Gold’s downward price movements on Thursday and Friday and the Dodd-Frank Act

June 25, 2011

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In this show Al discusses:
  • Segment 1 and Segment 2 – Big Al and Trader Rog discuss Dodd-Frank.
  • Segment 3 and Segment 4 – From London, James Turk discusses international economic conditions and the value of gold.
  • Segment 5 – Keith Schaefer discusses investing in energy.
  • Segment 6 – Big Al and Peter Grandich discuss the downward movement in the price of gold these past two days. Is it a big deal?
  • Segment 7 – Vanessa Bogart discusses Amarillo Gold and its operations in Brazil.
  • Segment 8 – Big Al and journalist Marc Davis discuss Aurcana Corporation.

Click download link to listen on this device: Download Show

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Click download link to listen on this device: Download Show

Click download link to listen on this device: Download Show

Click download link to listen on this device: Download Show

Click download link to listen on this device: Download Show

Click download link to listen on this device: Download Show

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    Jun 25, 2011 25:43 AM

    Big Al;
    The general conclusion I reach from your show is that we are headed for a high inflationary world-wide recession.
    I also believe that prices are set by a supply-demand equation. Given gold supply roughly constant, but in a world-wide recession, where is the money going to come from to increase gold prices?
    It seems to me the general public will be too tapped out to buy gold and while the Fed will be printing, I have difficulty in seeing how that money goes to buy gold rather than covering deficit spending.

      Jun 25, 2011 25:42 AM

      Hi David,

      You bring up a very good point.

      First of all, I think that a high inflationary world-wide recession is a distinct possibility. We are in uncharted waters so I don’t think that anyone has a clear and correct answer to the current situation. That is one of the reasons that I personally believe that we have to deal with the reality of the current situation, which is certainly volatile, and not worry too much about the “what-ifs”. I believe that because there are so many possibilities out there and really no one knows which of them will come to pass.

      Where is the money going to come from to increase gold’s price?

      Couple of comments.

      First all all my feeling is that there will always be some kind of money out there in the hands of investors. Gold has always been the currency of last resort and I am convinced that as more of this “money” is printed the price of gold (and silver) will increase for all of the reasons that it has increased to this point.

      Secondly, the real player in the gold market right now is China. They will continue to be a player, in my opinion, and if nothing else their actions should stabilize (and possibly increase) gold’s price.

      I want to stress again that we live in such unique and volatile times that I certainly don’t know what the outcome of this mess will be and I am dealing with it in what for me are rational terms.


      Big Al

        Jun 26, 2011 26:44 AM

        Big Al:

        I think one point you may have missed in terms of where the money is going to come from for gold, and something many newsletter writers have opined about, is the fact that when the long bond does crack, and it will sooner rather than later with the prices starting to fall rather substantially, that all those conservative investors (and there are many) will bail out of the bonds and place their money into the only area that is quite viable, that being the precious metals area.

          Jun 26, 2011 26:56 PM

          HI Bruce S,

          I don’t know if I would completely agree with that.The buy side of the precious metals markets may very well not be populated by that large a group of people. If that is not the case, and it could very well not be the case, than yep the demand will escalate very rapidly as will the prices.

          I know that everyone thinks they have all the answers. That’s how many of the writers sell their respective letters.

          I have watched the markets for over thirty years and I have learned one thing. When you least expect it the unexpected happens. I cannot tell you how many really bright people who I met back in the eighties believed their own shticks and ended up with no money.

          I like my philosophy which is: “I don’t walk on water; I live in the present; I stay as informed as I possibly can and, I stay as nimble as I can.”


          Big Al

        Jun 26, 2011 26:51 PM


        We also need to keep in mind that the bible tells us that one quart of wheat will cost a days wages in the last days – sounds like inflation to me.

          Jun 27, 2011 27:15 AM

          Morning Bentnail,

          I am reading a book entitled “Money Mischief” which is written by Friedman. (It has nothing to do with religion.)

