make.

 

Recent comments from both The Aden's and Jim Dines in effect say investors should still 'wait and see' in this changing environment. My personal view has been we should be doing some selective buying on those junior mining shares (or their long-term warrants) with cash in the bank, great management and good properties, many of which I own and continue to purchase at these ridiculously low prices.

 

Comments from James Turk:

"....No one can doubt any longer that the United States is run totally for the benefit of the banks. They get whatever they want. Secretary Paulson even brought out the old bromide to justify this pillaging of American taxpayers: "The financial security of all
Americans...depends on our ability to restore our financial institutions to a sound footing."

Note the use of the communistic "our" in Paulson's quote. It's not "our financial institutions". I don't own any bank stock, nor do most Americans. What's more, it's not the "financial security of all Americans" that is at stake here.

No doubt about it. The losses are building, and the bailouts are mounting. These facts are not lost on everyone outside of the United States who holds dollars, and they are also understood by a growing number of people in the United States. Consequently,
look for the dollar to plummet anew.

As I noted in the last letter: "We will not see the prices of the mining
stocks this dirt cheap again for years to come - if ever."

 Jay Taylor is suggesting to Buy:

"...Gold and silver cannot default as paper money can because its value is not dependent on the ability of others to repay their debts. Gold and silver is unadulterated value. Suddenly for the first time in many, many trading sessions, green appeared everywhere on the screens of those going long gold and silver stocks. The knife definitely hit the table and bounced at least once. In other words, there was a strong indication that it might be time to start seriously buying our undervalued mining shares once again.

If this reflation trade has legs--and we think it will--what we need to keep in mind is that the Dow and other averages could increase in nominal terms but lose in real purchasing-power terms. Indeed that is exactly what has been happening since about 2002. Keep in mind that the one stable unit of monetary measure in the world is gold, not paper money. As such we need to think of what we pay for everything we buy, not in terms of dollars but in terms of an ounce or gram of gold. Now take a look at the Dow. The chart shown below has year-end data points only. As you can see, when equities hit bottom, the Dow/Gold ratio has approached a 1:1. That has happened at various stock market bottoms over the past 100 years, the latest being in 1980. So, given the inflation bias of the fiat currency world we live in, I think it most appropriate to look forward to a Dow that is measured in terms of an ounce of gold rather than in terms of the dollar. If we hyper inflate, as I believe we will, we might see a Dow that reaches 40000 or 100000, as some people were predicting before the dot-com bubble burst back in 2000. But even if the Dow were to rise to 100000, that wouldn't mean it would necessarily be worth more than it is in 2008. In the end, we might see a 100000 Dow and a $100,000/oz gold price. In the end it only matters that an ounce of gold is always an ounce of gold. As Ian McAvity recently noted. An ounce of gold is an ounce of gold. A barrel of oil is a barrel of oil. What is a dollar? Given the inevitable move toward hyperinflation in order to keep from rolling into a deflationary depression, I think we need to think more and more in terms of purchasing power being an ounce of gold. Nothing else makes any sense..."

 

David Morgan's latest post with quotes from past leaders guaranteed to scare the hell out of you and make you very angry.

                Silver is the Only Asset that is Not Someone Else's Liability

 

 

Hitler Gets A Margin Call
 

A Canadian friend and subscriber sent me this video.  Perhaps you will hear Hitler mention your favorite analyst. Darn, I didn't make it.  This is very clever and well worth a couple of minutes of your time. Watch the entire video.

The title is "Hitler Gets A Margin Call"

http://www.investmentpostcards.com/2008/09/19/hitler-gets-a-margin-call/

 

_________________________

 

....and as I have been reminding you for several weeks...
 

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 recently 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. 

 

We have recently changed our pricing and offer different subscription packages for our services.  See below for details.

 

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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