Here's something you won't hear on CNN:

In July, the legislative assembly here approved a U.S. request for permission to dock 46 warships and 7,000 military personnel, mostly for narcotics missions on Costa Rican territory, sparking outrage among skeptics of the global war on drugs. The critics include outspoken politicians, pacifists, student groups and everyday Ticos, who are proud of their country’s six decades without a military.

So what gives?

Well, here is one theory and it is a doozy !!

The US economy is in the crapper and people are starting to fret and worry about the double dip scenario. Mid-term elections are just around the corner and Obama's popularity is waning.

Somehow, Team Obama needs a diversion. A way to make the peasant class focus on something other than the negative equity in their houses and the dim job prospects.

So, what is this diversion?

How about a skirmish with good old Hugo Chavez?

And with 40 some ships off the coast of Costa Rica, such a skirmish is easiloy at hand. Lift anchor, sail south, take a left at the Panama Canal and when you come out the other end of the canal...let er' rip with Tomahawk missiles and whatever other arsenal you have. Watch Hugo come to his knees then. Watch the media go into a frenzy. Watch the peasant class quickly forget their woes. Watch the Democrats maintain control of the House and Senate after the November election.....

Just a thought....however twisted it may be.

In a previous blog, I noted how society has lost its ability to critically think. The media preys on the masses with dire warnings of double dip recessions and the like.

Thankfully the folks at the UCLA School of Business have not lost their thinking ability. Edward Learner and his team have created an index that tracks economic activity based on the diesel fuel truckers buy as they move freight across the land. Ceridian provides many of the corporate charge cards that truckers use when buying fuel so the data is real time and accurate.

Take a visit to www.ceridianindex.com and have a look. What you will see is interesting. The Index reflects slow but steady growth in the economy.

As a further testament to its ability to act almost as a leading indicator, take a look at the period in early 2008. Notice how the GDP was trending sideways in a stable pattern. But observe how the Ceridian Index was trending down and thus hinting that something was amiss. Well something was amiss and we all recall how 2008 finished up.

So, the next time the media has you feeling unsure of what the economic future holds, take a peek at the Ceridian Index to find out the real story.

Beacon Securities has a $3 target on Foraco Drilling (TSX:FAR). Foraco is a Marseilles, France based driller with exposure to mineral, energy, water and environmental drilling services. So, how does Beacon arrive at a $3 target ? Well, .....not too much of a logical leap as $3 is the recent high hit in Feb 2010.

I have long been partial to drilling companies. When you see the huge fees they charge mineral exploration companies, you will understand why I like the drillers. Without drilling, the average mineral exploration story is....well, not a story at all. Whether the drill results are good or bad, it matters not as the driller will get paid. Foraco is working on acquiring both Advisor Drilling and Eastern Drilling to expand their reach. Both acquisitions should be accretive to earnings.

Look at the chart and you will see the last trading was at $2.13. If I see price action get above the 55 day Exp moving average at $2.34, I will be looking to enter a trade. Until then, I do like the drillers, but I am not about to chase a driller in an unsure market like this......

In case you have been absent the planet lately, you should know that the whole Rare Earth (REE) argument is about to heat up again. China has now imposed export restrictions and the National Defence Authorization Act working its way through the hallowed halls of Washington calls for the creation of neodymium based magnet supply chain in the USA. Yes, America is waking up to a cold reality of being shut out of the REE market by China.

Surely then, the REE space must be a money maker ?

Not so fast, I say.

Mining companies are clever in that they tend to omit some critical details at times. From having a mineral claim and a handful of drill results, company spin-meisters like to make a huge leap to the finished product stage and dazzle would-be investors with visions of huge profits.

If you are tempted to dive head-first into one of these REE stories, you need to take a step back, take a breath and start asking two questions.

Ask - what is the infrastructure at the project. Does the project depend on eventually having the Gov't spend millions of tax dollars to bring roads and power into the site? If so, just step aside and look for the next story.

Ask - what is the Metallurgy is like on the rocks. This will floor them and have them reeling on the backs of their heels. Few if any of these REE juniors have taken rock samples to Labs to see of the REE can even be liberated by crushing and grinding. I can think of one REE project in Hoidas Lake, Saskatchewan that has very complex Metallurgy. The spin doctors have nicely buried this boogey-man and have diverted investor attention elsewhere. In any of these REE stories, if the Metallurgy question proves to be too tough for company officials to answer...just walk away.

Now, if you do manage to find a company that has proper answers to these questions, then you may have a winner. At the risk of blowing my own horn, I say take a look at Strategic Resources (TSXv:UVR). True... share  price is low, because it does not pay big $$$ to spin doctors. It goes about its work quietly and efficiently. Yes, the infrastructure in its New Mexico project is excellent. and yes, the Metallurgy is good too. A rock study is underway at the Montana School of Mines right now and results are showing the REE can easily be liberated from the host rock.

