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

US bond market versus Cdn bond market. The US bond market is deeper by a wide margin and there's definitely more ameliority as far as corporate bonds are concerned. His concern would be that if you buy them you are exposed to the US$.

Natural Gas: A lot of supply and very weak demand. Expect it will weaken in the summer and will strengthen into Q4-Q1 but not into the lofty levels that they where in the past.

Crude Oil: Expects it to be higher than at present but not dramatically. You might see another $10. Market is anticipating up ticks in demand but we still have to chew through the floating inventory.

Gold: US$ is the world's currency. Any other currency that was spending like the US was would definitely face deflationary pressure. The world can't figure out a better currency to hold. Long-term trend on the US$ is down but correlation between it and gold is not as significant as it once was.

Gold: No time in history has there ever been the same circumstances that we now have, which could cause gold to shoot up substantially. Currently about $150 an ounce more than what he thinks its fair value. (His FV calculation is based on relative inflation rate of gold compared to the inflation rate of the US$.)

Market: This is a sucker rally. Far more downside ahead. In an over leveraged economy like this debt cannot be repaid and we need to see this shake out and we are years away from this. Bankruptcies and change of ownership is the bottom line. Not prepared to stick his neck out much further than gold and cash.

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

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

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

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

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

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

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

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

Bank Dividends: Feels that these are safe.