          Just started reading it. Must say that it is very interesting. Puts a thought-provoking perspective on what is going on today throughout the world.

          Big Al

    Jun 25, 2011 25:18 AM

    Thank You! …to everyone involved in putting together this weekly program. The insight and expertise provided really helps in decision making in this tough Market.
    Have noticed that possible investment opportunities mentioned are, many times, traded primarily on TSX. Sometimes they are available in the US Market in OTC/Pinks. Why would a TSX listed company not want to be listed on NYSE or Amex instead of as an OTC/Pinks offering?
    Hope your weekend is going well.

      Jun 25, 2011 25:50 AM

      HI Jim W,

      Many of the small mining companies that we discuss do not qualify for listing on the markets you mentioned.

      If you want to trade these stocks, simply work with a stockbroker who can and will buy them for you. I also believe that many of the on-line trading services offer this service.

      I am happy to give you a list of stockbrokers who you can work with in this arena.

      Best and you too have a great weekend,

      Big Al

    Jun 25, 2011 25:15 AM

    Many thanks for shining a light on Aurcana Corp.
    Listeners might also be interested to know that La Negra is now slated to ramp up production for the third time to 2,100 tpd by Q4, 2011, a further 40% increase in production.
    Coupled with 3.8 million oz at Shafter year one ,2012 should see AUN realise well over six million oz Ag Eq between the two mines.
    .57 cents with 330 million shares outstanding.
    Thanks again,Big Al and Mr. Davis.

      Jun 25, 2011 25:54 AM

      Hi Matt,

      Aurcana is a very interesting company. My personal opinion is that of the smaller producers it is as solid as any. Lenic is a good guy and a very competent businessman in my opinion. His chief geologist also falls into that category, in my opinion.

      Best as always,

      Big Al

        Jul 10, 2011 10:50 AM

        Regarding Aurcana

        What do you think about the dismissal of the Sprott lawsuit against Aurcana. Aurcana sais the offer was just a term sheet and not binding

      Jun 30, 2011 30:13 AM


    Jun 25, 2011 25:25 AM

    Another example this is going to end badly (just like the Boeing soga):

    Michigan is assembling $50 million worth of tax breaks and other incentives in hopes of tempting Sears to move to the Detroit area, The Chicago Tribune reported Saturday.

    Read more:

    Sears will move there and another city will offer then a better deal a year later with tax payer benies and Detroit’s tax holders will be left holding the bag. Rinse, repeat.

      Jun 25, 2011 25:00 PM

      Morning Har,

      Good to hear from you.

      Rinse and repeat, yep.

      The only solution to this situation is to have uniform practices in all states. But then, what about the concept of state’s rights?

      You know Kathy and I lived in Vancouver, Washington for about thirty years. Right across the Columbia River was the great city of Portland, Oregon. People lived in Portland enjoying the amenities while they paid a 10% income tax. We lived in Vancouver, Washington, enjoyed the amenities of Portland and paid no sales tax. Oregonians obviously feel that their quality of life is worth paying the extra money to their state’s government.


      Big Al

        Jun 25, 2011 25:58 PM

        Hello Big A,

        Enticing corprorations with tax payer benefits as I said is not capitalism. It is just going to put cities and states in more financial distress.

        Speaking of air quality. Are you worried about the “hot particles” from Tepco? The story that is not being told. I pray for you and your family.

        Fukushima-hot particles detected in Seattle air filters

          Jun 25, 2011 25:56 PM

          Of course one could say it is not pure capitalism.

          What are you gonna do? Every state wants the business. They are going to do what they can to get it.

          Thanks for the tip on and the link to the article.


