Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com, provides below further reformatted and edited [..] excerpts from Larry Edelson’s (www.uncommonwisdom.com) original article* for the sake of clarity and brevity to ensure a fast and easy read. Edelson goes on to say:

Major Forces That Will Drive Precious and Base Metals Higher
First, let’s review the major forces that are poised to drive gold, silver, platinum, palladium, copper, aluminum, tin and more — higher and higher and why you should make metals investments a key part of your investment portfolio.

Force #1: Asia
There’s no question that Asia’s rise in the world is unprecedented and it’s being led by China’s economy which has grown at an average rate of about 10% for the last eight years. Moreover, not only is it just high growth in Asia, it’s growth that’s starting from a level that saw 1.4 billion people in China — and another 1.6 billion people in the rest of Asia — emerge out of absolute poverty and now that China and Asia are modernizing, the standard of living of 3 billion people — nearly half the world’s population — is soaring.

Consider, for instance, car ownership in China. Right now, even after almost two decades of explosive economic growth, car ownership in China is still only about 40 vehicles per 1,000 people, compared to 900 per every 1,000 in the U.S. If that stat just rises to 100 cars per every 1,000 people in China — which is certainly not a stretch of the imagination — the demand for cars will overwhelm the markets for steel, aluminum, platinum, palladium, rubber, iron – you name it. That’s just autos and that pales in comparison to what’s happening to the demand for copper and other metals for housing, urban construction, infrastructure projects, and more in Asia and that is why China, in particular, has been on a rampage to secure natural resources, especially metals, all over the world.

The pace of China’s acquisitions of natural resource companies is exploding higher! Just look at the history. In 2002, China made only 1 deal in natural resource acquisitions; 2 deals in 2003; 3 deals in 2004; 11 deals in 2005; 25 deals in 2006; 33 deals in 2007; 53 deals in 2008; and more than 166 deals in 2009, mostly in natural resources! Asia and China’s demand alone would be enough to send metals prices higher but one of my major points today is that it’s not just Asian demand this time around. Demand for metals, indeed all natural resources — what I call tangible assets, real wealth — is being multiplied many times over by …

Force #2: U.S. Debt Implosion
Not only is Asian demand soaring but it’s happening at a time when the world is awash in debt and fiat currency and that is particularly true of the U.S., unfortunately. The U.S. is now the most indebted nation on the planet, and those debts — $136 trillion — are having immutable consequences on today’s economy and nearly all asset prices. Most of all, it’s changing the way they view the dollar! Hardly surprising, when you consider that even if the government could somehow pay off that debt at the rate of $100 million per day, every day starting right now, it would take more than 3,450 years to do so. As such, savvy domestic U.S. and international investors are now realizing that America’s massive debts are unpayable!

Force #3: The Devaluation of the U.S. Dollar
As a result of #2 above, the favorite debt solution of central bankers and politicians will be to pay off government debts with ever cheaper currency.

Step-by-step, international investors and international organizations are aggressively pushing to replace the dollar with a new reserve currency [which explains] why — despite recent disasters with other currencies like the British pound or the euro — the dollar is still down 32% since its high back in 2001. Moreover, it’s also why the dollar’s role as a reserve currency is being challenged all over the world, and why I believe we are now facing a final day of reckoning for the dollar.

A plunging dollar – a fiat paper currency losing purchasing power — is presenting investors with a whole different ball game. It means that if your capital is denominated exclusively in U.S. dollars and it does NOT include a strategy for protection against the falling dollar … you may be actually LOSING money even without knowing it as your money gradually buys less and less. Therefore, to truly preserve your capital and its purchasing power, you may decide you need to go on the offensive with a strategy that includes strategic contra-dollar investments such as precious and base metals that protect your wealth and allow you to grow it as well just like other savvy investors are doing with tangible assets and resources that not only provide the world with the basic necessities of life, but actually rise in value as the dollars falls.

These powerful forces — Asian demand, the financial crisis, and the falling dollar — give you a triple tailwind to invest in precious and base metals — and to propel those investments higher to protect and grow your wealth.

Most Metals Remain Cheap on an Inflation-adjusted Basis
Most believe that the prices of the precious and base metals are already high, or, that they’ve seen their highs just before the financial crisis hit and that they offer very little upside profit potential – but nothing could be further from the truth! The FACT of the matter is that the prices of most metals remain cheap on an inflation-adjusted basis — and have loads of catching up to do on the UPSIDE! For instance, consider:

a) aluminum
Its peak inflation-adjusted price was near $10,000 per metric tonne back in 1933 and its current price is about $2,000 per tonne. In other words, aluminum is selling for less than about one-fifth of its prior peak value — and could rise more than 400% in price in the months and years ahead.
b) tin
Its all-time peak in 1978 on an inflation-adjusted price was near $60,000 per metric tonne and today it sells for about $19,000 per tonne – or less than one-third its peak value.
c) copper
The price of copper, perhaps one of the most important base metals of all sold at an all-time peak in 1973-4 on an inflation-adjusted price of more than $17,000 per metric tonne and yet sells for only $6,700 per tonne today, i.e., about 40% of its prior peak value, and can more than double in price in the years ahead, from roughly $3 a pound today to over $6 a pound!
d) platinum
Its inflation-adjusted high: Nearly $3,000 an ounce in 1979. Its price today: Just a tad over $1,500 an ounce. In other words, platinum prices are set to DOUBLE.
e) palladium
Its inflation-adjusted high was more than $2,000 an ounce back in 1917 but is now trading for just $435 an ounce, showing it has the potential to gain more than 400%.
f) silver
Silver would have to rise almost ten-fold to reach its 1980 high in inflation-adjusted terms!
g) gold
g is for gold. Adjusted for inflation today’s price of around $1,200 gold the precious yellow metal is actually selling at just a tad more than HALF its all-time high. Its previous 1980 peak — in today’s dollars — is $2,271 per ounce. In other words, gold prices could EASILY double again in just the next couple of years. Moreover, at $1,200 an ounce, I believe gold investors are banking on the dollar’s purchasing power remaining stable which it is not going to do…
- not with the financial crisis still roaring
- not with governments around the world contemplating spending even more money to try and stimulate their economies
- not with the Federal Reserve continuing to print paper dollars like there’s no tomorrow
- not with other central banks around the world … in China, India, Russia and more — actually buying up gold reserves to protect themselves from the dollar’s inevitable decline!

