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0920 EST Wednesday Ides of March 15 2006

Good Morning: As we have recounted here in the past, during the last Energy crisis of the mid-Seventies, the situation in Europe was bleak to say the least, with no oil reserves to speak of, the shock Oil price increases delivered by OPEC: The then newly formed Oil cartel that was just starting to flex its muscle, meant utter despair for European economies and especially Great Britain, which bore the brunt, with a modern-day depression as stocks plummeted and the FT Index crashed from 540 to 149, in a near exact replay of Wall Street's own decline 44 years earlier (from 381.7 to 41), leading to political and industrial turmoil that cumulated in a three day work week and darkened nights to save on power. And then, suddenly out of all of this despair, came the miracle of all miracle discoveries of North Sea Oil and even onshore Oil, that overnight turned Britain from an economic basket case to Europe's fastest growing and leading economy, as it became self sufficient in Oil and a net exporter within a decade and along with it turned Norway into one of the World's most prosperous countries.

So amidst the despair of the present where the stark realities of a World running out of Oil and gargantuan sized imports needed to satiate America's supersized thirst for Oil and the consequent drain of $US Dollars from the US Economy needed to sustain this, comes indeed a new ray of light this week, that could lead to the first real potential increase in domestic Oil output in years and that, along with Alaska and other prospective offshore drilling sites, could drastically improve America's Energy picture, or at least buy us the time to make transitions.

Some time ago, we may have been among the first in the World to draw attention to a then unknown news story, that in essence hinted of the possibility of a massive new Oil field discovery in the Mexican sector of the Gulf of Mexico and almost the same day, one of our most known and prestigious subscribers shot back, basically telling us to get real and quit fantasizing, 'cause if there really was a big discovery, then the World would soon know about it. It wasn't just that this was some kind of state secret, in actuality, it was revealed by Presidente Vicente Fox in his state of the Union address and soon thereafter whatever coverage it may or may not have gotten, quickly died. However, not with us, because unbenownst perhaps to our subscribers, we wrote a 400 page financing proposal and made an intense study of the Mexican Gulf for a company with a 50 year operating history in the region, that was involved in many aspects of logistics and operational support for the Exploration Infrastructure in field areas and were intimately familiar with many aspects of the giant Cantarell Field which has been Mexico's mother lode of Oil for now well over a decade as the premier source for the 5th largest producer with 3+ million barrels daily.

And we were further energized in talking to knowledgeable industry representatives and researchers that something big was really brewing:
For a long time, there's been a belief amongst geologists, that territorial Mexico, with its massive gas reserves, could hold additional huge reserves of Oil that have yet to be tapped, but in the offshore zone in the Gulf, lies an Energy bonanza yet to be won and because of the geological superstructures that are almost unmatched anywhere, could lie the most potentially prolific producing fields ever yet known...

Yesterday, all of this rumor, heresay and speculation became an amazing reality, as just as with miraculous North Sea discoveries of 30 years ago, Mexico may have not only brought in a big one, but possibly this could be one of the potentially largest single fields of this era.

Ok. This stunning announcement by the Presidente himself may have an element of hype to it, but since the entire Gulf remains one of the most promising areas of the World, where staggering reserves the size of Saudi Arabia are thought by some to exist, the discovery of this new field has to be sending shock waves of excitement across entire regions, because where lies one large field, many more may also lie.

As with many of our exclusive advance stories such as this stunning news we broke a year ahead of time, Ultra Clean Fuels and potential energy saving futures that Coal may bring, MODAR's early Tar Sands Energy picks and other groundbreaking ideas, you heard it here first.

Yesterday, our bullish call on Silver and Gold was justly manifested by a rebound in Silver to within a few cents of new 25 year highs again illustrating the tightness in this market and a foreboding that Gold and Silver continue to surprise by moving sharply higher unexpectedly and we can see an unfolding case that in the event Silver runs up through $11 and Gold re-challenges $570 then we would have strong new reasons to suspect that Gold might be close to breaking up through the $600 level to as high as our upper range target this year of $750 and could likely settle in a new range later this year between $600 and $700, before breaking out in earnest in 2007 and heading up anew towards the $950 to $1,025 range with Silver to somewhere between $15 and $18 initially and later to upwards of $25 to $50 all over again.

As we suggested yesterday, the US Dollar could be potentially setting up for a breakdown from here and it fell quite sharply all day to near the highly important psychological barrier and a renewed breakdown through 88 could renew the downtrend that could be a positive for all.

Trade Well
From the Desk of Savant

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