A Comment -- General Comments From an Expert (A Commentary)

Economy: He is of the opinion that deflation is a non-event. There is zero risk of monetary or genuine deflation. Inflation is a very, very substantial risk and is almost convinced that we will see high rates of inflation in the years ahead.

Junior Mining Companies: If they don't have projects that are economic it will be tough to get cash. Opens up opportunities for investors to get into companies at cash or less in cash with companies that have real assets for further down the road 2 of the main things is to check for the amount of cash and debt they have. Also check management for their record and burn rate. Need cash to make sure they can get through the next 2 years.

Oil: Looks at oil and commodities on an inflation-adjusted basis. Thinks that $70-$80 is fair value for a barrel of oil now, given the inflation we have seen. Bullish on oil after the next 6 or 12 months. Also a believer in Peak oil.

Cdn$: Has moved up because of the flow away from the US$ and US index has dropped substantially. Also renewed strength in the commodity sector has been a factor. Expect to see continued strength for the next while and at some point will hit parity once again.

Uranium: An obvious clean alternative to ever declining oil. Starting to see a recovery. The producer he likes is Paladin (PDN-T). Stocks should do quite well over the next year or two.

Cdn$: Has been very much tied to the price of oil in the short term. It might be due for a little bit of a pullback but longer-term he can see it printing back to $0.90 to $0.95 in 5 years.

Genesis Trust vs. 5-year Canadian government Bond. This is a pairs trade going Long on Genesis Trust and Short the 5 yr Canada bond.

Top Short Five year Canada bond. This is a pairs trade going Long on Genesis Trust and Short the 5 yr Canada bond.

Bank Dividends: Feels that these are safe.

Enhanced Income Securities: Subcategory of trusts. Basically US companies that wanted to take advantage of the Cdn income trust market, so they rolled themselves into that kind of structure. Because of US domicile, they are not hit by Oct/06 legislation and won't have to cut distributions in 2011. A small group and the quality ones are even smaller. Risk is that they can become orphaned in the market.

Gold: US$ is going down and gold is going up. Expects gold will be well north of $1000 US by year-end. This area is a good place to park some of your money. He recommends holding some gold in a safety deposit box.

S&P 500: He is treating this rally as nothing but a rally. Even the Fed is pointing out that the economic outlook is pretty bleak for the next year or so. That indicates a lot of misplaced confidence in the market.

Gold: He prefers gold stocks to bullion because you can attach some investment value. (See Top Picks.)

Crude Oil: Inventory report out of US indicates it continues to be very bullish, probably because 1) we are in the summer build-up driving season and 2) CATANGO, which means that 5 years out oil is actually priced more expensively than it is currently. Buyers storing it for a year. OPEC has maybe 6 to 7 million barrels a day in excess capacity that they can turn on. When it gets expensive enough they will start to relax rules and he expects it will come back a little. It may be time to take some oil stocks money off the table.

Natural gas: Sees it very vulnerable at this point in time. Storage is at very high levels, 72% in Canada. The only catalyst for any price increase will come in the heating season of October/November. Expecting a pullback.