Three Longer-term Price Scenarios For Gold

I. Orderly decline in the dollar = $2,300/ounce
I believe that, no matter what, gold is going to hit its inflation-adjusted high of $2,300 an ounce — at a minimum but that assumes an orderly decline in the dollar, and an orderly process of phasing in of an eventual new world reserve currency of some kind.

II. More dramatic decline in the dollar = $3,000/ounce
In this scenario, where the world’s currency markets continue to show the kind of volatility that’s recently occurred with rising global uncertainty regarding the outcome, gold could eventually reach $3,000 an ounce.

III. Collapse in the dollar = $5,000/ounce
In scenario three, where the dollar falls completely out of bed and the markets take over, I wouldn’t be shocked to see $5,000 an ounce for gold.

Bottom Line
Gold is showing you that soaring economic growth in Asia coupled with the financial crisis, which is going to inevitably pound the dollar lower, devaluing its purchasing power step-by-step, are converging to give you an investment sector that’s perfectly positioned to not only help you protect the value of your money in the months and years ahead, but also give you multiple opportunities for profits.

3 General Steps Investors Should Take

Step 1:
For ultimate protection, and for future profit potential, I believe that everyone should have up to 25% of their liquid investment funds in gold and gold-related opportunities. Naturally, each investor needs to take a look at his or her individual investment needs but whether you invest 10% or 25% in gold, I recommend your allocation be further subdivided into four equal units.

Using a 25% allocation, here’s how it would break down:
a) 6.25% in bullion, in ingots or bullion coins such as the American Eagle or Canadian Maple Leaf. Given the storage hassles and costs, there’s no need to put more than that in bullion

b) 6.25% into the SPDR Gold Trust ETF, symbol GLD, and

c) 6.25% divided equally amongst my three favorite gold mutual funds as follows:
i) Tocqueville Gold Fund (TGLDX)
ii) U.S. Global Investors World Precious Minerals Fund (UNWPX)
iii) U.S. Global Investors Gold and Precious Metals Fund (USERX)

d) 6.25% divided equally into the following top-rated gold mining companies that own the majority of the gold reserves in the world today:
i) Goldcorp Inc., (GG)
ii) Barrick Gold Corp., (ABX)
iii) Kinross Gold Corp, (KGC)
iv) Gammon Gold, (GRS)

Step 2:
Diversify beyond gold to the other metals that are benefitting from this environment — rising Asian demand coupled with a long-term bear market in the dollar. Consider an assortment of my favorite Exchange Traded Funds such as:
a) ETFS Physical Palladium Shares ETF (PALL)
b) ETFS Physical Platinum Shares ETF (PPLT)
c) ETFS Physical Silver Shares ETF (SIVR)
d) PowerShares DB Base Metals Fund (DBB)

Step 3:
Also consider the intelligent purchase of short- and long-term call options on metals companies, bearing in mind that options are not for everyone, and certainly not for ALL of your money as they are volatile, speculative investments. However, the purchase of options has two unique advantages in that you can never lose a penny more than you invest and you get virtually unlimited profit potential!

Step 4:
Consider active guidance in the area of metals investing, and all natural resources.

*http://www.uncommonwisdomdaily.com/your-single-best-defense-9722?FIELD9=2 (Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. To view archives or subscribe, visit our web site.)

Editor’s Note:
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given.
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See larger image Profiting from the World's Economic Crisis: Finding Investment Opportunities by Tracking Global Market Trends (Hardcover) By (author) Bud Conrad List Price: $27.95 USD New From: $15.61 In Stock Used from: $15.50 In Stock

Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com, provides below further reformatted and edited [..] excerpts from articles by James Risen* (www.nytimes.com) and Una Galani** (www.breakingviews.com) for the sake of clarity and brevity to ensure a fast and easy read. Smith goes on to say:

The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world. An internal Pentagon memo, for example, states that Afghanistan could become the “Saudi Arabia of lithium,” a key raw material in the manufacture of batteries for laptops and BlackBerrys.

Obstacles to Development

1. Investment Risks
While it would take many years to develop a mining industry, the potential is so great that officials and executives in the industry believe it could attract heavy investment even before mines are profitable, providing the possibility of jobs that could distract from generations of war. U.S. officials have held meetings with large listed miners about extracting deposits but the [present] huge investment risks mean the established players are unlikely to be leaping on the opportunity [any time soon].

2. Security Risks
The security risks make an investment by one of the big listed miners highly implausible judging by their behaviour elsewhere. Many have only just begun to operate in Western African nations that emerged from civil war several years ago.