As the REE space heats up, I fear that anyone with even a hint of REE in their back yard garden will be trying to issue shares, so it is critical that shareholders pay attention and stay on guard.

For further reading, I strongly advise the site www.techmetalsresearch.com

America's trade deficit with China jumped to $26.2 billion. Clearly a sign that America is ailing and not exporting. A recent trip to Detroit underscored this when I saw far too many strip malls sporting vacancy signs and far too many fire-sale real estate deals. The industrial manufacturing heartland of America is wounded.

Recent attempts at market rallies have been nothing more than perfectly executed opportunities for the big serious money to jump off the equity ship.

Yields on US Treasuries have been driven down to silly levels as money pours into the fixed income market quicker than a flash flood deluge. In an encore to this silly drive to fixed income, this past week saw $7.9 billion in junk bond sales by players such as Peabody Energy, First Data and even the sickly OPTI Canada.

America needs to come to grips with the notion that Keynesian economics does not work in a situation where there already is an overwhelming debt load. In other words when in debt up to your eyeballs, you cannot spend your way out of it. You must start to embrace the "A" word - austerity. Cut Gov't spending. Admit that the stimulus money that paved Main Street in America during 2009 was a flop. And here is the big daddy - get your troops the hell out of the Middle East at $10 billion a month. The markets are not stupid. The markets can well sense that on its current spending course, the only solution will be higher taxes to generate the revenue to pay the debt. Higher taxes are a death blow for an economy already on its back in the global wrestling ring.

September has an ugly reputation as being the worst month in the markets. I am beginning to fear that we could see a watershed event in a few weeks. I am sitting largely on cash in anticipation of something ugly.

Be careful out there....

Wheat futures have surged of late from $5/bushel back in July to a recent high of $8/bushel. Russia is restricting wheat exports. Are we running out of food ?

Not likely, I say.

There is a substantial inventory of wheat in the world, some 175 million tons of carry forward inventory in fact. This crop year's exports from the USA are expected to be 319 million bushels more than last year.

So before you panic and pile into the Dec 2010 Wheat Futures, take a deep breath and relax. The exponential moving averages are looking a it toppy on the chart. If anything, give some thiought to a bear PUT spread of some fashion.

Last week-end was the annual (dreaded !!) family get-together week-end. My wife tells me if I wish to remain married, I will attend these annual events, no questions asked.

As painful as this event was, I must admit I did learn something from the farmers in the crowd. When the subject of crop nutrient came up, it was pointed out that Saskatchewan uses mainly phosphate type fertilizers as the soil in the Province has really only been farmed in a serious way since the 1960s. Prior to that, many farmers used more conservative practices including summer-fallow techniques. Round out the story with the notion that Saskatchewan has only been a Province since 1905 and you can see where this argument is going - the soils in Saskatchewan have not been drained of nutrients due to excessive farming and so all it takes is a bit of phosphate nutrient each year to keep things growing.

Compare this to the USA where intensive agriculture has been the norm for a very long time. Then stop to consider China where feeding a growiong population has meant terrific strain on the soil. The farmers in the crowd went on to tell me that anytime you have a venue that has seen intensive farming, the use of Potash as a crop nutrient is essential. Bottom line - the demand for Potash is NOT going away any time soon.

Today I looked at a chart of Potash One (TSX:KCL). I pulled up a 3 year chart and interestingly enough if one extends a line through the 2008 and 2009 high water marks, it intersects the right chart axis just slightly above current price levels. In other words, KCL is poising for a breakout situation. The 34 and 55 day exp Moving Averages have taken on a positive slope which is another positive. I would be a buyer of KCL at these levels.

ANother chart I looked at is that of Encanto Potash (TSXv:EPO). This chart is admittedly less pretty to look at. But, here is what I found intriguing. With an already large share structure, the company just did a financing at the 15 cent level with institutions. Normally when institutions are presented with a 15 cent story sporting a big structure, they run for the hills. But not in this case - and why, you ask ? Simple - these institutions grasp my above arument of Potash not going away any time soon. Which is more than I can say for Encanto. If one looks at what this junior has accomplished to date and when one factors in the potash not going away argument, it is sad to see just how little love Encanto is getting from the markets. I predict that Encanto is not long for this world. I say within the next 12 months it quietly slips into the waiting arms of one of the big major potash firms. Buy the stock at these levels and sit back and wait for the takeout, which will occur at prices higher than what we are seeing today....

Score one for the team at Donner Metals (TSXv:DON).

I was first introduced to Donner a few years ago when I took part in a flow through share offering. The argument at the time was that mining giant Xstrata was closing its Perserverance Mine near Matagami, Quebec and that there was a very good chance that Xstrata would eventually move to capitalize on the zinc resources being delineated by Donner as part of a JV agreement between the two parties. In all, the Donner/Xstrata 50-50 JV deal required Donner to spend $25 million to earn its 50%. The JV deal covers five different areas in the 4737 sq-km Matagami mining camp. The deal further states that Xstrata can claw back a 15% interest in any of these five areas by carrying out a feasibility study and spending $20 million.

