Great article by Trace Mayer.

Excerpt below:

At all times and in all circumstances gold remains money. It is the most powerful currency in the world. Oil is the world’s primary energy source which is why the gold to oil ratio is important. Gold is the most effective tool humans have to perform mental calculations of value. By analogy it is the tool used to determine how many calories an apple provides and how many calories it takes to collect and process the apple so it can be eaten.

Producing gold is essentially converting energy into bullion. How many calories go into producing a one ounce gold coin? In some cases to produce a single ounce hundreds of tons of rock are moved. Ultimately, money is about energy. To make it personal, how much value should you put on that nice steak dinner, bottle of water from Fiji or 3,000

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From "Trade-Finance Pinch Hurts the Healthy," WSJ, 12/22/08:

The global financial crisis is drying up the financing that firms depend on for trade. That's making the global recession nastier and deeper than it otherwise would be.

As with all kinds of credit these days, financial institutions are making less trade finance available and charging more for it. But the squeeze in trade stands out because it pinches otherwise healthy companies that should be driving a recovery in global commerce. Already, the World Bank predicts trade will contract next year for the first time since 1982.

The Deteriorating Trade Outlook

Here's the IMF's recent forecasts for exports -- from October and then November -- for world trade, disaggregated into advanced and developing country groupings.

Figure 1: Real goods and services exports by country group. Source: IMF, World Economic Outlook Oct. 2008; Nov. 6 WEO update.

These developments in trade financing suggest that

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The shares of Central Garden & Pet (CENT) are rated a Sell.

Management is addressing a difficult environment of weak retail sales, adverse weather, and higher costs, which have affected the company s sales and profitability.

The benefits from the strategy of expanding the operating margin through a positive mix shift towards higher margin products and the optimization of the supply chain have been delayed as higher graincosts have negatively impacted demand and profitability. Management continously lowered both sales and earnings guidance throughout fiscal 2008.

"CENT" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research

Sony is planning on cutting 8,000 jobs to reduce expenses by $1.1 billion as the company struggles to stay profitable. They will also delay spending on manufacturing and streamline their supply chain. Technology companies in Asia are worried that others may have to take similar steps as the worldwide slow down has reduced demand to high-definition television sets, computers, and other small electronic devices. Stock Movement The stock of Sony (SNE) has recently begun to move higher and is higher on the day 5% with the announced costs reductions. The holiday season has traditionally been a period of profit for the company and could surprise investors if store sales are stronger than expected. But longer term the company needs to deal with reduced margins, falling demand, and improving its return on investment which fell to 8.6% ...

A very large part of electronics production goes into consumer electronics products such as televisions; games such as the Nintendo wii, Panasonic (PC) Playstation and Microsoft (MSFT) X-Box; cell phones; personal computers; digital cameras and many toys.

In our opinion, sales this holiday season are likely to be flat, at best, with 2007. This does not bode well for Panasonic and Sony (SNE), the two major Japanese consumer electronics companies in our universe.

OPPORTUNITIES

The strongest area in 2008 has been flat panel TVs, mainly high-definition [HD] LCD sets that are 40" or larger. In anticipation of a good selling season, the manufacturers had produced significantly more sets than had been sold through the retail channels.

WEAKNESSES

Thus, there is an inventory build-up back through the supply chain as far as the LCD glass manufacturers such as Corning Glass (GLW), including the component producers like Trident Microsystems (

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Hoku Materials Inc., a wholly owned subsidiary of clean energy technology company, Hoku Scientific Inc. (Nasdaq: HOKU), today announced a silicon metal supply agreement that will supply Hoku with guaranteed amounts of metallurgical grade silicon for three years beginning in 2009.

Hoku’s agreement with leading alloy producer Polymet Alloys Inc. and its allied partner Rima Industrial S.A., will allow Hoku to use the grade silicon to manufacture trichlorosilane, an integral material in solar grade polysilicon production.

“Hoku is pleased to have established this partnership with Polymet Alloys Inc. and Rima Industrial S.A., leaders in the silicon metal industry,” Dustin Shindo, chairman and CEO of Hoku Scientific stated in the press release. “Silicon metal is a key raw material for Siemens-based production of polysilicon, and another important way for Hoku to manage our production costs. The fixed rates negotiated under this agreement are fair and fit well within our projected financial

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American Software, Inc. is a software developer and marketer, and supports one of the industry’s most comprehensive offerings of integrated business applications, including enterprise-wide, supply chain management, Internet commerce, financial, warehouse management and manufacturing packages.

American Software is the single source for value-based e-business solutions for the enterprise and the supply chain. American Software operates through their subsidiaries. American Software owns 86% of Logility, Inc. (NASDAQ: LGTY), a leading supplier of collaborative supply chain planning solutions via the Internet. New Generation Computing, Inc. (NGC), a wholly-owned subsidiary of American Software, is a global software company that has 25 years of experience developing and marketing applications for apparel manufacturers, brand managers, retailers, importers and other businesses in the sewn-products industry.

American Software’s e-Intelliprise™ is a total ERP/supply chain management suite that leverages Internet connectivity and includes multiple manufacturing methodologies, full global capability and integrated data marts.

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The rules of the global oil games are changing, says Keith Fitz-Gerald. And China — not the US — is leading the way. China doesn’t worry about the political leanings or dubious human rights of its energy suppliers. It needs a steady supply of oil to fuel its economic boom…and it will do what it takes to get it.

This from Money Morning:

Iraq recently signed its first oil deal in 35 years with a foreign company.

And –- quite surprisingly to many observers -– the company wasn’t one of ours.

Not surprisingly, the US news media barely acknowledged the deal –- even though the agreement was major news throughout the rest of the world.

According to reports from Baghdad, the 22-year deal between the Iraqi government and the China National Petroleum Co. involves $55 billion, or 87% of Iraq’s current total revenue at a conservative long-term estimate

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Perrigo Co. (PRGO) has been performing well in a down market, and analysts have been boosting forecasts. Fiscal full-year earnings estimates are up 2% in just the past week. The company announced record fiscal fourth-quarter results in mid-August.

Company Description

Perrigo is the nation's largest manufacturer of store brand over-the-counter (non-prescription) pharmaceutical products and it manufactures store brand nutritional products. Store brand products are sold by national and regional supermarket, drugstore and mass merchandise chains under their own labels and compete with nationally advertised brands. The Company's products include analgesics, cough and cold remedies, antacids, laxatives, feminine hygiene and smoking cessation products, and vitamins, nutritional supplements and nutritional drinks.

Recent Events

The company recently announced that it was dismissed from a patent infringement lawsuit. Earlier Johnson & JohnsonÂ’s (JNJ) McNeil unit tried sue Perrigo.

PRGO also recently acquired drug and nutritional products maker JB Laboratories

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Central Garden & Pet Company (CENT) produces, innovates, and markets pet, lawn, and garden products under leading brands. In fiscal 2007, the company generated 53% of net sales and 95% of operating income from the Pet Products segment, which markets Four Paws, TFH, Nylabone, and Interpet pet supplies; Wellmark insect control products; and Kaytee bird and small animal food. The company also markets Oceanic and All-Glass Aquariums, and Kent Marine saltwater aquarium supplies.

Management is addressing a difficult environment of adverse weather and higher costs, which have affected sales and profitability. The benefits from the strategy of expanding the operating margin through a positive mix shift towards higher margin products and the optimization of the supply chain has been delayed.

Higher grain costs are negatively impacting profitability. Management has lowered both sales and earnings guidance for fiscal 2008. However, the stock's decline discounts much of the negative developments. Therefore, the shares

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