This article is not intended to be published on Seeking Alpha.

America was a great nation. The concept of America is great. America can be great. America is not currently great. America is no longer the world’s richest nation, nor the most successful economy; It is the poorest country and it’s economy is the biggest liar, masquerading debt as capital. America has been living a lie, forced to take on increasing amounts of debt (selling future) to hide her true problems. This is unsustainable.

What, for most Americans, is the difference between America and many other nations? The Middle Class and its standard of living. What continues to enable the Middle Class to exist? Their access to debt - selling their future to others (a modern form of slavery). PERIOD. Most Americans are but one paycheck away from being in serious trouble. Many Americans are worth LESS than most citizens in other nations that they look down upon. America is not rich… America is now the poorest nation on Earth. The access to cheap debt is drying up and the house of cards is falling down. Capitalism without capital is not capitalism.

Capitalism can’t be solely funded on debt, that is slavery (owing your future to someone else!). America doesn’t practise true capitalism. That is the problem we are witnessing. What is most people’s (including politicians) answer? Bailouts and other socialistic policies. Socialism got us into this mess, but we pretended it was capitalism and blamed capitalism while looking toward socialism for answers. That is a joke. Capitalism was the answer - it was what brought wealth to America to begin with. We changed the system and now look at where we stand.

The system was changed so that others’ (the private banks that control the Federal Reserve and the politicians that control government) would control the money supply and our wealth. When others control the money they can control the people and funnel the wealth to themselves with increased taxation. This keeps the common man down. Taxation comes in many forms. You have taxes on earnings, taxes on purchases, taxes on payroll, property taxes, hidden taxes built into products (oil - the main energy source for this economy), taxes on investments, capital gains, and death taxes. Now they are talking about taxes on air. They tax money that has already been taxed. This level of taxation only further keeps us enslaved and asking for help from the government - The very same government that took our money and wealth away to begin with. Inflation is another tax that is largely hidden. This all allows the government and those that control it to have control over us! This was not always the case. At one time we had a real currency. Wealth, was at one time, real! They couldn’t track it very well, nor tax it efficiently. They changed the system, the currency, and the rules. After they created a fiat currency they could completely control (they did it over time), they went on to slowly create new taxes (hundreds of taxes now exist). They then slowly increased the taxes. Inflation was largely hidden from us without including the cost of energy, food, or housing. Our wealth was dwindled away to nothing. How else do you explain 4th and 5th generation Americans still not owning anything, especially when they should own some of the wealth that their forefathers earned during their lifetimes? Inflation and taxes ate away my forefathers lifetime earnings - and they did have some wealth and lived very frugally. What is to show for their savings? After inflation and taxes, not a whole lot.  A viable currency should also be a good store of wealth, which fiat currencies are NOT!

I have concluded that those who own the Federal Reserve (it’s not federal!) now also have a huge influence on politicians. They help get them elected with large donations and contacts. We call America a Democracy, but it’s an oligarchy. There are two parties! You get to choose A or B! The big media companies polarize America on smaller issues and help the parties stay in power by not allowing another party to emerge and be competitive. Both parties have been promoting socialist policies. Neither party is much different. Both parties have implemented FREE trade agreements with foreign nations that have not allowed us free access to their markets. Yup, both parties have made it so we must unfairly compete with foreigner’s who play by a different set of rules/laws (while we have our hands tied!). Both parties wanted the bailout! McCain and Obama were both in favour of giving taxpayer money (not yet earned money, further enslaving America’s future with increased debt) to private banks - and only the really big ones - not the local community banks or regular citizens. It is suspicious that the bill gave power over the currency to an external person who could not be audited or investigated. If it was “our” money (we the people), then why was it not done in an open fashion for all to see? But we can’t ever know what happened with that money.

Furthermore, what do you expect politicians to do as the house of cards continues to tumble down? More bailouts - to the large corporations - and yet no help at all for the small guy… In fact, they will tax the small/mid size businesses and the Middle Class to pay for the bailouts. Then, of course, they will give some handouts to the poor to appease them and keep the system from chaos and rebellion. That is what socialism is - it is handing money to the very poorest to stop a rebellion, while putting control of the masses in the hands of the few.

There is a serious flaw with the current system. It’s called debt (and fiat currency). Debt is not capital, currency or wealth. Most Americans have been lied to, told to go out and take a 30 year mortgage on a home - that it is a good investment. As interest rates got lowered, more Americans rushed out to buy homes - and they bid each other up in the process. A home that once cost $80,000 then climbs to $100,000+ in a matter of months, not because of inflation (though that also hurts!), but because people bid the homes up against each other with debt dollars - not even money they have, but tomorrows earnings. The manipulation of interest rates and of the currency have created the big bubbles and busts. Manipulation is not capitalism.

America would be free if she and her citizens were free of debt, taxes and inflation. Debt is the master, the owner - Americans are free to work where they want (as long as they can find or create a job that makes money). But Americans are not free to decide if they want to work. Most Americans must. They are not free. They are wage slaves. Someone else owns their future. They are slaves to the system. Even a portion of the money they earn is taken. When they die another portion of their life’s work is taken. Inflation eats the rest. This keeps our future generations down.

The system is designed wrong. Using debt as a currency is an evil of sorts. While the banks get bailed out (those that issue debt to others) - The people in debt see no bailout. Truth is, neither should have to be bailed out. The socialist system got us here. A system of fiat currency and the Federal Reserve (that is not federally owned - but a private corporation!) that controls our debt and what interest rates we must pay. Socialistic policies only delay the inevitable with bailouts and spreading the wealth around artificially and unsustainably. For how long will they delay the inevitable? We don’t know. Fiat currencies have always failed in history - and this one is set to fail as well. They won’t let it fail without a fight - but the longer they delay it, the worse the consequences will be. Remember, their solution is socialism and we know how well that has worked for others and ourselves.

After nearly a century with fiat currency and the Federal Reserve, America’s wealth has diminished to nothing. A century of hardworking individuals and what is left to show for it all? We still have no money and owe more than ever to others. The fiat currency and the Federal Reserve, combined with socialism promoted by both political parties has bankrupted America with an illusion of wealth and prosperity that promoted a level of unsustainable consumerism and a culture that was eager to take on more debt (remember, our culture used to despise debt!).

A rich country doesn’t have to take on debt. A rich country’s citizens don’t have to take on debt. A rich people don’t owe their future to others. America is not free. America, indebted to others. America, The Broke.

Ask yourself. How did America go from the most successful, prosperous and rich country on Earth - to this? America abandoned the system which brought us our initial success.

I recently read a book titled, Alcohol Can Be a Gas! It is an excellent 600 page book. A lot of time and research went into it. The book teaches almost everything you’d need to know to produce ethanol. I highly suggest you read the book if you’re at all interested in learning more about the ethanol industry, especially if you’re interested in investing in the industry. It might teach you something that could help you decide which ethanol companies are on the right track. I for one, won’t invest in producers using corn as their primary feedstock. There are many other efficient crops that make economical sense and don’t depend on government subsidies.

There are a lot of myths circulating about ethanol, so I thought I’d briefly show how the book debunks some of them.

