InvestMacro Forex News

By MoneyMorning.com.au

Federal Reserve Chairman, Ben Bernanke said this in a recent Bloomberg article:

‘“If you draw the conclusion that I just said that our policies — that our purchases will end in the middle of next year, you’ve drawn the wrong conclusion, because our purchases are tied to what happens in the economy,” he said. “If the economy does not improve along the lines that we expect, we will provide additional support.”‘

The market isn’t listening to what Bernanke says…it’s panicking. Just about everything got hit as a result. Equities, bonds, commodities, precious metals, all were slammed as the US dollar rallied. The Aussie dollar collapsed 2 cents…that’s a massive move in FX land.

The speculators got it wrong. They positioned for a soothing Bernanke statement. But they just got more of the same. That is, if the economy moves into a sustainable expansion, we cut out the asset purchases…if it falters, we’ll ramp them up.

That sounds pretty straightforward, but it led to a massive unwind of leveraged bets in anticipation of the beginning of the end of easy money.

Is it really though? The ‘end’ of QE might just be the thing that ensures it remains a part of the financial lexicon for years to come.

Why?

Well, bond yields are on the rise. The US 10-year bond yield, a benchmark for the global cost of credit, traded around 1.6% at the start of May. Following another sharp sell-off overnight, it’s now at 2.33%, the highest level in over a year.

In general, global market interest rates follow the lead of the US 10-year Treasury bond. So rising rates represent a tightening of monetary conditions in financial markets. Which means the US economy, for years heavily dependent on easy money, will come under pressure soon as higher interest rates begin to bite.

And if the US economy comes under renewed pressure, Bernanke won’t cut QE anytime soon. So no end to QE…long live QE!

But what if the US economy really is recovering? And what if this recovery DOES end QE sometime next year and then interest rates move back to normal in subsequent years?

Years of zero interest rates have robbed the system of real savings. In its place, the level of total debt has ballooned to keep up the façade of healthy and sustainable growth. And in the meantime, the structure (industry, incomes, employment, profits taxes etc) of the economy grows around this ongoing provision of cheap and easy money.

If you try to take it away, the economy will fall in a heap. That shouldn’t be a big deal but we’re talking about the world’s largest economy, and consumer of last resort here. The US’ ongoing propensity to consume more than it produces is made possible by easier and easier money.

As money becomes cheaper, debt levels grow to fund consumption. The whole economic structure of the world economy grew out of this falling US interest rate/rising debt/excess consumption model.

You think we’re going to get out of it easily? You think the Fed can all of a sudden put an end to this multi-decade trend without major problems?

Throw in the world’s second largest economic zone, (Europe) which is in the throes of its own painful structural adjustment…and the world’s second largest economy, China, which is about to experience what it’s like when a credit bubble goes bust, and…well, Houston, we have a problem.

So if QE can’t really end, where to from here?

If confidence in the Fed and Bernanke is receding, then liquidity will soon follow. One of the most beneficial impacts of QE is that it instils confidence. Confidence creates liquidity which creates asset price inflation.

In the Q&A following the press conference, someone asked about sharply rising bond yields over the past few weeks, and how that reconciles with the Fed’s view that it’s the stock of assets it holds on its balance sheet that determines yields.

Bernanke responded ‘we were puzzled by that‘, and then tried to explain it away by citing other factors like potential optimism about the outlook for the economy (optimism not shared by any other asset class, by the way).

When you admit to being puzzled by the effects of the largest monetary experiment in history, which you implemented, it’s a confidence drainer. And with confidence goes liquidity.

Greg Canavan+
Editor, The Daily Reckoning Australia

[Ed Note: To read more of Greg’s in depth macro-economic analysis, click here to subscribe to the free daily e-letter The Daily Reckoning.]

From the Archives…

The Power of Low Interest Rates Coming to the Aussie Market
5-07-2013 – Kris Sayce

S+P 500 Downtrend Looms? Counting Down The Days…
4-07-2013 – Murray Dawes

Here’s Your Six-Point Stock Buying Checklist
3-07-2013 – Kris Sayce

Are the Credit Rating Agencies at it Again?
2-07-2013 – Kris Sayce

Why This Could be Another Great Year for Australian Stocks…
1-07-2013 – Kris Sayce

AUDUSD’s upward movement from 0.9037 extends to as high as 0.9297. Further rise to test 0.9344 resistance is still possible, as long as this level holds, the rise could be treated as consolidation of the downtrend from 1.0582 (Apr 11 high), another fall towards 0.8500 is still possible after consolidation. On the upside, a break above 0.9344 key resistance will suggest that the downtrend from 1.0582 had completed at 0.9037 already, then the following upward movement could bring price back to 0.9800 zone.