          Big Al

        Feb 03, 2014 03:07 PM

        That’s a crcraecjkak answer to an interesting question

    Jun 25, 2011 25:42 AM

    Bankers…….smoke and mirrors….don’t let down your guard.,they just want the rest of the money(gold) they did not get last time,,
    Dodd and B.Frank are just trying to cover their tracks for the screw up they made
    with the mortgage mess they allow to happen….(freddie and fannie)
    The govt. is not going to protect anyone, before hand…..

      Jun 25, 2011 25:01 PM

      Morning Jerry,

      That’s definitely one way to look at it!

      Big Al

    Jun 25, 2011 25:01 PM

    Re: Greece. May I point one and all to the slight right-wing UK Daily Mail today.

    And let me also say I have always paid the €5 fare on the subway from Athens to Pireas when I use it.

      Jun 25, 2011 25:45 PM

      HI David,

      Thank you, I will read this tomorrow and comment if appropriate.

      Have a great rest of the weekend,

      Big Al

        Jun 26, 2011 26:59 PM

        I stopped reading the Daily Mail’s text after the first strange representation of facts. Public transportation with honesty systems is widespread globally, people who do not visibly validate their ticket at the entries often have other kind of valid tickets. David might want to point us to a 5 euro ticket price for the sub from Athens to Piraeus. A standard 90 minute ticket seems to be 1.40 EUR.

        A former big-wig politican talking about tanks in the streets if Greece were go back to the drachma,
        My take on this is that the tanks will (not: would!) be in the streets for sure, doesn’t really matter if before or after more panicky bank runs or a new currency. He’s just slowly getting the word out.

          Jun 26, 2011 26:00 PM

          Hello Gundhi,

          If the process is not effectively sold to the Greek people, of course there will be panic and the possibility of tanks in the streets.

          Interesting questions is, will it happen here in the U.S.? Hope not!

          Big Al

          Jun 28, 2011 28:13 AM

          Good Morning David and Gundhi,

          To me the point of this article was not the failure to pay a fee to ride a subway.

          What I got out of this article was the huge amount of tax evasion coupled with the exorbitant salaries paid to folks working in the public sector.

          Of course if these two facts are true eventual economic collapse is inevitable in Greece.

          More late,

          Big Al

          Feb 02, 2014 02:03 PM

          Right onith-s helped me sort things right out.

    Jun 25, 2011 25:46 PM

    Big Al – To be honest, I was a little disappointed with the lack of meaty information on Aurcana. Lenic’s a good guy. OK. Take a look at the financials. OK. In 2012, production is scheduled to move up to 5 million ounces. Got it. Aurcana bought back their silver stream. Got that. What I am getting at is this is old and previously released info and opinion.

    Lenic’s company is a sponsor of your website. I would think that you have more leverage or influence on getting more specific and relevant info. In retrospect, don’t you think Lenic or better yet, Dr. Peter Magaw would have been a better choice to interview. After all, Dr. Magaw was a significant hire to lend his recognized expertise in exploring and sizing up the two substantial project parcels that Aurcana controls. I believe he was brought on board about 6 months ago and that should be enough time to form an opinion on what he sees in the way of potential future growth of the Company’s mineral resources.

    Big Al, I love your website and your positive outlook for the precious metals. Can’t we get a more inside look of what is currently going on with Aurcana?

      Jun 25, 2011 25:47 PM

      Hi going down fast,

      You got a deal my friend. Sometime this coming week, I will get you all the information you want.

      I do agree with you, by the way.

      Big Al

    Jun 25, 2011 25:15 PM

    Great weekend show as usual. Really enjoyed the segments with James Turk.
    As for the Dodd-Frank Act: Another 2000 page bill!! I wonder if anyone read it. I really wonder who is writting these bills and why they are so massive. The Federal Reserve Act was only 31 pages. I fear it is like the health care bill where businesses need waviers from it to survive and once it is past there will be one surprise after another.
    A word about monsanto. They are poisening our food supply with their genetically altered seeds. The EPA approves anything they want without reguard to the health concerns. Many European countries have banned gmo foods. They also manufacture BGH, the cancer causing additive to milk. They are a very powerful and evil company.

