Subject: Don Coxe 2/29/08


BMO Capital Markets Institutional Client Conference Call for February 22, 2008
 
 Don Coxe
 Hollywood, FL
 
 
 Thank you all for tuning into the call, which comes to you from the Global Metal & Mining Conference in Hollywood - the closest I’m likely to get to performing in Hollywood – Florida. And the conference has wound up. It was a great, great conference, broke records of all kinds. And appropriately enough, some metals prices were…and a lot of, well virtually every grain price was breaking records of all kinds while we were meeting.
 
 So I’d like to begin by giving you my take on the conference because what was clear is that there’s a new generation of mining leaders and they aren’t dragged down by those twenty-one years of decline, disappointment and despair. They are interested in building shareholder value, as opposed to the predecessor generation who competed with each other to build big mines, then found out they couldn’t make any money at it and lost faith in the mining industry itself.
 
 So, this is a smart group and very diverse, we had twenty countries represented here. What comes across though is that it is extremely difficult to replace production and do it with ore that’s as profitable as what was in the ground – those unhedged reserves in the ground that I was singing hymns to for the last six years.
 
 And in addition, it is even more difficult to find that in politically secure regions of the world. And the gold mining industry in particular is feeling this. And it was really interesting to see how explicit some of the companies were about reducing political risk. That’s a reassuring concept too, because one of the arguments that has been raised by some of the critics of the gold mining industry who say “Well, don’t bother buying gold stocks, buy the ETF”, is that they’re subject to so much political risk.
 
 That said, there are grave doubts in my mind that we will be able to replace the gold from mines that will stay in private hands. And although we’re getting new supplies of gold coming in to the market with the IMF starting sales, and maybe some other central banks will resume sales, nothing out there suggests that the shortage of gold which gave us a new all-time high over night is going away.
 
 In addition, what we had was a break down of the Dollar over night. It may turn out to be a temporary break down, but it was important because we are at 1.51 on the Euro. And that, if we close here, that is a break out, I believe, for the Euro against the Dollar. And the importance of that is the European Union is facing some pretty severe recessionary conditions, particularly in the countries that had real estate bubbles worse than we’ve experienced in the United States. And the last thing they want at the moment is to have their currency go up sharply in value.
 
 Well that’s what they may feel at the moment, but there’s another force out there which I’ll get to later, which would allow for the idea of rising currencies being a way of controlling food price inflation. And I believe that’s in fact going to be an accentuation of the Chinese government’s policy going forward on the Renminbi.
 
 The base metal companies that are here also had terrific presentations in some cases about the ore bodies they have, the ore bodies they’re developing and the ore reserves they’re adding to existing geologic regions they’re producing from where they’re cleverly using new technology to find more ore.
 
 So, I’m very much left with the view that the base metal companies – as a group – remain a superior asset class, that although their costs are rising and particularly when they’re opening new ore bodies, particularly if they’re ore bodies now that are open pits, where they have to pay seventy-five and ninety thousand dollars a tire, these kinds of things, and they have of course, rising energy costs. So that the idea of simply investing in a mine, whether it’s a gold mine or a copper mine as an inflation hedge, what you need is a mine manager there that knows how to control their costs.
 
 The Cleveland Cliffs people were particularly impressive in their presentation about how scrupulous they’ve been able to be, at the moment, in controlling the costs as they’ve been opening new mines. But, they said that their inflation experience was 3% for the year. Well, it perhaps helps if you’re located in the upper Midwest of the US.
 
 The fact that we had so many people in attendance can be used by the cynical as an argument that we’ve reached a top for the mining industry, but you could have said that for the last four years in a row. Each one has been bigger and this time we had to move to this new location in Hollywood because our old location was outgrown. But, we still are dealing with a situation where it’s only a minority of investors – particularly in the US – that believe the mining story and are interested in buying mining stocks.
 