Provided by ForexCycle.com

By www.CentralBankNews.info     Brazil’s central bank raised its benchmark Selic rate by another 50 basis points to 8.50 percent, as expected, to help bring inflation under control.
    It is the third consecutive rate rise by the Central Bank of Brazil, which has now raised rates by a total of 125 basis points this year. Last year the central bank cut rates by 375 basis points as economic growth fell.
    The decision by the central bank’s monetary committee, known as Copom, was unanimous and the decision was not accompanied by a bias toward its next move.
    “The Committee considers that this decision will contribute to bringing inflation toward a decline and ensure that this trend will continue next year,”the central bank said in a brief statement.
    Brazil’s inflation rate rose to 6.7 percent in June from 6.5 percent, above the central bank’s target of 4.5 percent, plus/minus two percentage points.
    The central bank has forecast inflation of 5.7 percent this year and 5.3 percent in 2014.
    Brazil’s Gross Domestic Product rose by only 0.6 percent in the first quarter from the fourth quarter for annual growth of 1.9 percent, up from 1.4 percent in the previous quarter.

    www.CentralBankNews.info
   

Article by Investazor.com

Chart: GOLD, H4

As it looks now, in our opinion, the answer would be not yet. The FOMC meeting minutes showed that there are more members that agree with the tapering of the Quantitative Easing program, but it wasn’t specified the date for the start of the tapering. The speculated date was September this year, but it seems that the Federal Reserve has to see whether the unemployment rate is heading to 7%.

After the Minutes the dollar lost some ground, gold rallied to 1265$ per ounce but didn’t stay too much there. In less than an hour Ben Bernanke will have a speech and the investors will keep their eyes and ears focused on what the Fed’s chairman is going to say.

From the technical point of view, the price of gold encounter a good resistance area at 1268.00 level, that was tested 2 more times in the past 3 weeks, and could not pas. The bounce off 1265$ might mean that the pressure is still on the downside, even though it can be spotted an Ascending Triangle price pattern on the chart.

To wrap it up, during the speech of Bernanke we will look at the support 1243.30 and resistance 12568.45 key levels. Under the support the targets will be 1220.00, 1200.00 and 1180.00, while above resistance the price targets would be 1302.45 and 1350.00.

The post Is Gold going to Rally Back to 1300$ per Ounce? appeared first on investazor.com.

By www.CentralBankNews.info     Tajikistan’s central bank cut its refinancing rate by 40 basis points to 6.1 percent in light of a decline in inflationary pressures and the impact of external factors.
    The National Bank of Tajikistan, which last cut its rate by 30 basis points in August last year, also said in a statement from July 9 that the rate cut should make implementation of monetary policy more effective and lead to a decline in average interest rates on loans in the banking system.
    Tajikistan’s inflation rate eased to 5.6 percent in May from 5.9 percent in April while its Gross Domestic Product expanded by an annual 7.3 percent in the first quarter of 2013, down from a pace of 7.5 percent in the previous quarter.

    www.CentralBankNews.info

By www.CentralBankNews.info Here’s today’s Central Bank News’ link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don’t miss any important news.

By The Sizemore Letter

3M ($MMM) is a homely company.  There is nothing sexy about scotch tape or Post-It notes.  Or Ace bandages or Scotch Bright for that matter.  We’re talking about adhesives and cleaning supplies, for crying out loud.  No matter how hard you try, there is no way to make these items anything other than boring.

And as an investor, I’m ok with that.

Men are notorious for letting a beautiful woman impair their judgment.  But the same is true of beautiful stocks.  Think of recent “attractive” stocks that have led many an investor to ruin: Apple ($AAPL) and Facebook ($FB) are two that come to mind.  Like a glamorous date, it’s nice to be seen in public with an “it” stock.  But chances are good it won’t be good for your wallet or for your long-term peace of mind.

This is not a stock you will ever brag about owning at a cocktail party.  But frankly, you should.  The stock has quietly pushed to new all-time highs, and it is beating the S&P 500 by a wide margin year to date.

