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If you’re not investing in the natural resource sector, you’re not protecting your money AND you’re missing out on some pretty hefty profits to boot.
Consider, for instance, some of the profits subscribers to my premium natural resource trading services have grabbed in just the last few months:
In my trading service that takes positions in natural resource securities and ETFs, subscribers have enjoyed 13 winners, including juicy gains of …
55.0% on Yanzhou Coal Mining
60.7% on Gerdau Ameristeel Corp.
39.9% on Votorantim Celulose e Papel S.A.
45.1% on Rio Tinto
29.1% on Walter Energy, Inc.
And more, much more — in less than six months and in many cases, in as little as just four weeks!
In my more leveraged natural resource trading service, using options, subscribers have racked in even bigger profits, including gains of as much as …
268.75% in Yanzhou Coal Mining
143.48% in Pactiv Corp.
195.83% in TEPPCO Partners
124.39% in Walter Energy, Inc.
And many, many more, also in less than six months — and in many cases, in as little as just three weeks!
Naturally, not every trade can be a winner. But the slews of profits my premium subscribers have been raking in are in my opinion, very likely to continue, especially when I consider two MAJOR forces at work that I’ve been warning you about for months …
Force #1:
The U.S. Dollar Is Not Only Toast,
It’s Now Toast That Is Crumbling
Almost every technical indicator under the sun has been pointing to a rally in the dollar, turning the best currency experts in the world bullish on the greenback.
But has the dollar rallied? No.
Instead, the dollar has started to crumble again, crashing through important support, in complete harmony with the longer-term bearish cyclical outlook for the dollar that I’ve shown you many times — which points to a massive bear market in the buck that will eventually see it replaced as the world’s reserve currency.
You can see the recent action in the dollar in this chart I have for you.
Notice how the dollar was unable to rally through the downtrend line — and is now plunging through the horizontal support line, indicating the potential for another big leg down.
And make no mistake about it: The long-term bearish cyclical picture for the dollar is also supported by the fundamental forces impacting the currency. Facts that bear repeating …
The U.S. is the most indebted civilization in history, and ground zero for the financial crisis.
Worse, the debt problems are now infecting the government as the next shoe soon begins to drop, and the public becomes fully aware, like never before, that Social Security, Medicare, and other contingent government liabilities — now totaling more than $104 trillion — are almost entirely unfunded.
Meanwhile …
U.S. creditors China, Japan, and Russia balk more and more at buying our debt and funding the U.S. quagmire.
The imminent approval of a national health care plan also promises to further destroy the balance sheet of both the U.S. public and private sectors.
And, all the while …
Fed Chief Ben Bernanke continues to actively promote a weaker dollar, precisely as I have been warning you, in an attempt to solve the debt crisis by reinflating asset values!
Will his dollar devaluation method work? In some regards, yes, it will, in my opinion. Indeed, it is already helping to spark an upturn in asset prices.
But a clandestine dollar devaluation will also come with largely adverse consequences: Namely an aggravated crisis in confidence in government and its stock in trade, the dollar, ultimately leading to the demise of the greenback as the world’s reserve currency.
While that may still be yet a few years away, there is no doubt whatsoever that the smart, savvy money is already recognizing the inevitable and taking the only prudent course of action to protect their money and to profit from the crisis:
By investing in the most enduring asset classes of all, tangible assets — natural resources that are …
A. In limited supply — Mother Nature can only produce finite amounts of most natural resources …
B. Priced in U.S. dollars — making them a built-in almost automatic hedge against the falling value of the dollar …
C. Experiencing almost non-stop increases in demand — especially from China and India, representing fully 40 percent of the world’s population, as they continue to leap into the 21st century.
Speaking of which …
Force #2:
China’s Hunt for Natural Resource
Security Is Rapidly Accelerating
China has TWO simple but vastly understated reasons to massively hunt down and secure natural resource supplies.
The first is the needs and wants of its 1.3 billion people still rapidly modernizing and seeing their incomes explode higher.
The second is little known, but so obvious to me that I’m amazed so few analysts have caught on to it. For China, natural resources are also the country’s answer to the rapidly dwindling value of the U.S. dollar.
With $2.13 trillion in reserves that continue to grow — and most of those reserves still in U.S. debt securities, which Beijing cannot dump, for it would be shooting itself in the foot — Beijing has no choice but to hedge most of its U.S. dollar exposure.
And not in euros or some other paper currency wrought with its own problems. But in assets that tend to rise when the dollar weakens.
As I’ve explained above and on many previous occasions in my past columns, there are no better assets to hedge against a declining dollar and diminishing confidence in government than good old-fashioned tangible assets.
Which is precisely why China is NOW putting the pedal to the metal securing natural resources. Consider the following …
In 2002, 2003 and 2004, China made only one major natural resource acquisition per year. BUT …
In 2005, it made 9 deals
In 2006, the number of deals exploded to 21
In 2007, it held steady at 20
In 2008, the number of deals reached 29
And so far this year, while the number of deals is down, the dollar value that China is investing in natural resource acquisition strategies around the world is on track to more than DOUBLE last year’s pace!
Where is China gobbling up assets?
In almost every country on the planet. And they are gobbling up almost every commodity under the sun too, including … oil, gas, coal, gold, aluminum, tin, copper, lead, iron ore, platinum, palladium, soybeans, wheat, corn, coffee, cocoa, sugar — and more.
The latest deal, just announced last Thursday — China National Petroleum Corp (CNPC) will invest $30 billion in newly obtained loans from the China Development Bank (CDB) to fund overseas expansion.
Included: China’s largest ever overseas oil acquisition — a potential $14.5 billion bid for a 75 percent stake in Spanish oil major Repsol’s operations in Argentina.
My view: There are oodles of profits to be made in the natural resource sector, and even more so by focusing on what China is hunting down.
Best wishes,
Larry
P.S. My Real Wealth Report keeps you AHEAD of the major trends that are unfolding, giving you some of the best no-nonsense profit opportunities you’re likely to find, anywhere.
So if you missed out on my recent invitation to become a member at a deep 60 percent savings, don’t let that stop you. You can join at an extremely reasonable price of just $99 a year by clicking here now.
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Uncommon Wisdom (UWD) is published by Weiss Research, Inc. and written by Sean Brodrick, Larry Edelson, and Tony Sagami. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in UWD, nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in UWD are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical in as much as we do not track the actual prices investors pay or receive. Regular contributors and staff include Kristen Adams, Andrea Baumwald, John Burke, Amy Carlino, Selene Ceballo, Amber Dakar, Dinesh Kalera, Red Morgan, Maryellen Murphy, Jennifer Newman-Amos, Adam Shafer, Julie Trudeau, Jill Umiker, Leslie Underwood and Michelle Zausnig.
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{ 1 comment… read it below or add one }
Hello Larry,
Please tell me what is the meaning of “Reco”.
Thanks,
sammay