From much of the reading I've done over recent days it would appear that the short-term forecast for raw materials prices is down. This, naturally, should have a negative effect of the prices of mining stocks, especially the juniors, and non-producers in particular, quite as has happened over recent weeks.

This means that LBSR is not alone in seeing it's share price continue lower following the end of tax loss selling season, and during a time which is usually noted for a rebound from year end seasonality. Things are looking horrible, but there is still time left for the post tax loss selling rebound to begin going into spring.

Having said that, and in context of the what's happening within the sector, I think things are quite overdone.

Franklly, what worries me the most is the economic house of cards that builds higher and higher on a daily basis.

It's bad enough that our system is built on fiat money and fractional reserve banking, but the advent of, and amazing ballooning of the financial derivatives market seems (to me) to be all that is sustaining the system at present. In other words, I think that the single largest factor behind the ever rising major market indices is the derivatives market.

Why might that be? While it's very hard to explain, let me offer what I think can form an easy basis for understanding, though this is perhaps quite overly simplified, and a concept not that widely held, YET.

An orginator of a dirivative, say a bank, buys an asset. Then, instead of lending out that money for constructive purposes, they use it as collateral for, say, a 90 percent loan to puchase another financial asset. Then, that purchase is used again as collateral for another loan, and the process is repeated over and over again for as long as the process can continue. ...find more cash, and repeat.

Hence, a million dollars of an initial investment and be turned into hundreds of millions of dollars in debt obligations.

But where is most of this money going? Mostly into other financial instruments, including other derivatives. It certainly is not going into job creation.

And by newer financial institution regulations, it is not going into so-called speculative investments such as mining-related issues.

Eventually, the only things to survive out of this will be what you can, figuratively, hold in your hands or dig out of the earth.

So, do I worry that LBSR can survive with the stock getting deeply into sub-penny territory? No, my only regret is having gotten into this issue far too early in the story. I'll be buying more with my income tax refund.

http://www.washingtonsblog.com/2012/05/top-derivatives-expert-finally-gives-a-credible-estimate-of-the-size-of-the-global-derivatives-market.html

http://www.moneycrashers.com/what-are-financial-derivatives-trading-examples/

VP in AZ