copper

Gold, Silver, Copper, Nickel and the Slow Death of Money

Gold, Silver, Copper, Nickel and the Slow Death of Money

A huge opportunity to hedge against both inflation and deflation is lying out there in the open. There are no transaction costs and right now there’s even a built-in discount. But most people will never realize any of this. In 1933 President Franklin Delano Roosevelt signed Executive Order 6102, which made it illegal for U.S. citizens to hold gold bullion. Prior to that, the $20 bill was essentially a warehouse receipt for a one-ounce gold coin. Prior to the Federal Reserve Act of 1914, the $20 bill actually told you this. After Executive Order 6102, $20 notes weren’t allowed to be exchanged for gold anymore. Americans couldn’t legally own or trade gold as money and savings, only as jewelry or collectible coins. A year after making monetary gold ownership illegal, FDR revalued gold from $20.67 per ounce to $35 an ounce with the Gold Reserve Act. The Act also required all gold and gold certificates to be turned over to the Treasury. The dollar was debased. A chunk of the gold it used to be good for was legally removed. Instead of  “containing” 1/20 an ounce of gold, each dollar now only contained (or represented) 1/35 an ounce. And of course you couldn’t actually own the gold itself. In 1971 Nixon severed the last official ties between gold and the dollar. The dollar quickly sunk to its real value, which had been debased by years of money supply inflation. By 1975 Americans were allowed to own bullion gold again, but during the roughly 40 years bullion gold ownership had been illegal, the dollar had been drastically debased. At its former lowest point in the summer of 1980, the dollar …

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An Egyptian Firebrand Away from $400 Oil

Investors are remarkably sanguine about the events in Tunisia and Egypt… Oil actually fell yesterday to $88.27. The Dow has been on a hot streak and is up again today — as it has been for months — to 12,149. History suggests events in the Middle East go from bad to worse. According to the Democracy Index put out by The Economist , there are no “established democracies” in the region. Israel is listed as a “flawed democracy.” Lebanon and Turkey were listed as “hybrid regime,” along with Palestinian territories, Pakistan, Armenia, and Iraq (Lebanon is now run by Hezbollah). The rest are categorized as “authoritarian regimes.” The last free vote saw Hamas sweep the Palestinian elections in 2006. Hamas started as an offshoot of the Muslim Brotherhood in Egypt. On gaining power, they started lobbing rockets into Israel. In 2007, the Battle of Gaza was fought between Hamas and the Palestinian security forces. Hamas is listed as a terrorist organization in most G-20 countries. In the aftermath, Israel and a Hosni Mubarak-ruled Egypt imposed an economic blockade on Gaza that is still in effect. Population and scarcity Jack Andrew Goldstone points out in his book, Revolution and Rebellion in the Early Modern World , that all revolutions from the French to the Russian, from China to Japan, occur where there is a rising population and diminishing resources coupled with an inflexible ruling party. (Note: The population in Russian doubled between 1850 and 1913.) Today, the Arab world has the fastest growing population on earth— and the youngest. In Yemen, the average age is 17.9 years with a birth replacement rate of 2.71, which puts it at number 23 in the world. The United Arab Emirates is in fourth place with 3.56, Kuwait is fifth with 3.50, the Gaza strip is six with 3.29. Libya, Chad, Egypt, Oman, Syria, and Iraq all make the top quintile. These young people will be the next rulers of the largest oil-producing region within the next ten years — mostly because all of the current leaders are in their 80s… with the exception of Qaddafi…

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The Metal People are Dying For

The Metal People are Dying For

Maybe the weak are simply being weeded from the gene pool so the strong may survive… This theory might help explain why people keep electrocuting themselves to death, cutting into live power lines to extract copper. Stories of deaths related to copper thefts have been all over the news: Last summer, a 42-year-old Appalachian man died while trying to steal copper from a live power line. Charleston Daily Mail reported “American Electric Power says copper thieves are becoming increasingly brazen, and their tactics have resulted in four deaths so far this year in the Appalachian service region.” An Illinois man hit a live wire while scrapping for copper last fall and was electrocuted. Police said this is a recent trend, with similar activity in Granite City, Venice, Brooklyn, Washington Park, and Belleville. In October, a couple from Southern California attempted to steal copper from an electrical vault. The man was electrocuted to death; the woman suffered severe burns from attempts to pull the man from the vault when it exploded. And just last month , a man attempted cutting live copper wires with a bolt cutter. He suffered from electric shock and fell 30 feet from his ladder, later dying at a Charlotte hospital. I could go on, but I think you get the point. I guess these people aren’t bright enough to know that rather than risk electrocution, it’s easier to rob someone’s house and …

