Luke Burgess - Angel Publishing

Africa's Newest Gold Region

Officials from the Nigerian Ministry of Mines and Steel Development hope to begin developing the country's gold and other mineral resources as an alternative its oil and gas industry.

The renewed interest in minerals follows the discovery of 300,000 ounces of gold, with an estimated 2 million ounces contained in Western Nigeria.

The Ministry of Mines believes Nigeria has gold belts in the western half of the country that are very similar to those of Ghana — the world’s second largest producer — which accounts for about 10% of the world’s gold reserves.

Nigerian officials will also focus on the development of oil sands with estimated reserves of 27 billion barrels of oil equivalent, coal (2.7 billion tonnes), iron ores (3 billion tonnes), limestone (2.23 billion tonnes), barytes (14 million tonnes), and lead/zinc sulphides (1 million tonnes).

One company investing in Nigeria gold right now is CGA Mining (TSX: CGA). CGA owns the Segilola project, where the company recently proved the existence of 620,000 ounces of gold at a grade of 4.3 grams per tonne.

Luke Burgess
Editor, Wealth Daily
Investment Director, Hard Money Millionaire

The Definitive Guide to 2010 Gold Stocks

There's no doubt about it... Everything points to higher gold prices this year:

Weakness in the U.S. dollar: The value of the dollar has fallen 35% since 2002 and 9% in the past 12 months. Meanwhile, the national debt is approaching $12.5 trillion and the 2010 budget deficit is projected to hit a new record: $1.56 trillion.
Economic uncertainty: Investment markets worldwide continue to be on shaky ground. Gold is considered the most respected store of value. It is the ultimate safe haven and the least risky of all investments.
Supply constraints: World gold production has fallen every year since 2001. Meanwhile, central banks have now become net buyers of gold after over 30 years of selling.
Growing investment demand: Global investment demand has more than tripled in the past few years and continues to spike higher.
Cyclical bull market: Gold prices are in a long-term cyclical bull market that will continue to push prices higher. The price of gold has increased over 150% while the Dow Jones has remained flat in the past five years.

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Gold bugs are buying the physical metal in the form of bars, coins, and ETFs. Meanwhile, more speculative investors are tapping into gold stocks where the rewards are much higher.

Investors buy gold stocks because they have leverage. That means small changes in the price of gold can greatly affect share prices of gold stocks. For example, over the past 12 months gold has increased 23%. But at the same time, AngloGold Ashanti (NYSE: AU) has increased 40%; Randgold Resources (NASDAQ: GOLD) is up 68%; and IAMGOLD (NYSE: IAG) has returned a 112% gain.

Of course, the leverage effect goes both ways. And gold companies with falling production — or forecasts of falling production, like DRDGold (NASDAQ: DROOY) and Kinross Gold (NYSE: KGC) — have underperformed the underlying metal. While gold has gained 23% in the past year, DRDGold pulled back 21% and Kinross lost about 4%.

In 2010, things will be no different. Gold companies with steady and rising production will most likely be this year's success stories. And those with falling production will be the year's flops.

To get you started investing in gold stocks for 2010, here are...

Three Large-Cap Gold Stocks Increasing Production

Barrick Gold (NYSE: ABX)

Share Price:	~$36
Market Capitalization:	~$35 billion
2009 Gold Production:	7.2 - 7.6 million ounces
2010 Gold Production Guidance:	7.7 - 8.1 million ounces
Change:	+7%

Barrick Gold is the world's largest gold producer. The company retains a portfolio of 26 operating mines and a pipeline of projects located across five continents, as well as large land positions on some of the most prolific mineral districts.

The company estimates to have produced 7.2 to 7.6 million ounces of gold in 2009 at total cash costs of $450-$475 per ounce. This year, Barrick expects to lower production costs and increase gold output to 7.7-8.1 million ounces with the startup of Cortez Hills operation in Nevada.

Goldcorp (NYSE: GG)

Share Price:	~$35
Market Capitalization:	~$26 billion
2009 Gold Production:	2.4 million ounces
2010 Gold Production Guidance:	2.6 million ounces
Change:	+8%

Goldcorp is the lowest-cost and fastest growing senior gold producer, boasting 14 operations and development projects throughout North and South America.

The company reported record gold production for the 2009 year of over 2.4 million ounces at a total cash cost of approximately $295 per ounce on a by-product basis and $390 per ounce on a co-product basis. In 2010, Goldcorp expects to produce 2.6 million ounces of gold with an increase of approximately 17% to total cash costs.

The overall forecast production increase in 2010 is broad-based, featuring increases at nearly every mine in the portfolio. Going forward, Goldcorp aims to lift gold production to 3.8 million ounces by 2014.

Newmont Mining (NYSE: NEM)

Share Price:	~$46
Market Capitalization:	~$23 billion
2009 Gold Production:	5.2 million ounces
2010 Gold Production Guidance:	5.5 - 5.7 million ounces
Change:	+5% - +10%

Newmont Mining is a leader in the mining industry, with operations on five continents.

The company estimates 2009 gold equity sales of approximately 5.2 million ounces at a total cash cost of $400–$425 per ounce, reflecting ongoing cost reduction efforts and favorable by-product credits. For 2010, Newmont expects to produce between 5.5–5.7 million ounces, primarily as a result of higher production from its Boddington mine in Australia and Batu Hijau operation in Indonesia.

With gold demand on the rebound and prices holding record levels, these are just a few stocks that are positioned for growth this year.

Here's one last...

2010 Gold Stock Doubling Production

Agnico-Eagle Mines (NYSE: AEM)

Share Price:	~$54
Market Capitalization:	~$9 billion
2009 Gold Production:	500,000 ounces
2010 Gold Production Guidance:	1.0 - 1.1 million ounces
Change:	+100% - +120%

Agnico-Eagle Mines is a mid-tier gold company with operations in Quebec and Finland, and exploration and development activities in Canada, Finland, Mexico, and the United States.

The company expects to produce 500,000 ounces of gold in 2009 at a total cash cost of $340 an ounce. This year, Agnico-Eagle is looking to more than double gold production to 1.0–1.1 million ounces at a slightly higher cash cost. Going forward, the company expects gold production to average 1.4 million ounces annually from 2011 to 2014.

I expect sizable gains from these and other mid- to large-cap gold companies that will be increasing production in 2010. Larger gains, however, will be returned by...

Investing in Junior Gold Stocks in 2010

Don't be fooled... Mining for gold is a risky business.

Not only are mining companies subject to volatility in the price of gold, but they must also bear the burden of geological, operational, and geopolitical risks. But it is this risk that allows gold stocks to outperform their underlying commodity, as I discussed earlier.

Junior gold stocks are even more speculative. But their risk/reward tradeoff amplifies potential gains even further. And when junior gold stocks are in favor, they can quickly return legendary gains...

One good example is Ventana Gold (TSX: VEN), which increased 3,589% in the first 11 months of 2009 as the company explored their Colombian gold projects and made mineral discoveries. A $5k investment turned into $180,000. Check it out:

Junior gold stocks, like Ventana, give investors spectacular opportunities to make a lot of money. But the problem for average investors is choosing the right junior gold stock.

There are over 1,000 junior mining companies that are listed on the TSX Venture exchange alone. And it's very difficult to sort through all the promotions and scams to find solid junior gold stocks.

My job as a newsletter writer is to sort through all the garbage to find the real opportunities that can deliver the big returns. For example, I waded through around 70 junior gold stocks to find my latest recommendation; a small $32 million company with a $727 million gold resource. With a resource worth over 22 times its market capitalization, strong management, geopolitically safe projects, and near-term production, I expect this $0.50 stock to be trading over $4.50 in short order, for a +900% gain.

Going through all those companies was a very time-consuming and nerve-racking ordeal. If you don't have the time or patience to spend pouring over junior gold stocks, I recommend taking a look at the Market Vectors Junior Miners ETF (NYSE: GDXJ).

The Market Vectors' Junior Miners ETF just started trading a few weeks ago. The ETF is composed of 56 mineral companies of small-and medium-capitalization. To be eligible to be listed in the ETF, companies must have a market capitalization of greater than $150 million and a three-month average daily trading volume of at least $1 million. Here is a list of the top ten holdings in GDXJ:

Company	Symbol	GDXJ Holdings
New Gold	NGD	5.24%
Alamos Gold	AGI.TO	4.07%
Gammon Gold	GRS	4.00%
Helcla Mining	HL	3.78%
Silver Standard Resources	SSRI	3.60%
Couer d'Alene Mines	CDE	3.50%
SEMAFO	SMF.TO	3.48%
Silvercorp Metals	SVM	3.42%
Allied Nevada Gold	ANV	2.72%
San Gold	SGR.V	2.65%

If and index ETF isn't for you, then I invite you to check out the profits you could be making right now by joining my Hard Money Millionaire advisory service.

In 2009, the Hard Money Millionaire portfolio delivered 22 winning investment recommendations out of 23 ventures — a 95.7% success rate.

At its best, my portfolio returned members seven (7) winning investments that each returned a +100% gain.

In fact, the gains from my Hard Money Millionaire portfolio are on par with $100 million hedge funds!

For the year, the Hard Money Millionaire portfolio returned an average of 21.3%. The Barclay Hedge Fund Index, which uses data from 1,658 hedge funds around the world, calculates that hedge funds returned an average of 24.1% for 2009 — only slightly higher than my average return.

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Whether you join my team of investors or not, I strongly urge you to take some time to explore junior gold stocks.

I believe that 2010 is the year gold bugs have been waiting for. There's no doubt that gold will breach the $1,500 level this year. As it does, junior gold stocks are going to be in play.