 Global investors who are here, of course, throngs, have a much more enthusiastic attitude and are looking for value wherever they can find it. But, what you don’t get is a sense of a euphoria or a mania, because there’s lots of worries being expressed out there about what could go wrong. And therefore, there’s still enough caution that I believe that the capital investments will be done in an orderly basis and on an accretive basis to the stockholders. And it’s a good thing to see some of these Canadian mining companies going truly global and developing ore bodies and to the extent that they’re developing regions of the world that are pretty politically secure, it’s still reassuring.
 
 There’s some gutsy ones that are going in to some pretty hairy regions of the world, but I’ll leave it up to those of you out there who are born risk-takers to decide how much risk you’re prepared to assume in buying companies that are located in places like the Democratic Republic of Congo.
 
 The move in gold through the 950 level is historic, because what it indicates is that the inflation pressures are being felt and that there’s more and more of a skepticism that central bankers will be able to stand in the way of this one. Now the fact that Ben Bernanke cut the Fed funds rate seventy-five basis points within a day of the announcement of the highest US CPI in fifteen years was a sign that the Fed was not going to spend its time fighting inflation, it’s got to deal with the detritus of the bad behavior of bankers on Wall Street.
 
 So, you can argue that the best thing that happned to gold was five major banks on Wall Street. And who would have thought that that was the real correlation that would take gold up from seven hundred dollars on to a higher level. But, at the moment, what we have is that gold is being driven by…partly by fear, also by inflation, also by an inverse correlation to the US Dollar. In other words, what we’ve got is all systems are go for gold, at the moment. And you can’t sort of separate out amongst them, what is the biggest feature. But it reinforces my view that – certainly for new money investment in the mining industry – this remains the most attractive sector.
 
 As for the base metals, the stories do range across the base metals with continued bullishness for copper and Robert Friedland gave a powerful endorsement of the future for copper in two presentations: one that he gave for the convention on his own mining company, Ivanhoe, but also in his wonderful presentation done for the platform yesterday. He’s in a league of his own as far as a platform presenter.
 
 And what comes out of this is simply that if you just use US consumption figures, yes, you’d be misled as to whether copper prices can trend higher. But even in the US, that could change if there really is a move towards hybrid cars or other developments which are related to the green environment, because so many of them – according to him at least – are massive copper consumers.
 
 Meanwhile, although there are great new deposits being brought on stream, it’s the consensus of our analysts that there will be price discipline in the copper field because this industry is consolidating so rapidly. And although we don’t have the equivalent of what was called CPEC back in the late 70’s which was the attempt of copper-producing countries to imitate OPEC, we don’t have that in the form of BHP Billiton and Rio Tinto and the Chilean government’s Codelco. But what it does have, is that it’s concentrated in strong hands and if there are oversupplies developing, near-term, just because of the US and maybe the EU slowing down that we’re not going to get flooded with copper and the price get driven down to the two dollar or lower range.
 
 The chart that we talked about in the flag formation last week, we have broken through that on the basis of a log chart. And I thank Caesar Brian for drawing that to my attention. And we’re still just above the line on the more simple-minded chart that I sent out last week. So it does look as if copper is giving us a signal that the global economy is going to remain strong no matter how bad things are. Is it possible to have a boom in China and a depression on Wall Street? I think that it is possible, although I have the good luck not to be working on Wall Street.
 
 Those things come to me from this conference and again, I say that it was a great opportunity to meet so many people from the industry and to meet so many clients who kept the faith and have been following the industry for years. But I want to shift gears a bit because this is going to be my last conference call for a few weeks because I am going on vacation. And to update you on my feelings on a trend which is gold-friendly but unfriendly for most other things.
 
 Because my fears of a global food crisis are intensifying. The developments day by day are extremely negative. This week, Kazakhstan, which has been the world’s sixth biggest wheat exporter of many recent years, embargoed exports of wheat. That adds to Russia’s embargoes and you’ve got other countries such as China and India that have imposed punitive export taxes. And as we commented on last week, the fact that the American Bakers Association tried to get the US government to embargo wheat exports, which would of course have torn apart the WTO, is a sign that we have really run down the cupboard.
 
