The single currency is still under pressure after yesterday ECB decision to cut the interest rate by 0.25% to be 0.5% saying that was for stimulating the economy while the pricing pressure is strongly well contained currently as the falling of HICP flash reading of April to 1.2% y/y.

The decision was widely expected as the economic activity slowing could dampen the prices over the consuming level by the weak demand while the unemployment rate in EU countries are still rising up by longer than expected recession as the ECB has mentioned that it has lingered to this spring but it is still looking for rebound in the second half of this year.

The market participants are still trying to translate the stimulating wave which has been sent out from BOJ last week by showing extending possibility of its JGB maturities holding with doubling the amount of it has of them by the end of 2014 by buying what are from 60 to 70 trillion yen yearly. You can see now the yield curve of JGB 10 years up to 0.53 from 0.45% at the time of these decisions and what’s below 0.5% before them and this can be read by different ways The first, it is tending to taking risks selling the bonds looking for unlock of the safe haven positions while this wave is causing rising of the risk appetite even in some emerging markets.

When it works in your favor, leverage can be your best friend, multiplying returns. When the opposite occurs, it can be ruinous. We were reminded of this when last week we read a report1 distributed by the Congressional Budget Office (CBO) demonstrating what the interest payments on the federal deficit would increase to when Treasury rates rose under several recovery scenarios.

We have lived in a debt-driven economy in the U.S., and to a lesser extent Canada, for the past half century. Credit cards were unheard of two generations ago. Now they are de rigueur. Their existence means that everyone, government included, knows your spending history.

Written by Micheal Berry, MBA - [ Discovery Investing Web Site ]

The risk appetite is still depressed by the weak US non-farm payrolls of March which have shown adding new 88k jobs while they were expected to be to 200k from 236 in February have been revised up to 268k. the US major indexes are still in the red territory while the greenback is still under pressure versus the single currency which could have a place again above 1.30 after yesterday rising following Draghi’s comments which ensured that there is no way to use Cyprus rescue plan as a template in other euro zone countries.

We had anticipated publishing a Note on the astounding developments in Cyprus over the weekend. However, events were happening so fast that we decided to pause and get a better sense of the significance of this momentous event and gauge the repercussions.

We now learn that banks in Cyprus will be closed until Thursday of this week so the Cypriot Parliament can vote on the proposed terms of a bailout of Cypriot banks. Here are the proposed terms of the bailout as of mid-morning Monday March 18:

Written by Micheal Berry, MBA - [ Discovery Investing Web Site ]

Yesterday, Passport Potash (PPI: TSXV, PPRTF: OTCQX) delivered a Preliminary Economic Assessment (PEA) on its 100% owned Holbrook Basin Potash Deposit in Arizona. Passport CEO Josh Bleak described the results as “robust.” We provide them below for your review: 

Written by Micheal Berry, MBA - [ Discovery Investing Web Site ]

Written by Micheal Berry, MBA - [ Discovery Investing Web Site ]

 If my good friend Dennis Gartman can do it –so can I!

Dennis and I know each other from the 1980s when he came to my MBA seminar at U.Va. to teach a lesson. There isn ’t anyone in the world that combines trading and geopolitics better than Dennis.

But this AM I have the bragging rights.

Written by Micheal Berry, MBA - [ Discovery Investing Web Site ]

The FOMC minutes of its meeting on last 30th Jan came to show worries about the Fed’s QE outlook as what have been shown in the recent report.

The FOMC’s members have given ideas but most of them were towards decreasing of the current QE plans not increasing them putting pressure on the current market sentiment causing loses in the equities markets and pushing the USD up on the risk aversion and on increasing of the closer than later expectations of ending or pausing the QE pumping liquidity of it.

Gold is declining once again this morning. In fact gold has fallen quite dramatically from its high on October 4th of last year at $1797.70 an ounce. Gold trades, as I write, at $1608 an ounce, a decline from its October high of almost 11%.

Gold bugs everywhere are fretting and the gold haters are saying “I told you so." As you can see, the market gods have not been kind and may have labeled gold the “barbarous relic” John Maynard Keynes dubbed (he was referring to the gold standard at the time) almost a century ago (Monetary Reform 1924). So has gold run its course? Are we now

Written by Chris Berry, MBA - [ Discovery Investing Web Site ]

A Case Study on the Next Potential Uranium Discovery Story

Last month we wrote a Note on the potential for uranium junior mining companies to outperform the broader markets over the next 12 to 24 months. Our rationale centered on the current low uranium spot price that has caused a scaling back of production/expansion on the part of the major producers (BHP, Cameco, AREVA, etc.). This is compounded by the potential for the Japanese nuclear industry to come back online (slowly), the nuclear build out in China and other countries, and the potential end or change in terms of the Megatons to Megawatts agreement.

Written by Chris Berry, MBA - [ Discovery Investing Web Site ]

The greenback refused to be capped below the parity with the Canadian dollar after dovish assessment has been released out from BOC after its decision to keep the interest rate unchanged as it is at 1% since September 2010.

The report has indicated that the bank is underpinning the household spending which is struggling suggesting keeping the interest rate at this low level for a longer than expected period.

As the market has seen previously in the data which came out from Canada substantial improving by rising of the net added jobs last month by 39.8k for the fifth consecutive month of net adding with falling of the unemployment in December to 7.2% while the market was waiting for it to stand at 7.8%.

