Agora Financial’s Rude Awakening

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Laguna Beach, California

• Gold and oil punch through psychological, and historical, barriers,
• Every commodity has its day in the sun, ensure you get your golden tan,
• Fluke, or harbinger for the dollar in ‘08? And more…

A relaxed, but not very rested, Eric Fry reports from Laguna Beach,
California…

Faithful readers of the Rude Awakening would be aware that your editors hold
a candle for gold. Sometimes the Precious Lady requites our unwavering
devotion with abusive price declines. But lately, she has revealed a kinder,
gentler side – she has rewarded our affection with fleeting moments of
tenderness…
 
During the first trading day of the New Year, for example, gold soared $22 an
ounce to $860 – a new 28-year high. The oil price also rocketed higher –
kissing $100 a barrel for the first time ever. The stocks market, meanwhile,
suffered its worst first-trading-day drubbing since 1983.

Your editors do not pretend to know what these record-setting pyrotechnics of
the New Year portend for the rest of 2008, but we are captivated by the
spectacle. Collapsing share prices and record-setting commodity prices seem
so anachronistic…so 1979. And yet, the calendar clearly reads: 2008. Gosh,
maybe reckless monetary policies actually do matter. And maybe a weakening
dollar isn’t really a painless cure for whatever ails our credit-addicted
economy. And maybe the dollar-holders of the world actually do tire of
watching their dollar-denominated wealth erode.

Or maybe yesterday’s gold rally was just a fluke.

But if soaring gold prices are not a fluke, resource investors around the
world might enjoy a few more tender moments from the Precious Lady during
2008. That’s why Byron King and Kevin Kerr, the co-editors of Outstanding
Investments, remain avid fans of gold stocks, and also of various other
resource stocks. For the last several years, Outstanding Investments has been
guiding its 30,000 readers to sizeable profits throughout the resource
sectors.

At present, the eight recommended precious metals investments in the
Outstanding Investments portfolio have gained more than 200% on average. Of
those eight, Kinross Gold is one of the “worst” performers – up “only” 63%
since Byron King recommended the stock four months ago. At yesterday’s
closing price of $20.15, the stock has already jumped above Byron’s “Buy up
to” limit of $16.

But even so, the Kinross story might appeal to Johnny-come-latelys, or to any
investors who might be looking to add to their gold investments on pullbacks.

Therefore, for what it’s worth, Byron King shares a few thoughts on Kinross
Gold Corp…

—- Outstanding Investments Special Report —-

Introducing a revolutionary investment…

A “WEALTH INSURANCE” POLICY with a potential 201% upside in two years… and zero downside

With the stock market gyrating wildly in recent days, wouldn’t you like the
security of an investment guaranteed to never lose money… while giving you
the ability to cash in on a gold price that could reach $2000?

I’m so confident about gold tripling in price and protecting your hard-earned
wealth, I’ll even make a triple-your-money guarantee…

(But you have only until January 15th, 2008 to act… or this “wealth
insurance” may never be offered again.) Read on Here for details.

————————————————-

When Gold “Gets Mad”
By Byron King

Joe Paterno is a harsh disciplinarian. So is gold. When Joe gets mad, his
football team pays the price. When gold “gets mad,” the world’s paper-
currency holders pay the price. Gold is getting mad.

In April, a group of Penn State football players were involved in an off-
campus fight. The local police arrived on the scene and made a number of
arrests. Coach Paterno was not pleased. As former Nittany Lion linebacker and
Pittsburgh Steelers great Jack Ham once said, “Don’t get Joe mad.”

From Coach Paterno’s perspective, the football program at Penn State had a
black eye. The transgressions of the few had embarrassed the many. So Coach
Paterno sentenced the entire team to hard labor. The entire team would have
to clean up the Penn State football stadium after every game of the 2007
season. And Penn State’s football coliseum, Beaver Stadium, is no tiny
structure. It seats almost 110,000 oft-crazed fans of the Blue and White.

So on the morning of Sunday, Sept. 2, 2007, the day after walloping Florida
International University by the score of 59-0, all 110 members of the Penn
State football team could be found wearing work gloves and lugging trash bags
through the bleachers of Beaver Stadium.

After a couple of hours of stooping in the hot sun, the team members began to
drift toward the buses that would take them back to their dormitory rooms.
But Coach Paterno inspected the grounds and griped that they “didn’t do a
good enough job.” So the gridiron squad – from first string to the water boy
– headed back into the stands to finish the task.