Myth: It takes more energy to produce alcohol than it’s worth.

This myth is false, perpetuated by people that believe corn is the only crop that can create ethanol. Corn isn’t a very efficient crop, but luckily there are crops out there that are MANY times more efficient than corn. Brazil uses sugarcane to produce energy in a very efficient manner and is one of the most energy self-sustainable countries on the planet. The biomass parts of the plant that can’t be turned into ethanol are used to help distillation. It’s a very efficient method. There are other crops that are even more efficient than sugarcane, as alcohol can be made from anything with sugar or starch. There are also many companies and researchers working on creating cellulosic ethanol which will allow an even greater variety of plants to create ethanol. Regardless, some ethanol crops can be made very efficiently and produce MORE energy than consumed. It all depends on what crop, how it’s being grown, etc.

The people that cite this myth also often discount, or completely forget, the byproducts that result from manufacturing ethanol. Even corn ethanol results in a byproduct called DDGS. This ‘dried distillers grains with soluble’ still contain all of the protein and fat, and much of the cellulose, vitamins and minerals. The only thing that has been removed is the starch. This byproduct can still be used as an animal feed, and has been proven to be better than corn when fed to cattle (quicker cattle growth!). The removal of the starch, which goes through cattle undigested, allows quicker digestion and growth of the animal when DDGS is used.

Myth: Not enough land for food and fuel.

In terms of corn growth, corn only utilized ~8% of arable farmland, about 17% of the prime land, in the US. However, the reason so much corn is grown is to support the cattle industry and now the food industry in general (sugar from corn is now used in many of our soft drinks and other food products). In fact, the reason the US ethanol industry uses corn is because for years, due to government subsidies, farmers have been growing more corn than we know what to do with. Yes, ethanol production in the United States began using corn as an answer for the overproduction. Otherwise, much of the US ethanol would be grown using much more efficient crops and crops that don’t have subsidies.

You can’t forget that the byproduct of producing ethanol still leaves us with DDGS, which can effectively feed many animals. Also, if it were necessary, we could grow fish. Cattle take about ten pounds of feed to produce 1 pound of meat. That isn’t very efficient. We can improve the situation, if you’re truly worried about starving, by switching to fish. Fish only require 1.5 pounds of feed to produce 1 pound of meat. We could also use natural desert plants, on government land, for ethanol purposes, without any additional water or using up valuable farmland - Mesquite! The ocean can also be used to produce marine algae. What I’m trying to say is, many plants can be used on a variety of lands (and even sometimes on the ocean).

Myth: Ethanol dirtier than gasoline.

Ethanol actually burns a lot cleaner than gasoline! Alcohol doesn’t have many of the harmful chemicals that gasoline does. Just go get your emissions checked while you’re running on 100% ethanol… They will assume their machine isn’t working because almost none of the normal pollutants from gasoline are present.

One part of the equation often forgotten is that during the growth of the plant, a lot of carbon dioxide is converted to oxygen, and a lot of carbon dioxide is sequestered in the cellulose tissue. Growing plants is good for the environment!

Summary

I didn’t include all the facts. The book, Alcohol Can Be a Gas! is an excellent one that has been well researched and contains a plethora of information. I’m 100% in favour of solar technology, but I think we often forget that plants are natures’ sustainable solar technology. We can use plants for fuel and food in a sustainable manner.

Often times the ethanol is just one piece of the puzzle. If you want to increase food production of both protein and plants, while solving our energy needs, it can be done. You take the DDGS byproduct from the crop (whatever crop you decide to use) during the production of ethanol. This byproduct is very valuable. You can either sell it to farmers/feedlots or you can grow your own protein. Cattle will grow faster with it! Even better, you can grow fish extremely efficiently. The fish create their own effluent (waste) that is just like a liquid fertilizer. The fish waste can be pumped into a greenhouse that is growing highly valuable vegetables/herbs/flowers/fruit/etc. You just got free fertilizer to grow a high quality crop! The plants take the effluent out of the water and the water can then by recycled back into the aquaculture system and is now safe. Yup, the fish feed the plants and the plants clean the water for the fish, which reduces the amount of water needed to grow fish. Now you can sell ethanol, high quality greenhouse crops, and valuable fish. Talk about efficiency and making economical sense! We can feed more people, make more money, and solve our energy problems. Not bad, eh? Alcohol Can Be a Gas! is a must read.

There should be a wider debate on economic principles and what the role of government is. We’ve become confused about the role of government in the economy - and the role of individuals and corporations. This is a big debate that isn’t taking place at the forefront of the media. Instead, the media is too busy talking about what the government can do to fix these economic problems - but they usually focus on “fixing” the symptoms, instead of focusing on the real problem; An economy financed on debt is unsustainable and only masks the true problems of competitiveness and sustainability. We should not be relying on consumers’ spending of debt dollars in order to be economically prosperous! No amount of government bailouts, stimulus packages, or increased taxation to allow more government “spread the wealth” programs, will ultimately deal with the underlying economic issues.  They only mask the issues and lead to greater problems in the long haul by delaying the economy from answering them. We need to become competitive again through innovation, invention, progressing technology forward, increasing efficiencies, etc, etc, if we are to solve our economic problems. Debt can now be added to a long list of our economic problems. This process will not be short neither will it be painless, but it is necessary.  In the fight of ‘Government vs. Economics’ - I pick Economics as the ultimate winner.  Yes, the government may appear, at times, to be winning - But it can’t fight the Economics forever, in the battle of attrition, we know who will win.  Fundamental economics has a greater endurance (forever, infinite) than a political agenda (set by politicians and governments of the day).

• Jeffrey Christian on why Gold and Silver could spike up.
• Bailouts Must Be Odious.
• 10 reasons to be positive about the stock market!
• More on the Deflation versus Inflation debate…
• Jason Hamlin on China Shifting Reserves to Gold and Hyperinflation.
• Should we bail-out the big three automakers? There are 300+ comments already!
  

  My Take: Tesla Motors has created the Tesla Roadster - 100% electric, 244 miles per charge, 0 to 60 in 3.9 seconds, costs only pennies per mile, all for $100,000 (and that could come down if they were mass producing - they only build 1,000 a year!). Why can’t the big three compete? Innovate!!!

• I hope we have seen the last of the stimulus and bail-outs, but I have my doubts due what people believe (government, please save us! hahahahahaha). Yuck!
  

  My Take: We don’t need government stimulus. Things will turn around, they always do. The problem is we, as consumers, are too leveraged and have too much debt at the moment. We’ve spent money we have not yet earned - and now we are beginning to realize we’ve taken on too much debt, and we are going to spend less until we have paid for what we already spent!!! Debt hid our problems during the “good” times (where we were taking on more of it!) and will make the bad times look worse (while we pay down some of it). Ultimately, things will turn around, but it will take time (perhaps a decade - as that is about how long it took us to get into this mess) and it won’t be painless.

  This debt burden that we now have at one time helped mask the true problem: America is no longer economically competitive. The taking on more and more debt was unsustainable. America is no longer competitive nor was this debt accumulation sustainable. Now we have to face reality and get back to competing and using our brains instead of other people’s money. How is burdening the Federal Government (and every citizen) with more debt going to help the sustainability and competitiveness of this economy??

