Don Coxe’s 11/18/11 Conference Call

· Wants to look at Euro crisis from a few other angles. Things we may be getting to a point where something will have to be resolved albeit with more pain.

· North American banks have written about ½ trillion in default swaps on European bonds. Concern is that these bonds are really “naked” despite these swaps so what we are getting is a sell off in Greek bonds.

· Don believes that the Europeans will print money …they have no choice so the market will see some support.

· Spanish elections this weekend resulted in a swing to the right to defeat the socialists. But Don believes the Spaniards have no confidence in any particular politician or political party. Thinks this occurred as they do think the conservatives may have better result in negotiating with the Euro powers.

· What they are doing in the Eurozone is repealing democracy in order to protect the financial system. The Elitists are making decisions on their own without voter involvement.

· Germans have their savings (lots of savings) in the banks and the concern over their own banks is now scaring people. Banks in France and Germany have great exposure to “dubious bonds.” Merkel is facing the possibility of bailouts if there are further defaults.

· Where then to invest in all this turmoil? Well we are seeing what Central Banks are doing with the announcement from World Council that Central Banks in 3rd quarter added significantly to their gold reserves. There has been a “sea change” in opinion there. This is much more that what they have done in the past. Sell off in gold is counter intuitive. Don’s enthusiasm for gold has intensified if anything given what’s happening in the world.

· Doesn’t take a genius to see that the dollar will eventually stop rising.

· With the “Major expansive monetary policies” the amount of paper money in the world will be increased so significantly resulting in more enthusiasm for gold than even Don thought just a few months ago.

· MF Global is much worse than originally thought. They took money out of client’s accounts which should never have happened. Corzine has maintained a very high priced criminal lawyer to defend himself personally. As these unwind we are seeing sell off in commodities as a group.

· Other news is Obama’s cancellation of Keystone project. This was purely a political move which raises all sorts of concerns about what else will happen in this country prior to the election. Obama is now back to doing what he does best….he is the world’s best political campaigner. He is getting the support now of the environmentalists in place of the 20,000 construction workers that would have had jobs. He is delighted to see another Canadian company jumping into the fray with the neat scheme by Enbridge of moving oil away from Cushing. This which will result in American’s paying more for their oil/gas. This means that there will not be much pipeline available for the Bakken area. One big winner here will be Warren Buffett who is setting up his trains to transport oil which will be much more costly for the producers.

· BHP announced in a recent conference that it is now the 7th biggest independent gas and oil producer in the US. Looks like they are focusing more on oil/gas. What this says is that they don’t see that they can buy assets in the mining sector as well as they can oil and gas. This means a well heeled player is becoming a bigger factor in the oil and gas industry. This might not be such good news for those junior miners who were thinking they would be taken over by BHP if their price became quite attractive. Don’s point is that BHP seems to be changing its focus from PM mining to oil/gas.

· The financial system is impaired making his overall indicators suspect. He still sees risk in stocks generally until this European thing gets solved. Something dramatic will have to happen in Europe. It will therefore be a tough time for equities.

· Question about the Super Committee and their inability to reach resolution? This is not a near term risk as any cuts will occur after the election. This means that a new Congress can decide not to abide by these rules. He is not optimistic they will find any deal here. Doesn’t think this will be catastrophic for the dollar as the actual cuts occur much later although there could be more political impact.

· Canada remains the one virtuous country as far as its banking industry goes.

· Question about the price of fertilizer compared to the price of nat. gas. Given the abundance of nat gas will we see lower fertilizer prices? Thinks we could have lower prices in nitrogen. CF Industries stock got blasted recently on this news but as of Friday was up $7.