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Freeport-McMoRan Q4 Profit Climbs 60%, but Shares Fall (FCX)

Copper producer Freeport-McMoRan Copper & Gold Inc. ( FCX ) on Thursday posted much better-than-expected fourth quarter earnings, but its shares still slipped significantly in premarket trading. The Phoenix-based company reported fourth quarter net income of $1.5 billion, or $3.25 per share, compared with $971 million, or $2.15 per share, in the year-ago period. Excluding a one-time charge, adjusted profit was $3.26 per share. Revenue jumped more than 21% from last year to $5.6 billion. On average, Wall Street analysts expected a much smaller profit of $3.03 per share, on lower revenue of $5.35 billion. Despite the solid earnings beat, Freeport-McMoRan shares fell $3.07, or -2.7%, in premarket trading Thursday. The Bottom Line We have been recommending shares of Freeport McMoran ( FCX ) since Dec.13,2010, when the stock was trading at $112.87. The company has a 1.74% dividend yield, based on last night’s closing stock price of $115.16. Freeport-McMoRan Copper & Gold Inc. ( FCX ) is a “Recommended” dividend stock, holding a Dividend.com DARS™ Rating of 3.5 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

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Going Beyond Rare Earths

Filed in BP, copper, Gold Market, o by on January 19, 2011 0 Comments

Back in April 2010, I published an article called “5 Rare Earth Stocks to Hedge Against Chinese Control.” In that piece, I wrote: Because 95% of the world’s rare earth elements are produced in China, it is becoming increasingly urgent for developers to find REEs in other parts of the world. This becomes more and more apparent every time I talk to high-performance battery manufacturers and companies that rely on rare earth magnets for things like wind turbines and energy efficient electric motors. Bottom line: China needs those REE supplies for its own consumption. And in the not-too-distant future, those supplies found outside the Middle Kingdom will be the only supplies we’ll be able to get our hands on. So here are a few companies that are operating in this sector, and are not based in China: Avalon Rare Metals, Inc. (TSX: AVL) – projects in Canada Great Western Minerals Group (TSX-V: GWG) – projects in Canada, South Africa, and the U.S. Rare Earth Metals (TSX- V:RA) – projects in Canada Commerce Resources Corp. (TSX- V:CCE) – projects in Canada And of course, there’s Molycorp, which has just recently filed to go public. This company is looking to develop operations in Mountain Pass, California, just about 15 miles from the Nevada border. Since that article, rare earth stocks soared. In fact, of the four listed in that …

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Southern Copper (NYSE:SCCO) PT Bumped Up on Projected Copper Price Increase

Southern Copper (NYSE:SCCO) was given a big boost in its price target today from Deutsche Bank (NYSE:DB), citing expectations copper prices will continue to move up. Deutsche said, “We believe Southern Copper deserves to trade at a higher multiple than its peers given its high growth potential and high dividend payout policy.The firm notes, “Southern Copper (SCCO) is the world’s 6th largest

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Commodity Roundup – Markets on your Radar

Filed in commodities, copper, currencies, Debt, economy, euro, Gold, o, outperform, silver, ubs by on January 8, 2011 0 Comments
Commodity Roundup – Markets on your Radar