Only through diligent research is it possible to thresh out the good from the bad. But with time, patience, and maybe some aspirin, you can make a lot of money in gold stocks in 2010.

Good Investing,

Luke Burgess
Editor, Wealth Daily
Investment Director, Hard Money Millionaire

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China Remains World's #1 Gold Producer

The China Gold Association reported that domestic gold output increased 11.3% to a record of 312 tonnes last year, clinching the county's position as world's largest gold producer for the third year in a row.

China's booming gold industry reported 138 billion yuan (US$20 billion) of gross industrial output value in 2009 — an increase of 19%, compared to the previous year.

Nearly 60% of China's gold output last year came from the five producing province: Shandong, Henan, Jiangxi, Fujian, and Yunnan.

The ten largest gold firms produced 149 tonnes — 47.3% — of the country's total output. China had more than 700 gold producers in 2009, down from more than 1,200 firms in 2002 as the industry consolidated.

The China Gold Association gave no figures for domestic gold demand. However, metals consultancy group GFMS said last month that it expects China to overtake India as the world's largest gold consumer in 2009. Total Chinese demand is forecast to reach 432 tonnes as investors defy record bullion prices.

Luke Burgess
Editor, Wealth Daily
Investment Director, Hard Money Millionaire

Peru Remains World's Top Silver Producer

Production of gold, silver, and copper in Peru increased during 2009, while output of other base metals declined, according to Peru’s Ministry of Energy and Mines.

Gold production in Peru increased 1.41% to 6.4 million ounces. Meanwhile, Peruvian silver production increased 4.56% to 136 million ounces, and copper output rose 0.54% to 45 million pounds.

Peru is the world's top producer of silver and ranks as the third largest copper producer and sixth largest gold producer. Other base metal production fell in Peru last year. Below is a table with annual metal production data from Peru:

Metal	2009 Production	Change from 2008
Gold	6.4 million ounces	+1.41%
Silver	136 million ounces	+4.56%
Copper	2.8 billion pounds	+0.54%
Zinc	3.3 billion pounds	-5.85%
Lead	667 million pounds	-12.37%
Tin	83 million pounds	-3.93%
Iron	9.7 billion pounds	-14.38%
Molybdenum	27 million pounds	-26.47%

As the Peruvian mining industry continues to expand, there will be a growing need for more energy. My colleague, Sam Hopkins, recently returned from the country where he got a first hand look at Peru's growing wind energy projects. To learn about Sam's Peruvian adventure — and two wind energy companies he believes will return expect upwards of 60% in short order — check out his latest report.

Luke Burgess
Editor, Wealth Daily
Investment Director, Hard Money Millionaire

Lihir Gold Joins the 1 Million Ounce Club

Mid-tier gold producer Lihir Gold (NASDAQ: LIHR) wrapped up a fourth consecutive year of record gold output in 2009, with production exceeding one million ounces for the first time in the company’s history.

The company reported production of 1.12 million ounces of gold at a total cash cost of $397 per ounce last year — up 27% from the previous year.

In 2010, Lihir is forecasting slightly lower gold production. The company expects to produce between 960,000 and 1.06 million ounces this year from its three producing operations in Papua New Guinea, West Africa, and Australia.

Going forward, Lihir expects to ramp up gold production to 1.3 million ounces in 2012 as expansion projects boost output at Lihir Island and Bonikro.

Good Investing,

Luke Burgess
Editor, Wealth Daily
Investment Director, Hard Money Millionaire

Platinum, Palladium Surge to 18-Month Highs

Platinum and palladium prices climbed to 18-month highs this week, boosted by demand from two newly launched ETFs.

The ETFS Platinum Trust (NYSE: PPLT) and ETFS Palladium Trust (NYSE: PALL) began trading on January 8 with much fanfare. And in the three weeks since their NYSE listing, both ETFs have witnessed large investments.

These ETFs — like many others — are backed by the physical metals. The platinum ETF currently holds 195,000 ounces; the palladium ETF holds 400,000 ounces. The metal currently held in the platinum ETF is worth over $300 million and is equal to over 11 times the world's daily platinum output.

Platinum for immediate delivery rose as much as $1,629 an ounce this week, while palladium peaked at $466 an ounce.

Platinum and palladium are mainly used in catalytic converters that lower pollution from combustion engines. Support for platinum and palladium demand is expected to be boosted by China, where up to 17.2 million cars are forecast to hit the road this year — a 26% increase from 2009.

Good Investing,

Luke Burgess
Editor, Wealth Daily
Investment Director, Hard Money Millionaire

Shares of Junior Miner Explode After Rare Earth Discovery

Share prices of First Gold Exploration Inc. (TSX-V: EFG) skyrocketed as much as 180% after the company announced a new high-grade discovery of rare earth elements and lithium at its Éléonore Property in Northern Québec.

The company reported that recent grab samples from an area between two of First Gold's previous lithium and rare earth element discoveries - contained very high grades of lithium, rubidium, tantalum, beryllium, niobium, and gallium.

The announcement of the new discovery sent the stock soaring from $0.34 to a high of $0.95. Share prices cooled off by the end of the day to close at $0.68 - a 113% gain.

The news even sparked near-panic buying. Investors traded 9.3 million EFG shares by the end of the day - a whopping 4,000% increase over the stock's 3-month average daily volume.

First Gold's press release stated the company was compiling the results of the drill hole that should be released in the coming days.

As the price for rare earth elements and lithium continues to march higher, new discoveries — like those being made First Gold's Québec property or the $273 billion in rare earth elements found in Greenland — will continue to pay off for investors

Luke Burgess
Investment Director, Hard Money Millionaire

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Investing in U.S. Gold Stocks

The world's most precious metal is probably right in your own backyard.

Data from the U.S. Geological Survey shows remaining natural resources of over 1 billion ounces of gold here in the United States.

In fact, the USGS believes $700 billion worth of U.S. gold is still completely undiscovered. And that's exactly why billions are spent every year...

Investing in U.S. Gold

In the mid-1980s, U.S. gold production levels spiked as a result of two major factors:

The astonishing investment profits made from gold during the great precious metal bull market of the 1970s;
Advancements in a production process called heap leaching, which allowed miners to begin recovering gold from low-grade deposits in Nevada and other states.

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Gold production in the United States jumped over 600% in the decade between 1983 and 1993. Take a look:

The United States remains one of the world's most important gold producers. In 2008, the country produced approximately 230 tonnes of gold, making it the third-largest gold-producing nation behind only China and South Africa.

America is actually a net exporter of gold. In 2008, the U.S. exported nearly 21 million ounces of gold. Approximately two-thirds of this gold was exported to the United Kingdom, Australia, and Switzerland.

Over 70% of the gold produced in the United States today comes from large, open-pit heap leach mines in Nevada. Nevada's gold mines have produced nearly 3% of all the above ground gold in existence. And it's exactly where you'll find what I reckon as the...

Top 2 U.S. Gold Stocks

Barrick Gold (NYSE: ABX)
Share Price: $41
Market Cap: $40 billion

Barrick Gold is the largest gold company in the world. And nearly a third of the company's total gold production comes from Nevada.

In 2008, Barrick's seven Nevada gold mines produced over 2.5 million ounces and were estimated to host nearly 35 million ounces of gold reserves.

Newmont Mining (NYSE: NEM)
Share Price: $49
Market Cap: $24 billion

Newmont Mining has been pouring gold in Nevada for nearly 50 years. The company's operations include 14 open-pit and four underground mines and 14 processing facilities.

In 2008, Newmont's gold operations in Nevada produced 2.2 million ounces — 43% of the company's total production for the year.

The West Is the Best

Nevada has the highest concentration of gold mining claims of any state in the U.S. But there are more lucrative investment opportunities in some of the surrounding states...

About 60% of all the gold mining claims in the U.S. are located in the states that encircle Nevada.

The map below — rarely seen by anyone outside of the gold mining industry — shows the hundreds of thousands of gold mining claims that dot the Western United States:

There are over 200,000 gold mining claims located in eleven Western states that surround Nevada.

Geologists are specifically staking gold targets in Wyoming, Arizona, and Idaho, where some of today's most prospective gold investments are currently being made in the Boise Basin.

Mining professionals know that this region is one of the best places in the world to discover and mine for gold.

The Western United States is home to some of the richest gold deposits on earth. And the country as a whole is extremely mining friendly boasting:

political stability
a skilled labor force
social stability
terrific infrastructure
manageable environmental regulations
fair taxation laws

Based on these important factors, investors are encouraged to invest with confidence in gold stocks with quality projects in the Western United States.

I will be sending you an article this weekend which features yet another gold investment idea. This tiny $0.34 stock has a gold resource just north of Nevada that's worth over 60 times the company's market value.

The company is preparing to start production of this sizable resource. And as a result, I think shares could make their first move to $2.50 in short order.

Be on the lookout for my next piece, as I continue to bring you profit opportunity with gold and other precious metals...

Until this weekend,

Luke Burgess
Editor, Wealth Daily
Investment Director, Hard Money Millionaire

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The U.S. Department of Energy has indicated that enough electric power for the entire country can be generated by covering about 9% of Nevada with solar power systems. This is a plot of land roughly 92 miles by 92 miles.
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Mexico's $150 Billion Gold State

The sudden clamor for gold properties in Central Mexico is handing triple-digit gains to investors.

A recent bidding war over a mid-sized gold deposit in the Mexican state of Zacatecas has already yielded a +100% return for investors since the beginning of the holidays.