Smaller startup miners may have more appetite for the mix of risk and reward but the recent suspension of licences from Canadian miner First Quantum Minerals Ltd. in the Democratic Republic of Congo, threatening a US$1-billion investment, is a sign of how difficult projects can be.

3. Taliban Presence
American officials also recognize that the mineral discoveries will almost certainly have a double-edged impact in that, instead of bringing peace, the newfound mineral wealth could lead the Taliban to battle even more fiercely to regain control of the country.

4. Rampant Corruption
The corruption that is already rampant in the Karzai government could also be amplified by the new wealth, particularly if a handful of well-connected oligarchs, some with personal ties to the president, gain control of the resources. Just last year, Afghanistan’s minister of mines was accused by American officials of accepting a $30 million bribe to award China the rights to develop its copper mine. The minister has since been replaced.

5. Tribal Leaders
Endless fights could erupt between the central government in Kabul and provincial and tribal leaders in mineral-rich districts. Afghanistan has a national mining law, written with the help of advisers from the World Bank, but it has never faced a serious challenge.

6. Chinese Interest
American officials also fear that resource-hungry China will try to dominate the development of Afghanistan’s mineral wealth which would upset the United States, given its heavy investment in the region. After winning the bid for its Aynak copper mine in Logar Province, China clearly wants more, American officials said.

7. Environmental Protection
Another complication is that because Afghanistan has never had much heavy industry before, it has little or no history of environmental protection either.

8. Lack of Infrastructure
With virtually no mining industry or infrastructure in place today, it will take decades for Afghanistan to exploit its mineral wealth fully.

Preparations Already Underway
The Pentagon task force has already started trying to help the Afghans set up a system to deal with mineral development. International accounting firms that have expertise in mining contracts have been hired to consult with the Afghan Ministry of Mines, and technical data is being prepared to turn over to multinational mining companies and other potential foreign investors. The Pentagon is helping Afghan officials arrange to start seeking bids on mineral rights by next fall, officials said.

Background to Discovery
In 2004, American geologists, sent to Afghanistan as part of a broader reconstruction effort, stumbled across an intriguing series of old charts and data at the library of the Afghan Geological Survey in Kabul that hinted at major mineral deposits in the country. They soon learned that the data had been collected by Soviet mining experts during the Soviet occupation of Afghanistan in the 1980s, but cast aside when the Soviets withdrew in 1989.

During the chaos of the 1990s, when Afghanistan was mired in civil war and later ruled by the Taliban, a small group of Afghan geologists protected the charts by taking them home, and returned them to the Geological Survey’s library only after the American invasion and the ouster of the Taliban in 2001.

Armed with the old Russian charts, the United States Geological Survey began a series of aerial surveys of Afghanistan’s mineral resources in 2006, using advanced gravity and magnetic measuring equipment attached to an old Navy Orion P-3 aircraft that flew over about 70 percent of the country.

The data from those flights was so promising that in 2007, the geologists returned for an even more sophisticated study, using an old British bomber equipped with instruments that offered a three-dimensional profile of mineral deposits below the earth’s surface. It was the most comprehensive geologic survey of Afghanistan ever conducted.

The handful of American geologists who pored over the new data said the results were astonishing but the results gathered dust for two more years, ignored by officials in both the American and Afghan governments. In 2009, a Pentagon task force that had created business development programs in Iraq was transferred to Afghanistan, and came upon the geological data. Until then, no one besides the geologists had bothered to look at the information — and no one had sought to translate the technical data to measure the potential economic value of the mineral deposits.

Soon, the Pentagon business development task force brought in teams of American mining experts to validate the survey’s findings, and then briefed Defense Secretary Robert M. Gates and Mr. Karzai.

Extent of Discoveries
So far, the biggest mineral deposits discovered are of iron and copper, and the quantities are large enough to make Afghanistan a major world producer of both, United States officials said. Other finds include large deposits of niobium, a soft metal used in producing superconducting steel, rare earth elements and large gold deposits in Pashtun areas of southern Afghanistan.

Just this month, American geologists working with the Pentagon team have been conducting ground surveys on dry salt lakes in western Afghanistan where they believe there are large deposits of lithium. Pentagon officials said that their initial analysis at one location in Ghazni Province showed the potential for lithium deposits as large of those of Bolivia, which now has the world’s largest known lithium reserves.

Conclusion
For the geologists who are now scouring some of the most remote stretches of Afghanistan to complete the technical studies necessary before the international bidding process is begun, there is a growing sense that they are in the midst of one of the great discoveries of their careers.

That being said, any way you look at the opportunity the concerns over unlocking Afghanistan’s treasures mean the country remains some time away from any magical resource-led transformation.

*http://www.nytimes.com/2010/06/14/world/asia/14minerals.html?emc=eta1
** http://www.nationalpost.com/Kabul+keeps+miners/3155195/story.html

Editor’s Note:
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given.
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Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com, provides below further reformatted and edited [..] excerpts from Rick Mills’ (www.aheadoftheherd.com) original article* for the sake of clarity and brevity to ensure a fast and easy read. Mills goes on to say:

In 2008, uranium mining supplied roughly 70% of nuclear utility power requirements. The remaining supply deficit used to be made up from stockpiled uranium held by these very same utilities but their stockpiles are pretty much depleted and the deficit is now primarily supplemented by ex-military material and this ‘Megatons to Megawatts’ program ends in 2013.