But while 3M’s stock price performance has been spectacular, I’m more interested in the business and its consistency.   3M does quite a bit more than tape and sticky notes.  They make everything from the reflective films that cover traffic signs to insulation for airplanes.  But all of their products have a couple things in common:

1. They perform their functions behind the scenes and are hardly ever noticed by anyone except the user. (Last time you were on your friend’s boat at the lake, did you ever stop to wonder what brand of sealant they used?  Yeah, me neither.)
2. They are the sorts of products that tend to get used up and need to be frequently replaced.
3. When you need them, you need them.  Whether it’s an ankle brace or flame-retardant film, demand for 3M’s products is generally pretty inflexible.

Like all companies, 3M has some amount of sensitivity to the business cycle. If a company is shedding headcount in a bad economy, it’s probably not stocking up on office supplies.  But 3M’s revenues are remarkably consistent, and other than a brief blip in 2009, the company sailed through the crisis and its aftermath with barely a scratch.

3M’s consistency is also shown in its dividend payments.  The company has continuously paid a dividend for 97 years, and it has increased its dividend every year since 1959.  Its current dividend yield of 2.3% may not be extraordinary, but the dividend has doubled since 2002.  Had you bought 3M in 2002, you’d be enjoying a yield on your original investment of about 5%.  Again, not extraordinary, but not half bad either.

3M will never double your money in a year, and you’re certainly not going to get rich quick owning it.  But it’s one of those stable, consistent holdings that will quietly chug along, throwing off dividends, and never give you trouble.

If bought at a reasonable price, it’s also a stock that would be difficult to lose money owning over any reasonable time horizon.  And at 15 times expected earnings, I would say its pricing is anything if not reasonable.

Disclosures: Sizemore Capital has no positions in any stocks mentioned.

By WallStreetDaily.com

Family Dollar Stores (FDO) is seeing profits dwindle.

The discount chain’s earnings shrank in the third quarter, but they beat Wall Street’s forecasts – topping $120 million.

Overall sales did increase 9%. But looking further into the company’s financials reveals that revenue of discretionary items took a hit.

While sales of consumables (such as food and health goods) grew nearly 15%, clothing sales dropped almost 9%.

According to the company’s Chief Executive, Howard Levine, Family Dollar is struggling to get shoppers to buy things that they don’t deem necessary – something that’s bound to cut into its profitability.

“Our discretionary sales remained challenged as our customers have been forced to make spending choices between basic needs and wants. Consistent with market trends, we expect that our customers will continue to face financial headwinds,” says Levine.

Or could it be that consumers are becoming more confident – and, as a result, are moving away from discount stores in general? After all, first quarter underlying retail revenue at Burberry jumped 18%, as the British luxury brand made more than $500 million and maintained its full-year guidance.

Either way, Family Dollar expects slower sales growth this quarter at stores open at least a year, and it narrowed its profit forecast for the full year.

The stock, which had been an investor favorite during the Great Recession, has fallen roughly 8% in the last 12 months. But beware. As BMO Capital Markets analyst Wayne Hood says, “We would not use the weakness in Family Dollar as a buying opportunity, as confidence in our earnings-per-share estimates is lower.”

There is something that should put investors at ease, however. Inventory at its stores shrank a bit. Wall Street was worried that the chain had too much merchandise on hand, which could push it to further cut prices.

The post Do Lower Sales At Family Dollar Point to Tougher Times Ahead? appeared first on  | Wall Street Daily.

Article By WallStreetDaily.com

Original Article: Do Lower Sales At Family Dollar Point to Tougher Times Ahead?

By www.CentralBankNews.info    Kenya’s central bank held its Central Bank Rate steady at 8.50 percent, saying last year’s rate cuts still need time to work their way through the economy and first quarter growth was strong while inflation remains within the government’s target and the exchange rate has remained stable.
    But the Central Bank of Kenya (CBK), which cut its rate by 700 basis points in 2012, said the high current account deficit and instability in the Middle East could threaten price stability by affecting the price of oil and tea exports, with implications from Kenya’s balance of payments and inflation.
    Kenya’s Gross Domestic Product expanded by 0.5 percent in the first quarter from the previous quarter for annual growth of 5.2 percent, helped by a 8.3 percent rise in agricultural output.
    The inflation rate rose slightly to 4.91 percent in June from 4.05 percent in May, within the government’s medium-term target of 5.0 percent, plus/minus 2.5 percentage points, and the CBK said there were no suggestions of “immediate underlying inflation pressure” and the decline in oil prices and non-inflationary credit growth supported the short-term outlook for inflation.