• What do U.S. Policy Makers Know?
  

  My Take: The “policy makers” are the problem. Of course they make it up as they go! People now cry to the government when they lose their job! So they want the government to do something, so the government does something - not that it works or makes any economic sense…

  Perhaps debt and interest rates shouldn’t be core objective - An economy financed on debt will ultimately fail. It is unsustainable. So anything to do with interest rates is just a futile effort to get people to take on extra debt to mask the true problem with the economy, competitiveness.

• Tony D’Altorio on Great Expectations of Obama, but not the Economy.
  

  My Take: Society has went toward one that begs government to solve it’s problems as if government has all the answers. So government politicians are pressured to “do something”. With Obama entering the Whitehouse, it’s no wonder corporations are lining up for cash… they can smell some free money - and if enough of them cry loud enough - they might just get some. I hope it doesn’t happen - but Obama was in favour of the bail-out… so why wouldn’t he be in favour of more? That’s the answer government has - bailouts… so we just need more bailouts if they are correct, pepper in some stimulus packages and some tax increases to give the government more money to spread around to solve all these pesty economy problems. It’s so wrong!! Bailouts don’t solve the underlying problems.

  Bail-outs, Stimulus packages, reduced interest rates, etc, etc… All of these proposals only deal with masking the symptom - that spending in the economy is declining - but fail to address the underlying problem that has created the symptom - The economy isn’t competitive and is unsustainable. We’ve taken on too much debt! We hid our problems for decades by taking on debt and spending it, as if it was already earned - but consumers have realized they need to pay some of these debts off…

  No politician that promotes bailouts or picking and choosing winners with unearned money, will solve the problem. The economy is not sustainable nor is it competitive. Unless these issues are addressed (and I don’t expect them to be), I really can’t see what it is people hope can be accomplished by “spreading the wealth” through more stimulus packages and increased taxes. Those only further mask the true problems. But I have no fear - in the fight of Government Vs. Economics - Economics will win in the end. We will, eventually (might take decades), realize that we need to be more competitive (and innovative/inventive) and less reliant on consumers spending debt dollars if we want to be sustainable.

After all the talk about Obama, I thought I’d switch a bit and focus on what I’d do. This is a simple list of economic policies that COULD be helpful. If I was President (or an adviser), I would look into the following. That doesn’t mean I’d implement them, or even know how to properly implement them (they’d be hard), but you get the point. I’d look into all these economic policies and see what could be reasonably be done to help the world create “fair trade”. Ultimately, these would make the economic situation better and our investments would follow!

1. Leave taxes alone, do not raise or lower at the moment, until the budget has been balanced and the country becomes debt free. Then look at lower tax rates once government has balanced its budget and repaid ALL loans. A tax freeze would give some stability to the economy.
2. Cut government spending on non-vital items. Infrastructure, health, education, social programs, and defence are vital. That said, government spending, once the budget is balanced, should never increase faster than the rate of inflation!
3. All government spending should be re-examined and scrutinized. We need to increase the efficiency of our spending. We should also make it easier for companies to bid on government contracts and make details of contracts PUBLIC (unless it’s classified information). We have to cut spending to balance the budget.
4. Introduce regulations on banks - similar to Canadian regulations, that enforce strict lending requirements. If you can’t afford a mortgage, you won’t be qualifying for one, and you therefore can’t be tricked into getting one. This protects consumers in the long run. Consumers have been using debt too loosely and spending it too easily. Many of the US competitiveness problems have been hidden by loose spending made possible by increasing debts.
5. Trade: This is the hardest to deal with. The trade imbalance shows that the US economy is unsustainable. We need to balance the trade deficit. To do this we must look at the very root of our trade agreements. We must not allow free trade between the US and countries that harbour an unfair advantage that has nothing to do with core efficiencies and capitalistic competition. For example, in order to get a “free trade agreement”, a nation should have similar labour laws to protect it’s citizens’ standard of living, including minimum wages and some social benefits for citizens to fall back on. That nation should also not employ the use of currency manipulation to gain a favourable, but unfair, advantage over American companies. Child labour should also be frowned upon. (This is so hard to do, maybe we shouldn’t touch it!)
6. Free trade should not be granted with countries that purposefully manipulate their currency to gain an unfair trade advantage, which has nothing to do with free competition. (This is so hard to do, maybe we shouldn’t touch it!)
7. For those countries that do not have basic labour laws to protect their citizens or manipulate currency in their favour (or both), a tariff should be put on any items coming from that country. The tariff should vary from country to country, and should be just enough to level the playing field after taking into account the wage differentials, social and currency differentials. The tariffs imposed should not be overly hard or punitive on a country. It’s purpose is the level the playing field, not completely hurt or shut-off America from doing trade with that nation. Free trade should be replaced with FAIR Trade. This works both ways. For countries that America has an unfair advantage on (if there is one!), we should allow them to impose a small tariff to level the playing field. The tariffs on all nations should be examined every quarter, and adjusted to keep “fair trade” moving forward. Eventually, with enough pressure from Washington, we would hope more countries gain “free trade” with the United States by implementing similar basic standards of living. (This is so hard to do, maybe we shouldn’t touch it!)
8. Foreign Ownership Rules: This should vary from country to country, depending on the agreement they have in place with the US. A particular nation should should also allow American businesses/citizens to invest freely in their nation if that nations corporations or citizens wish to have the same opportunity in America. Reciprocity. If they allow us to invest in their country, they can invest in ours. If they restrict certain investments, we should reciprocate. Do unto others as you’d have them do unto you. It’s only fair.
9. Sovereign wealth funds should be banned from owning property and companies within the US.
10. All schools from K-12 should have some basic money management and economic courses to help people manage their personal finances. The entire economy would be stronger if each citizen had some more financial knowledge.
11. Science, Math and Technology should be the corner stones of the education system. Right now schools spend too much time on theory and not enough time on practical experiments and real world situations and solutions. We need kids to see and do things that are interesting to stay interested in these subjects - They’ve been presented in a very boring way. We need a generation to embrace these subjects and become world leaders in them to maintain prosperity.
12. All government surpluses should go toward paying down debt. Each year, the money saved on interest payments can be spent on new programs and be considered increased spending. The beauty of this is that it technically isn’t increased government spending (the government is still spending the same amount) as it is just diverting some money that used to go to useless interest payments to something useful!
13. Never promise new spending. Instead promise to change the way government spends what it has.
14. 401k’s and Roth IRA’s should have a stated fixed tax rate that they will pay when funds are withdrawn - We want to eliminate any future government from increasing the taxes on these assets dramatically - If you think the tax rate is going to go up dramatically in the future, you won’t bother (rightfully so) to defer taxes in savings programs like these.
15. Start a massive program to open up the Space Frontier economically. We will need to create new ways to get to space efficiently - This is vital to world security and peace. Our goal should be to create a colony on the moon, with our eyes set to other planets as well for small colonies – and to mine some of these planets for valuable resources.
16. Open up Space by getting rid of any regulation that prevents regular folks and businesses from launching into space. Provide incentives to companies that do research and manufacturing of things to get us to Space and on any business buying these items. Incentives should be used - I don’t want government to pick and choose companies that will become leaders in space, but to encourage the entire economy to compete and get us there with massive incentives for consumers and businesses buying any such technology. We need something really dramatic while still not picking and choosing winners… let the economy decide who wins, we just want to encourage the economy to shift its focus to space and sustainable energy instead of war and oil.
17. Provide massive incentives to people purchasing alternative energy (including new vehicles that make use of alternative energy). Ethanol and bio-diesel should be considered alternatives as should solar, wind, wave, geothermal, fusion, etc, etc, etc). This may help us balance the trade deficit!
18. Alter accredited investor rules that prevent regular folks from investing in local businesses and communities. Regular folks should be allowed to gain access to this type of investment, but the company should still have to prove it’s no scam with some easy regulations to protect investors. I just don’t agree with NOT allowing investors to invest in an entire area of OUR OWN economy!