“The more that prices are depressed in the short term, the fewer mines that are likely to be built and developed and that could possibly exacerbate any price spike,” Will Smith, the London-based portfolio manager of Geiger Counter Fund told Reuters recently.

“A gap of almost 12 trillion kilowatt hours needs to be filled by 2030…. We expect nuclear energy to play a major role in this growth.” CIBC analyst Ian Parkinson said in a research note.

I’m not saying there is a shortage of uranium – there is enough to meet expected demand for the foreseeable future. Unfortunately, a lot of it is just not economic to dig out of the ground at current prices. Exploration for new deposits seems to be falling drastically and with lead times approaching a decade or more, the mining industry looks like it is not going to have enough supply to meet the called for increased demand.

A flat to downward uranium price through 2009 kept most uranium juniors in check throughout the year. There were only a very few companies that got any respect from investors and they all had one thing in common – they were large, open pit, lower grade deposits.

The lower grade open pit deposits being developed in Africa were, for 2009 anyway, the investment stars of the junior uranium sector. Could investors be catching on to the fact low-grade deposits can have low costs and therefore high profitability?

Maybe investors are starting to focus in on profitability and mine life instead of solely on grade. Are investors starting to catch on to the fact that the extremely high-grade deposits in the Athabasca Basin of Saskatchewan, Canada are freaks of nature and that a deposit with a much much lower grade is more representative – more the norm – for uranium deposits? Only time will tell.

The fact is, however, that despite the huge disparity in ore grade between high and low grade deposits, the other inputs of scale/cost can offset the lower grade. This results in almost identical gross margins between the two types of deposits. Of course, with a low-grade deposit, asset size does matter more. You need the size – the overall tonnage of the deposit – to be very large. This tonnage is required for success in spreading a big fixed capital cost over a large enough amount of input and over a long enough period of time. If companies can do that, their unit costs will be low enough to build an economically robust mine even in times of low uranium prices. Low grade can mean big profits for investors.

All new uranium production in the last five years has been from lower-grade material. When I started looking at the line-up of near term producers (those with economic studies), they were all lower-grade deposits. Remember, we’re not talking deep and complicated underground mining situations. We are talking about open pit mining prospects, simple, low-cost earth-moving operations. Investors can wrap their heads around these kinds of situations and do seem to be catching on to low-grade economics.

So where should uranium investors look for an investment? Well, companies with what appear to be extremely large low-grade bulk tonnage open pittable deposits, located in good mining jurisdictions, might be a good place to start.

*http://www.aheadoftheherd.com/Newsletter/92%20Electric%20Avenuepdf.pdf

Editor’s Note:
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See larger image Investing in the Great Uranium Bull Market (Paperback) By (author) David Miller List Price: $24.95 USD New From: $50.50 In Stock Used from: $49.50 In Stock Release date September 21, 2006.

In further edited excerpts from the original article* Pat McKeough (www.tsinetwork.ca) goes on to say:

Here are 2 profit-killing strategies to avoid when buying commodity investments:

1. Futures trading
Rising resource prices will likely tempt more investors to trade commodity futures. These include metals and minerals, fertilizers and agricultural products. You can only profit in futures-linked deals by out-guessing other futures traders by a wide enough margin to offset commissions and other trading costs. When you dabble in commodity futures, you are betting against professionals who make a full-time occupation of studying these markets, who have better access to information than you do, and who pay far lower commissions.

Most futures traders start out with a planned limit on how much they are willing to lose before they quit. In six months or so, most lose that amount, and quit trading. What’s more, because futures traders tend to trade often, a surprisingly large number find that the total brokerage commissions they pay during their trading career is close to the total losses on their commodity investments.

2. Structured investments
There are various structured products sold by brokers that give you exposure to commodity investments, while limiting risk. Most participants will ultimately lose money in these investments, as well, or they will make a poor return in relation to their risk.

The difference between these products and futures trades is that the losses won’t happen so quickly. In addition, more of the money you lose will flow into brokers’ fees and commissions, while you’ll typically lose less on the commodity investments themselves.

Here is our preferred approach:

1. Invest in the stocks of resource firms
We feel that investing on the basis of price changes for commodity investments instead of in commodity stocks is more of a gamble than an investment. These activities don’t earn income, but instead consume funds for storage fees, insurance and so on.

A far better way to profit from rising commodities is by investing in the stocks of resource firms. That way, you benefit from increases in commodity prices, and give yourself the potential for capital gains and income. You also save on the higher brokerage fees and commissions associated with other types of commodity investments.

Summary
Avoid trading in futures and investing in structured products and concentrate on the stocks of resource firms.

*http://www.tsinetwork.ca/daily/commodity-investments/commodity-investments-the-2-worst-ways-to-invest-in-rising-resources/ ( To learn more about what TSI Network has to offer visit: http://www.tsinetwork.ca/about/)

Editor’s Note:
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given.
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See larger image Commodities For Dummies (Paperback) By (author) Amine Bouchentouf List Price: $24.99 USD New From: $7.67 In Stock Used from: $5.98 In Stock

In further edited excerpts from the original article* Paco Ahlgren (www.BottomViolation.com) goes on to say:

Sure, you’ll get a good return from the stock market — in nominal terms — in coming years but in real terms, it’s unsustainable and unrealistic. Oil, gold, and agriculture are going to be the biggest winners when the dollar starts its slide.