Say what you will about Coach Paterno, the man does not lack a moral compass,
nor the passion to cultivate integrity and character in his players. It is a
shame that the monetary policymakers in the U.S. never played football for
Joe Paterno. They might have learned something about how to cultivate a
monetary policy with integrity.

I won’t bore you by rehashing the mess that the U.S. Federal Reserve has made
of the U.S. dollar over the past 94 years. But suffice to say that the slow
but sure erosion of the purchasing power of the dollar over time is simply a
fact of life. This monetary phenomenon is hard-wired into the U.S. economy.

Thus, the first rule of making money in our economy is to structure your
portfolio not to lose its purchasing power. Even if you are 100% in cash
stuffed in a mattress, you have made a certain investment decision and
condemned yourself to lose purchasing power over time, as inflation robs you.

We believe that the underlying themes of Outstanding Investments offer a
valid way to confront this problem. That is, we recommend investments in
precious metals, energy and other natural resource sectors, where the basic
resource commodities support their own forms of long-term value.

That’s also why we have been long-term advocates of precious metals
investments…and have urged our readers to increase their exposure to precious
metal…even as gold and silver price climbed to two-decade highs.

Long term, we believe that precious metals and most other commodities are in
a long-term bull cycle. We still counsel accumulating the shares of these
precious metals firms, as well as others that we have not necessarily placed
on the list.

With this in mind, let me offer a few kind words about Kinross Gold. Kinross
is the world’s eighth largest primary gold producer, with the world’s fifth
largest gold reserves, 45 million ounces. Kinross operates nine mines in five
countries: the U.S., Canada, Russia, Brazil and Chile. All of these locales
are considered “friendly” to mining (yes, even Russia).

During the past few years, Kinross has been investing heavily in acquisitions
and new projects that will be coming online within the next three years.
Kinross is also attracting some of the best professional talent in the
industry to its ranks. So we expect precious metals output and profitability
to increase and earnings per share growth to accelerate.

Here is a breakdown of the Kinross gold reserve structure:

At the current quote, Kinross trades for about $275 of market capitalization
per ounce of gold reserves, not including silver or copper resources, which
is among the lowest premiums among major stock companies. Call it “cheap
gold,” considering what you would have to pay for other stocks.

As is the case with all mining companies in these times, Kinross faces
pressures from the rising costs of energy, labor, freight and transportation,
equipment and consumables, plus, in some cases, unfavorable exchange rates.
However, the company has a continuing focus on cost control as a core part of
its culture. Kinross has one of the best growth profiles in the gold
industry, with the above-noted three major projects in development, which
will increase its output by 60% over the next two years.

During 2007, Kinross produced about 1.65 million ounces of gold, which was
comfortably ahead of 2006 production. We believe that Kinross is one of the
best of the larger-cap gold mining value plays around. And we also believe
that we will not soon see any of the monetary policymakers of the U.S.
central bank learning any lessons about their duties to the team. There will
be no monetary Coach Paternos to force them to clean up all the dollar bills
they are littering into the global economy…or to clean up the macro-economic
messes these excess dollars create.

Nope. Ben Bernanke and the rest of the Fed team will continue tossing dollar
bills from the skies…and that’s going to make gold very mad, maybe even
$1,000-mad or $2,000-mad.

So if you want to bulk up your portfolio with some gold mining shares and
temper your exposure to the long-term decline in the value of the dollar, use
any pullback in the gold price to accumulate shares of Kinross.

[Joel's Note: Byron King also runs Energy & Scarcity Investor – an investment
service that focuses on smaller companies in the natural resource sector. Due
to the small market capitalization and thin trading margins of these smaller
companies, he cannot in good conscience recommend them in Outstanding
Investments. If you are interested in learning more about Byron's Energy &
Scarcity plays, here's all the information you need:

Byron King's Energy & Scarcity Investor

---- Oil Hits $100: Special Energy Report ----

A California Energy Site So Secret, You Can't Even See it Without a Top-Level U.S. Navy Clearance...

But a former Navy 'insider' is now ready to disclose the names of five
'secret' energy companies that could make you $372,340...

The Navy has already collected $194 million from this discovery.

And CNNMoney.com reports that 'Investments in [this 'secret' energy sector]
jumped nearly four-fold over the last two years, to about $100 million last
year… Because it’s [still] so small, there’s large growth potential
here…’ Details In This Report.

————————————————

Rude Endnote: Byron and Kevin have long “held a candle” for gold, as Eric
puts it. To read the GOLD $2,000 report for yourself, and to learn 5 ways to
play the rise and rise of the precious metal, read on here: THAT Gold Report

Cheers,

Joel Bowman
Rude Awakening