In other words, I would modify the Free Fair Trade Agreement with Mexico. The current agreement forces (Yes, forces) American companies to lay off Americans with high wages and send the jobs down to Mexico so the company can exploit workers with much lower standards of living and little in the way of benefits, or it can’t compete with foreign companies and will go out of business. A race to the bottom is not what we wanted the Free Trade Agreement to start; It was intended to help the rest of the world industrialize and increase their standard of living while still maintaining our standard of living. I believe technology will be the key to increasing the standard of living for all.

Our economic policies aren’t working. On one hand we have Democrats telling us we need to increase governments ability to “spread the wealth” with high taxes and MORE government spending. On the other hand we have the Republicans that want to give out tax cuts like it’s water, with the belief that we will grow our way to balanced budgets… Yet even they promise more spending and bigger governments (They really aren’t conservative anymore…). Both parties seem to be doing the same thing: Spending too much and favouring bail-outs. We must freeze taxes. Cut government spending to just the bare essentials. Fix trade balances by re-examining which countries have a sweet deal with the US, and make it so it’s a fair deal. Pay down government debt. Then lower taxes. Meanwhile, we need to change focus on the economy from Wall Street to the real economy and start shifting toward the future economy; Space and Alternative Energy (and all the technologies that come with both of those!).

Ultimately, the two major focuses should be on creating an environment where alternative energy and Space are the focus of the world. We want to change the entire focus of the planet from warring with each other over disagreements, to looking forward to new frontiers of Space and the technology that comes with it. Living sustainable in space would require technologies that would help many 3rd world nations as well, such as growing technology and alternative energy that is sustainable. We must look forward; It’s the only direction we can go.

I read a great article over at Blip Blap wondering if wealth was a zero-sum game or not; It implies that wealth can’t be created, just moved around. Brip Blap concluded that wealth is NOT a zero sum game and I agree. If wealth is a zero sum game then when your wealth increases, someone else must see a decrease by the same amount. This may appear to be the case in any given transaction, but it fails to take into account the benefits derived from the service or product involved in the transaction. Belief in this zero-sum game can lead us down a dangerous path where we begin to implement policies to “spread the wealth”, rather than focusing on creating it.

Wealth can be created, as the benefits derived from a new efficient technology may far outweigh what it’s selling price is. But critics look even deeper and tell us that the new technology that increases efficiency (let’s use an example, say a highly efficient growing technique in a technologically advanced greenhouse) may increase wealth for both the inventor and the purchaser, but decrease wealth for anyone that doesn’t have the technology with its higher efficiency - partly because now more supply will be introduced by anyone that does owns the new technology, and this increase in supply will decrease the price that many competitors in the same industry get for their efforts. It can get real deep if you start over-thinking the entire process.

I left a comment on Brip Blap’s blog that sums up what I believe about wealth:

“Creating wealth is definitely NOT a zero sum game. As you said, services, inventors, and technologies can be huge benefits to many people, far more than what they “cost”.

@ Clever Dude: What if a company were to invent an efficient method for growing MORE food, cheaper, using less water, which makes more food available to more people for less money??? Don’t exclude the wealth creation involved with new technologies.

That said, there are obviously some limited resources on this planet that are a zero-sum game, but I wouldn’t say those limited resources create wealth, but they are probably best described as a store of wealth for some people. And the mining companies that make money, are creating wealth by “finding” and “extracting” these limited resources so they can be usable, not just being paid for the resource itself - our they wouldn’t have to do any work (or wealth building) besides just sitting on their land with the minerals/metals contained in it.

I like some limited resources as a store of wealth, but I always invest in the mining operations which help create wealth as well, through exploration and extraction of these resources. - Even better, I like innovative companies that invent or use new technology to solve problems and create wealth for everyone (like the greenhouse growing technique HDVG system employed by Valcent, as just one example, for growing more food in less space with less water for a cheaper price, than has ever been done.) That is wealth creation, and it ain’t no zero sum game!!! Win-win!!”

Yes, limited resources can be considered a store of wealth, but they do not create wealth. But then I start to wonder if somewhere, even deeper down the economic line, someone does end up with a decrease in wealth due to a new technology. If they don’t own the new technology with higher efficiencies and that technology goes on to decrease the price for the underlying product, then I guess someone in the end does see a decrease. I’m confused - It gets deep! I still have this overwhelming belief that wealth can be created, I just don’t know how to explain it. What do you think?

As you already know, Obama is the next President of the United States. I hope to take a look at what I believe will happen and how it will affect the economy and our investments. One note first: We don’t know what or how Obama plans to do in great detail, so much of what I say could, and probably is, wrong. Many around the world are wearing rose coloured glasses, thinking that because of his race or his charisma or his great speaking skills, he will be a the best President ever. I think those have nothing to do with whether he will or will not have success. I believe, as with all politicians, they should be judged by their deeds - Obama has done nothing yet to warrant either the big hype of greatness nor the doomsday preaching. We need to allow Obama to start working before we can pass final judgement. Yes, I’ve been critical, but my critique in the past was on some of Obama’s proposed legislation - whether or not he introduces some of his proposals untouched and unchanged remains to be seen. We must continue to use our brains and think for ourselves and stay actively engaged in politics. In other words, we need to look at each piece of legislation and every proposal, and debate it, the same that we should do under every President. We can’t give Obama, or anyone, carte blanche. I hope we are able to look beyond the hype and look to find REAL solutions. I also hope, when Americans see something being done incorrectly, that enough speak up to put America back on the right track. Obama doesn’t have all the answers and he isn’t God. He is but one man. If America is to prosper and survive, it will take more than 1 man to do so…

Here are some predictions and general thoughts.