In further edited excerpts from the original article* Ahlgren goes on to say:

Here’s what the common wisdom is saying:

PHASE ONE: Collapse in the prices of nearly all global asset-classes.

PHASE TWO: Global quantitative easing — meaning unprecedented rate-cuts, coupled with unprecedented currency-printing, borrowing, and spending.

PHASE THREE: Stock market recovery.

Suddenly everything is fine, right? No! Everything is not fine. Unfortunately, the evidence continues to mount that we’re not anywhere near the end of the pain. There is a fourth phase to this economic storm:

PHASE FOUR: Foreign creditors begin to abandon U.S. Treasuries, driving yields higher. Unprecedented printing causes massive inflationary pressure, driving the prices of all asset-classes higher, as major world currencies fail. Most people become euphoric, proclaiming an “economic recovery.” Others buy gold, oil, and agriculture and hunker down for the worst.

In real terms, however, equities are going to underperform gold, oil, and agriculture for a long time, and this necessarily means stocks will underperform inflationary price increases. It’s just math. In fact, all asset classes are going to go higher when the dollar disintegrates! That’s the way inflationary pressure works! Remember: just because asset-classes are moving inversely to the phony currency in which they are denominated (by definition) does not mean we are in the middle of an economic recovery!

Our foreign creditors — like Japan, China, and Saudi Arabia — are now talking about ditching the U.S. dollar in favor of another reserve currency. Do you really believe they’re going to continue to lend to the United States at absurdly low rates, in perpetuity? Our government has committed itself to spending $13 trillion dollars on this economy. Where is that money going to come from?

I assure you, printing dollars in current quantities is the death knell of our beloved currency. I equally assure you our creditors are neither naive nor stupid, and they are not going to simply keep dumping money into a debtor economy whose currency is in jeopardy, whose savings rate is almost zero, and whose consumer has run out of leverage. Why do you think the Chinese — for instance — have bought U.S. Treasuries for so long? Because they knew the American consumer would return the capital to the Chinese economy many times over – but the American consumer is now out of fuel. So what now?

Here’s the deal. Just as every asset-class in the universe collapsed starting in 2007, the massive implementation of quantitative easing that ensued is going to ensure equally massive inflationary pressure on most — if not all — of the world’s currencies. So your job, as an investor, is not to try to figure out which asset-classes are going to increase in value, because they all are — relative to the currencies in which they are denominated.

No, your job is to figure out which assets are going to outpace inflationary price increases. I’ve already given you one clue: this stock market surge you’re seeing? It’s an illusion. While equity prices will undoubtedly go higher, productivity and earnings are not going to outpace inflationary price increases — simply because consumers are not going to have the power to fuel corporate profits as they once did. Sure, you’ll get a good return from the stock market — in nominal terms — in coming years and maybe that’s enough to get you excited. I watch CNBC enough to know that there are a lot of people who believe this rally is authentic but in real terms, it’s unsustainable and unrealistic. It won’t be long before the smartest investors recognize stocks are not going to outpace inflationary price increases and thus begins Phase Four.

So what asset-classes will outpace inflation? Do I have to say it again? Precious metals, energy, and agriculture. These assets are no longer mere hedges against inflation. Not only will they continue to elicit demand from investors seeking return, but many of them have industrial value, as well — increasing the likelihood of increased demand and superior returns. There’s one more thing I have to add – if you can get into any superior-performing assets using leverage at a low fixed-rate of interest, you’re rate of return is going to be exponentially higher.

Phase Four. The train is starting to pick up speed. If you [haven't be paying attention], I hope you will now!

*http://www.bottomviolation.com/

Editor’s Note:
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given.
- Sign up to receive every article posted via Twitter, Facebook, RSS feed or our Weekly Newsletter.
- Submit a comment. Share your views on the subject with all our readers.
- Buy the book below from Amazon. It’s pertinent to this article and inexpensive too.

See larger image Commodities For Dummies (Paperback) By (author) Amine Bouchentouf List Price: $24.99 USD New From: $7.67 In Stock Used from: $5.98 In Stock

Below are further edited excerpts from the orginal article* by staff at www.oilprice.com:

Most people just know platinum for its expense or it’s appearance in jewellers windows, but this incredible metal is much more than that!

What Exactly is Platinum?
Platinum is a precious metal, which basically means it’s rare, expensive and composed of metallic elements that are scarce.

It’s a silvery white metallic colour (somewhere in between silver and nickel). It’s a very dense metal with an atomic weight of 195.23, making it almost as heavy as gold. It’s malleable, lustrous and ductile and is used in many industries from jewellery to making refrigerators and car parts.

In fact, over 20% of manufactured items use platinum at some point in the manufacturing process with the production of catalytic converters consumes over a third of platinum produced on a yearly basis.

Rarity of Platinum
Platinum is very rare as it’s difficult and expensive to locate and mine. In fact, it’s the rarest of all the precious metals, with an annual production of about seven million ounces. This is less than a tenth of annual gold production.

Over 90% of global platinum supply comes from South Africa (80%) and Russia who have both been cutting back their production targets at a time when demand is increasing by hundreds of thousands of ounces a year.

With reserves and supply limited to two countries this is a danger to production as strikes, political problems or economic issues could lead to a swift reduction in supply which would obviously have a sharp impact on platinum’s price.