Long-term investors have seen much higher gains, however, with two recent discoveries in Zacatecas. These discoveries have uncovered approximately $150 billion worth of precious and base metals. It was all found in...

Mexico's Golden State

Zacatecas is a landlocked state in Central Mexico, best known for its historic gold and silver mines.

The state's incredibly rich silver deposits were first discovered by colonial Spanish explorers during the 16th century. One hundred years later, the mines of Zacatecas were producing nearly a third of Spain's silver and a fifth of the world's supply.

But despite having already produced the equivalent of about $2.5 trillion worth of precious metals for the Spanish, geologists are using modern exploration techniques to find new gold and silver deposits in Zacatecas today.

Recent discoveries at the Peñasquito and Camino Rojo projects — both located in northeastern Zacatecas — have revealed a total resource of 40 million ounces of gold and the equivalent of 5.6 billion ounces of silver.

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Peñasquito

The Peñasquito project is 100% owned by Goldcorp (NYSE: GG). It is home over 35 million ounces of gold, 2.4 billion ounces of silver, and $50 billion worth of zinc and lead. The Peñasquito mine will be Mexico's largest open pit mine once it is completed and commissioned in early 2011. The mine is expected to produce 500,000 ounces of gold, 30 million ounces of silver, and over 400 million pounds of zinc over its estimated 22-year mine life.

Camino Rojo

A half-hour drive to the southeast of Peñasquito is Canplats Resources' (TSX-V: CPQ) Camino Rojo project. The Camino Rojo ("Red Road") project is much smaller than Peñasquito, hosting almost 4 million ounces of gold and 70 million ounces of silver. A mine at Camino Rojo is expected to produce 122,300 ounces of gold and 902,100 ounces of silver over a 10-year mine life.

To gain control of the Camino Rojo project and expand operations in Zacatecas, Goldcorp made an offer to buy Canplats for ~$230 million back in mid-November.

Under the terms of the agreement, Canplats shareholders would receive 0.074 of a Goldcorp share and one share valued at C$0.18 in a new exploration company, representing a combined value of approximately C$3.60 per share.

Shares of CPQ instantly jumped 40%. And many investors walked away quite happy.

But the action in CPQ wasn't finished...

Last Tuesday, Canplats received the first of two higher offers from Minera Penmont, S. de R.L. de C.V., a company jointly-owned by Fresnillo PLC (LON: FRES) and Newmont Mining Corp. (NYSE: NEM).

Minera Penmont initially offered C$4.20 in cash and shares of a new exploration company.

And again, shares of CPQ jumped instantly... this time by another 50%.

Goldcorp exercised a prearranged right to match the offer on Christmas Eve. But over the weekend, Minera Penmont increased their offer to C$4.60, which Goldcorp matched again on Wednesday.

The offer for Canplats now still stands at C$4.60 in cash and shares of a new exploration company. And with a bidding war still underway, shares of CPQ have already increased as much as 102% since Goldcorp's initial offer.

With such a frenzy of interest in Canplats, I decided to take a look at other companies that have gold projects in Zacatecas. Here are...

Two Mexican 'Gold State' Stocks

Our ability to get investment exposure to gold projects in Zacatecas is actually quite limited. Goldcorp and Canplats have the most substantial projects in the state. And Goldcorp has already made moves to secure other mining interests in Zacatecas, leaving them with partial interests. Here are two companies with gold properties in Zacatecas that Goldcorp has made agreements with...

Corex Gold (TSX-V: CGE)

Corex Gold's 40,000 hectare Zuloaga property is located less than 10 miles from Peñasquito. The company has mapped the property and collected a few samples, but the project remains under-explored. Despite the limited exploration, Goldcorp has already reserved the right to earn a 70% interest in Zuloaga by spending $4,000,000 on the property over a five-year period. Goldcorp can gain another 10% interest in the Zuloaga property by funding the full construction of a mine.

Quaterra Resources (AMEX: QMM)

Quaterra Resources controls five 100%-owned concessions totaling 69,034 hectares in Zacatecas and San Louis Potosi. These concessions are even less explored than those held by Corex. Nevertheless, Goldcorp recently acquired the right to earn a 65% interest in Quaterra's Zacatecas properties by funding a $10 million exploration program.

Conclusion

Investment access to gold projects in Zacatecas is limited. But geology does not abide by political borders. There are many other gold and silver projects in the surrounding states of Durango, Coahuila, Nuevo Leon, and San Louis Potosi.

As always, I recommend looking for companies with quality projects and strong management with experience in the full development of mineral projects.

And with the New Year right around the corner, smart investors will widen their vernacular to include not just precious metals like gold and silver, but rare earth metals, as well.

With a new decade comes new technology... And today, Jan. 1, Denmark relinquishes its control over a $273 billion rare earth metals resource — the same metals essential for nearly all modern electronic devices. We reveal how you can get in on massive profits from these technology metals in our new report.

Enjoy the rest of your holiday,

Luke Burgess
Editor, Wealth Daily
Investment Director, Hard Money Millionaire

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Gold Mining Production Costs

Even at $1,200 an ounce, gold is still one of the safest investments you can make.

That's because, unlike 99.9% of other investment vehicles, gold has an intrinsic and universal value that has supported a strong market price throughout human history.

And now we have even more reason to remain confident in gold as a safe investment, thanks to a surge in mining production costs that may help buoy gold prices for decades to come. It all starts with the...

Rising Production Costs of Gold

Mining for gold is often romanticized as an adventurous, sometimes dangerous, way to get rich real quick. But as a business, it's very difficult to make a profit. And the real danger is financial.

Gold production is a very energy- and labor-intensive process, making it very expensive to operate a gold mine... especially now. Over the past few years, rising energy and labor prices have forced global gold production costs to increase quite dramatically.

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In 2000, Barrick Gold (NYSE: ABX) was producing gold for $145 an ounce (inflation adjusted = $185/oz). During the first three quarters of 2009, the company's total cash cost were $463 an ounce — a 215% increase.

According to GFMS, a world authority on gold markets, Barrick's current production costs are about average. Data from GFMS shows world gold production costs for the first half of 2009 averaged $457/oz. This average cost is down from $623/ounce in the third quarter of 2008.

Gold production costs swelled over 150% in five years between 2003 and 2008. And due to recent increases in energy and labor prices in the second half of 2009, experts estimate global gold production costs may average up to $500 an ounce for the year. Take a look:

In the long-run, the average gold production cost must increase.

The most easily accessible and cheapest gold resources will always be developed and exploited first. As these resources are diminished, producers will be forced to develop the next cheapest gold resources in line.

The ever-increasing nature of the cost of production may help support a growing valuation floor above $500 for gold prices. And it's one of the reasons that I think...

Gold Has the Best Worst-Case Scenario

The price of gold should always find price support near the average global cost of mine production.

That's because if the cost of production significantly exceeds the value of the yield, operators will likely halt output until market conditions improve. It's simply a matter of economics.

This halt will decrease the total supply of new mine production. And this decrease may ultimately help buoy gold prices to varying degrees depending on demand.

So if the average global cost to produce gold is $500 an ounce, I think gold's ultimate valuation floor may be near that level.

Conclusion

Indeed, a near 60% decline to $500 could be considered the worst-case scenario for gold. However, the worst-case scenario for currency-denominated asset classes like stocks and bonds is a 100% decline. So gold is still one of the safest assets to own.

Aside from being the safest investment, I also believe gold will be one of the easiest ways to profit over the next 12 to 24 months. The bottom line: I don't believe that we've seen the biggest moves this gold bull market has to offer. And the time for gold to build up a head of steam and tackle is inflation-adjusted high of $2,500 has never been better.

In order to leverage gold's huge investment upside potential for members of my Hard Money Millionaire advisory service, I am currently building a brand-new portfolio of junior mining stocks. So far, I've recommended three stocks in the portfolio (with a fourth to be added sometime next week), but have already done quite well. In fact, you can take a peek at my junior mining portfolio just by clicking here.

If you're also interested in gold stocks, you might want to check out these...

Three Low-Cost Gold Producing Stocks

In doing research for this article, I learned gold production costs currently average about $450 an ounce for companies, including Agnico-Eagle (NYSE: AEM) and Newmont Mining (NYSE: NEM).

As I looked through the financial statements of the individual companies, I noted those with the lowest gold production costs. Below I've list the three companies with low-cost gold production within the three major financial classes.

Goldcorp (NYSE: GG)

Financial Class:	Senior Gold Producer
Share Price:	$44.50
Market Cap:	$32.5 billion
3Q Gold Production:	620,000 ounces
3Q Gold Production Costs:	$295/oz.
2009 Gold Production Guidance:	2.3 million ounces
2009 Gold Production Costs Guidance:	$365/oz.

Goldcorp is one of the largest gold mining companies in the world. With 14 operations and development projects, Goldcorp expects to produce 2.3 million ounces this year at a total cash cost of $365 an ounce. During the third quarter of 2009, the company produced over 620,000 ounces for total cash cost of $295 an ounce.

Eldorado Gold (NYSE: EGO)

Financial Class:	Mid-Tier Gold Producer
Share Price:	$13.75
Market Cap:	$5.5 billion
3Q Gold Production:	89,000
3Q Gold Production Costs:	$297/oz.
2009 Gold Production Guidance:	550,000
2009 Gold Production Costs Guidance:	$340/oz.

Eldorado Gold is a mid-tier gold producer active in exploration and development in Brazil, China, Greece, Turkey, and surrounding regions. The company plans to produce a total of about 550,000 ounces of gold this year at a total cash cost of $340 an ounce. During the third quarter, Eldorado produced 89,000 ounces at $297 an ounce.