• Some Americans love Obama so greatly, they appear to act like sheep and may willingly give up a lot of control to him. I fear that many of his hard core supporters will not look at any of his policies with a critical eye (not to bash him, but help him) to modify policies and improve them. I fear his hard core supporters will see any critic as racist and/or counter-productive Republican nonsense, instead of being a productive way to improve the Democracy. We still need to debate things… We don’t vote a dictator into office every four years and sit back and let them do whatever (though sometimes it feels that way)… Debate is the norm and should continue to be so. Obama supporters won’t like debate or critical opinions of his proposed actions. Just watch.
• Any politician with this much love, support and blind faith, can be dangerous, or alternatively, can turn out to be extremely beneficial to a country. We should never give blind support to anyone, ever. We can give him support and have faith in him, but we need to stay engaged and use our own brains to think for ourselves - less sheepishness! He’s not the messiah, Jesus or God; He is a man. Acting any different is a dangerous thing and I’d advise against worshipping the man, or any President or leader.
• Obama is still a human, a politician; his poop stinks too. Like you, he’s not perfect. He will make mistakes, everyone does. I expect Republicans to jump on every mistake and be overly critical and Democrats to get mad at them and see none of the mistakes… It will go too far in both directions.
• I think Obama has over-sold himself to Americans, which is hard to deliver on. That said, many of his best supporters will see him with rose coloured glasses no matter what happens. Since he over-sold himself, many Republicans will have more to criticize… and rightly so. If you don’t promise the world, you don’t have to deliver it. He has promised so much change, and yet almost everything will be the same except more stimulus packages, increased spending, and increased taxes… That’s hardly a big fundamental change in the way politics are conducted in Washington.
• Obama will always be an important President in history, no one will ever take that away from him. It’s not about his individual policies… Ultimately, we forget many of the political decisions our famous Presidents have made… we remember them for one or two things and they are considered great in our history books… I expect the same for Obama.
• Obama will try and reach out across the political isle so he looks good in the history books. Ultimately, his policies won’t take much input from the other side of the isle since the other side of the isle has a much different way of fixing the problems. I do expect some Republicans to work with him, and adopt Democrat ideals, mainly for political reasons and to gain popularity…
• The Republican party will be in shambles for the next eight years, until they find an identity. They will attempt to fix it for the election in 4 years, but they’ll fail. I’m a conservative (for economic policies, maybe not everything else) and believe smaller government and less government spending is important, as is balancing the budget. Republicans broke all of those - they overspent, lowered taxes when the budget wasn’t even balanced, and generally started to make government more powerful than ever with some of the new legislation that took away or modified the constitution! That isn’t what I consider conservative economic policies.
• Looking at many of his advisers and those close to him doesn’t impress me. Some are from Goldman Sachs, the same company that needed the bail-out and then turned around and gave something like $7 billion in wages and bonuses to employees and execs, and went on extravagant company trips. These are some of the people advising him. A lot of Obama’s other supporters are from the Clinton Administration, which ushered in an era of cheap debt and created bubble wealth and the sub-prime mess we are currently dealing with. All it did was mask America’s problems with debt. They can, and will continue to, blame Republicans for the entire mess. Anyone that does in-depth research of the economic policies will know the truth, that both parties errors have accumulated and given us the economic situation we are in today. Bush isn’t free of error (that’s for sure!!), but Clinton and his cronies have got off scott-free with respect to their fare share of the blame for our current economic mess. I doubt they will engineer a way out of the mess that they, in large part, created. That said, the recession, like all recessions, will end and it will end despite their efforts, not because of them.
• After we get a better picture of who will be in his close circle, we will begin to have a clearer picture than we have today… so much of what I’m writing in this article could be completely off depending on who he chooses… I don’t foresee any radical choice (like Ron Paul, that’d be sweet!) and think many of the people that have been in power all along will continue to be…
• Corporations gave Obama a lot of donations, for a reason. When government starts handing out money to large corporations in the form of aid and stimulus packages and gives them less foreign competition with isolationist practises and new modified trade agreements, you’ll start to see why it was a smart move for them to bring in a President - even one that would raise their tax rate. I expect many to take advantage of the R&D tax loop holes that will open up to help offset some of the tax increases. I personally like the R&D tax loophole to encourage innovation and invention, but I think it will be somewhat misused by some corporations. Either way, I don’t expect to see a balanced government budget, even with tax increases.
• For being a man of such change, he sure was quick to endorse the $700 billion bail-out for Wall Street and Bankers… I assume he will be in favour of some more bail-out and economic stimulus plans that go to help friends of government. Why not print more money and “redistribute” more wealth? That’s what government does best.
• Class warfare is wrong, but it is being waged. Rich businessmen and corporations are being targeted. Some will leave and head to countries that aren’t waging this economic war. The rich did not cause all of societies ills, but they are being treated like it. This does remind me of something Hitler once did with respect to blaming a certain group of rich business men…
• If America had wanted fundamental policy change in a dramatic way, Ron Paul would have been the man. Hopefully some of his views live on.
• By April or May of 2009, many Americans will begin to see the end of the honeymoon period when they first see some of his proposed “solutions” to the problems. His hard core supporters will never take the rose coloured glasses off, and they will be on the honeymoon forever. His proposals will just show us that “change” wasn’t as dramatic as he sold us.
• Government will tax more, spend more, and print more money - this has been done before in America and isn’t exactly a big change. But this is the change Obama campaigned on. I’m sure he will deliver on this promise of “change” and carry out tax and spending increases, but this isn’t revolutionary or a major change in the way government and business is organized or conducted. Very little will change in that respect. It’s not the massive change many Americans are hoping for. Too bad Ron Paul wasn’t asked to do something important in Obama’s camp (or maybe he will?!?!). Paul would have really rocked the establishment! (Go research Ron Paul and how he would get rid of the IRS, the Federal Reserve, and make America what the founding fathers wanted - He’s the strictest constitutionalist there is and would very strictly protect America.)
• America will ultimately come out of the recession, despite Obama’s economic policies, not because of them, though he will get much of the credit as past President’s often have. This will not happen quickly though.
• Obama will help end the Iraq war, thankfully! We’ve spent enough money we can’t afford for a people that aren’t our friends. It’s not about winning and losing, it’s about letting them run their own country and having “freedom”. We can’t afford it, and they couldn’t afford to help us if the situation is reversed. Even a democracy in a place like that could decide to elect someone we considered dangerous.
• Obama will push alternative energy sources. This is good. Governments can help industry along. I strongly believe we are headed this direction anyways, but this may help speed the process along. I do hope caution is used with the money, as it can be waisted on government “chosen” companies, which isn’t an efficient use of money.
• Obama won’t balance the budget, ever. He’s promised too many things to too many people. If Middle Class America wants health care, medic aid, social security, and an increase in other social programs, it will have to pay for it, like people in all nations, one way or another.
• Americans often don’t understand that socialized medicine hasn’t been perfect in Canada. No, we’ll never get rid of it because we do love it, but there are massive problems, and you need to see them if you want to avoid them. We have wait times for many surgeries that can take months and even years… Yeah, it’s “free” if you live to get it. You are placed on a waiting list, a list that is only going to get longer as the boomers age. We say health care is free in Canada but it isn’t. We pay some of the highest taxes out of all the G8 nations for the privilege. Plus, we have to pay health insurance on top of it. The government forces me to pay $44 a month. It’s not much, but it does go to show you, we do pay health insurance too. We have no drug coverage unless you purchase some extra insurance. No dental benefits either. Those are all extras, same as anywhere, so don’t act like all health related services are “free”. We pay for these benefits dearly, in both long wait times that many people never make it through and very high tax rates that make it difficult for our companies to compete with foreign ones that have more cash due to lower taxation. A massive amount of our government money goes toward health care, and it’s growing quickly, but no matter how quick it grows, it’s never enough. It never will be. We can’t attract enough doctors, due to lower wages, and higher taxes. A lot of our doctors go to the United States to earn higher salaries and pay less tax. Yes, I understand why Americans want socialized health care, but they need to design it better than we have or they will have many of the same issues. I think some of the issues could be avoided if the program was designed properly.
• Obama will be re-elected in four years, despite the political situation or any success or failure he has endured during his first term; He will always be a loved President.
• Obama will continue to deliver great speeches. His speeches will be full of hope and masterfully crafted to keep Americans hoping, despite slower than expected progress, and believing in him (like he’s some sort of messiah or prophet to some, and just one heck of a good orator to others).
• Foreign nations will reach out to Obama. He will try and help them, but will have a strong bent toward protecting American industry - It will be a weird time of both internationalism and isolationism, with a mix of each.
• NAFTA and other trade agreements will be renegotiated. I don’t see how America will gain anything from Canada though. Canada is now in a stronger position than ever, and many in Ontario’s manufacturing belt line will NOT accept any Canadian politician implementing policies that hurt Canadian manufacturing - It would be the end of a political career to willingly allow or sign an agreement that disproportionately helps America and hurts Canada - It will hae to be win-win or have a fair give and take (and if it’s a fair give and take, neither may be any better off anyways). Alberta oil, since it’s a bit dirtier than most, will also be hotly debated. Either way, Canada is America’s biggest supplier of oil and has a little more power than it did when the agreement was originally crafted.
• If Obama ends up trying to introduce an Amero currency or a North American Union, we will know he is a minion, chosen to take America down a dangerous path when he was given so much power and faith by the electorate. I hope this doesn’t happen, ever, under any President.
• I see inflation. Both inflation and a stagnant economy isn’t good. It doesn’t spell the end of America, but it isn’t good either.
• Many corporations will begin to shift their headquarters to other nations that are a little more friendly. In this world a corporation can be headquartered anywhere, and still have access to most of the world markets, including the US. Why should a company base itself in the US, when the population is ageing, taxes are going up, social programs and wage laws are getting stricter, when there is a whole world out there full of vibrant upcoming economies that want the capital and corporations and won’t punish them? In the future, countries will have to compete for corporations, capital, investments, and talented people.
• Outsourcing will continue to increase for as long as the US allows free trade instead of “fair trade”. Fair trade should take into consideration currency manipulation and differentials, as well as environmental and labour differentials. Free trade with ANYONE forces companies to outsource and move manufacturing to other nations. Technically, free trade shouldn’t be used unless it is fair. Fair trade should be what we shoot for, but any steps taken to level the playing field, will be seen as protectionism and bad.
• I foresee a weak USD due to inflationary pressures, continuation of high deficits, increased debt, and less willingness by other nations to continue to buy American debt.
• We’ll see increased regulation, some being good, some being bad. Once again, we have to take it step by step and look at the specifics when the proposals get released.
• The tax policies will affect the Middle Class, despite what he has told us. Perhaps federal income taxes won’t increase, but can the same be said of dividend, capital gains, inheritance (death), state and local taxes? Either way, some tax increases will be hidden. Inheritance taxes affect us all, as do capital gains and dividend taxes, with respect to our investment and retirement portfolios… I don’t like those proposals.
• The economy has been unsustainable for a long time, we’ve just come to realize it when the party of cheap credit has finally come to an end.
• In the future, America will be less important. It will still do well, but will become more like Europe - still successful and powerful, but not the sole or dominant force in the world. We are seeing a tidal wave of change right now. Asia, South America, Russia and Africa will play an increasingly important role in the world, though none of them will dominate the entire world by themselves the way Britain or America once did. It will be a more balanced world with different countries specializing in different industries.
• Not everything bad that happens during his 8 years will be his fault… much of the underlying economics are an accumulation of things that go back more than a decade, so clearly Bush and Clinton deserve some of the blame.
• Not everything good that happens economically is because of Obama. He is but one man in an economy with 300 million…