      Jun 25, 2011 25:54 PM

      Hi Karen,

      I have some concerns re: Monsanto. I decided to go ahead and take a small position in the company because they do provide a good entry into the agricultural field.

      What is your opinion of my action?

      Big Al

        Jun 26, 2011 26:49 PM

        Hi Al,
        Since 90% of the food I purchase is organic I have read many articles relating to Monsanto. Its not just that they want a competitive business model, it is that they are trying to be the sole supplier of seeds. Even if I only believe half of what I read about them, they are a mofia company with the EPA in their pocket. For plenty of articles you can go to and search monsanto.
        As for my opinion, (I am honored that you asked) I would invest in MOO instead which is an ETF and the only one I am familiar with. Most of my investments are mining sector and energy.

        Jun 26, 2011 26:58 PM

        Never mind about MOO. I just realized that one of their companies is Monsanto. I am just sticking to mining and energy.

        Jun 27, 2011 27:15 PM

        Big Al;
        If you are interested in the agriculture are, my personal belief i that ADM is a much better large cap value stock than MON.
        It ADM) has better earnings and dividends.
        It had a major buy signal 9/2008 at about $15,
        just had a sell signal in Feb of this year at $37.
        But now appears to be heading down towards a buy signal,
        guestimate (using linear extrapolation) would be in about 2 months, at about $24.

          Jun 28, 2011 28:15 AM

          HI David,

          Many thanks for the opinion.

          My big interest in agricultural companies right now is in the small caps that are involved in potash. Seems like a natural to me.

          Big Al

      Jun 26, 2011 26:04 PM

      Have you seen the movie, Food Inc.? An interview with its director here:

        Jun 26, 2011 26:08 PM

        HI Karen and Gundhi,

        Yes, I did see Food Inc. It was a very interesting movie.

        You may find this hard to believe (well, maybe not) but this movie changed our eating habits dramatically. We too, for the most part eat organically. We eat very little beef anymore (And, boy do I feel better!) as we are concentrating more on fish and fowl. I am however very careful as to the origin of the fowl that I purchase as is Kathy. (I cannot believe some of the crap that is foisted off on the public.) Living in the Northwest it is also very easy for us to purchase freshly caught (in the wild) fish. We absolutely stay away from any farmed seafood.

        Thanks for your continued comments and input.


        Big Al

    Jun 26, 2011 26:45 AM

    Re: Aurcana. This is the first time I have a negative comment about any company on Kereport comments.
    Disclaimer: I do own some AUNFF shares. However, I am probably about to sell them, because I do not believe the board of Directors act on best interest of their shareholders. I am very wary of excessive dilution.
    Specifically on May 30, 2011:
    Lenic Rodriguez was granted 3,200,000 options at 69 cents.
    Adrian Aguir was granted 1,600,000.
    Roert Tweede was granted 1,600,000.
    Paul Matysek was granted 800,000, Salvador Huerta 600,000 and Terese Gieselman 400,000. If these options are exercised, which I would expect if AUN rises significantly, my holdings will rise in value but I am being diluted out of significance.

      Jun 26, 2011 26:53 AM

      Hi David,

      I did not realize that 7,200,000 options had been granted a couple of weeks ago. Thank you for bringing that to my attention.

      I will be taking another look at the company this week as I promised “going down fast” above.

      By the way, at the outset, I would say that granting these options is not necessarily a bad thing. The potential dilution is about 2%. Also, when options are issued the company has the ability to discount the price from the market price. I just looked at the share price for the dates in question for Aurcana and I noted that there did not seem to be any discount given.

      As a point of interest, just received the following from Lenic:

      Hi Al: I just heard it. It was great. Our 1st Q results are also great. La Negra earned 7 times more than the comparable 1st Q 2010.