Minera Andes (TSX: MAI)

Financial Class:	Small-Cap Gold Producer
Share Price:	$0.75
Market Cap:	$200 million
3Q Gold Production:	22,000 ounces
3Q Gold Production Costs:	$313/oz.
2009 Gold Production Guidance:	undisclosed
2009 Gold Production Costs Guidance:	undisclosed

Minera Andes is a small but successful gold and silver miner. The company producers almost an equal amount of gold and silver by value, but is worth mentioning here because it is currently one of the lowest-cost small-cap gold producers around.

Minera will produce over 75,000 ounces of gold this year at an estimated $330 an ounce, although there is no official guidance. During the third quarter, the company produced 22,000 ounces of gold at $313 an ounce.

Enjoy the rest of your holiday,

Luke Burgess
Editor, Wealth Daily
Investment Director, Hard Money Millionaire

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Peak Gold is a Myth

Since the mid-1950s, researchers have been concerned that peak oil will send petroleum prices spiraling out of control.

Today, a growing faction of gold bugs has recently been discussing their own "peak" theory for the future:

Peak Gold.

They believe the world's total production of gold may have already peaked. And now gold production will fall drastically, helping push gold prices over the inflation-adjusted high of $2,500 an ounce.

Some are even making predictions of over $5,000/oz.

And I think they may be right — but for the wrong reason.

Peak Oil vs. Peak Gold

Peak oil is simply the maximum rate of global oil extraction.

According to their models, peak oil theorists maintain the total rate of world oil production will grow exponentially over time until reaching a pinnacle, and then fall into a terminal decline. That pinnacle is peak oil.

The resulting timeline of global petroleum output would follow a basic bell curve shape. Something like this...

The concept of a peak in world oil extraction is based on production rates over the lifetime of individual oil wells, fields, regions, and countries. A prime example is the production life of the Cantarell Oil Complex.

Located just 50 miles offshore, Cantarell is the largest oil field in Mexico and was once one of the top five largest producing petroleum fields in the world.

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Cantarell more than doubled oil output between 1995 and 2005, topping out at 2.1 million barrels per day. But in the four years that have followed, oil production from Cantarell has plunged almost 75%. A 15-year chart of petroleum extraction from Cantarell mimics the classic model of peak oil theory. Take a look...

Production rates at other major oil fields around the world are starting to look similar. In fact, as many as 6 out of the world's top 10 largest oil fields may have already peaked like Cantarell.

The exact date when oil will peak is debated. Experts estimate the date of the global production peak to range between the years 1990 and 2020 — after which oil becomes less available and more expensive.

So it's suiting that speculators are tailoring their portfolios to take advantage of a rapid increase in prices. My colleague Ian Cooper is one such speculator, and he knows commodities can translate into big dollars in this market...

Other investors have noticed a recent decline is gold mine production and have applied ideas from peak oil theory to create a new paradigm for the future, aptly called "peak gold."

What is Peak Gold?

Peak gold is basically the gold mining equivalent of the peak oil theory, as I explained it above.

Proponents of peak gold point to the fact that global gold production reached an all-time high of about 83 million ounces per year in 2000 and has since fallen to about 72 million ounces. This accounts for a 13% decline in 9 years.

They also contend that rising demand will send gold prices mushrooming higher due to sharp supply/demand imbalance.

But there are a few important factors to consider when comparing peak oil to peak gold.

First (and maybe most important), is that oil is a perishable commodity. Its energy can only be used once.

Gold, on the other hand, is virtually indestructible. And its use as a store of value is everlasting.

Gold can be recycled and reused. And unlike barrels of oil, every ounce of gold that has ever been mined is still around.

Therefore, the demand for gold will forever be able to be met.

Moreover, gold production has been gradually rising and falling for over 6,000 years.

During the 20^th century, there were three decade-long periods when world gold production fell by an average of 30%. Nevertheless, global gold production reached another record high in by the end of the century. Take a look...

I believe the real reason for the drop in world gold production since 2000 was the commodity bear market of the 1980s and 1990s.

During this period, companies lacked the financial incentive to explore for gold, resulting in limited capital for exploration and development of new mines that would go on to produce gold today.

Peak Gold Conclusion

There is simply less evidence to support the case for peak gold right now. And I don't think it should have any serious impact on the gold market in the near-term.

However, perception is everything...

And if a broad enough audience of investors begins to believe that the world's capacity to produce gold really has peaked, speculative mania buying could rapidly drive up gold prices well past their inflation-adjusted highs.

I remain, of course, bullish on gold over the long-term due to rising investment demand. Members of my Hard Money Millionaire have already had the opportunity to make almost 60% in three physical gold investments listed in our portfolio. (You can take a look at my portfolio here.) But I expect even bigger gains over the next several months, as gold continues to surpass record prices.

In the meantime, we just need to hang on for the ride.

Good Investing,

Luke Burgess
Editor, Wealth Daily
Investment Director, Hard Money Millionaire

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Alaska Gold Mining Stocks

Heart-pounding word of massive gold strikes in Alaska swept North America in the late 19th century. . . and the rush was on.

Many of the fortune-hunters who set out on the journey were professionals. They were teachers, lawyers, doctors — even a mayor or two — who gave up respectable careers to search for buried treasure.

Most were well aware that it was unlikely they'd hit the mother lode. But they went anyway — if for nothing else, for the adventure.

Adventurers seeking vast fortunes from Alaska's gold resources are still around today.

But instead of eyeing for small flecks of yellow metal in a river, we're investing in Alaska's gold mining companies.

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Alaska is one of the best states in the U.S. to mine for gold. It hosts an estimated gold resource of over 250 million ounces, and is one of the most mining-friendly states in the nation.

In fact, former gold mine developers run the state's Department of Natural Resources, the organization that regulates mining.

DNR Commissioner Tom Irwin is a gold mining veteran with more than 30 years of experience in the industry, overseeing operations such as Kinross Gold's (NYSE: KGC) Fort Knox mine — Alaska's largest gold producer.

So it comes as no surprise. . . The state of Alaska has never turned down a gold mining permit.

Mining legislation is even written right into the state constitution:

Article 8 - Natural Resources

§ 1. Statement of Policy

It is the policy of the State to encourage the settlement of its land and the development of its resources by making them available for maximum use consistent with the public interest.

§ 2. General Authority

The legislature shall provide for the utilization, development, and conservation of all natural resources belonging to the State, including land and waters, for the maximum benefit of its people.

With rising gold prices, and support from the state to develop its abundant resources, capital investment in Alaska's precious metal industry has skyrocketed over the past few years. This investment has developed Alaska into the second-largest gold producer in the U.S. — contributing about 10% to total annual U.S. production.

With investment money still pouring in, estimates suggest gold production in Alaska will continue to climb this year, nearing the peak of production during the Klondike gold rush. That means there's never been a better time to start investing in. . .

Alaska's Gold Mining Stocks

Investors have already stuck the proverbial "mother lode" with companies that have quality Alaskan gold projects such as NovaGold Resources (NYSE: NG), Northern Dynasty Minerals (AMEX: NAK), and International Tower Hill Mines (TSX-V: ITH).

NovaGold Resources (NYSE: NG)

NovaGold Resources is a $990 million exploration and development firm that has a 50/50 joint venture with Barrick Gold (NYSE: ABX) in the Donlin Creek mine. Located in central Alaska, the Donlin Creek mine is special because it is expected to be one of only a handful of gold mines in the world capable of producing over 1 million ounces of gold a year. NovaGold investors have had the opportunity to make a gain as high as 289% this year.

Northern Dynasty Minerals (AMEX: NAK)

Northern Dynasty Minerals is a smaller $680 million exploration and development company that has a 50/50 joint venture with Anglo American (LON: AUUK). The two companies share the rights to the massive Pebble copper/gold deposit in southern Alaska. The Pebble deposit is estimated to contain 72 billion pounds of copper, 94 million ounces of gold, and 4.8 billion pounds molybdenum, as well as quantities of silver, palladium, and rhenium. Since the beginning of the year, shares of NAK have increased as much as 133%.

International Tower Hill Mines (TSX-V: ITH)

International Tower Hill Mines is the smallest of the three, with a market cap of $370 million. The company has a total of eleven exploration-stage projects in Alaska, including one with an 11 million ounce gold resource. International Tower Hill has significantly increased the company's resource base over the past several months, so shares have outperformed both NG and NAK. For the year, ITH investors have gained over 300%. In fact, as I write this, shares of ITH sit on a 52-week high.

Gold prices have had surprising strength over $1,100 an ounce of the past few days. And it looks like these three growing Alaska gold stocks could continue to knife higher along with gold prices.

If you're feeling a little more adventurous and want a little leverage, Kiska Metals (TSX-V: KSK) will be an Alaskan gold stock to watch over the next several weeks.

Kiska Metals was formed over the summer by the combination of two international mineral exploration companies: Rimfire Minerals Corp. and Geoinformatics Exploration Inc. The group is now focused on the development of the Whistler project in southern Alaska, which covers an area of 440km² within the same geological belt that hosts Northern Dynasty's and Anglo American's massive Pebble deposit.

The Whistler project is currently home to almost 6 million ounces of gold resources, but the company is rapidly working to increase those resources with a new drill program that began in September.

Conclusion

With considerable resources and a mine-welcoming government, Alaska is a good place to mine for gold. Investors can take advantage of both rising gold prices and the state's goodwill toward mining by buying shares of companies that have exposure to Alaskan gold projects.