 Mother Hubbard’s cupboard is virtually bare. The US has seven weeks supply of wheat on hand, that’s the lowest in sixty years. But what it is is not enough wheat - wheat weeks, that is – until we get the winter wheat production, because that’s not going to show up until late Spring.
 
 So we have the potential for a crisis in something as fundamental as bread and bagels coming up. And that’s in a country that has always had its policies on wheat dedicated to trying to export more of it or to give it away under Public Law 480.
 
 And the prices we have seen this week for the feed grains are truly awe-inspiring. I mean, the Minneapolis Grain Exchange prices are so far off the charts and what you;ve got it short covering and disasterous effects on farmers who sold their crops forward. But if we take out those distressed buyers, we’re still looking at prices for wheat in the other markets which are at levels that frankly, I wouldn’t have thought we would see until much later in this cycle. And we’re past eleven dollars on Board of Trade wheat and that is again a level which is…scary, for US inflation.
 
 The connection between corn and soybeans and oats and rye and sorghum and food inflation is much more tenuous because it has to be processed through animal bellies to translate into some kind of consumer good. But, when you’ve got wheat at these levels, this is in goods that the consumer will see, and yes, you get the consolation that there’s not that much wheat in a loaf of bread or in a bagel or in a bun, but the baking industry exists on very tiny margins. So, the baking industry is going to have to pass along their cost increases, if they can find the wheat to produce. We may have more of a shortage in the near-term than a price increase.
 
 But, think about it out there. Think about what were the chances you’d hear anybody who called himself a strategist, talking about a shortage of bread. That sounds like something out of, you know, a much earlier millennium. But, we are all tied in together and the fact that the Chinese and Indians are consuming so much dairy products and meat is something that is going to continue.
 
 But, what is breaking down is the old trading patterns where you could equalize out supplies around the world. And this is despite the fact that we don’t have any crop failures on the horizon. This is simply supply being inadequate for demand. A crop failure this year, certainly in the US Midwest would be a global catastrophe and it might have political impact so far above and beyond what happened in the 1970’s that it’s almost scary to think about it. Remember this, that at Tiananmen Square, many of those demonstrators were there because of food price inflation in China at the time. And the technocrats managed to drive down food price inflation thereafter, but now it’s roaring back. And of the seven and a quarter percent inflation in China, six percent of that number is food and remember this is before we got the effect of the grain price increases of the last six weeks.
 
 It’s…the PPI numbers this week were twenty percent for raw foods, nineteen for semi-finished foods and up around seven for finished foods, but again, these numbers are grossly out of date. That’s the equivalent of pricing gasoline based on the fact that somebody might have had some old inventories around of seventy dollar oil at a time that spot oil was trading at ninety-six.
 
 So, what’s going to come along here is going to be a shock, it’s a worldwide shock. And there’s a law that may sort of help you to think about this, those of you who are amateur political strategists. The law is Engel’s Law. This is not the Engels of the Communist Manifesto, it’s E-n-g-e-l, and his law, which dates back to the 19th century, is that whereas there’s food price inflation, the impact is correlated to the income level of consumers. So that within a country, the poor hurt most, the middle class next and the rich aren’t effected much at all. But you use the same correlations to analyze the effect on economies by country. And the countries that are most at risk then, from political instability, civil wars, and so forth caused by food price inflation are the poorest or those that are still in the early stages of industrialization.
 
 In this case, we’re talking about more than half the world’s population. And it’s the sense that these price increases are beyond anything we’ve ever seen before. It is impossible to say how this all plays out in a positive way. And yet, there’s no demand from leading candidates for public office in this country to stop the ethanol programs. And Robert Friedland just described these policies as insane. And there could be even more extreme terms used for them now. We just can’t afford these things.
 