Obama paints a rosy picture, but the devil is in the details. We will have to wait and see what he implements to understand more specifically what will happen with our investments and the economy. I, for one, don’t foresee as much “change” as he wants people to believe. In fact, many of the changes, I see as backwards for the US in respect to raising the taxes up again, and increasing government power; that’s not new. They are also looking at things the government attempted in the 1930’s to get out of the Depression. Many of the policies implemented back then did very little other than give people confidence and hope… It was a massive and nasty war, and the consequences of a demographic boom (the baby boomers) that helped the world climb out of the last Depression, not the stimulus packages. This isn’t a Depression, this is just a global recession caused by unsustainable lending practises, a credit collapse and an unsustainable economy due to so many free trade agreements being made with other nations. The recession will eventually end.

Government can’t solve all your problems, and you shouldn’t expect it to. It’s not governments role to interfere in your lives in an overwhelming way. It’s governments job to protect you and put in place an environment where people can flourish. America became great because the government allowed people to flourish. The government did not flourish the people, the people flourished the government. Ultimately, it is you that must go out and start businesses, use science and knowledge, innovate, and create wealth and prosperity for all through hard work; Don’t act or expect Obama to do all the work for you.

Last night we all witnessed history in the making, a glorious occasion for all those that truly thought it was not possible. I’m not among those that thought they’d never see the day. I’m from a young generation and grew up in a different time than many of the baby boomers. I’ve known it would happen for a long time and was just waiting on an ethnic candidate to seize the opportunity… To tell you the truth, the second I seen Obama make a speech early on, I knew he would win. I knew the second I saw him! I’m not lying or joking. I knew it. That’s why I’ve been critical of Obama and barely said anything about McCain, who I was also not a big fan of either. To me, I seen a man who was a GREAT speaker (one of the best in a LONG time!), inspirational, and he promised hope to a country that was lost - and to top it all off, he was Black! That was the perfect candidate! Yes, a white Democrat may have won too, just simply because of the hatred toward Bush and the failure of the Republicans, but I doubt the win would have been as strong, decisive, popular and make such a difference to so many people.

I truly believe being black was a net benefit, despite what many say. Look no further than popular culture (from movie stars to music artists, to comedians, to talk shows, athletes, etc, etc) and you can understand that being black is no longer the hindrance it was in the past, but may be sort of cool, and a benefit. African Americans play an important role in society. I’m young and have seen, I’ll call it ‘Black Culture’ for the lack of a better term (though it has morphed into pop culture), become mainstream and popular amongst all races. People in virtually every Western nation (many of the same nations we perceive as racist) wanted Obama to win! Obama got a higher vote from whites than Clinton did! He also got a higher turn out amongst various ethnic groups. People that had never voted, registered to vote for him - some of these people NEVER voted and decided they wanted to break the incorrect perception that race was still a barrier. Last night marks the official end of racial barriers for holding the highest office in the land, but many things have had to change for this moment to become reality. Obama symbolizes something special to a lot of people, of all races.