There are many other Alaska gold mining companies on the market other than the four I mention above. I found several mid- and large-cap firms and a handful of very small 20 cent stocks with exposure to Alaskan gold while doing research for this article. So there are plenty out there.

As always, it's important for you to do your own due diligence to look for companies with talent, experience, and quality projects.

Three weeks ago, I started to build a brand-new portfolio to seek high-yield gains from junior gold and mining stocks. I've made three recommendations, and all three have since returned a profit for an average 35% gain. You can find more information on how to get access to these three junior gold stocks in my latest research report.

Good Investing,

Luke Burgess
Editor, Wealth Daily
Investment Director, Hard Money Millionaire

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The U.S. Dollar and SDR

You didn't see this in the news.

And it's unlikely you'll read about it on any blogs or hear about it by word of mouth. Even the most extreme government watchdog groups seemed to have missed this story. . .

1. Most of the world is quickly diversifying from the U.S. dollar to hedge against the multitude of American macroeconomic problems.

2. Now, even the U.S. government is trading in its own dollars for another currency — the same currency that China, Russia, oil-bearing Gulf countries, the UN, the IMF, the World Bank, and many others have already suggested to replace the greenback as the world's main reserve currency.

3. Over the past few weeks, the U.S. Treasury has liquidated billions of U.S. dollars to more than quintuple the national foreign reserves of this very currency. This is a clear sign. . .

The U.S. Government Doubts the Dollar

But this is more than just an outright signal that the U.S. dollar is in serious trouble. We already know that much.

The U.S. government's move to further diversify from its own currency is a beacon for investors to seriously prepare for another sharp increase in commodity prices. And in just one minute, I'm going to share with you several ways to profit. But before we get into that, it's important to understand how and why commodity prices will rise, as the. . .

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U.S. Dumps Dollars for Special Drawing Rights (SDR)

The Special Drawing Right (SDR) was created by the International Monetary Fund in 1969 to support the Bretton Woods fixed exchange rate system.

The value of the SDR was initially coupled to one U.S. dollar, which was still pegged to gold ($35/oz) at the time. But after the collapse of the Bretton Woods system in 1973, the value of the SDR was adjusted to reflect a basket of 16 world currencies.

Today, the SDR is currently pegged to four currencies: the U.S. dollar (44%), euro (34%), Japanese yen (11%), and the British pound (11%).

The SDR is unlike any currency you're familiar with. SDRs are not backed by assets, nor do they represent a claim on the IMF. Rather, each member agrees to back its SDRs with the full faith and credit of its own government and to accept them in exchange for convertible currencies.

In reality, the SDR is less of a currency and more of an accounting entry. However, the SDR has similar characteristics as money, such as an interest-bearing asset, store of value, and means of settling debt. The SDR is a private currency of sorts — useable and accepted exclusively by IMF member states.

There are no SDRs in physical circulation like the dollars or euros in your pocket; they have an electronic unit of value.

So the SDR can be simply created, instantly, at the will of the IMF board — which is not bound by regulations. Therefore, there is still the threat of inflation as with any regular fiat currency.

This lack of regulation — combined with liquidity issues and the fact that the SDR makes a claim on nothing — creates potential pitfalls of using the SDR as a reserve currency.

But that hasn't stopped many world governments and other international finance organizations from making a push to use the SDR as the world's main reserve currency, laying the groundwork for. . .

A Post-U.S. Dollar World

The possibility of the U.S. dollar losing its main reserve currency status has sent government officials into a frenzy. Over the past few months, U.S. administrators have been extremely vocal in supporting the dollar as the world's main reserve currency.

Of course, U.S. Treasury Secretary Tim Geithner's voice has resonated loudly from Washington. Here are just a few things Geithner had to say about the dollar in recent months:

"I think the dollar remains the world's dominant reserve currency . . . that's likely to continue for a long period of time.”

– At a meeting with the Council on Foreign Relations, as reported by The New York Times on March 26, 2009.

“The dollar will remain the principal reserve currency.”

– During a visit to Abu Dhabi, as reported by Reuters on July 15, 2009.

“We have a special responsibility here in the United States to make sure we are doing the things in this country to preserve confidence in the U.S. financial system – confidence that’s very important to sustain the dollar’s role as the principle reserve currency in the international financial system. . . We expect, as I think countries expect around the world, the dollar to retain that position for a very long time.”

– At the G-20 summit in Pittsburg, PA, as reported by Bloomberg on September 25, 2009.

Despite Geithner's public confidence in the U.S. dollar, the Treasury increased its holdings of SDRs in one week by 453% — worth $27.5 billion — in late August. Just take a look at the U.S. Treasury's International Reserve Position statements between August 21 and August 28:

Since that time, the U.S. Treasury has increased its SDR holdings by another 11%, and currently owns almost $40 billion worth of SDR. Current SDR holdings account for nearly 30% of the U.S. total foreign currency reserves.

This is a clear sign to the world that the U.S. government is making moves to hedge against its own falling dollar. . . and this may be the catalyst that leads the entire world to sharply diversify from the dollar.

An actual changeover in reserve currency dominance would send the value of the U.S. dollar plummeting, quite likely to all-time lows. Fortunately, there's still some time before the dollar completely collapses. And investors can prepare themselves with. . .

Easy Ways to Profit from Commodities

One of the best ways to hedge against a falling U.S. dollar is, of course, by investing in silver and gold. Precious metals have a 6,000-year history of preserving value against fiat currencies like the greenback. The most direct way of investing in gold and silver is to hold the physical metals. However, many investors prefer the ease of investing in gold and silver ETFs.

Other commodities — such as energies, grains, softs, and meats — also do well during times of a falling U.S. dollar. There are plenty of easy ways to invest in these commodities, including investing in ETFs, stocks, futures, and options.

Exposure to other foreign currencies, such as the euro and Japanese yen, will also provide a good hedge against a devaluing dollar. A simple option for investing in foreign currencies is currency ETFs. You can buy and sell them as easily as stock — without special transaction fees.

As the value of the U.S. dollar continues to decline, commodities will broadly rise. I strongly urge all investors to have at least some exposure to commodities.

Good Investing,

Luke Burgess
Editor, Wealth Daily
Investment Director, Hard Money Millionaire

Inflation Investments

Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles.

A tsunami of money is headed your way.

It's true.

But it might not be exactly what you have in mind. Here's what I mean. . .

Just a few days ago, the U.S. government reported that the federal deficit officially hit an all-time record high for fiscal year 2009 ending in September — $1.42 trillion!

And even though it's now over 10% of the nation's GDP, the 2009 budget deficit is just small potatoes. Going forward, the Fed expects the budget deficit to dramatically increase to $9 trillion over the next decade.

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Meanwhile, the U.S. national debt will cross $12 trillion as early as next week — about $40,000 for each citizen — and doesn't include other future financial obligations, like Social Security and government-sponsored health care. Analysts estimate that these future obligations could cost the United States up to $100 trillion!

With an exploding budget deficit and thinning credit, the federal government will be forced to create a mountain of new U.S. dollars to help finance the country and repay debt.

Fortunately, there's still some time before this strong inflationary period will start to have a negative effect on the dollar. And as investors, we can prepare and let inflation work for us rather than against us. More on that in just a second. . .

——————————————-

But first, in case you've missed any of the recent top stories from Wealth Daily and our companion publications, I've included them below.

Technical Trading Made Easy: 3 Tools You Can Use to Easily Spot Stock Trends
Wealth Daily Editor Ian Cooper makes it easy for investors to understand the three best technical indicators that have historically called tops and bottoms of stocks and major indices.

The Best Biotech Stock for 2010: Grandpa's AMBER Alert Could Make You $1 Million
Wealth Daily Publisher Brian Hicks explains one strategy for picking stocks and reveals a huge milestone for his front runner in the biotech sector.

Smart Grid Stocks: The Trillion Dollar Transmission Horse
Energy & Capital Editor Nick Hodge discusses smart grid stocks and the coming $1 trillion investment that will send them higher.

The #1 Silver Stock for 2010: How to Get a 2nd Chance at a 7,667% Gain
Editor Luke Burgess unveils the most profitable silver stock in the past decade and tells investors about another company that Wall Street believes is in for similar gains.

The Best Way To Buy Gold: How To Get A Limited-time, Exclusive Discount on Gold Bullion
Wealth Daily's Greg McCoach explains how the biggest gold rush in world history could push prices over $5,000, and how to buy gold below spot prices right now.

Biotech Company Buyouts: How to Catch the Building Wave in Biotech Stocks
Editor Steve Christ takes a look at the big surge in biotech buyouts and what they mean for the pharmaceutical markets.

The Gusher Behind the "Montana Millionaires": One of the Largest Domestic Oil Finds Ever
Wealth Daily Publisher Brian Hicks discusses three brand-new investment opportunities positioned in what the U.S. Geological Survey calls the largest continuous oil formation it has ever assessed.

——————————————-

Wealth Daily Editor Adam Sharp reported from the Buttonwood Gathering in New York last weekend that legendary currency investor George Soros is still very bearish on the dollar. Adam's coverage of the conference included Soros's discussion of "a general flight from currencies."

The rest of the market is just as bearish. The value of the U.S. dollar (as measured by the U.S. dollar index), fell again this week by another 1%.

Reacting to the drop in the value of the U.S. dollar, commodities continued to rise this week. The iPath S&P GSCI Total Return Index ETN (NYSE: GSP), which follows a index of 19 commodities, gained almost 2% for the week — outperforming the Dow Jones, NASDAQ, and S&P 500.