    www.CentralBankNews.info
   

Source: Zig Lambo of The Energy Report (7/9/13)

http://www.theenergyreport.com/pub/na/15429

The “Bernanke Put,” or promises of quantitative easing, has become the standard government response to economic uncertainty. But while the powers that be insist everything’s fine, Sprott Resource Corp. Founder Kevin Bambrough and COO Paul Dimitriadis see financial deterioration around the globe. Only one thing is for certain: Taking the contrarian view provides the best opportunities to buy low and sell high. In this interview with The Energy Report, they explain why they expect energy assets to perform better in the long haul, cluing us in on a few names they are considering for big returns.

The Energy Report: How would you characterize the current economic background? Are things really looking better in your view?

Kevin Bambrough: Markets typically peak when fear is low and complacency is high, and bottom when fear is rampant and people are extremely worried. The U.S. markets in general have performed quite well this year, but the U.S. bond markets have started to see a lot of hiccups. The European debt market still remains on very shaky ground. The Chinese debt market is now showing major problems in the banking system and the Japanese are still trying to find a solution to their debt woes with increased monetization, and have started an aggressive currency devaluation exercise. Debt levels for governments and individuals around the world are still at unsustainably high levels relative to GDP or individual incomes.

Bankers and governments continually lie to the public and pretend that things are better than they are. If they told the truth, no one would own a bond or keep money idle in cash. These days, the government guarantees and what people have referred to as a “Bernanke put” are the only reason rates are low and the bond market doesn’t crash. The Federal Reserve must talk tough from time to time and pretend it’s going to curtail its quantitative easing. The fact is it can’t.

Curtailing quantitative easing would force interest rates back up significantly, increase the government debt burden and raise the deficit. At the same time, it would crush the housing market and over-levered consumers already struggling to pay off their mortgages. The increased debt burden would bankrupt governments, individuals and the entire financial system.

TER: So realistically we’re stuck with low interest rates for the foreseeable future?

Paul Dimitriadis: There’s no way that rates, in my view, are going to rise anytime soon. The Federal Reserve knows it can’t allow them to rise materially. Americans may have an egocentric view that everything is fine because the S&P 500 is at a new high. Globally, the situation is not that great. The emerging markets have performed terribly this year and we’re starting to see unrest in a number of places around the world as social situations deteriorate rapidly, mainly in Brazil, Turkey, Egypt and such. All is certainly not well and I don’t expect the situation to get better anytime soon.

TER: When will everybody realize this is all a big charade?

KB: I often try to predict the catalyst that breaks the bond bubble. Government bonds are primarily held by mega funds, and sovereign banks. The banks around the world do it because they can lever up and play the carry-trade game. Most governments do it to keep their currencies low and support their export economies.

If interest rates rose, banks would be bankrupt, so they have no interest in seeding their demise. Governments try to pretend that deficits are going to eventually be brought under control, and continually make statements that there is no inflation, so they can prevent their currencies and bond markets from collapsing. Whenever economies slow as a result of higher interest rates, consumer confidence drops and interest rate-sensitive sectors like housing slow. Central bankers, or shall we say central planners, will become more aggressive with quantitative easing and bring the rates down to try to kick-start the economy again. That’s the delicate game they have to continue playing.

I expect this will continue for many years until the systemic U.S. trade deficit stops being funded by foreigners. It could be a few months from now or a few years, but eventually foreigners will come to understand the stupidity of buying U.S. government bonds to try to help their economies. I believe this is the Achilles heel of the system, and the U.S. dollar reserve-based global financial system’s days are numbered. The U.S. dollar will lose its reserve currency status when the Chinese, Japanese, Koreans and other major purchasers of U.S. bonds decide it’s not in their best interest to continue doing so. For the longest time, China and other countries have viewed purchasing U.S. bonds as an effective way to keep their currencies relatively stable. But at some point they’re going to give up on the foolishness of supporting the U.S. trade deficit and focus more on their domestic economy, rather than on competitive devaluation to support exports. The fact is, they collectively have been giving the U.S. over $500 billion worth of goods and services per year for over a decade. They will recoup little from these “loans” in the future. When they try to cash in their bond holdings, they will find there is no buyer other than the Federal Reserve, which will deliver them freshly printed currency that will only be accepted in the U.S.A. because no foreigner will want to accumulate more. When the trillions sent overseas come home to the U.S., inflation will explode and trade restrictions will rise.