MB Wealth Corp. is not responsible and does not endorse anything outside of the content of this article authored by Matthew Bradbard President of MB Wealth. As most followers recognize, I break the commodity markets into seven sectors: financials which include the indices and debt markets, energies, currencies, livestock, metals, grains and finally the softs. So let’s examine sector by sector what should be on your radar as we conclude one trading year and a fresh year of opportunity is upon us. Financials While the first part of the year brought uncertainty and perhaps too much pessimism after a bottom formed in the summer indices have appreciated lifting the Dow and S&P approximately 25%. From here, we think prices have gotten ahead of themselves and expect a 5% depreciation from their current levels. Aggressive clients have started to purchase March ES bear put spreads . Reflecting back on the year, Treasuries have had an inverse relationship to the indices enjoying trade higher in the first half of the year reaching an interim top in the summer and falling off since. The greatest loss has been in Q4, as yields have increased and 30-yr bonds and 10-yr notes have lost considerably. We expect to see a bounce into the new year and have advised aggressive clients to buy dips in 30-yr bonds, 10-yr notes or to position themselves in NOB spreads with their directional bias in the direction of bonds. Energies There has been a powerful force lifting prices higher in crude oil and the distillates virtually all year and we see no reason for that to change. Continue to use price retracements as buying opportunities as we see $110/115 in Crude by mid 2011. Assuming we are correct with this assumption, both heating oil and RBOB would likely be 20-25% higher as well. Natural gas remains a dog unable to make any significant headway all year. There have been fits and starts but the range bound action for the last six months has been discouraging and lost my clients money on several attempts. From here we may opt to scale into long…

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It’s Funny How We Get The Perfect Job Number

It’s Funny How We Get The Perfect Job Number

Earlier this week on January 5th, 2011 the payroll processing company ADP reported that the U.S. economy had added 297,000 jobs. The economists went wild raising the expectations of today’s government non-farm payroll report to over 200,000 jobs. However, today the job report was released at 8:30 am EST and the U.S. Labor Department only reported a headline number of 103,000. This is quite a disappointment for all those who thought the economy was adding much more jobs as the ADP report suggested. It is important to note that all of these reports cannot be trusted. Even in modern times with all the wonderful technology in the world it seems that the readings when it comes to economic data should be taken with a grain of salt. All that really matters is if the Federal Reserve Bank will continue with it’s U.S. Treasury purchases called QE-2. As long the central bank continues to create capital reserves by buying bonds and keeps the fed funds rate at zero percent the economy will inflate overall. That has been seen throughout history. Investors should just look at when the former Federal Reserve Bank Chairman, Alan Greenspan, lowered the fed funds rates(overnight lending rate to large major banks) to 1.00 percent in 2002. The economy inflated higher for five straight years. However, once interest rates began to increase the economy had already created one of the biggest bubbles in recent times. That was obviously the housing and credit bubble of 2007-2008. We can only wonder how bad this bubble will be that is being created now? The Federal Reserve Bank tells us that there is no inflation. However, the economies in Asia are trying to fight inflation. If this is a global economy how could one part of the world have inflation and the other part have no inflation? It is simply because of the labor market and the fuzzy math that is used by the economists. When a country has high unemployment there is never signs of inflation. However, if one looks at the price of copper, gold, silver, gasoline, oil, or food they will easily see that there is inflation. Leading commodity stocks such as Freeport McMoRan Copper & Gold Inc.(NYSE:FCX), Southern Copper Corp.(NYSE:SCCO), Silver Wheaton Corp.(NYSE:SLW), and many others are trading at or near all time highs. You see today’s weaker than expected job number gives the Federal Reserve an excuse to say that we need to continue their quantitative easing program. Remember quantitative easing is the catalyst for the rally as traders and investors continue to buy the dip. If today’s government job report would have been near 300,000 new jobs the U.S. Dollar would have spiked along with higher U.S. Treasury yields. This would have caused a major sell off. Therefore, you can see how a not so good or even a disappointing job number can be good for the stock market. It’s simply amazing how this all works. Nicholas Santiago InTheMoneyStocks

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Rubber Jumps to Record High

Filed in commodities, copper, jp morgan, New Gold, o, South African Gold by on January 4, 2011 0 Comments
Rubber Jumps to Record High