 And the EU has not responded to the demands from China, Indonesia and Malaysia to cut back on its biodiesel programs because palm oil just keeps setting new price records and that’s a major source of protein for the very poor in the urban regions.
 
 If I were running China, and looking at this, one of the first things I would do is accelerate the price increase of the foreign exchange rate of the Renminbi, upwards, much faster. Because I would look to offset whatever competitive losses I had by exporting more inflation into the US and Europe. We’ve had eight straight months in the US where the price increases of goods coming in from China have been above price increases in overall US CPI.
 
 So, you take the fact that Wal-Mart is such a gigantic factor in the overall economy of the US and they’re the seventh biggest trading partner of China and the other six are countries. What the Chinese could do is drive up the value of the Renminbi, considerably, and rely on raising US inflation so much that they would still be competitive.
 
 Now, that’s a very remote possibility, but what you must understand is that the breakdown of the relationship between raw material prices and the advanced industrial economic goods which occurred in the 70’s, had enormous political consequences. Not just economic, but enormous political consequences. And those price increases back then look trivial compared to what we’ve seen so far. And as I say, this is while we are still waiting to see what the northern hemisphere crops will be for this year. Yes, we’ll be planting right through from fencepost to fencepost in the US Midwest, but we better have good growing weather.
 
 So in terms of making economic forecasts for this year I'd put it at the top of your list, following the weather in the Midwest because if there is a drought in the Midwest or if there is a July flood as there was in 1989 then we've got a chaotic world. We're going to have very serious inflation everywhere. But it won't be as serious in the US and in the EU as it's going to be everywhere else. But because we're a global economy we're not going to escape this unscathed and it's going to be bad for stock markets worldwide.
 
 Now, you may say I'm overdoing this but what I'm looking at here is that as the metals prices go to new highs in the case of precious metals and base metals surprise on the upside and oil trades at 99.92, this commodity boom is showing no sign of letting up. It's just got a new set of leaders at the head of the parade, which are a bunch of things that most people didn't think you'd make money trading on.
 
 Therefore, I think that during the few weeks that you aren't going to hear from me, follow the grain prices. And in the meantime do think about increasing your exposure to the ag stocks on any pullbacks. Because we've had such huge run-ups in stocks like Potash, a day like today where it pulls back a few dollars is a sign that it's not like a hot air balloon that just keeps going up. There will be opportunities to re-enter.
 
 But remember that the exposure you can do within your portfolio and this is limited by the supply of the stocks of the companies that are important. In order to have the diversity that you have with energy so that once oil went through $35 you could invest in a wide range of companies to share on the run to 100. No such luck with agriculture.
 
 So for those of you who don't happen to own farmland - haven't inherited a farm - there's going to be problems ahead. And what the biggest problem of all is that no major western governments are admitting that is a problem at the moment and making policies to deal with it. Because of the combination of the farm lobbies and the fact that the farmers refuse to believe it - I have yet to meet a bullish farmer - they all have the view that prices are high now but they're going to come down because they always have.
 
 This is now the ultimate application of my maxim that the best investment opportunities come from an asset class where those that know it best love it least because they've been disappointed most. Because when you're talking about the managements of a few hundred mining companies or a few hundred oil companies with the impact that that fact of the dead weight of the twenty-one year crash had on their unwillingness to do exploration or to engage in cap ex, when you apply this to the farmers of the world that they just cannot believe that something's going to last. They will plant now to take advantage of extremely high prices but what can they do to significantly expand production? Yes, we will add more land from the set asides, but that will only be again playing at the margins.
 
 So, we need new technology being used widely. We need the farm implements stuff being used widely. All of these responses are going to take a long time. We may not have much time.
 
 So, that is the risk story out there. But in a funny kind of way it's a gold friendly story at least because for those with long memories it was food inflation that kicked off the inflation of the 70's. It was food first, then oil, then base metals. My screen suggests that something like the 70's is coming back. And I can tell you for those of you who invest in the S&P, back then it was a miserable time to be investing in ordinary stocks.
 
