Category: Precious Metals

Coincidental post election free-fall. What do you think?

Martin Weiss writes some of the most compelling newsletter copy I have ever read. Although not a subscriber, I like to read his stuff whenever I come across it on the web. In his latest missive, he concludes:

This is the worst time to hitch your wagon to the Dow and the ideal time to profit from investments that naturally rise when the dollar falls. That includes …

• Gold, gold shares, mutual funds and ETFs
• Energy shares and ETFs
• Select foreign securities and ETFs, especially in countries like China, still on track for near-double-digit growth in 2007.

Weiss’ latest

If you are a regular reader of this site – you know where I stand on commodities.  As far as I am concerned, investing in commodities is the “low hanging fruit” on the pathway to Financial Freedom.  If there was one thing that I remember for Econ 101 - it is that supply deficits with increasing demand leads to higher prices. Low and behold that is what we find in the commodity patch.  Take a gander at a quote from Jim Puplava. 

“For example in the past decade Asia has accounted for 50% of the increase in global demand for oil and 80 % of the demand for copper. Are we to believe that if the U.S. economy slows down, a new car owner in China will leave his car in the garage and ride his bicycle?”

Jim drives home the point with the following:

The perception in the financial markets is that a slowdown in the U.S. economy and a global economic slowdown will reduce demand for basic commodities. However, decades of neglect and supply deficits will take time and money to correct. This is a structural bull market, which is going to last for a lot longer than most experts predict. If China sells 2,000,000 automobiles this year and next that means there are going to be a lot more Chinese consuming larger amounts of gasoline. China’s economy may slowdown from its breathtaking rate of 11%. However, an 8-10% growth rate means more copper, more iron ore, more cement, more steel, and more gasoline consumption. Let us also not forget India, whose economy is growing at 9% per annum.

Remember Wall Street’s priority is to put the most money in their pockets.  That happens by convincing Main Street to purchase stocks in which it is most heavily invested.  Commodity related Exchange Traded Funds (i.e. GLD, GDX, OIH) are still relatively new, so there is little money to be made there by Wall Street.  By the time Commodities truly become a bubble, Wall Street will be pumping it 24 hours per day – 7 days a week.

Take a read on Jim Puplava’s latest commentary – “Commodities: Bust or Boom?”  It is a great read.

 

This article will give you a feel for why my dollars are invested in commodity stocks. China’s demand for Copper, Zinc, Nickel, Silver, Oil and don’t forget clean water will not subside in the foreseeable future.  Read the Week in Review to find out which stocks are benefiting from this trend.

by Joseph Kahama
President of Tanzanian American Development 2000 Inc.
11/22/2006
JS Mineset . com 

After traveling for more than 19 hours between Tanzania and The Peoples Republic of China, I have now arrived. It is a few minutes past midnight now here in the Capital of Beijing and yet the activities by way of trade, commerce and construction are continuing throughout the night as if it is daylight.

On my way to China I had ample time during my flight to read Ted C. Fishman’s book, “China Inc.” (The Relentless Rise of the Great Superpower). I can ascertain that what I read in Fishman’s book is true.

Thousands of construction projects are relentlessly and simultaneously being undertaken in China. From state-of-the art highways to airports, skyscrapers and sports stadiums. This has been the case in two cities that I visited, Beijing and Chang Chung. The story repeats itself in Guangzhou, Guangdong Province, Shanghai, Tianjin and many other cities and towns. China has 160 cities with more than 1 million people. Beijing itself has more than 20 million inhabitants during daytime. I also had the opportunity to visit the Olympic Village 2008 and the mega construction projects being undertaken there, as well as the stadium for the Asian Winter Games 2006, both of which China will be hosting. With many billions of dollars being spent every year on construction, technology and electronics including aircraft fittings and manufacturing by China, it is no wonder there is a great demand for minerals and oil by China. Continue reading “China’s Insatiable Demand for Minerals and Oil”