Other broad-based commodity ETFs also did well this week:

Dow Jones-AIG Commodity Index Total Return ETN (NYSE: DJP) gained 1.7%
PowerShares DB Commodity Long ETN (NYSE: DPU) was up 9.6%
ProShares Ultra DJ-AIG Commodity ETF (NYSE: UCD) tacked on 2.2%

Commodities were led this week by precious metals and energy. In precious metals, gold and silver prices were only trading slightly below highs made the previous week. Meanwhile, both platinum and palladium prices reached 14-month highs this week.

In energy, crude oil was lifted to a high of $82 per barrel this week — a 12-month high. Heating oil and ethanol were also lifted to 12-month highs, while natural gas prices approached $5 per Mcf, over 100% higher than eight weeks ago.

Looking ahead, we can expect continued strength in commodities across the board, as long-term inflation pushes the dollar lower and lower. And I believe that the broad-based commodity ETFs mentioned above are easy and secure ways to hedge yourself against a falling U.S. dollar.

Good Investing,

Luke Burgess
Editor, Wealth Daily's Gold World
Investment Director, Hard Money Millionaire

Niall Ferguson on the U.S. Dollar

Editor's Note: In today's Wealth Daily, Guest Editor Adam Sharp gives us Part 2 of his report from the Buttonwood Gathering, held last week in New York City. I spoke with Adam about the conference and its speakers on Wednesday, over a pint of beer and round of darts. We talked — and argued — about many of the ideas proposed by the guest speakers at the conference. And I'm certain that you'll enjoy the conclusion of Adam's insights and his coverage of the Buttonwood Gathering as much as I did.

Enjoy,

Luke Burgess

——————————————————

The Buttonwood Gathering: "Fixing Finance"

There were dozens of noteworthy sound bites at Buttonwood last week. . . but none set off a firestorm like Niall Ferguson's. The controversial Harvard professor's comments on the dollar have fueled the currency buzz this week.

Ferguson warmed up the audience with this blunt observation: "We are living through a gradual shift away from the dollar-centric system."

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But when an audience member asked him about sustainable solutions for America, the professor came through with the quote of the day: "The problem of being a declining empire doesn't have a solution."

The audience instantly snapped to attention. Anyone dozing off was roused by booing and nervous laughter. And, for a conservative bunch such as this one, boos, hisses, and laughter are not considered proper etiquette during a discussion panel.

Professor Ferguson went on to say that in ten years, we will look back and realize this period was a major turning point — that this was the point at which power truly began to shift from West to East.

Bold claims, and ones with major implications for investors.

So is Ferguson on to something? Or is he trying to sell his book, The Ascent of Money?

Perhaps a little of both. . .

Shunning the Dollar

An ominous emerging trend seems to support Ferguson's theory. Foreign central banks are shunning the dollar in favor of what they perceive as sound(er) currencies, like the euro and yen. Another emerging trend is China's worldwide commodity grab. In prior years, they might have spent those reserves on U.S. t-bills or higher-yielding mortgage-backed securities.

The key difference is this: central banks have talked for decades about diversifying away from the dollar. Now they're actually doing it.

According to Bloomberg News, the dollar is making up a shrinking percentage of foreign reserves. The greenback recently dipped to 37% of new foreign reserves. That's down from an average of 63% in 1999.

This does not bode well for the dollar — or for America's continued ability to borrow on the cheap. Our status as the world's leading reserve currency allows us to carry a higher debt load than most nations could bear. As Ferguson points out, a gradual shift away from the dollar does indeed appear to be underway.

Dollar Bears: Lemmings or Savvy Traders?

These days, everybody and their brother is betting against the dollar. They're directly shorting it, buying commodities like gold, or playing the "carry trade" (borrowing cheap $US, and buying higher-yielding foreign currencies), to hedge against its decline.

These situations are always tricky. Crowded trades like long-gold or short-dollar can reverse quickly and violently. Some contrarians are long the dollar because of this. However, these long-term trends can go on much longer than people think. There are strong fiscal and monetary forces at work here.

Some even think the Fed and Treasury want a weaker dollar because it will allow debt to be paid off with devalued currency.

The Dollar Bull Case

Many dollar bulls are betting on Fed interest rate hikes next year, and betting against more reckless fiscal policies. I'm skeptical that the Fed will jack up interest rates in 2010. It's certainly possible, but Bernanke has made clear that he's willing to do whatever it takes to "help" the economy.

A short-term rally in the dollar seems inevitable, but the long-term trend is clearly down. Until fiscal and monetary policy change, the dollar's path seems unlikely to do so, either.

The Investor's Corner

It never came up on stage. No speaker would dare touch it. . . yet gold and silver were on the minds of many Buttonwood attendees.

After all, one of the conference's focal points was the U.S. dollar and where it's headed. And, as you know, gold and silver are among the best ways to hedge against a falling dollar.

Today it's estimated that only 1% to 2% of Americans have some investment exposure to gold. Meanwhile, silver is gaining momentum — and we strongly suggest taking a position. The following report offers a great way to get started. Click here to read the full write-up.

Regards,

Adam Sharp
Guest Editor, Wealth Daily

P.S. As promised, here are some of the more telling quotes from the Buttonwood Gathering. . .

Notable Quotes

Elizabeth Warren, Chair of TARP oversight panel and Professor of Law at Harvard:

The reason banks lost confidence in each other is because they looked at their own books. (As a reply to a question on the role a "loss of confidence" played in the crisis.)

We need the toughest possible accounting standards. . . You can't trust anyone's books these days.

What we have confidence in is the fact that big institutions will be bailed out. (In response to a question about the importance of confidence.)

Tim Geithner, Treasury Secretary:

We've got unsustainable deficits over a five- to ten-year window.

We have been 'remarkably effective' in stabilizing the financial system.

We need a way to put them [too big to fail institutions]. . . how can I say this, 'out of existence.'

The emerging world will be a much stronger source of strength, it is showing resurging strength that will support us.

George Soros, Chairman of Soros Fund Management (arguably the most successful currency trader in history):

The U.S. will remain a drag on the world economy. World growth is bound to be flat for a number of years.

Yes. (When asked if Wall Street has "captured" our government, as prominent economist Simon Johnson has said.)

Diane Garnick, Investment Strategist at Invesco (during a session on executive compensation in finance):

The credit crisis may be over, but the credibility crisis is just getting started.

Our most important resource is human capital, and we won't maximize our potential as long as such a large percentage of our top talent is attracted to finance.*

Compensation in the Western World is a bit like Dolly Parton: there is a huge bubble at the top. (Diane prefaced the simile by mentioning that the joke always bombs in Asia. For the record, it basically bombed to the ~40 people in this session, but I liked it.)

*paraphrased

Jeffrey D. Sachs, Columbia University Economist and Director of the Earth Institute

Wall Street is patting themselves on the back for making lots of money, for making profits on fantastically easy monetary policy.

They [Goldman and other investment banks] have been allowed to "feed at the Fed" on loose money, and profited from it.

Richard Bookstaber, Risk Management Expert and Author of A Demon of our own Design. (The following quotes were from a debate on this proposition: Financial innovation boosts global growth. Bookstaber was on the 'con' side.)

Derivatives are the current weapon of choice for gaming the system.

Derivatives create risk, not protect against it.

I'm all for capitalism, but Wall Street is only half capitalist. When things are good, they're capitalists. When things turn bad, they become socialists.

Jeremy Grantham, Chairman of Grantham Mayo Van Otterloo (also known as GMO, a firm with $89 billion under management. His role as a money-manager make his comments that much more interesting.)

Finance produces nothing of value, no widgets. All we do is shuffle money around and collect fees.

The more complex and opaque the [financial] instrument, the more likely that it is ripping people off.

Larry Summers, Director of the White House's Economic Advisory Council, former Treasury Secretary under Clinton:

We need financial regulation that recognizes human nature; trying to change it is pointless. Even in the annals of speculation, there are few successful careers based on predicting bubbles and going the other way (short).

To be sure, it is easy to predict bubbles. Just predict them all the time. But that is surely not a realistic view to regulate based on.

How to Profit from U.S. Inflation

The FDIC's Deposit Insurance Fund — the insurance fund that protects your money in the bank — is $300,000,000 in the negative.

A growing number of bank customers are beginning to fear the negative balance means the FDIC is no longer able to provide coverage for their deposits.

But the FDIC says the sum of its insurance fund does not affect its ability to protect depositors. That's because the agency has access to sufficient capital needed to safeguard client accounts at member banks. But there's a huge catch. . .

The American taxpayer could face losses that are already planned to total as much as $500 billion — over $1,500 per American citizen. Fortunately, we as investors can turn these losses into profit by hedging our investments in gold and shorting U.S. Treasuries.

The Economist Calls it "The Fifth Fuel"...

After uranium, coal, gas, and oil...

And there's one company that has a monopoly on it.

Giant banks like Citigroup, Credit Suisse, and Goldman Sachs... are all investing in it.

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The share price will easily double - or triple - as word gets out.

Seeking Shelter and Pursuing Profits

The Federal Deposit Insurance Corporation (FDIC) is one of a handful of U.S. government-owned corporations. It was established by the Glass-Steagall Act of 1933 to preserve and promote public confidence in the American financial system by insuring customer deposits in banks.

Today, the FDIC insures deposits at 8,124 U.S. banks and savings associations with $13.1 trillion in assets, which include $9 trillion in customer deposits.

When a bank fails, the FDIC reimburses customer deposits from its Deposit Insurance Fund. This fund is financed by the insurance premiums paid by member banks.

And the end of 2007, the DIF held $52.4 billion. But after 123 bank failures in 21 months. . . the Insurance Fund that Protects your Checking Account is now $300 Million Negative.

