A Melman Minute By: Leonard Melman   NOTE: In order to complete Mr. Melman's forthcoming book on the essential fundamentals of the developing international financial crisis and its relationship to gold and silver, new "Melman Minutes" will be posted only three times per week, each Monday, Wednesday and Friday. Since the work has been expanded to include potential solutions to the growing list of seemingly insoluble dilemmas, the working title of the book has been revised to 'REVERSING THE WAY IN!"   March 16, 2010 Greetings; and we can say without fear of contradiction that it is good to be back in our own writing studio once again.  Travel may be enlightening, but, truly, "there's no place like home."  Also, please accept our apologies for missing our "Melman Minute" which had been scheduled for Wednesday, March 9, but we were caught up in meetings and unable to break loose. One of those meetings turned out to be truly important and involved a nasty bit of legislation pending in Parliament; a Private Member's Bill identified as Bill C-300.  Those in the mining industry who are not aware of this pending Bill should do their research because it will be a genuine threat to junior miners, both in terms of a company's finances and their reputation, should it become law. In short, the bill allows the Canadian government to become involved in a company's foreign as well as domestic holdings should anyone file a complaint against those operations.  Complaints might be filed by environmental, religious, aboriginal or social organizations and, should a complaint be filed, the company's reputation could be severely harmed just by the accusation and this might have profoundly negative consequences in terms of their fund-raising efforts. This new law is also similar to the so-called "Human Rights" tribunals in the sense that when an accusation is made, all the power and financial strength of the government goes to work to investigate the complaint while the company itself is responsible for mounting - and paying for - its own defense.  Unlike most Private Member's bills which normally suffer an early death, this bill has already passed through its second reading and, if successful in its third reading, will then be forwarded to the Senate for consideration.  Should the Senate approve, it will become law.  Once it is enacted into law, should that take place, then a period of approximately one year is set aside for the creation of rules and regulations before the law's true impact can begin to take place.  ................ In some ways, time seems to have stood still during our travels of the past two weeks.  When we left, President Obama was promising 'swift action' regarding medical insurance and jobs creation and he is still doing exactly the same thing.  China's currency transactions and value were the source of much debate - and they still are.  The world was awash in speculation regarding the dire need to resolve Greece's banking and finance crisis - and that speculation still continues.  Optimistic talk regarding the growing strength of the economic recovery was earlier met with conflicting data regarding the strength of that recovery - and it still is. It is not just the news background which has been indecisive, but action in several of our closely-watched markets has also been uncertain, and we are including several charts to illustrate the point. Throughout all of February and into early March, the U.S. Dollar Index appears to be 'marking time', trading within a narrow range of about 79.5 to 81.25.  However, it is now beginning to appear that a rounding top formation seems to be developing.  Clearly, there are few indicators in terms of the precious metals which have more impact than the U.S. Dollar, so this will bear close watching. At the same time, the Canadian Dollar has been gathering strength, has just broken out above resistance between 97.5 and 98 cents US, and looks like it is headed swiftly toward parity with the Greenback.  Given that resource development is one of the major influences in terms of strength in the C$, this would appear to be a plus for the resource industry outlook. Our chart of gold is beginning to show a most interesting coincidence which we believe has bullish implications.  Between early 2008 and late 2009, the price of gold formed a large "head and shoulders bottom" formation which finally broke to the upside in late 2009 and eventually led to the historic high of $1,230 in November of that year.  Since that time, it is our opinion that the subsequent correction in gold's price has once again formed the same type of formation; only it has done so much more swiftly than during the earlier example.  Resistance along the 'neckline' appears to have formed in the $1,150 to $1,160 zone and the appearance of the chart suggests to us that a breakout above this resistance could easily lead to an assault on that all-time high price level. During our absence, several reports of a most interesting - and ominous - nature have piled up.  We plan to review two of them and report to you tomorrow as our "Melman Minutes" resume their normal Monday-Wednesday-Friday schedule. Markets this morning show precious metals enjoying a strong rally with gold up by about $15 per ounce to the mid-$1,120's as of 9:50 AM PDT while silver and platinum are also on the 'plus' side in early trading this morning.  Financial markets in the USA are mostly trading quietly with the Dow ahead by about 20 points but Canada's TSX, reflecting strength in both metals and the petroleum complex, is ahead by about 65 points.  All base metals are trading higher with gains averaging about 1.5 to 2.0% and mining share indexes, not surprisingly, are also trading to the upside.  Crude oil has gained almost $2.00 per barrel to trade just under $82.00 and the US Dollar has weakened in currency markets. - - - - - All quotes US$ unless otherwise noted. Next Melman Minute scheduled for Wednesday, March 17, 2010           ◄  Previous Minute                                                                                                        Next Minute  ►
		DISCLAIMER The information presented above is based on data which we believe to be from reliable sources, but the accuracy of which cannot be guaranteed.  Any opinions or predictions contained herein are those of the editor and are likewise offered also for information purposes only. Any investment decisions should be made only following consultation with registered investment professionals.