In many ways, it isn’t even Obama himself, but what he represents, that is so special about this election and America in general. I challenge you to show me any country that has democratically elected a man from a different race than the majority - I couldn’t see a black candidate winning in Europe for at least another fifteen or twenty years (has more to do with the low percent of population and a lack of participation in politics). I can’t EVER see a white candidate winning in an African nation. I can’t see a black or white candidate winning in the Middle East or Asia, ever. That’s what makes America so great! I congratulate America, and feel that America is proof that race can’t stop someone from success if they work hard enough. I completely understand what an Obama win means for African-Americans (who voted 96% in favour of Obama).

One of my pet peeves is those that claim white voters who voted against Obama are racist. This thinking reminds me of a Bushism, “if you’re not with us, you’re against us”. It simplifies things and discounts ALL political views, which can’t be neglected in a political race! It interjects reverse racism (which is racist) into the equation and a misguided belief that only whites can be racist (which is untrue, but no one seems to be running around accusing the black vote as racist…). It also discounts the fact that more whites voted for Obama, in real number and percentage terms, than did so for Clinton. Those that didn’t vote Obama should not be looked down upon as racist. Politics can’t be discounted in a political race.

Now, next time (I‘m talking after 8 years, as Obama will win the re-election in 4), I hope the election is more centred around policies and political beliefs, and less about race, regardless of who is running for President. I do have to wonder if we will go through the same situation with respect to electing the first Asian, Indian and Latin Presidents of America. I think we should (and will) see those Presidents in time, but I don’t want to see men (or women) get elected because of race or gender, and not their core policies and political beliefs. I yearn for a time when we are beyond race in such matters - but I fear that reverse racism may play a large role for a while, and white candidates running against ethnic ones, have no chance at winning, regardless of who is better for the job. I doubt this fear will last, as America is a great nation and stands the best chance of any for overcoming such trivial nonsense, though it might take time.

I have to include something I read from a talk show host, Charles Adler.

“I was not for Obama. I never sucked on the Kool-Aid. I thought of him as a really bright operator with a terrific skill set as an orator, as long as the stuff was laid out on the teleprompter. I didn’t find his professional experience qualifying him for C.E.O of any major company, and especially of the largest corporation in the world — the Government of the United States.

But although I lean right, I have no difficulty understanding that the appetite to smash the Republican brand was huge. I also have no trouble understanding why any black man, woman or child would be incredibly inspired by the sight of a black face in the Oval Office. Thankfully this election will put a lie to the idea that Americans won’t give the big job to a black man. Hurtling the barricade of colour will likely give the USA big brownie points with many people around the world, including many in this country (Canada).

It isn’t cliche to say it’s historic. It’s accurate. Many of us will remember exactly where we were when a black man was elected to become the pre-eminent leader of the world. In a country that for so long denied so many basic rights, access to good jobs, good housing, good schools, this is very large. You can disagree with his politics. You can draw easy conclusions about most media people being in the tank with the Obama campaign. You can say that Obama’s real running wasn’t Joe Biden, but rather Dow Jones, and you can find a dozen other ways to dilute this enormous victory for Barack Obama and the Democrats.

What you cannot deny is that breaking the colour barrier to the White House is huge symbolic victory for the USA.” - Charles Adler.

Now, back to politics, and putting race aside, since in a perfect world, it shouldn’t matter anyways.

This isn’t a political blog, but politics affect the economy and our investments, and therefore I can justify writing this. I’m not a Republican either, for the record. Yes, I lean right, but I have varying views on different issues and can’t clearly identify myself with either party. I don’t agree with Obama on many of his political views, especially his economic policies. Readers of my blog know this. I like the great picture of hope and prosperity for America that he paints, I truly do. I even believe many Republicans like the picture Obama has painted. Republicans and Democrats generally want the same outcome; A strong, proud, noble, prosperous and fair society where opportunities are available for all. Republicans and Democrats just have a different way of getting to that end goal. That is where our debate lay. I think his heart is in the right place, but I think his policies are misguided. Regardless, congratulations.

You may or may not have heard of I.O.U.S.A, a new documentary that shines some much needed light on the U.S. financial situation and the amazing debt loads and never-ending deficits. I urge you to watch the short 30 minute clip of the documentary, or at the very least watch the 2-minute trailer. If you like it a lot, I hope you are able to see the full documentary. This is an important documentary for the U.S population to watch. Very few will be able to watch this before the elections next week, but I think it’s something to consider before voting. If you’re an investor, you will want to watch this video and think about the consequences that may plague us in the coming decades. I’ve spoke about the debt levels, fiat currency and many important problems for a long time. It’s nice to see an award winning documentary finally shine light on this subject for the average citizen.

If you enjoy watching the documentary I hope you find some of the below articles useful:

• Fiat Currency: A Potentially Fatal Flaw?
• You Can’t Borrow Forever, You Must Eventually Pay It Off…
• Would a USD Currency Collapse Help The U.S. More Than Harm It, Long-Term?
• Fiat Currency: The U.S. Wants To Devalue The Dollar, Mr. Dines & The Nuclear Age
• Peter Grandich Predicts Trouble Ahead For U.S. Economy & Stock Markets
• U.S. Economic Outlook
• U.S. Economic Outlook Not So Good: What Can You, The Little Guy, Do?
• Do We Need the Federal Reserve? It Has Failed Us!
• Some People Just Don’t See It
• The Democrats are Socialists and the Republicans are Liberals!
• Ron Paul on Capitalism
• The Consequences of Outsourcing on the Middle Class
• Obama Economics: The Future of Investments & the Economy Under President Obama
• USD Strength Temporary, Extreme Inflation Coming

If you’ve been following my thoughts lately, you know that I have a lot of opinions that seemingly conflict each other. I believe that many great companies are being thrown out with the bad. I believe we are in a recession. It won’t be easy or real short but it will eventually end. That said, I believe the commodity boom is far from over. I think we are headed into a weird time of socialist government policies and a wildly loose monetary policy. I also foresee extreme inflation, or hyperinflation and rising interest rates (once the inflation hits). Some call this stagflation. The world population is continuing to expand and previously impoverished nations are industrializing and beginning to compete with us for capital, jobs and resources. Our economy is unable to compete with others and we are seeing increased outsourcing due to differing labour and environmental laws/regulations, currency manipulation(and arbitrage) and taxes.

Many of the above thoughts may conflict with each other. But in some odd way, they make sense to me. Maybe I’m nuts? But I think you MUST have some exposure to hard assets as a hedge to fiat currencies and the coming hyperinflation. One way to hedge is to buy physical gold or silver (or other precious metals). That is a really good idea, but holding physical gold and silver, safe as it is, doesn’t actually make economic sense (to me). I’d rather invest in a mining company that holds these assets in mass, but also makes money by exploring and extracting these minerals from the ground. Regardless of how you get exposure to this industry, I think this is a good time to buy.