One of the ten Discovery factors for our DiS is the potential for a catalyst to impact a company’s success and share price. Over the Holidays, a positive catalyst occurred for European Uranium Resources (EUU: TSXV, EUUNF: OTCQX).

We have seen once again what can happen to share price when this Discovery Investing Factor is realized in a positive light.

Late last year, the company announced that they signed a memorandum of understanding (MOU) with the Slovak government defining how EUU and the Slovak government will work together to advance EUU’s 100%-owned Kuriskova uranium deposit in Slovakia.

Written by Chris Berry, MBA - [ Discovery Investing Web Site ]

This Morning Note is Part II of our extensive research on the lithium space which we published last week.1 In it we discussed our thoughts on the lithium space in 2013 and beyond. Our thesis holds that there is little opportunity for additional, lower grade lithium production capacity from junior mining companies. As we discussed, currently there exists an oligopoly in the lithium space dominated by four players including, lately, a new Chinese player. This Note will focus on our recommendations to profit in lithium investing in 2013 – through take out scenarios.

Written by Chris Berry, MBA - [ Discovery Investing Web Site ]

XAUUSD could add to its gains versus the greenback trying for heading to 1700$ per ounce as the reached deal for averting the fiscal cliff in US could put pressure on the US dollar as the investors looked again for risky assets pushing up the US blue ships in the first session of the year supporting the gold in the same time as there was no withdrawing liquidity out from the economy for restoring the financial position in US showing inflation upside risks offering defensive place for the greenback again.

From another side, the deal can help the demand for commodities generally not just the precious metals as the demand for manufacturing is not to abate too thanks to this reached deal which supported the commodities currencies versus the greenback driving the Aussie to be traded around 1.05 psychological level before some profit taken pressure could help this last currency during the US session.

Another 10 trillions yen have been added today to BOJ assets purchasing plan to worth 101 trillions currently after it had ended its 2 days meeting few minutes ago.

As this action was widely expected anyway, after The LDP party outstanding victory in Japanese lower house by 294 seats and its allied party Kometo by 31 seats last Sunday, Nikkie did not react positively as it is not under the pressure of the dovish US session closing and red future of the US indexes currently but it is still holding above the 10.000 psychological level while USDJPY came lower than 84 figure before it could rebound again whereas it was before the decision at 84.20 waiting for Shirakawa’s press conference.

We heard from another junior miner yesterday. The name, NuLegacy gold (NUG SXV). The CEO who called to discuss his prospects, Jim Anderson.

When a few years ago Chief Nesbit, Ralph Rooney and I spent time in Nevada we were tutored by Dr. Ralph Roberts and his partner Raul Madrid. Sadly both these gentlemen are no longer with us. Dr. Roberts is generally acknowledged as one of the two discoverers of the Carlin and Battle Mountain gold belts and trends. Many people do not know that Nevada produces 80% of the gold in this country. Nevada is now a prolific gold producer with  several major gold trends acknowledged. Below is a cartoon of a typical Carlin still geology. NuLegacy’s discovery hole RHB-006, 27.4 meters of 1.4 grams of gold, is superimposed

Written by Chris Berry, MBA - [ Discovery Investing Web Site ]

The LDP party victory in Japan is still containing the market sentiment after strong bullish Asian session as the market has become waiting for bigger stimulus package from BOJ which is scheduled to meet next Wednesday.

The market is wondering now whether or not the new Japanese government will be able to make its own recovery following US or not after it has been lagged distance behind it in the recent years following the credit crisis especially with its trade balance turning to be negative forming another challenge to this new government which can have wider financial stimulating plan of its own after the previous government recent plans to boost the economy which is still facing persisting deflation problem.

I just returned from two speaking engagements in London. One issue is abundantly clear. Financing opportunities for most discovery juniors are non-existent and it is imperative that a junior mining company wishing to survive the current capital drought exhibit two factors.  

These are financial sustainability (cash is king, today) and robust project economics.  While most discovery stories seem compelling, at the end of the day they’re just stories.  To ensure survival of the thousands of junior mining companies today, more "meat on the bone" is a musti. Our discussions with institutional money managers in North America and Europe lead us to believe that unless you're a near-term or early-stage producer of gold and silver, nobody cares even at these severely depressed share prices. I think this short term thinking is a mistake as someone who has focused on the industrial metals and minerals sector.

Written by Chris Berry, MBA - [ Discovery Investing Web Site ]

The single currency is moving versus the greenback between the effect of the bad economic and political news from Europe and the increased market expectations of having hints of further funds to be pumped from the Fed next year when it finish its meeting next Wednesday by god’s will while the governmental financial effort are looking setting back to the market on  the fiscal cliff which is looking until now unavoidable with the time running with no clear clues of a reached deal between the Republican Party and the Democratic Party for even lowering its massive negative impact which can cost the American families from $2k to $5k a year cutting the GDP growth by 1% approximately by God’s will with no concession until now because Obama seems insisting on the tax hikes and the republicans are still pushing for cutting further health care spending showing that there can be no change of last year last summer agreement to start the austerities measures from the beginning of next year by cutting the govern mental spending by $109 bln and ending Bush’s tax cuts after it has been extended before for another 2 years and imposing new taxes to the higher than 250k$ income a year families ending emergency unemployment benefits to cut the deficit by about $550 bln next year in a plan for saving 7 trillion dollars in 10 years.