Platinum and Industry
As mentioned above, “platinum is used in over 20% of manufactured goods” and the industrial demand is only increasing as we discover new uses for the metal. Platinum is almost un-corrodible, it’s malleable, it has high electrical conductivity and it’s very durable. It’s used in the production of chemicals, fertilizers, computers, gasoline, glass, wires, paints, medicines, cars, explosives & planes, etc.

In addition, you will also find platinum in a great number of items: jewellery, spark plugs, fibre optic cables, fuel cells, hard disc drives and of course catalytic converters because of its high catalytic properties.

Platinum Jewellery
Platinum’s lovely silver blue colour has meant it’s been in great demand in the jewellery business since the 18th century. Jewellery production accounts for over 25% of yearly global platinum production. It has seen a large drop from 2000, however, when it accounted for over 50%, due to its high platinum prices and the popularity of substitutes (silver & gold)

Apart from its colour, it’s also desired by jewellery manufactures for its hardness and strength, its flexibility and also the fact that it’s resistant to corrosion i.e. doesn’t tarnish or oxidise when exposed to air or water.

Another often overlooked benefit of platinum jewellery is that it’s hypoallergenic, so it’s a great choice for people who have reactions to other metals or 14k gold.

Platinum as an Investment
The commodity bull market has led to an increase in the prices of all precious metals. Apart from its use in the manufacturing sectors platinum is also seen as a store of value and hence a hedge against the dollar and other paper assets. Over the last few years this has led to a significant increase in investment from private investors, mutual funds, pension funds and companies.

Platinum ETFs were introduced in London and Zurich in 2008 which have proved very popular amongst investors. [Editor's Note: Canada has the world's first and only open-ended mutual trust that invests in equal proportions of unencumbered, fully allocated gold, silver and platinum bullion.]

Platinum retail investment products have also been very popular over the last few years as the banking crisis showed the flaws in our financial system and it’s got to the point where it’s difficult to locate dealers with supplies of platinum coins that aren’t charging an extortionate premium over the spot price.

Platinum Mining
Mining for platinum is very capital intensive as it takes up to 10 tons of platinum ore to produce one ounce of pure platinum. Platinum ore deposits are very scarce and highly scattered. It usually occurs with five other metals which are also rare, expensive and chemically classified as noble metals. These are: iridium, osmium, palladium, rhodium & ruthenium. It’s also found as compounds with arsenic and sulphur.

Over half of the world’s historic production of platinum has come from one site in South Africa and the platinum has come from a thin layer of rock little more than 3′ thick.

With world demand steadily increasing and no new reserves being found this is one precious metal that should hold its ground in the future.

*http://www.oilprice.com/article-platinum-golds-big-brother-uncovered.html

Editor’s Note:
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
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What is Tantalum?
Tantalum is a rare metal found in Australia (56%), Africa (19%), Brazil (16%), China (5%) and Canada (4%). This high performance metal has a high melting point, high strength, high ductility, high reliability, high resistance to corrosion and high thermal conductivity making it a highly efficient, highly reliable and environmentally versatile component for use in a wide variety of applications that contribute significantly to our economy and way of life.

What is the Market for Tantalum?
- 68% of tantalum is used in the electronics capacitor industry in such products as cell phones, DVD players, personal computers, digital cameras, gaming platforms, LCD monitors, wireless devices, telephone switch boards and computer networks because of its unequaled capacity to store and release electrical charges.

- 11% is used in other electronics applications such as PC memory chips, igniter chips for car air bags and other automotive electronics.

- 8% is used in the manufacture of super alloys for jet engines, turbines, space vehicles, nuclear reactors, power plants and chemical equipment due to its extreme hardness.

- 5% is used in the manufacture of carbides (5%) for cutting tools, drill bits, excavator and bulldozer teeth and the forming of dies.

- 2% is for use as optical coatings, memory chips and silicon wafers for use in microcompressors.

- 1% is used in military and recreational ammunition and

- 3% is used in the manufacture of a variety of other products such as rayon fibers, heat shields, ink jet printers, x-ray film, hip and knee replacement systems (because of its non-corrosive nature) and in the manufacture of surgical instruments and appliances.

What is the Demand for Tantalum?
According to the US Geological Survey Mineral Commodity Summaries report and the Tantalum-Niobium International Study Center:
a) world-wide demand for tantalum was 6 million pounds per year in 2006
b) consumption has been increasing approx. 7% per annum over the past 20 years
c) primary mine production has increased 38% since 2004 to 2.84 million pounds in 2006
d) the USA imports 87% of its 1.5 million pounds annual requirement (the balance reclaimed from recycling) and, according to the US Defense Logistics Agency,
e) the US’s current stockpile of tantalum will be depleted by the end of 2007 at current disposal rates.

The above facts add up to an impending major imbalance in supply and demand starting in 2008 and quite possibly a major escalation in the price per pound of tantalum in the years ahead.

What is the Current Price of Tantalum?
Tantalum is not traded on the commodity metals markets but, rather, the price is freely negotiated between supplier and processor. As such, over the past 30 years, the tantalum market has been marked by long periods of stability, punctuated by very sharp price hikes created by a combination of strong demand and fear about a shortage of supply.

From what we know about the many and growing market applications for tantalum, the impending supply shortage of tantalum, the present low price for tantalum and the historic high price tantalum commanded just a few years ago it is evident that the future price of tantalum has no where to go but up – big time!

How can an Investor Profit from Tantalum?
There are major ‘unmined’ profits to be had by investing in one or more of the tantalum junior explorer companies (12 in total of which 5 are major); mining companies (14 in total with 4 producing 60% of the world’s supply); processor companies (9 of which 3 supply 80%); producer companies (26 in total of which 8 are major); integrators and recyclers.