 We are going to change the ranking of the commodity stocks relative to the market, in the next few years. It will take a long time but it will happen. Because I believe they have less endogenous risk than the rest of the stock market. And this is a gigantic change. And those of you who are faithful enough on these calls won't be too surprised to hear this, but you won't make friends at cocktail parties by announcing that.
 
 So that's my wrap-up from the conference. Are there any questions?
 
 Question 1 (Gary Brooks): In relation to your comments about the food demand and the problems that we're all familiar with listening to your calls, I was stunned yesterday to see an announcement from the UN that said that world fertilizer production is to outstrip demand for the next five years. Have you seen anything like that out there, or wonder where they’re getting their information?
 
 DC: No, I can't imagine that because - well, first of all you got to realize that if you use the average number of tons of potash and phosphorus that's been consumed over the last five years and then you look at production that we're going to going to have for the next few years, then that would be a statistically accurate statement.
 
 But, the point is that when farmers get such an immediate gigantic payback for doing a good job with fertilizer, because of the high grain prices, what we're going to have is much more demand. So therefore, the fertilizer companies have not gone crazy on this. And we need much more fertilizer because this is one where there's direct return in yields.
 
 These days, you see, it's not a question of farmers over-fertilizing the fields. They all know about Liebig's law of limits. They've got formulas as to how much of each of the ingredients is optimum for their farms. That is, the big producers and the others pretty much learned it.
 
 In advanced industrial countries you've got agricultural - government agricultural representatives who come around and take soil sampling and they tell you exactly what it is. So I don't think there's a question here, where farmers will not optimize as a group, but that means adding more fertilizer because they are going to try to get the extra yields.
 
 I mean, when you're looking at 14.75 soybeans, putting in extra potash, the payback is so terrific that, yes, there will be a lot more potash consumed. And there will be a lot more potash produced, but this doesn't mean potash prices are going down.
 
 Thank you. Any other questions?
 
 Question 2 (Drew Hayworth): I'd like to hear your thoughts regarding what you think the Fed is going to do not only here in the near time but even a little bit further out.
 
 DC: Well, I really pity Ben Bernanke. Boy, talk about inheriting a poison chalice.
 
 You know when Alan Greenspan drove rates down to 1%, his justification included that the US CPI at that time was 1% and he said, "Look at the deflationary forces out there. China is exporting deflation. And there's no commodity inflation out there." So it's safe to goose the system this way - that wasn't the verb he chose - and what happened was we got all sorts of pressures imbedded into the system and meanwhile money supply growth globally was growing because of the new participants on the new economies.
 
 Well, now what you've got is the true stagflation threat, which is that the economy is going down and raw material prices are going up. And what we see in China is that their wage rates have climbed dramatically because of food prices in a country which according to Engel's law where over 35% of the CPI is food, therefore you have to pay your workers more just to eat. You don't improve their standard of living at all. You just give them more food.
 
 So, although, I actually did a Bloomberg interview yesterday from down here at the convention and right before I went on was a woman from the National Association of Business Economists who had done an update on their forecast for the year. And she announced that they were much more bearish on the economy but they had reduced their CPI forecast for this year to 3%, because the US economy was going to slow down.
 
 In other words, this was a pure Phillips curve analysis. And at the time she was talking, we were seeing all time record prices being set for oil and food prices. And yet it hadn't penetrated to those business economists.
 
 Now, what chance is there of a central banker - given that kind of environment - saying that you know "I'm going to worry about inflation when I'm faced with the crisis that's going on in the financial system"?
 
 So, given with what's happening out there, I think that the idea which has been expressed as being one of the Fed people having been alleged to have said we can afford to drive interest rates down now and expand the money supply because when the economy recovers we will raise interest rates.
 
 By the way, what this woman said was the reason the economists were so satisfied that inflation was coming down was because of Fed monetary policies. With the Fed funds rates plummeting like this, how can you say that that is going to produce lower inflation? So, at the moment the Fed is being given a free pass to lower money to a rate where it's almost free. But that won't last long.
 