Well... fast forward to today and the Matagami area is abuzz with excitement. Xstrata has decided to develop one of the areas that comprise the JV (the Bracemac McLeod deposit). Xstrata reckons the mine will cost $158 million of which it will contribute $104 million. Donner plans to finance its part of the mine with debt and equity.

Meanwhile, Donner plans to continue exploration on the other 4 areas in hopes that Xstrata will opt for further mine development.

I could go on and on with more details, but I will leave that to other writers elsewhere on the 'Net who are more long-winded than I.

Instead, I will refer you to the stock chart of Donner and offer up my view of the future.

Following the release of this positive news, DON jumped from 18 cents to 30 cents. Since that time, price action has traded between 22 and 27 cents.

Take out your ruler and draw a few lines and presto !! - see the pennant shape that has formed ? I like pennants as they generally infer a continuation of trend. The next resistance I see on the charts is 35 cents followed by 45 cents.

If you like the future prospects for Zinc, you will not go too far wrong with the Donner story. A Canadian mining story in an established camp funded largely by a global mining giant. What's not to like? Give thought to acquiring some Donner Metals at these prices.

Keep a close watch on Western Lithium (TSCv:WLC) and its Kings Valley project in Humboldt County, Nevada. This area was first explored by Chevron back in the 1970s when the big energy companies were spending away excess profits by searching for uranium and other commodities. Chevron found a very unique Lithium deposit in Humboldt County, Nevada not too far from the Oregon state line. Western Lithium acquired this ground in 2005 a and too has delineated a series of pod-like formations up to 300 feet deep that contain LIthium Carbonate.

But...here's the kicker. A quick look at the stock price chart will leave you wondering what the big whoopedy doo  is,  as the chart looks downright un-appealing.

So...here's the deal.

Western Lithium has delineated a sizeable resource of 48 million tonnes (indicated) grading 0.27% Li and almost that much again in the inferred category. But, we all know that Chevron had only developed a laboratory scale technique for recovering the Lithium Carbonate. So...the markets are saying "I'm from Missouri, show me !!". Indeed - show me that the Lithium can be recovered via a large scale commercial mining process.

A June 29 press release alludes to the notion that WLC is undertaking work to provide that proof to the markets. After all, the markets do have a right to be skeptical as there is loads of Lithium in the "salar" type deposits in South America that can be easily recovered.

I will be keeping my eye on WLC for more unique reasons. As news in the public domain shows, a company I am involved with ( Strategic Resources, TSXv:UVR) has claims just to the north of WLC about 2 miles from the Nevada state line. Strategic has made submissions to obtain drill permits, and is quietly watching Western Lithium to see what sort of news it can deliver. If the news from WLC is positive, then keep your eye on UVR as well....

Has society gone brain-dead ?

My lovely wife and I were in New York recently on the 4th of July having a wonderful dinner at a quaint Bistro called Les Halles on John Street in the financial district. At about 9pm as I was savoring the last morsels of a delectable desert, my wife remarked that it was getting dark out and we should best be heading off to the fireworks display. We exited the restaurant and at once I sensed something odd. People were walking towards the Hudson River much like sheep walking to pasture. Not much noise, not much conversation. Just the schlepping sound of shoes on pavement.

We arrived at the Hudson just in time for the fireworks. Now I have seen fireworks many a time before. But these were by far THEE most spectacular fireworks I have ever seen. On many occasions my wife leaned over to me and expressed her absolute delight at the colorful bursts in the night sky. But again, I noticed something odd. The masses that had congregated to watch the display were quiet. No ooohs. No aaahs. No shrieks of excitement.

My mind quickly turned to thoughts of George Orwell's 1984 where the Thought Police told folks when to think and what to think. My mind then turned to a book I was reading called the Age of American Unreason which argues ( quite adeptly ) that people have lost their ability to critically think and to form opinions. We are all too often told what to think by the talking heads on Fox, CNN, CNBC and the like. We are overwhelmed with information to the point where the human psyche has given up. The war in Afghanistan is going well this week. The economy is gaining steam. No...hold it... now some other talking head says the insurgents are gaining strength. The economy is faltering. Information overload....

We have lost out ability to think to such an extent that a group of people gathered along the Hudson River could not manage even a few remote displays of emotion at the brilliant fireworks. But, had a CNN reporter been there yammering away on a big screen TV for all to see, I can assure you he would have told the crowd when and where to formulate an opinion and display emotion.

I want you to think about this carefully. Encourage your kids and grand-kids to read Orwell's 1984 classic and discuss it with them. We may have an entire generation out there who cannot reason and think. Let us dare not allow a second generation to follow in their footsteps.