Enough alliteration. Let’s talk business.

While I will never complain about a day that sends almost every position in our portfolio into the green, there are way too many red flags in the air for me to celebrate today.

Sure, the TFN Strategic Trader portfolio currently boasts six plays worth double-digit gains (47%, 44%, 50%, 10%, 29%… and 200%), but it’s a contrarian mix if I’ve ever seen one.

In other words, if our current portfolio is on fire (and it is), something is not right with the nation’s economy.

As with most things American, all we have to do is turn to The Donald for an answer.

Earlier today, Mr. Trump phoned his friends at CNBC. He had a bone to pick and he knew his the staff of “financial experts” – who gladly fill in when a Today Show gab is missing – would lend an ear.

Trump gets a lot of press time, but most of us agree the only thing he’s an expert at is bankruptcy proceedings. Taking his financial advice is like getting a clipping from a blind barber – another of Trump’s apparent flaws.

Sometime during the past few weeks, a bank must have looked at Trump’s credit record and said, “No way, Jose,” because the king of narcissism is angry at the banking industry.

He tells his audience that banks must be forced to lend more of that taxpayer cash they are sitting on. Trump believes the economy will never recover unless the banking sector loosens its standards and starts writing checks again.

Um, Mr. Trump, isn’t that what got us into this mess? Guys like you taking massive loans without a way to pay and then calling a bankruptcy lawyer.

Really, what could go wrong if we follow Trump’s advice and allow the government to force banks to lend?

Sure, most of those shaky loans will never get paid back and we’d be in a worse financial fiasco in eighteen months, but boy would it feel good now.

And there lies your problem. In a world where reality-show wannabes make front page news for embarrassing the White House and a golf star’s car accident gets more press time than Iran’s recent nuclear moves, it is all about feeling good now.

Who cares what tomorrow’s consequences will be? Somebody will bail us out. We feel good now.

It’s sad to say, but that’s the same logic driving the stock market these days.

Sure, the dollar is eroding fast, unemployment is above 10%, the national debt is off the charts, taxes are on the rise, and corporate earnings are stagnant, but dang it, it feels good to pretend it will be a “V-shaped” economy.

Anybody with half a financial brain knows it will all crash down someday, but too many of them just hope and pray that somebody will step in and fix it.

I know from the comments I received about my recent gold commentary, many Notes readily understand what’s to come. That’s why they are rushing to the “safety” of gold.

But let me warn you once again; gold’s recent run has as much to do with the nation’s feel-good-now mentality as the Salahis’ sudden rise to fame.

The collateral on both sides will not be pretty.

My advice? Go short. If it works for TFN Strategic Trader members, it will work for you.

*** With all of this talk about healthcare reform, Afghani strategy, White House crashers and gold’s 30% run, one industry has been greatly overlooked. And, once again, the action comes thanks to the folks in Washington.

The ethanol industry – which was recently plagued by bankruptcies and production shutdowns – is soaring these days as it awaits word from the EPA that ethanol allowances in gasoline could be raised from 10% to 15%.

Here’s a bit of what I told TFN readers earlier today:

“The ethanol industry is having yet another good day. After near political abandonment, the nation’s biofuel sector reeled from the pain of a wave of bankruptcy filings earlier this year.

“But now, thanks to some more political maneuvering the industry is once again finding itself on the leader board.

“Should you get used to it?

“Before we answer that question, let’s look at the catalyst for the action. Today was supposed to be the EPA’s deadline for a decision that would allow gasoline blends to contain up to 15% ethanol versus the 10% cap now in place.

“But word this morning says the EPA is not ready to make its decision quite yet. It now wants to make the decision by sometime next summer. Judging by the day’s pricing action, the Street views this as a positive sign.

“Companies across the industry are eager to push more of their product into the nation’s fuel source.

“One of the big winners today is Pacific Ethanol, the once highly touted California-based producer with subsidiaries in and out of bankruptcy court over the past year.

“Word that more ethanol production may be around the corner was enough for the company to pull the mothballs out of its Burley, Idaho production facility by January. The company owns a total of four production facilities, only one of which is currently operating.

“If the word from the EPA is positive, expect shares to continue to climb. As I write, traders are getting in (and out) at $0.87, up 56% on the day.

“Two more companies worth mentioning are…” To find out, keep reading here.

*** Finally, don’t forget about the question of the week: Is it a coincidence the weekly political roundtable programs air at the same time churches offer their weekly services?

We’ll discuss the various views on Friday.

I hear it a lot from inexperienced Wall Street analysts, bloggers, and money managers who spend little time living in the “real world”.

Here’s what they’re saying: “Gold is way too popular now… It’s near the end of its bull market.” The recommended “action to take” is to cash in your gold profits and move on to something different.

I can tell you that taking this advice is a big mistake. Anyone who believes gold is too popular with the mainstream public simply doesn’t know who the mainstream public is… and they don’t understand how bull markets end.

Sure… gold is up big since it broke out to a new high in September. In just over two months, it has climbed from $950 an ounce to $1,100 an ounce.

Click here to read the rest of Brian Hunt’s analysis of the state of gold, published online at Fleet Street Invest.

For much of 2009, gold traded in the range of low-mid $900 per ounce. There was a dip over the summer, with a strong upswing starting in September. Gold is now trading well over $1,000 per ounce, in fact just under $1,100.

