A lot of numbers to keep in mind

Found this FP article which tries to look at what's behind the surge in commodity prices.  I always felt that part of QE2 was to devalue the US$ and that's been behind some of the strength in commodity prices.  Now, as the article says, is the rise in price due to a bull market in horses or a bear market in goats?

Also, Diane Francis had another insightful article about the state of sovereign debt in Canada.  For some eastern Canadian provinces, it is as bad as it is in the US.  The counter balance of commodity rich western provinces masks the national average.  I should follow Diane Francis as she had a nice article called China Cheats last month.

Now, I wonder about junior stock valuation.  I had thought Avion at $2 should be fully valued if we compare it to Kinross based upon their gold production.  Kinross is really taking a hit right now.  I gave up on Northern Dynasty and took a $1700 hit on that one (had taken a $900 hit on Kinross in March).  Now I'm break even again and waiting on Sunridge Gold and Ethiopian Potash to hit it big for me.  I also have Everton, Romios and Malbex in my RRSP.  Will one of them be a rocket like Continental Gold was last year?  I hope so.

Looming large is also the demographic time bomb and Andrew Coyne mentioned it again in Maclean's and on CBC At Issue Panel. Jonathan Chevreau also quoted Peter Grandich suggesting the era of the retirement pension entitlement is coming to an end.  Today, there was an FP article promoting RESPs.  Chevreau also had an easy plan to save $2000/year by saving $5/day. I figure if I can donate 10% of my gross pay, then anyone should be able to save $5/day.  Indeed, it takes just $1/day to sponsor a child in the third world.  So, the era of do-it-yourself finance is coming as government entitlements are ending.  Consequently, the Tory immigration plan of not allowing the sponsorship of elderly parents is VERY APPROPRIATE!  We can't afford to pay entitlements to elderly newcomers who have not paid a cent into the very entitlement they are receiving!

Gold hit an all time high again the past week.  However, it's still not at the $2500 inflation adjusted 1980 high (use this spreadsheet to work that out - I put in $850 and 3.5% and you'll get about $2500 at 31 years).  If you want to modify it, you'll have to download it to your computer.  I also remembered that when Canada switched to Metric in the mid-1970s, the gas price was $0.17/L in Edmonton.  Now, using that spreadsheet, I worked out that at 6% inflation/year over 35 years, the gas price would increase to $1.31/L (which is about what it is today).  I guess the price really hasn't gotten higher after all (factoring sort of reasonable inflation).  That doesn't fill the hole in my wallet though!