Filed under: Major Movement , International Markets , Forecasts , Industry , Goodyear Tire and Rubber (GT) , Commodities , Agriculture Last week copper set record highs. JP Morgan Chase (JPM) is sitting on $1 billion of copper. Today, the story is rubber. Rubber jumped to a record high of $5.05 per kg, according to the Financial Times. Rubber is used in tires, condoms and gloves. The price has jumped 25% in two months. Bridgestone (BRDCY ) Michelin ( MGDDY ) Goodyear ( GT ) and Continental have raised tire prices three times in 2010. Continue reading Rubber Jumps to Record High Rubber Jumps to Record High originally appeared on BloggingStocks on Tue, 04 Jan 2011 14:00:00 EST. Please see our terms for use of feeds . Read | Permalink | Email this | Comments

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Palladium: Best Performer of 2010, Hits Nine-Year High

Filed in commodities, copper, G 20, o, South African Gold, Spot Gold by on January 3, 2011 0 Comments
Palladium: Best Performer of 2010, Hits Nine-Year High

Filed under: International Markets , Forecasts , Russia , Economic Data , Commodities Looking back can be painful, especially if you missed the biggest bull move of the year. The star performer was palladium, which is used in catalytic converters. The metal rallied 95% during 2010, according to the Financial Times . One major reason for the jump was the belief that Russia has exhausted its stockpiles of palladium that they had accumulated during the Cold War. The big metals trader, Johnson Matthey, said that palladium could swing into a “serious deficit” if sales from the Russian government diminish. On the futures market, March palladium touched $800 per ounce. Some analysts are forecasting $1,000 per ounce in 2011. Continue reading Palladium: Best Performer of 2010, Hits Nine-Year High Palladium: Best Performer of 2010, Hits Nine-Year High originally appeared on BloggingStocks on Mon, 03 Jan 2011 09:30:00 EST. Please see our terms for use of feeds . Read | Permalink | Email this | Comments

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Top Picks 2011: Northern Dynasty (NAK)

Filed in Bank Gold, commodities, copper, Gold, gold-stocks, o by on December 28, 2010 0 Comments

Filed under: Newsletters , Commodities , Stocks to Buy , Best Stocks for 2011 This post is one in a series in which more than 60 newsletter advisors share their Top Stock Picks for 2011 . This special report is courtesy of TheStockAdvisors.com . “Northern Dynasty ( NAK ) — my top pick for 2011 — is an exploration and development mining company that has discovered and drilled off one of the largest gold-copper deposits in the world,” says Tom Bishop . The editor of BI Research explains, “The Pebble deposit, discovered by and still 50% owned by Northern Dynasty, is located in southwestern Alaska and contains 80 billion pounds of copper and 107 million ounces of gold. Continue reading Top Picks 2011: Northern Dynasty (NAK) Top Picks 2011: Northern Dynasty (NAK) originally appeared on BloggingStocks on Tue, 28 Dec 2010 15:00:00 EST. Please see our terms for use of feeds . Permalink | Email this | Comments

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Uranium’s Secret Comeback

Filed in BP, copper, Gold, GOld juniors, Gold Market, lead, o, outperform, silver by on December 28, 2010 0 Comments
Uranium’s Secret Comeback

Precious and base metal prices hit record highs in 2010, as economic uncertainty rattled the globe. We saw gold breach $1,430 an ounce and silver top $30/oz during the fourth quarter of the year. Meanwhile, base metals like copper and nickel also rallied in the final quarter of 2010. But there is another metal— outside of the precious and base metal families — that will wrap up the year outperforming most others… I’m talking about uranium. In the past eight weeks, the price of uranium has jumped 19.4%; since October, the radioactive metal is up 30.9%. Take a look: Manufacturers, academics, and analysts agree that the long-term fundamentals for uranium prices continue to be compelling. The International Atomic Energy Agency estimates that in addition to 436 reactors now operating in the world, there are 56 under construction and 200 more planned. Those nuclear reactors are responsible for 15% of the world’s electrical power generation — and that number is increasing. China alone is expected to double its uranium purchases to around 5,000 tonnes this year to build stockpiles for new reactors, according to Thomas Neff, a physicist and uranium industry analyst at the Massachusetts Institute of Technology in Cambridge. The rapidly increasing worldwide demand for uranium has prompted most

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