Turns out that the government of India was buying gold in mid-October. Over a two-week span, the central bank of India bought 200 tonnes (metric tons) of gold from the International Monetary Fund (IMF) at an average price of $1,045. The IMF — over which the U.S. holds veto power for most actions — got approval to sell the gold from — where else? — the U.S. Congress, last spring.

Previously, the government of India held 350 tonnes of gold reserves. This 200-tonne purchase is a 57% increase in India’s reserves. There’s joy in India, I’ll bet. (It makes me wonder what the Pakistanis think, now that their large neighbor has both nuclear weapons AND a growing gold hoard.)

To read the rest of the story and learn more about China’s golden ambitions, click here.

This week it was announced that their Madagascan assets are being taken over at $4 a share – for which you’ll get cash – while their other Southern African assets are being rolled into a new company, for which you’ll get a share.

If you bought, and I hope some of you did, you can treat yourself to a new frock…

Pan African’s story shows the enormous possibilities that lie in the junior mining sector, even in this bear market. But the takeover, which came from Asia Thai Mining, has wider implications, which I’ll come to in a moment. You can’t argue with a quick profit, but, given the breadth and depth of Pan African’s assets, I think Asia Thai have got themselves a bargain.

Another exciting opportunity – for the whole mining sector

Meanwhile, Jinshan (CA:JIN), another junior mining company I have been recommending (and which I own shares in myself), has had some exciting news, which also has enormous wider ramifications.

Jinshan is a Canada-listed gold producer in China. After several years of exploration and development, its mine finally went into production last summer. By the end of this year it should be producing at a rate of just over 100,000 ounces a year at a cash cost of between $350 and $400 per ounce. It’s a very nice little junior mining story, thank you very much.

Then last week it was announced that China’s largest state-owned gold mining company, the imaginatively-named China Gold, had bought a 42% position in the company.

Why have the Chinese done this? And what is the significance for Jinshan?

Firstly, it gives Jinshan access to a great deal of money – the same money, ultimately, that made the 12% purchase of Rio and now is building a stake in BP – and Jinshan will be making serious acquisitions. Previously these would have been limited by Jinshan’s $450m market cap. Not anymore. Deals can be done for cash now, meaning less dilution for shareholders, and for much larger companies than would previously have been possible.

If any such acquisition happens – and I hear they want to have made one by autumn – surely a listing in Hong Kong will be on the agenda, which will significantly raise the company’s profile.

Are the Chinese trying to create a new reserve currency?

The Chinese, on the other hand, want access to Jinshan (for that, read Canadian) mining expertise. China is the largest gold producer in the world. The country has hundreds of mines, but, astonishingly, Jinshan’s modest 100,000-150,000 ounce producer is one of the biggest.

In other words, despite being the world’s largest producer, China’s mines are underexplored and underdeveloped. Jinshan president Jay Chmelauskas reckons they could be operating at as little as 10% of their potential. Jinshan head of exploration, Keith Patterson, feels that China has as much exploration opportunity as anywhere. This is a man who not so long ago went out into Argentina with a pick and a notepad and helped make the Navidad discovery, now regarded as the biggest undeveloped silver deposit in the world.

China is a great sponge. The Chinese will hoping that they can learn from Jinshan. They will be refining, if you’ll forgive the pun, their gold mining expertise. For Jinshan it means they will gain access to many of China’s existing gold mines and no doubt acquire some of the better ones.

This is yet more evidence, if you needed it, of China’s unquenched thirst for resources. But Jinshan is a gold miner. Why would the Chinese want gold? Do the Chinese govt all want new earrings? What could possibly interest the Chinese about gold mining?

Richard Russell, the veteran US newsletter writer, observed a few weeks back that China is the largest gold producer in the world and the largest holder of dollars. As the dollar implodes, could it be, he suggested, that the Chinese have designs on global reserve currency status? If so, they will have the dollars and the gold to back it. This Jinshan deal might be further evidence of Chinese monetary aspiration.Can you imagine our glorious Labour government doing anything similar?

The good times are ahead for junior miners

The deal also has ramifications for the junior mining sector. Admittedly, the Chinese are buying a stake in a Chinese gold mine. But all the same, Jinshan is – or was – a junior. This is a first, and it could open the floodgates. Don’t forget the Asian takeover of Pan African. It’s possible that we are seeing the early stages of a wave of cash-rich Asian takovers of undervalued junior miners. The junior mining sector is coming alive, my friends – enjoy the ride.

You are not going to see the fireworks you saw with Pan African. But Jinshan is in a nice steady uptrend. It is now making the transition from junior to significant player, and I would expect to see the stock some 50% higher within 12 months, possibly more. I recommended it as a buy below $2.50 and I maintain that recommendation. If you’re impatient or you think it won’t make it back down to $2.50, you may want to start accumulating here. I’ll leave that to you. But if you believe in gold and you believe in China, you should own some Jinshan.

Source: http://www.moneyweek.com/file/45537/why-you-should-buy-this-chinese-gold-miner.html

According to the site, “gold for June delivery tumbled $41.80, or 4.5%, to $879.70 an ounce on the New York Mercantile Exchange. Other metals futures were also sharply lower, with platinum selling off 7%.”

Read on at MarketWatch.com

The greenback has climbed higher against the euro today on fears that the economic woes in the US will go global.

Despite today’s sell-off, commodities expert Frank Holmes expects copper – which has gained 400% in the past five years and now sells for $3.75 per pound – to hit $8 to $10 in the coming years.

To find out more, click here.