 And this is a year, an election year, and one thing that all the voters are going to notice by late summer that how serious the food price inflation is. And of course they will blame everybody in sight. Since Hillary Clinton has called for an excess profit tax on big oil to use for stimulating production of alternative fuels, they won't be able to do that - an excess profit tax - on Illinois corn farmers so they will then blame the supermarkets. They'll blame everybody in sight.
 
 But what Mr Bernanke is going to face is the worst possible combination of juxtaposition of events. And since nobody predicted the food shortages - the USDA didn't even predict - the USDA actually uses a figure of 3 to 3 1/2% food inflation for this year. And that's because the work that's done by their good economists down below is processed out at the top by those who liaise with Congress.
 
 And if they were to use a higher food price figure, they might have to cave into the Americans Bankers' Association and do something to restrain wheat exports. Remember a lot of the wheat exports they're giving out there are being financed with cheap government financing on loans to the buyers because these policies have been in place for a long time and nobody thought to check on them. That's how we got the great grain robbery in 1972.
 
 So put all these factors together and Ben Bernanke is somebody for whom you should give both sympathy and a prayer, because he hasn't got many prayers of his own at the moment. It's a tough job. Thank you.
 
 Question (Dave Lemons): Given that you can own stocks of all these companies that are going to help farmers increase the yield of their farms, why do you think there's so much enthusiasm now for food stocks? I'm thinking of Warren Buffet buying Kraft and a lot of other news about processed food companies. What are your thoughts there about the food companies themselves?
 
 DC: Well, it's of course a very brave man indeed, who would challenge Warren Buffet's judgment for something like this. But, it's true that back in the 70's, some of the premier food companies who had big brands and were good at supermarkets and shelf space were able to pass along the price increases. And certainly the supermarkets did pass along the food price increases. However, it's a pretty heroic assumption that it can be done with the more open markets we have now with food products coming in from all over and with the US Dollar so weak.
 
 So, on the other hand, he's a long term investor and remember he doesn't buy commodities. He bought silver once and wasn't happy with the results. So he may be of the view that we may have near term food price inflation and that's bad for Kraft but when is he going to get a chance to buy a great brand name like this and one that over the next ten years or so will work out. And the other thing, of course, is that you've got to be a contrarian when you're a Warren Buffet. You've got to buy something when there's a big reason for it being down but you think that the longer term fundamentals are good. So in that sense, he is benefitting from this.
 
 Remember he started investing in the stock market heavily in 1974-75 when inflation was rising and stock prices were getting absolutely hammered. So, he's demonstrated that he can invest in companies such as this in an inflationary environment and that they pay off for him later on. But is this a strategy I'd recommend to mere mortals? The answer is no.
 
 Thank you. Next.
 
 Question (Mike Giovani): The question I had was, aside from having the portfolio of agri stocks are there any ETFs that kind of give a comprehensive exposure to both the agricultural commodity area and the base metals?
 
 DC: Not that I'm aware of. There are definitely ETFs for the ag stocks. But at the moment at least there are no sort of ETFs for commodities generally. But since the ag stocks are the ones that are maybe hardest to accumulate then, any of the ETFs that they have with such illustrious names as MOO and so forth are certainly a good place for investors to start.
 
 But no, I think that I'm emphasizing obviously at the moment golds and ags and base metals for fundamental value. And because you're going to be taken out by either BHP or Rio Tinto or China or somebody over the next two or three years, because these companies are so great. But yes, I'm not aware of any ETFs for the mining stocks.
 
 Thank you. Any other questions?
 
 Question (David Miller): I came in quite late and this might not be quite on topic, but you spoke about a year or so ago about the US regulators modernizing the oil and gas reserve accounting rules. And I'm wondering if there's any update on that?
 
