Boy, he seems to have become more aggressive in the purchase of PM.....

March 4, Don Coxe Institutional Conference Call

· Back in ‘70’s food and fuel inflation brought down governments in the western world. That is not what’s happening today…..its happening in the poorer countries.

· Fact that we have these revolutions in the part of the world that has the oil reserves is understandable. But the rise of oil and gold this week is truly amazing.

· Libya has light sweet crude so Saudia Arabia’s increased production of sour won’t do much to relieve this oil stress/pressure.

· Best assumption now is that the oil shock this time will not be a sudden shock that will end as suddenly. This will not be 70’s style inflation.

· We had record prices this week for both beef and pork. This is serious food inflation – the worst since the 70’s.

· We will not have normal economic growth pattern (even after all this stimulus $$$) given the breakdowns across the Arab world. Will have a negative back drop for the idea of a global economy. This is not the back drop for strong bull markets in the industrial world. We will be losing public sector jobs and not gaining a lot more private sector jobs…all at a time when we will be paying more for our food and fuels. However, this will unfold at a slower pace given the Walmarts of this world competing for the consumers and thus not passing on immediate price increases.

· The oil companies will find themselves in a situation where they won’t know who to negotiate with and the former deals they struck with Libya will be undone.

· We are now dealing with a very different world.

· Precious metals are bound to be a refuge for those who up to now were not concerned with inflation. In the longer run, copper and gold will not go up together. To date what commodities boom has reflected is real supply and demand. From here on in, copper which reflects actual economic activity may be different. It will be much tougher for copper, iron ore and zinc to continue their rise in the turmoil to come.

· For those of you concentrating on the commodity sector, I told you to scale back on gold in January. But this has now changed in my opinion given because of what’s going on in the Arab world.