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

People are finding the markets rather tough. If you are prepared, you don’t mind. The bottom is not close. It’s been almost a year. The world is de-leveraging right now and it’s going to take time. Many institutions want to sell assets. There’s always something happening somewhere in the market. Is happy to short in this market.

Gold: Q: Royal Bank of Scotland (RBS-N) is calling for a market crash within 3 months. What happens to gold? A: If this happen, which she doubts, gold would probably go up.

Turkish Economy: Strong emerging market in 2008 and for years to come. Stocks trade at about 8X forward earnings with very handsome dividend yields of about 4% and 5%.

Canadian Banks: As of now they are dead money. If you go for yield, you are going to get slaughtered. Canadian Banks currently are the most expensive banks in the world.

Stagflation: When there is persistent inflation, say 4%, and at the same time the economy isn't growing. A period when it is hard to make money. If this happens, you might want to own “real return bonds”, bonds that are issued by governments and are reset according to inflation. Also regulated utilities that are allowed to raise rates according to information.

Natural Gas: Potential for natural gas in the future is very, very good. Based on where oil is trading, they should be $20 MCF rather than its 12. Undervalued. The potential probably won't show up until we are into the winter heating season.

Agriculture: Food inflation is going to continue to accelerate. With the price of oil going up, shipping costs have to be passed on to consumers. The input costs of growing food products has all gone up as well.

Would like to see the government have a strategy similar to what was done in the last oil crisis where they created Petro Canada. It did very well for the country by spewing a lot of money into government coffers and, when it was sold, was a big windfall for the government. Time has come to create a national alternative energy company at the government level. They should invest $50 to $75 billion and combine geothermal, solar and wind. Would like to see a point where we are completely self-sufficient on the electrical power grid through renewables. Currently about 13% of our electrical power comes from Hydrocarbon consumption, 16% from coal and 14% from nuclear. Surplus power could be sold to the US. 10 years from now oil is going to be astronomically high.

Market Call Tonight was a special on Stock Scams with the OSC representative. No stocks were talked about, so there is nothing to report.Have a good weekend. Bill

Oil: Physical demand now is about 86 million barrels, which is about what is in storage. Summer driving season will pick up another half million barrels. Going into the winter demand could be 88 to 89 million. With 86 million in storage inventory is very tight. Oil prices will be considerably higher. Could back off another $10 in the next month and that's when you should be looking to buy. High impact exploration companies can be taken on now. (See his 3 top picks.)

Oil: Guru George Soros is calling for a correction, so he would be a little nervous short-term. Not reducing his weighting in energy related stocks. Looking out in 3 years, their will be great domestic growth in China, India and other emerging markets, which will offset any decline in world trade.

Likes agriculture, precious metals and infrastructure groups both short and long-term.

Gold: To date it has traded on US$ weakness but thinks this weakness is now over. Major force driving gold from here will be inflation, accumulation by central banks and sovereign wealth funds as well as the general demand for gold. Sees gold at $1250-$1500 over the next 12 months.

Gold: Tough to forecast. Not something you can model a supply/demand on. Very much driven by sentiment and technicals. Inflation is a little bit of a concern and gold has always been viewed as a safe haven from inflation. Think it will trade anywhere between $825 and $1000. He buys at the low end and sells at the high end.

Canadian Bonds: Not enamoured with provincial bonds. With higher inflation and a 5% yield, inflation is going to chew into this. Not looking for interest rates to come down. He does like corporate bonds where spreads have blown out dramatically.