 DC: Yes, there is work being done on this. They're moving forward on it at the SEC. And they've publicly announced that they are hearing briefs, they're sending research reports out and the machinery has started to move. So I think it's only a matter of time before we get a reclassification of oil sands and oil shale reserves.
 
 And that I think frankly the Chris Cox who runs the SEC, he's certainly no relative to me, a very smart guy,and he is very much aware of the strategic position of the US in this, that if the accounting rules they have prevent US companies from developing what are now economic reserves - remember these rules came in 1982 to deal with oil shale fraud. And back then oil prices were only 24 dollars a barrel. And Shell is doing work right now on oil shale has basically said that they're going to need 80 bucks a barrel.
 
 Now there's an overall inflation since then but nobody found a way to make them economic back in 1982. So the SEC rules made sense then. This is a useful update. But it also has, you're right, economic impact. Because once you can use the oil sands in your reserve life index that makes the Suncors of this world look a lot more valuable.
 
 Thank you. Any other questions?
 
 Question (Greg Tyson): Sorry, Don, it's Sharon calling from Greg's phone in Calgary. We also talk to farmers besides oil people here in Calgary. And one of the things that I agree with we certainly don't talk to optimistic farmers. But they also anecdotally tell me that there is lots of durum wheat in the southern parts of Saskatchewan and Manitoba and Alberta sitting in bins. But they're not going to sell it to the Wheat Board for 8.50. But if they truck it across the border and try and get 25 or 18 or whatever they're going to jail. So, not only do you have a shortage problem but you have an interference problem. And you have a government, again, who is not stepping in and making the problem better.
 
 DC: Thank you for that. That's a great story. Well, in a funny kind of way then Canadians, who are not wheat farmers that is, may want to rejoice for the Canadian Wheat Board. I'd never thought you'd hear me say that on a telephone call. But what it means is that Canada may back into a policy of not exporting something that's going up in price just for the first bidder that comes along. And who knows. What that means is that Canadians will have cheaper pasta than the Americans as a result of a bureaucratic foul up.
 
 I'll take a good result as a Canadian food consumer, my Canadian family members, wherever I can get it. But I'm delighted to hear that some good results could occur to most Canadians as a result of the Canadian Wheat Board.
 
 As to whether the Canadian Wheat Board makes sense for farmers, particularly western farmers, my viewpoint is different. I tend to ordinarily identify with the producers. But you're absolutely right that the shortages there - yeah, the prices will be enormous – but, even the Canadian Wheat Board will be forced to unblock it and who knows maybe by the time they unblock it, the prices will be so high that everybody will rejoice that there was this snafu in the meantime. Everybody that is except pasta consumers in the US.
 
 Sharon: Well our headlines this morning and yesterday - bakeries in Calgary are talking about paying double the price for flour. And they're going to pass it on in the price of bread. So whether it's pasta or bread, it's getting passed on here even if there is 8.50 grains in Canada.
 
 DC: Wow, well that is intriguing. Well, those kinds of anomalies will be squeezed out of the system with something as relentless and gigantic as what's unfolding here. So, although I don't doubt that those people at the Canadian Wheat Board who will assume that when they read what's in the Minneapolis grain exchange that it's either a misprint or just another proof that Americans are idiots.
 
 Thank you. Any other questions?
 
 There are no further questions registered at this time, Mr. Coxe.
 
 DC: Thank you all for tuning in to the call. We'll talk to you in a few weeks.
 
 _____________________________________________
 
 Don Coxe profile from the BMO websites: Donald G. M. Coxe is Chairman and Chief Strategist of Harris Investment Management, and Chairman of Jones Heward Investments. Mr. Coxe has 27 years experience in institutional investing, including a decade as CEO of a Canadian investment counseling firm and six years on Wall Street as a 'sell-side' portfolio strategist advising institutional investors. In addition, Mr. Coxe has experience with pension fund planning, including liability analysis, and tactical asset allocation. His educational background includes an undergraduate degree from the University of Toronto and a law degree from Osgoode Hall Law School. Don joined Harris in September, 1993