It behooves you to investigate the companies involved that are publicly traded, do your analyses, make an informed choice as to which ones to invest in and deploy your investment dollars accordingly. Tantalum is, indeed, a tantalizing investment opportunity that warrants further study.

Editor’s Note:
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given.
- Sign up to receive every article posted via Twitter, Facebook, RSS feed or our Weekly Newsletter.
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See larger image Junior Mining Investor: 14 Natural Resource Experts Show You How to Invest Profitably in Emerging Gold, Silver, Platinum, Base Metals, and Uranium Mining and Exploration Stocks (Paperback) By (author) Kevin Corcoran List Price: $22.95 USD New From: $22.95 In Stock Used from: $21.00 In Stock

In further edited excerpts from the original article* Peter Krauth (www.moneymorning.com) goes on to say:

For thousands of years gold’s most enduring role has arguably been in the form of money – as a store of value. Despite gold’s much longer history as true money, however, some believe that copper – the much humbler metal – could be positioning itself to upstage gold.

China’s Role in Upsurge in Copper
If copper is to replace gold as the world’s most-valuable metal, China will have to play a huge role. Today, China sits atop a paper Everest, with foreign-currency reserves worth more than $2.4 trillion. No public financial institution boasts that degree of financial-asset firepower. Of that total, more than $800 billion is held in U.S. debt.

A war chest of this size serves as a great insurance policy during tough economic times. The trouble is that China is painfully aware of the damage that U.S. dollar inflation will inflict on that massive hoard of greenbacks with Luo Ping, a director general at the China Banking Regulatory Commission on record as saying: “We hate you guys. Once you start issuing $1 to $2 trillion… we know the dollar is going to depreciate, so we hate you guys, but there is nothing we can do.”

What Luo Ping said is not completely true – there are some things that China can, and is, doing. It recently announced that its official gold reserves had catapulted by 76% by quietly becoming the world’s largest gold producer and buying up all that it produced.

China to Use Copper to Leverage its Developmment and Diversification
No doubt China will continue to covet gold, but with such a large reserve (a world market share of 38%) in dire need of both diversification and securitization, this emerging global superpower has set its sights on other tangibles. Let’s face it, the gold supply is small, and China needs resources of all kinds. As such, it makes perfect sense for Beijing to trade holdings it has too much of – like U.S. Treasuries, for example – for assets China needs more of, like copper. There are multiple benefits to this strategy, too: not only is China swapping a holding whose value is declining (dollar-based holdings) for a tangible asset whose value is on the rise (copper), it’s also getting (in copper) an asset that’s central to its ongoing infrastructure build-out.

Furthermore, some believe that China’s actions reflect a new strategy since this acquisition binge goes way beyond national consumption requirements and could be sustained for some time. It could be that copper will be used to back a currency but it is also necessary for the modernization of China and could even propel China into the lead in the next wave of automobile technologies – both electric and hybrid.

Why is the Price of Copper Still So High?
Commodities traders often refer to this all-important non-ferrous metal as “Dr. Copper.” Its price and supply/demand characteristics are widely assumed to reflect the health of the world industrial economy, hence its “Ph.D. in Economics.”

Given that reputation as an excellent barometer, it’s tough to understand just what’s keeping copper prices high (up 226% in 2009) but here are a couple of reasons:

1. Hedge funds are taking physical positions in the metal, rather than through futures contracts, due to concerns the Commodity Futures Trading Commission (CFTC) will bring in position limits.

2. China’s State Reserves Bureau has purchased large amounts of copper, pushing the nation’s year-over-year imports up by 63%.

Longer-term View
I am convinced that we are still relatively early in a secular commodity bull market. In fact, with the modernization of Chindia and numerous other less-developed nations, I expect this bull market will be one for the record books. Fundamental demand coupled with inflation will push resource prices to unimaginable heights.

*http://www.stockhouse.com/Columnists/2010/Feb/10/Copper-could-be-positioning-itself-to-upstage-gold
*http://moneymorning.com/2010/02/09/copper-new-gold/

Editor’s Note:
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given.
- Sign up to receive every article posted via Twitter, Facebook, RSS feed or our Weekly Newsletter.
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See larger image Hedgehogging (Paperback) By (author) Barton Biggs List Price: $16.95 USD New From: $7.21 In Stock Used from: $3.99 In Stock

In further edited excerpts from the original article* Sean Brodrick (www.uncommonwisdom.com) goes on to say:

Some Platinum Facts: Rare, Rare
All the platinum ever mined could fill a room 25′x25′ square; only about six million ounces of platinum are produced by mines every year (less than 5% of annual gold production); above ground supply of platinum could be expected to last about a year (compared to about 25 years for gold). Platinum is rare!

The largest known reserves of platinum are found in South Africa (80%), with Russia and Canada also having some of the larger platinum deposits.

Like gold and silver, platinum can be used for jewelry but jewelry demand is now only 20% of yearly platinum demand versus 40% just five years ago. The biggest and growing demand for platinum is in industrial products, especially in catalytic converters for automobiles (more than half the world’s production) and, as such, platinum sees its price rise and fall with demand for new automobiles.