. . . And according to the FDIC's own forecasts, the DIF deficit could reach as much as $100 billion, thanks to a rapid increase in bank failures in the United States.

A total of 98 U.S. banks have failed so far this year — up from 25 in 2008, and only 7 total between 2004 and 2007.
As a result, the daily rate of U.S. bank failures has increased 3,400% since 2007. Click to enlarge the charts below. . .

The FDIC believes bank losses could reach $100 billion. But Congress seems to have even less confidence in the banking sector.

In March, Congress approved a bill that allows the FDIC to borrow as much as $500 billion from the U.S. Treasury to cover customer deposits amidst the crumbling finance industry.

But the United States doesn't have this kind of money just lying around; $500 billion is the GDP of Switzerland. It's more than 3.4 times higher than what the U.S. spent on the Global War on Terror in 2008. Besides, the United States has run a deficit for most of the last 50 years — creating a jaw-dropping $12 trillion national debt portfolio.

For the 2009 fiscal year, the Congressional Budget Office (CBO) estimates the U.S. deficit will be $1.4 trillion. That's about 11% of the U.S. GDP — the largest share since World War II. After that, the CBO forecasts the deficit exploding to over $9 trillion in the next 10 years.

But despite the facts that it's more than twice what they spent on WWI and their budget deficit is projected to increase 545% over the next decade, the U.S. government isn't worried about where they'll get the money.

They know exactly where to get $500 billion. . . from you and (worse) me!

But I've got a few investments up my sleeve that I'm already using to. . .

Let the U.S. Government's Plan to Raise $500 Billion Work for Us

To raise $500 billion in the annual budget, the federal government would have to boost taxes across the board by about 20%. But a 20% tax hike is going to be next-to-impossible to pass in an already cash-strapped nation. There's been talk of a new Value-Added Tax (VAT), which is essentially a national sales tax. But whether or not the government raises taxes or creates a new VAT, it's unlikely they'll be able to fish another $500 billion out of the ole' tax pond.

The U.S. Treasury holds about $134 billion in foreign currency reserves and 287 million ounces of gold, worth $287 billion at $1,000 an ounce. So even if the country sold off all of its foreign currency and gold reserves, it still wouldn't be able to loan the FDIC $500 billion. Besides, selling off the national currency and/or gold reserves to cover banking losses would be a troubling signal to American investors, to say the least.

The fastest and easiest way for the government to raise the $500 billion to loan the FDIC would be to simply create new money or borrow by selling U.S. Treasury Bonds — or a combination of the two, which I think is much more likely.

And that's exactly when we start to make money. . .

2 Easy Ways to Make Money as the Government Creates It

Investment Idea #1: Short U.S. Treasuries

The U.S. Treasury Department already sells about $4 trillion in U.S. debt bonds each year to help finance the country. So an increase of $500 billion would boost the supply of new U.S. debt by 12.5%. As a result of this supply increase, Treasury yields will need to increase, driving prices down. And the most direct way to profit from this scenario is, of course, to simply short U.S. Treasuries.

There are lots of ways to short U.S. Treasuries. And it's a lot easier than you might think. You can short U.S. Treasuries directly, by selling the actual securities short. Or you can short Treasury futures contracts — or sell calls (or buy puts) on Treasury futures contracts.

But the easiest way for most investors to short U.S. Treasuries is with ETFs and mutual funds. At last count, there were about 80 U.S. Treasury ETFs on the market, including products from PowerShares, iShares, Proshares, SPDR Barclays, and Market Vectors.

Investment Idea #2: Buy Gold

The creation of new money means inflation. Whether or not gold is a hedge against inflation has been recently disputed among analysts.

Critics often point to the fact that inflation has outpaced gold's performance since 1980. Gold prices experienced a 21-year bear market between 1980 and 2001. Average annual gold prices fell 56% from $613 an ounce to $271 an ounce.

Since that time, of course, average annual gold prices have risen. For 2009, gold has averaged $933 an ounce — a 55% increase since 1980. Meanwhile, inflation has increased 162% over the same period.

So, yes, inflation has beaten the performance of gold prices between 1980 and today. But there's one thing those who are critical of gold as an inflation hedge don't mention. . .

Gold prices have outperformed U.S. inflation every other year besides 1980 over the past two centuries.

If you compare gold's price performance to inflation between 1970 and today, you get a completely different picture. Inflation since 1970 has increased 456%. Meanwhile, the price of gold has increased 2,564% — beating inflation by 5.6 times.

So gold prices do not outperform inflation 100% of the time. But in the past 200 years, gains in gold prices beat inflation 99.5% of the time. And that's a track record that I'm sticking with.

Conclusion

To avoid DIF insolvency in the short-term, the FDIC will require some insured institutions to prepay their estimated quarterly insurance premiums for the fourth quarter of 2009 and for the next three years. The agency estimates that the total prepaid premiums collected will net approximately $45 billion. But that won't last long. . .

Preliminary estimates suggest that the 50 banks that fail during the third quarter of 2009 will ultimately cost the DIF over $15 billion. If quarterly bank failures continue to cost the DIF at a constant rate, the insurance fund will be completely dried out again in less than nine months.

After the FDIC burns through the $45 billion collected from the prepaid program, they'll have to go knocking on the doors of the U.S. Treasury. And that's exactly when their actions will result either in your benefit or burden.

Before the FDIC schedules their next sit-down with the suits in Washington, I urge you to establish exposure to both gold and to short U.S. Treasury positions.

The number of U.S. banks to fail this year will most likely hit 100, as soon as next week. This will probably be a big story in the mainstream financial media. And I expect to see a nice little extra bump in gold prices as a result.

Good Investing,

Luke Burgess
Editor, Gold World
Investment Director, Hard Money Millionaire

P.S. Some consider physical silver to be the best hedge against inflation, thanks to its ability to outperform gold by a rate of 6-to-1. But investing in silver stocks is even more profitable. Silver Standard Resources (NASDAQ: SSRI), for example, paid annual gains of 852% for nine straight years. I'll give you the whole story in my new report — plus tell you about another silver stock that's ready to return 450% in the next 18-24 months. Click here to read the report right now.

Banks With 20% Unpaid Loans at 18-Year High

The number of lenders in the United States with 20% of their loans more than 90 days overdue hit an 18-year high this week.

According to new data from the Federal Deposit Insurance Corp., there are 26 firms with more than a fifth of their loans 90 days overdue or not accruing interest as of June 30. Three reported almost half of their loans weren't being paid.

Firms range in size from Frontier Bank in Everett in Washington, with $3.98 billion in assets, to Gordon Bank in Gordon in Georgia, with $35 million in assets. Six of the banks are in Florida and five in Illinois.

These banks are among the most vulnerable of a larger group of lenders whose failures the FDIC said could cost $100 billion by 2013.

A total of 95 banks have failed so far this year at the fastest pace in almost two decades. These failures have drawn the balance of FDIC's deposit insurance fund to $0. In a frantic effort to raise funds, the agency proposed last week that financial firms prepay three years of premiums, which would add $45 billion of reserves.

The cost of this year's failures to the FDIC equals 25% of the banks' assets, according to agency data. Applying the same ratio to the $14.1 billion of assets held by the 26 lenders with 20% of their loans more than 90 days overdue means the FDIC could face additional losses of $3.5 billion.

In total, the FDIC counts 416 firms on its confidential list of "problem" lenders at mid-year, signaling that more bank failures and losses going forward.

Good Investing,

Luke Burgess
Editor, Gold World
Investment Director, Hard Money Millionaire

Falling Gold Production

It's been a disaster that's left investors with virtually nowhere to run.

The global financial meltdown has rattled cages in every investment market. Even gold, traditionally viewed as a crisis-proof hedge, was not able to escape the fallout of the global finance industry's orgy of irresponsibly managed risk.

But as it turns out, the global economic crisis may actually help boost gold prices in the end by stifling new production. Here's what I mean. . .

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Aurum Delirium

In early 2008, a sudden drop in consumer spending associated with the global recession caused gold demand for jewelry and industry to contract. These sectors are important to gold's supply/demand fundamentals, as they account for about 80% of total world gold demand.

Declining demand for jewelry and industry stalled a seven-year gold bull market in March 2008 — just as prices topped $1,000 an ounce for the first time. Subsequently, gold prices were pushed as far back as $700 an ounce seven months later.

But the gold market has since changed.

Falling demand from the jewelry and industrial sectors has been buoyed by a booming increase in gold investment demand.

Last quarter, overall gold demand for investment increased 46%, while investments in gold ETFs and similar products increased a stunning 1,315%, as investors sought shelter from a declining U.S. dollar.

Mounting investment demand bolstered gold prices over the summer. Last month, gold set a new record high for the average monthly price of $996.59 an ounce. That's about 3% higher than the previous record set in March 2008.

Investment demand is expected to continue to increase again by as much as 60% this year. And while this growing demand will continue to be met in part with recycled material and official sector sales, the bulk of the gold will have to come from mine production, or producer de-hedging. But there's a problem. . .

Gold miners are producing less and less gold every year.

In fact, total world gold production has steadily decreased about 7% since 2003. Take a look:

And the outlook for new gold production is also declining.

The End of the Exploration Boom?

Between 2002 and 2007, exploration budgets of small-cap gold miners — the most active explorers — increased by an average of about 55%. But in 2008, exploration budgets of junior gold companies were quickly slashed as tumbling prices virtually erased access to new capital.

Preliminary estimates indicate that marketwide exploration budgets for expenditures related to precious and base metals, diamonds, uranium, and some industrial minerals will plummet again this year by about 40%.

