Don Coxe 9.8.11 Conference Call

· The Swiss Franc is a big story and had basically been tracking gold. Swiss assets have quntripled in one year in a time of deflationary forces is really remarkable.

· Don provided some interesting background on the franc which in the 70’s when you invested in Swiss banks you also had to agree to have 10% of your assets invested in gold. That of course has changed.

· The fact that the other safe haven available to investors other than gold has seen fit to tie itself to the Euro has now removed its safe haven status. This is a time that is very tough for investors to determine what is safe. A Greek default looks like it could occur in a matter of weeks with Italy now in the cross hairs. It won’t be long before we are discussing an Italian default. The Italian labor rates have just soared making Italy pretty much non-competitive. Discussions will go on from day to day, week to week about another collapse and all of this with connections to our banking system. No surprise that we are getting a sell off on the financial stocks. The Euro disease is spreading. French banks have gigantic positions with all of this debt.

· Thinks the Swiss franc will continue to decline. The currency traders are in such a state of shock that they are rushing into the dollar. We see this even with the weakening Canadian dollar simply because people have to have something big when they have big buckets of money to move around.

· As to investors what do you do now? Can you afford to take a longer term view when we well could have a financial crisis bigger than 2008?

· Don warns that we should not be using the profit numbers for S&P to dictate our decisions. Remember that EURO is biggest exposure to multi nationals. What that yet means no one knows.

· Any good news? Well I suppose that they stopped denying they have a problem. Merkel’s political base is eroding. It’s not clear how you are going to get the politicians to work together to get things implemented. Not clear how you translate an accord into actual implementation especially when the banks are in such bad shape. (EURO was the child of the elitists who had a grand vision but they cannot not now dictate what will happen.)

· The real risk now is in sovereign credits which is a brand new situation. How that will be evaluated is anyone’s guess.

· Notice how the mining shares are the only things in the green even when the bullion is down. Recommends that we take advantage of the enormous earning power of the miners. These are cheap and you can believe these earnings. They are not dependent on governments being able to pay its bills or on consumers. (E.g., Illinois is 6 months behind in paying its bills)

· Canadian’s assets are a safe haven even if loony is not at this time reflecting it as it closes in on par with the dollar. Thinks there will be a delayed reaction in favor of the Looney.

· Gold is having bigger price swings. But this is because people can’t make up their minds as to whether gold is in a bubble or the only safe haven left. Even with these price swings gold is over $1800 up over 1/3 from beginning of the year. Point is that the stocks you can invest in tied to gold make huge amounts of money at $1700 gold…they don’t need $2000 dollar gold. That compared to gold ETF where you do need gold to go up from this level.

· Mentions again great study by BMO on gold miners. Gold miners are not being priced on the value of their current earnings let alone the value of their reserves in the gold. There will be a re-evaluation of these miners.

· Question about agriculture and whether this sector continues to be a good place to invest? This is a good news story that the market is ignoring. Distinction being drawn by investors from more pure plays like the seed and fertilizer companies and the more industrials like the John Deere’s. New forecast on corn will be forthcoming which could mean incredibly expensive corn. Cash crop farmers are in good shape compared to the economy at large. By far the most impressive group (agriculture) other than the precious metals area. Food prices are rising far ahead of others including fuel. Agriculture sector then is a source of comfort.

· Question – but if this will be worse than 2008 will market recognize these fundamentals? In 2008 there were no safe havens anywhere except for long term zeros? Don mentioned Lehman bankruptcy in 2008 where things were dumped regardless of their worth and first time we had had a major sell off in the markets so that we had a bunch of people who just bought agriculture for the first time ever. Therefore the last in investments in were the first ones out. Since that time folks have looked at the powerful earnings of this group. Per IBD the best performing group over the last 6 months was the miners and then the agricultural/chemical stocks. Money is moving into this group and doesn’t think this will be the group folks use to generate their source of cash. The big unknown is what’s going to happen to oil prices. A big recession will mean lower oil prices. Grains remain a terrific sector to be in and you should overweight that in favor of the other sectors (except for miners).

· Question (Susan comment - from Elizabeth Bramwell who runs a large fund and is often on the Barrons Round Table discussion) – Treasures are still under review for further downgrade. What kind of gold supply do US have compared to others? Wonder whether gold going to come into play as to some form of payment if deficits continue? If Bernanke were to go to QE3 you would have a very negative effect on the economy. Thinks current Treasury rally is self-limiting. Not easy for Pension Fund Committees to make a shift as to their investing thesis but thinks over time could happen. (Don didn’t really answer her question)

· Question – Can you speculate on how you think this Euro situation will play itself out? Not sure but there are companies out there who do not have to rely on the banks for their funding. The idea of the EURO imploding is such a shock to investors that no one is sure at this stage where to go. Only thing he can say is that all the taxpayers in Northern Europe will not agree to pick up the tab for all the players in Southern Europe. Basically Don just doesn’t know at this stage how to call it.