Gold

My favourite gold company at the moment is called Northern Dynasty Minerals [TSX: NDM $2.75; AMEX: NAK $2.17]. It’s a relatively risky, but potentially lucrative investment that I recently wrote an article about here. Suffice to say, this Company now looks extremely undervalued and the mine will be built over the next few years, barring any environmental setbacks. Not only is it extremely undervalued, but it’s a potential take-over target. If it isn’t bought out, it will have impressive cash flows after the mine is constructed in 2015. Yes, this is a relatively long-term investment of mine (if it isn’t taken over).

Silver

You would never expect to see an extremely innovative business structure involved in the silver industry, but weirder things have happened. Silver Wheaton [TSX: SLW $3.77; NYSE: SLW $2.87] is the largest pure silver company in the world despite the fact that it owns and operates NO mines. Think of Silver Wheaton as a neat financier for mining companies. Silver Wheaton buys rights to the future stream of silver from mining companies at fixed rates (like $3.90 per oz.) for a lump sum payment. The lump sum enables mining companies to construct their mines, of which silver is often just a by-product anyways. Silver Wheaton is currently PROFITABLE, cash flow positive, and expanding it’s silver rights rapidly. If inflation does occur as I predict, then Silver Wheaton will do very well.

Iron

Why iron? As the rest of the world industrializes, steel is going to be in high demand and iron is an important element. Okay, that’s a bit of a stretch, but it makes sense. The truth is, I fell in love (this could hurt) with the Company before it decided to focus solely on iron. This is my riskiest investment out of the three listed in this article. That said, I do believe the prospects for iron are positive.

The Company is called Adriana Resources [TSX-V: ADI $0.29]. I first fell in love because of it’s extremely small market capitalization with an all-star management team responsible for creating several multi-billion dollar mining companies in the past. I like the strategy of focusing on generating some cash flow so it can continue to afford the exploration costs involved to find world-class deposits. Now the Company has decided to alter directions (instead of just being a mining company looking for any minerals/metals) and focus itself by becoming a world class fully integrated iron ore producer due to management’s perceived opportunity to profit from the industrialization of the rest of the world.

As the Company was searching for world-class iron properties, it uncovered an interesting opportunity near Rio de Janeiro, Brazil, where limited shipping capacity on ports was hindering iron producers access to foreign markets. The Company bought a parcel of land on the Brazilian coast and decided to build a world class shipping port. I’m a big fan of Brazil (I like the future of their economy!).

But plans have been slightly altered, again. Now the world’s leading steel company, ArcelorMittal, has agreed to buy 80% of the shipping port for a total consideration of $40.5 M USD. Adriana will then have over $65 million in working capital upon completion of this agreement. Please note that the Company’s market capitalization is currently $25 million with the recent stock price drops! (Share price is $0.29 and there are 88,677,040 shares fully diluted, though the number of shares will increase). ArcerolMittal intends to investigate future strategic and mutually beneficial world-wide opportunities with Adriana.

ArcelorMittal is also going to buy up to 19.9% of the shares of Adriana (in two private placements) and help Adriana find financing to fund it’s portion of the $250 M USD port. Yes, it’s a big port that will ship 10 million tonnes per annum with options to expand to a deep sea port capable of 50 million tonnes per annum. I seen some older projections that mentioned revenue of $12/tonne and operating costs of $4/tonne. If those are accurate, and I have no clue if they are, then Adriana could have cash flow of $8 per tonne on 2 million tonnes a year and eventually up to 10 million tonnes per year! I believe Adriana plans on using this capacity to ship their own ore out of a mining property they hope to find and acquire in the region.

What really impresses me is the ability of Adriana’s management team to find opportunities, change plans, form strong partnerships and raise money in a difficult environment. Clearly connections matter. They have been conducting private placements for shares at prices well over the current market price. I also forgot to mention that the Company is selling it’s exploration rights in Northern Canada for $6 M worth of stock in Goldbard. Adriana is keeping the Lac Otelnuk, December Lake and Bedford’s iron properties in in Quebec, and Newfoundland & Labrador, Canada.

Obviously Adriana intends to acquire mineral rights in Brazil that will have access to their new port. At the same time the management team impresses me, it makes me dizzy. I never know what to expect next, but I’m confident they know what they are doing. I think the markets have thrown this one out with the rest. The share price was, historically, around the $1.10 mark, which is about the price I paid for it and about the price the company continues to get private placements for. This Company is a LONG way from owning any operating mines and is very risky.

Summary

I have massive losses on each of these investments. I don’t mind. The Companies haven’t changed (too much) and all look to be going forward and making progress. I will continue to acquire shares in each of these as long as I see value and opportunity. Maybe I’m nuts?

I want your help! I’m looking for opportunities all the time.What are some of YOUR favourite mining companies and why?

Full Disclosure: The author does own shares in NDM, SLW and ADI at the time of writing this article. (Also Note: I wrote this article a few days ago when the share prices were a bit lower.)

Valcent Products Inc. [OTCB: VCTPF] is an interesting company that creates, designs and patents highly innovative techniques for growing more efficiently in greenhouses. This is a market that I foresee a lot of growth. One of the primary products the Company has developed is called High Density Vertical Growth (HDVG). This was developed with Pagic Inc., and now allows greenhouses to grow a lot more efficiently by making use of all that previously waisted vertical space within the greenhouse.

The HDVG system not only uses a lot less water (just 5% of conventional field crops) but also produces 20x more food per acre without the use of herbicides or pesticides. The system works by using vertical sheets that have pockets where the plants are able to grow from. The sheets are moved around the greenhouse by a conveyor belt system to ensure each plant has access to the sun. The whole process utilizes technology which delivers nutrients to each plant while making sure each plant has the correct amount of light, water, heat, and pH balance.

Valcent hasn’t stopped there. The same vertical growing system can be slightly altered to grow an energy crop, algae. Algae is grown in mass to produce a vegetable oil for biodiesel. The first commercial scale bioreactor plant is being tested in El Paso, Texas. Initial results indicate that the production costs of oils will be much lower than both palm and soybean crops, making for an affordable way to grow our own energy. Just to illustrate the efficiency please note the per acre yields of oil: Soybeans (48 gallons), Palm oil (700-800 gallons), and algae (up to 20,000 gallons using just a pond system - not the HDVG system - and ponds have the surface area problem because light can only penetrate a few inches below the surface and evaporation and contaminants can hinder production.). Algae can be used to make either biodiesel, jet fuel or ethanol. Valcent has some really good videos that explain both the HDVG system and the bioreactor. I highly suggest you watch them.

A lot of interesting things seem to be going on with the Company. I’ve always had a personal interest in efficient greenhouse designs and growing biodiesel/ethanol efficiently as well. I live in the cold north, where our food travels thousands of miles and is low quality despite the high cost. It’s too bad I can’t do something with this patented technology - on September 16, 2008, a private Alberta based corporation signed a License Agreement for the exclusive rights to use Valcent’s HDVG system to grow vegetables in Alberta. Guess they beat me to it .

Overall, I really think Valcent has some interesting technologies that will help the greenhouse industry. If you’re bullish on the agricultural sector and/or the alternative energy sector (biodisel/ethanol), I highly suggest you take a look at this Company and watch the videos!

Full Disclosure: At the time of writing this article I DO NOT own shares in VCTPF.