Junior mining companies are expected to account for the largest share of the overall decline — although most mid- and large-cap players have made deep cuts of their own in their 2009 exploration plans.

The overall cuts in exploration budgets will help to continue the trend of declining total world gold production. New gold projects must be explored, tested, and analyzed with great detail before any company can claim valid resources or reserves, which are very important tools in securing capital to develop a project into a producing mine.

Randgold Resources Ltd. (NASDAQ: GOLD) is one such company that says it will curb exploration spending, even though gold has risen to over $1,000 an ounce.

Rangold Resources CEO Mark Bristow said that the company was "done with acquisitions for the time being" at the Denver Gold Forum two weeks ago.

Bristow continued, "Exploration is something you shouldn't use like an accelerator, you should not have to step on it when the gold price is up, and take your foot off the accelerator when the gold price is down . . . We do not manipulate our exploration budget according to the market sentiment. We change our exploration budget according to the opportunity and qualities of our exploration portfolios."

Volatility in the gold market and general market and economic uncertainty in the short- to mid-term make it very difficult to accurately forecast how exploration budgets will be affected going forward.

But we can be certain that marketwide exploration budget cuts will result in lower total world gold production. And in the midst of what might become the greatest gold rush of all-time, I expect falling mine supplies to help significantly boost gold prices in the future.

Good Investing,

Luke Burgess
Editor, Gold World
Investment Director, Hard Money Millionaire

P.S. While gold's still the talk of the town. . . silver could be even better. In fact, I just finished a new report on one silver stock that increased an average of 852% every year for nine straight years! You can learn all about it. . . as well as another silver stock that could be poised for similar gains. You don't want to miss out on this one. Check it all out right here.

World Gold Panic

With gold trading just under $1,000 and the economy still in flux, it's never been more important to know what's happening in the precious metals markets. In fact, more and more readers are asking us for more gold editorial. That's one of the reasons we've decided to bring Gold World — one of our fastest-growing publications — directly to Wealth Daily and you. Each Friday, Gold World editors Luke Burgess and Greg McCoach will publish their unique gold and precious metals insights right here in this letter. I hope you enjoy it.

Profitably yours,
Brian Hicks
Publisher, Wealth Daily

——————————————————————-

Gold is looking to wrap up September with record monthly prices.

The yellow metal has traded over $1,000 an ounce in 12 of the 18 trading days of the month so far. And with only three business days left in September next week, the average monthly price for gold is currently $998 an ounce. This compares to March 2008, when gold prices topped the $1,000 level for the first time in history and averaged $968 for the month.

A new average monthly record is extremely bullish for gold prices right now. It is a sign that the third and final investment mania stage of the gold bull market is in bloom — that's when gold prices skyrocket.

And while no one knows exactly when the big breakout in gold prices will be, it sure feels like that moment's getting much closer.

The U.S. dollar is staring at deep trouble and has a real chance of ending up on the heap of failed fiat currencies. The inverse relationship between gold and the dollar is about to become more pronounced over the course of the next 12 months.

This alone could run gold prices to a new record high in the $1,200 to $1,500 range, providing us with an exceptional opportunity to profit and make spectacular gains.

The truth is, gold is going to go much higher — whether Wall Street gets it or not. Gold bull and contrarian author Richard Russell made some interesting observations in his Dow Theory Letters, published in September. Richard wrote:

Somewhere ahead I expect to see a worldwide panic-scramble for gold as it dawns on the world population that they have been hoodwinked by the central banks' creation of so-called paper wealth.

I have never seen a bull market of this size end without a highly-speculative third phase explosion.

You can't create wealth out of a computer — you create wealth from the sweat, intelligence and risk- taking of men. Gold comes from a gold mine. A gold mine represents the expenditure of capital, risk-taking, the sweat of hundreds of men — and courage. A gold mine's product, gold, has represented timeless wealth since Biblical times. No central bank has ever produced a single ounce of gold. Nor has any central bank ever produced a single element of true, sustainable wealth.

In their heart of hearts, men know this. Which is why, in experiment after experiment with fiat money, gold has always turned out to be 'the last man standing'.

Politicians can threaten gold with forthcoming central bank sales, they can sell gold in quantity, they can smother gold with short sales, but the primary trend of gold will win out. It will be expressed today, in a month or in 2010. The trick for us is to hold onto our position — don't trade it, don't move in-and- out with it, don't hold so much of it that you get the heebie jeebies every time it dips ten dollars. The primary trend of gold is up. We're riding the bull. The bull will try to shake us off his back. We'll hang on.

In the past few weeks, I have seen several stories in the news that indicate we're about to have a big run in gold prices.

First, I just saw that Barrick Gold (NYSE: ABX), the largest gold company in the world, will be covering their hedged gold positions. Barrick is doing a bought deal public offering to raise money to pay off the hedged positions within a year. The company will raise $3 billion to cover these obligations. It's clear that Barrick made this strategic decision to gain full leverage of rising gold prices.

In other news, Hong Kong has demanded all its gold reserves back from London. The country wants to store its reserves domestically in a new state-of-the-art vault. The Hong Kong Monetary Authority stated that it will also transfer gold reserves stored in other vaults around the world to the depository later this year.

This has massive implications for higher gold prices. If Asian banks start demanding their physical gold, the "paper game" the manipulative crowd has been playing for so long may soon be up in smoke.

Meanwhile, China has put a stop-loss on their derivative losses. That means firms like Goldman Sachs, who knowingly and recklessly sold this derivative garbage, may have to deal with defaults. This could turn out to be a huge development that has a major impact on higher gold prices.

These are just a few of the most recent examples of signs that we're about to see the next leg upwards in gold prices.

At some point, the pressure that has been building in gold for years will explode in dramatic fashion. Unfortunately, however, it's impossible to know exactly when this is going to occur.

I continue to recommend staying the course with physical gold. Buy and hold physical gold bullion bars and coins with the lowest premiums. It's going to be a ride for the record books. Be sure you don't get left behind.

Good Investing,

Luke Burgess
Managing Editor, Gold World
Investment Director, the Hard Money Millionaire

Editor's Note: My colleague Greg McCoach isn't just a gold 'insider.' He's the real deal. And he's recently come up with a play that's already earning readers sizable gains. It's a property he calls "the greatest gold discovery of the last 50 years." Greg's prepared a full report on this developing situation, and how the entire mining industry is waiting for drill results to confirm what's expected to be a homerun play. Click here to read our brand-new findings.

Top Silver Stocks

The greatest silver rush in history has just begun. . .

Global economic and investment uncertainty is rapidly increasing silver's appeal as a precious metal. As a result, silver is quickly becoming the investment of choice for those who recognize its traditional role as a safe haven asset.

While industrial and fabrication demand for silver has recently been impacted by the lower demand for the goods it is used in, an increase in silver investment demand can be expected to continue in the near term.

For investors, this means increasing silver prices and market valuations for the companies that mine the white metal.

Below is a list of five small silver stocks that are expecting to increase silver production this year.

An Urgent National Priority

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Five Small Silver Stocks Increasing Production
September 2009

Great Panther Resources (TSX: GPR)
Share Price: $0.90
Market Cap: $77.5 million

Great Panther is a growing primary silver producer with two operating mines in Mexico. The company steadily increased silver production from the mines from 600,000 ounces in 2006 to 1.2 million ounces last year. Great Panther is forecasting another 25% increase in production to 1.5 million ounces this year; they then expect silver production to continuing growing to 2.8 million ounces in 2010.

Silver Standard Resources (NASDAQ: SSRI)
Share Price: $22.00
Market Cap: $1.5 billion

Silver Standard has 16 geopolitically-diverse projects that range from exploration to production. The company's first major mining operation and flagship Pirquitas mine recently began production. The mine is expected to produce three million ounces of silver in 2009 and to achieve full production of approximately 10 million ounces of silver in 2010.

Fortuna Silver Mines (TSX-V: FVI)
Share Price: $1.50
Market Cap: $137 million

Fortuna Silver is a small production and development company with two main mineral assets: the Caylloma Mine and San Jose Project. At the Caylloma Silver-Lead-Zinc Mine, silver production increased 79% last year to 860,000 ounces. This year, the firm predicts an increase in production — to 1.6 million ounces. Fortuna is still developing the San Jose Silver-Gold Project. The company expects to begin construction of the mine next year and begin silver production in 2011. The San Jose Mine is expected to yield 3.5 million ounces of silver-equivalent annually, bringing Fortuna's total silver production to 5.5 million ounces.

Endeavour Silver (AMEX: EXK)
Share Price: $2.75
Market Cap: $142 million

Endeavour Silver is a rapidly-growing production firm with two high-grade silver-gold mines in Mexico. The company has ramped up silver output seven-fold in its first four years of production to 2.3 million ounces in 2008. This year, Endeavour forecasts another 17% increase to 2.7 million ounces. The company hopes to reach production capacity of 4.5 million ounces in coming years.

First Majestic Silver (TSX: FR)
Share Price: $2.60
Market Cap: $215 million

First Majestic is building a senior silver producing mining company with a focus on Mexico. The company currently owns three producing silver mines that yielded 3.7 million ounces in 2008. Although production won't be as high as the company expected earlier this year, First Majestic is still planning to increase production by 22% to 4.5 million ounces.

Good Investing,

Luke Burgess
Managing Editor, Gold World

P.S. With a gold resource worth 63 times more than its market cap, this junior gold stock is getting ready to pay off big time. This tiny $0.34 stock could make it's first move over $2.00 in short order. The whole story is laid out for you here.