TER: So how do we convert this into an investment strategy from a contrarian viewpoint?

KB: It is difficult to try to determine the best asset class to own. You also have to pick a time horizon and focus on what the world is going to look like 10–20 years from now and evaluate the asset classes that could give the best rate of return. Ultimately, we always come back to what we believe—that food, energy and other base and precious metals will do better in the long run. The key to investing in cyclical resource sectors is buying when they’re depressed. Now we’ve got a situation where they’re extremely depressed in many sectors.

TER: What are you doing at Sprott to deal with the current market environment for energy-related investments? Has your approach changed since your last interview?

KB: Precious metal equity values have come down substantially this year and we’re starting to see some very good value and opportunities in that sector. As for base metals, we still think there’s more potential downside.

We’re quite optimistic on developments in the natural gas market. Last year’s injection season marked the smallest inventory increase in the modern history of the natural gas market. The withdrawal season was also the third largest on record, and that was with relatively average winter weather. At around $4 per thousand cubic feet ($4/Mcf), demand is going to continue to grow faster than supply and that price will eventually be pushed higher. That will create value for companies like Long Run Exploration Ltd. (LRE:TSX), which we own, and which has significant natural gas exposure as well as stable profitability from its oil production.

PD: Purely gas-focused drilling activity is almost down to zero. We need to see higher prices to generate drilling demand from producers, which I think we will begin to see this year.

KB: Another sector that’s been quite depressed is coal, mostly as a result of low natural gas prices. A lot of mines have had to close or go through a restructuring. It looks like we’re getting closer to a historic bottom in coal equity valuations and so we’re looking around for opportunities to get some long-term exposure to that sector.

PD: As an example, Arch Coal Inc. (ACI:NYSE) is down from $28 to below $4 in the past two years. It was up over $70 around five years ago before the financial crisis.

KB: During a boom in any sector, a lot of the big companies are tempted to take on debt and continue acquisitions. Arch Coal still has a significant amount of debt. There are other coal companies that will certainly survive. We may not be incentivized to bring a new coal mine into production today, but there’sgreat incentive for us to buy coal mines that have long life reserves and wait.

TER: You mentioned Long Run, which we talked about during your last interview. Where do you think that one’s going?

PD: The company merged last fall (Guide Exploration Ltd. and WestFire Energy Ltd. combined to form Long Run) and recently completed its first couple of quarters as a new entity. Production is going well and cash flow is meeting expectations. It’s focusing on oil production exclusively this year due to the oil and gas pricing environment. There’s a lot of room to pay a dividend later this year or next perhaps, which both we and the market would welcome seeing. Long Run’s gas reserves are significant, so there is huge optionality on the gas side. Overall, it’s a solid story and it’s discounted to its peers, probably because it’s a new name and there’s currently a lack of fund flows into the general Canadian energy market.

Looking at the various metrics relative to its peer group, you can safely conclude that it’s trading at a 30–40% discount. If the sector gets revalued because money starts flying back into it, things can go higher from there. The optionality in the gas market could take the stock even higher.

TER: Sprott Resource Corp. completed that nice deal on its Waseca Energy Inc. holdings last year when it sold out to Twin Butte Energy after four years.

KB: We were very pleased with the performance of that company. Again, we stuck with our strategy of investing in a sector while it was depressed. We bought into heavy oil when it was no bid in Canada, formed the company and ultimately were able to monetize it when margins were significant and the company had grown from zero production into a +4,000 barrels per day company. That delivered another big win for our shareholders with a nearly $70 million profit.

PD: Along that same vein, we’ve invested in a drilling company based out of Houston, Texas called Independence Contract Drilling just over a year ago. It drills shale formations and, again, we invested in the sector when it was generally out of favor, and built the company up from book value to probably having above 12 rigs in production by the end of next year. I expect that at that time we will be able to capitalize on its strong cash flow and look for some sort of monetization, whether it’s an IPO or sale of the business.

TER: Another area we haven’t talked about yet is uranium. I know you’re into Virginia Energy Resources Inc. (VUI:TSX.V; VEGYF:OTCQX). What’s the update on that name?