Platinum Demand: Zoom! Zoom!
Now here’s the interesting thing about platinum demand. China’s auto sales have passed that of the U.S., and should grow by 44% year over year. While there are about 900 cars for every 1,000 people in the U.S. there are only 30 cars per 1,000 people in India, and less than 10 cars per 1,000 people in China. Where do you think car sales will go in India and China? I’d say zoom! What will that do to platinum demand for catalytic converters? Zoom-zoom! Where would that take the price of platinum? Zoom, Zoom, Zoom!

Platinum Prices: Up, Up
HSBC has a target of $1,600 an ounce for platinum, and my target is $1,700 – that’s an 11% move from recent levels – and it could go higher, perhaps back to its 2008 high around $2,300 an ounce, especially since there isn’t a lot of platinum around.

Platinum Funds: More, More
1. The iPath Dow Jones-UBS Platinum Trust Subindex TR ETN (PGM) is based on an index composed of one futures contract on platinum. It has an expense ratio of 0.75%, and an average daily volume of 66,000 shares. It has a market cap of $137.77 million, and it recently traded at a 9.25% premium to its net asset value.

2. The E-TRACS UBS Long Platinum ETN (PTM) is based on a basket of platinum futures contracts. It has an expense ratio of 0.65%, and an average daily volume of 61,000 shares. It has a market cap of $84.3 million, and recently traded at a 4.28% premium to its net asset value.

Do you see what these two funds have in common? Neither of them holds physical platinum. That’s not necessarily bad, but if you like your fund to hold the physical metal, be aware of that. Also, both funds have stopped creation of new shares (for now), so they trade at a premium.

3. The E-TRACS CMCI Short Platinum Excess Return ETN (PTD), tracks the inverse of a basket of platinum futures contracts plus a fixed income return on a Treasury Bill Portfolio. So, if you’re bearish on platinum, PTD is the fund for you.

4. The new ETF Securities platinum and palladium ETF (PPLT) which is soon to come out is backed with the physical metal. Why would investors choose PPLT over PGM or PTM? Well, along with the fact that it will hold the physical metal, ETF Securities has wrestled market share from larger funds in part because of its lower cost structure.

Conclusion
If a new fund starts buying physical metal in a very small market I think platinum could blast off and that’s not the only new source of demand. Let’s get back to India and China for a minute. In addition to the expected growth in car sales in both countries they have an affinity for precious metals and, in the case of China, their demand for platinum jewelry was expected to double in 2009, and that trend should continue as long as prices remain below their peaks.

In short, the outlook for platinum is very bullish. Before you buy, though, keep in mind that in a thinly market prices can be volatile ( platinum dropped 65% from peak to trough in 2008) and, as such, can work both for and against you so I would only recommend buying on dips — and set your price target to sell on the rips.

*http://www.uncommonwisdomdaily.com/platinum-in-the-fast-lane-8063 (Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets.)

Editor’s Note:
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given.
- Sign up to receive every article posted via Twitter, Facebook, RSS feed or our Weekly Newsletter.
- Submit a comment. Share your views on the subject with all our readers.
- Buy the book below from Amazon. It’s pertinent to this article and inexpensive too.

See larger image Precious Metals Investing For Dummies (Paperback) By (author) Paul Mladjenovic List Price: $24.99 USD New From: $13.82 In Stock Used from: $11.95 In Stock

In further edited excerpts from the original article* Don Vialoux (www.timingthemarket.ca) goes on to say:

Major Use
A major reason for strength during this period is increasing demand for platinum used in automotive catalytic converters during the key spring auto buying season. Catalytic converters consume about 37% of the world’s platinum production. Secondary reasons include improving demand for platinum used in jewellery and speculative buying in anticipation of higher precious metal prices.

Demand Increasing
Demand for platinum in 2010 is expected to increase significantly thanks mainly to a strong recovery in auto production and sales. According to Scotiabanks’s senior economist Carlos Gomes, “Improving access to credit and growth in the global economy should enable 2010 car sales to recapture half of the ground lost over the past two years, setting the stage for record sales volumes in 2011″. Emerging markets in China, India and Brazil will lead the way, but even the hard-hit U.S. market will see a double-digit advance.

How to Invest
Adding to demand is the launch of ETFS Physical Platinum Shares (PPLT/NYSE ARCA) an exchange-traded fund on palladium that is backed by the metal. Launch of the ETF and rising demand for the auto sector come at an interesting time. A direct way to invest in platinum for the current period of seasonal strength is through ownership of iPath Platinum Exchange Traded Notes (PGM/NYSE). Platinum equities also are available.

Demand for platinum has exceeded production during the past eight years. A spike in demand in early 2010 sets the stage for a significant gain during its period of seasonal strength. Strength relative to the price of gold has been positive since the beginning of December, a sign that platinum is responding more to increasing economic demand rather than speculative precious metal buying.

Got platinum!

*http://www.kelowna.com/2010/01/09/buy-platinum-now-and-sell-in-may-recovery-in-auto-market-new-etf-add-to-demand/

Editor’s Note:
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given.
- Sign up to receive every article posted via Twitter, Facebook, RSS feed or our Weekly Newsletter.
- Submit a comment. Share your views on the subject with all our readers.
- Buy the book below from Amazon. It’s pertinent to this article and inexpensive too.

See larger image Junior Mining Investor: 14 Natural Resource Experts Show You How to Invest Profitably in Emerging Gold, Silver, Platinum, Base Metals, and Uranium Mining and Exploration Stocks (Paperback) By (author) Kevin Corcoran List Price: $22.95 USD New From: $22.95 In Stock Used from: $21.00 In Stock