      Shafter is progressing on schedule. On July 12 we have a court appointment to have the Sprott lawsuit dismissed (I hope it goes away!)>

      Next year 100 million + in cash flows at Aurcana.

      Keep up the good work!

      Per your request and the request from “going down fast”, I will chat with both Lenic and Peter this week and report back to you.

      I have sponsors on my website to help defray the costs of production. (Which are not cheap!) You will note; however, that I have many less sponsors than other similar sites. The reason for this is that I am truly very selective. I am aware that folks take what I say seriously even though I stress that it is not investment advice. I have a real passion for what I do and what I do does not include being an advertising agency for just any company that is willing to write me a check. I have actually told companies that I was dropping their banners when it became obvious to me that they were just looking for advertising agency type services. That is not what I do.


      Big Al

        Jun 26, 2011 26:33 AM

        According to one Aurcana document it was 10.2 million options, but I could not trace the filings of 3 million of them.
        I appreciate your services to us, the general public, Big Al. I treat your website as a starting point and do my own due diligence, just like you always tell us to do!
        You are one of the few people I do trust in the mining business and believe you are doing your very best. After 4 or 5 years of following your website, your total honesty has been repeatedly demonstrated.

          Jun 26, 2011 26:09 PM

          Thank you very much. That is a wonderful thing for me to hear.


          Big Al

    Jun 26, 2011 26:06 PM

    Going down fast,
    Not sure what you are specifically looking for as most of what Dr. Me Gaw and Lenic state about the company and the mineralization is common knowledge and interviews of Lenic and Dr. MeGaw ore here on KER or on the web.
    VP Andy Nichols gives details on both operations and it is current:


    Jun 26, 2011 26:54 PM

    Gold dropped because monday is opex. That was the reason. Always pay attention to when opex comes.

      Jun 26, 2011 26:52 PM

      Gold dropped because I told you to short it at $1530.

      Jun 26, 2011 26:58 PM

      Hi never accept the terms of service,

      Many thanks for your input,

      Big Al

    Jun 26, 2011 26:51 PM

    I did agree with Roger concerning a one world currency. The bankers make to much money off exchange fees. Plus the biggest stock exchange in the world is the FOREX market – imagine if those profits went away overnight?

    I went to Cape Town to 3 weeks in January on a business trip. I did a quick calculation on ATM conversion fees, credit card exchange fee and the bad exchange rate I got compared to the real spot prices and it was over $900 a week just in forex conversion fees. That is all gravy for the bankers.

      Jun 26, 2011 26:52 PM

      Opps. I do not agree with Roger.

        Jun 27, 2011 27:22 AM

        Yep Har,

        I also don’t agree with Roger. (At least in the short to mid term.) Too many variables relating to North American countries, South American countries, China, European countries, etc.

        Reading the news this morning, it is obvious that a bad international situation remains volatile. Will be very interesting to see what happens in Greece this week.

        I am not optimistic for the future and I am not just talking about Greece.


        Big Al

    Jun 27, 2011 27:33 PM

    Big Al – Re: Aurcana – Not to beat a dead horse, but I would have to agree with David about his concern relative to the options being granted and the possible dilution from their exercise. One other concern not recently mentioned is the lawsuit that Aurcana finds itself in with Sprott.

    A little less concern with the compensation of the insiders and a little more attention to execution of the game plan would probably benefit all shareholders.

    As for Matt’s question re: the information that I am most interested in re: Aurcana mostly has to do with the significant hiring of Dr. Magaw. His expertise could be the single biggest asset for the Company going forward. His responsibility is new exploration. He is independent of the geology team that is responsible for making sure that the mill(s) have sufficient material to process. He is there to grow the resource by assessing and exploring the Company’s two large project parcels (TX and MX).

    Jun 28, 2011 28:17 AM

    Good Morning “going down fast”,

    I will be contacting Peter this morning re: his participation in this discussion and his opinion.

    Yes, the situation with Sprott is critical.

    Big Al