KB: The uranium market is similar to coal. Natural gas has weakened valuations and demand in all energy sectors. Fukushima also really upset the short-term demand and created a very negative sentiment in the nuclear space. But demand for physical uranium for nuclear power production is going to grow over the next decade or two and mine supply will fall short with $40 per pound ($40/lb) uranium. When we look at overall planned, permitted nuclear facility growth and as well as extensions of the existing facilities, we see robust demand and we see very little supply coming on the market.

PD: We will see large supply shortfalls emerging in the next few years. The market’s going to have to catch up on funding mines, because funding has been scarce over the last few years. We believe a uranium price north of $75/lb is going to be required to balance supply. Although the Commonwealth of Virginia has not yet passed legislation that would provide a framework for permitting uranium mining projects, we are hopeful it will in the near future. At that point the company would be greatly positively revalued.

KB: Regardless of the uranium market, Virginia Energy Resources is one of the largest undeveloped uranium projects in the United States, and major producers will likely try to take out Virginia Energy Resources when the permitting framework is in place.

TER: Where you see opportunities in the fertilizer/potash markets?

PD: Potash prices have softened a bit lately. We’ve invested in one potash company that produces SOP potash, called Potash Ridge Corp. (PRK:TSX; POTRF:OTCQX). It is developing a project in Utah, we think has very favorable economics based on the preliminary economic assessment. A prefeasibility study is expected in the next couple of months, which should give greater clarity on that project. The project’s key benefits are the byproducts in the deposit, which lower the production cost dramatically. It should be one of the lowest-cost producers of SOP potash, which is a growing market globally. We’re optimistic that someone is going to have an interest in an offtake agreement and perhaps assist with the financing in the next 12–18 months.

The phosphate market has been more stable than the potash side. In the U.S., there is some risk for domestic producers due to potential shortfalls in their mines over the coming year. The phosphate market could be in very good shape over the next five years as those companies seek to replace their production. We’re quite optimistic about one of our investments in a company called Stonegate Agricom Ltd. (ST:TSX, SNRCF:OTCPK), which is developing its potash project in Idaho. That should come into production in late 2014 or 2015.

TER: Do you have any final thoughts you’d like to leave with us?

PD: The resource sector, generally, is probably the most out-of-favor it has been in a long, long time. If you’re ever going to put money to work in this sector, right around now would probably be an opportune time to do so.

KB: This is the kind of market that really allows those who are willing to step up and invest to make a lot of money.

TER: Thank you gentlemen, for your updates and insights today.

Kevin Bambrough founded Sprott Resource Corp. in September 2007. He is a seasoned financial executive with more than a decade of investment industry experience and is a recognized leader in the commodity investing space. Since 2009, he also has served as president of Sprott Inc., one of Canada’s leading asset managers, which has more than $8 billion in assets under management. Between 2003 and 2009, he held a number of positions with Sprott Asset Management, including market strategist, a role in which he devoted a significant portion of his time to examining global economic activity, geopolitics and commodity markets in order to identify new trends and investment opportunities for Sprott Asset Management’s team of portfolio managers.

Paul Dimitriadis is Chief Operating Officer for Sprott Consulting and Sprott Resource Corp., where he evaluates and structures transactions, coordinates and conducts due diligence and is involved in the oversight of subsidiaries and managed companies. He serves on the board of directors of two of Sprott Resource Corp.’s subsidiaries, Stonegate Agricom Ltd. and Long Run Exploration Ltd. Prior to joining the Sprott group of companies, he practiced law at Blake, Cassels & Graydon LLP. Dimitriadis holds a Bachelor of Laws degree from the University of British Columbia and a Bachelor of Arts degree from Concordia University.

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DISCLOSURE:

1) Zig Lambo conducted this interview for The Energy Report and provides services to The Energy Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of The Energy Report: Virginia Energy Resources Inc. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.

3) Kevin Bambrough: I or my family own shares of the following companies mentioned in this interview: Sprott Resource Corp. I personally am or my family is paid by the following companies mentioned in this interview: Sprott Resource Corp. My company has a financial relationship with the following companies mentioned in this interview: Sprott Resource Corp. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

4) Paul Dimitriadis: I or my family own shares of the following companies mentioned in this interview: Sprott Resource Corp. I personally am or my family is paid by the following companies mentioned in this interview: Sprott Resource Corp. My company has a financial relationship with the following companies mentioned in this interview: Sprott Resource Corp. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

5) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent.

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