My Home     About Me

0920 EST Monday February 06 2006

Good Morning: Last week, we declared that in our foreseeable lifetimes what has happened in the past to commodities like Cocoa when affected by wars and subsequent supply disruptions, may be just a foretaste of what's to come in the 21st Century as the World begins to run out of increasingly valuable and essential, yet finite resources that up until recently we all took for granted would last till the end of time or at least through the end of our time... But as we proclaimed back then, the reason we were telling you this story is because what happened with Cocoa, not only in this decade, but decades ago, has huge implications for Gold, Silver, Copper, Platinum, and Palladium, Oil and a horde of Commodities and Resources that are going to influence our futures beyond anyone's imagination in the coming years...

The US is currently using about 43% of the World's oil and has about 5% of the World's population. The rest of the World is catching up to US rates of consumption at an alarming rate, that could increase the Global demand for Crude Oil from around 83 Million barrels per day to as much as 120 ~ 130 Million bpd by 2025. For more than 30 years, successive Governments and Presidents have been calling for the US to reduce or eliminate its dependence on foreign oil, but instead, as each year goes by, the US imports even larger quantities of Oil that finally are so mindbogglingly off the charts, the stark reality of what is happening today is like Ross Perot's giant sucking sound that's not only taking US jobs overseas, but also the overbearing roar of a giant vacuum cleaner, sucking dollars out of the US economy at a faster rate than anything ever experienced before, resulting in continuing record trade deficits getting progressively larger, and almost every month, as we now have deficits that have been steadily expanding ever since the very first Oil shocks of the 1970's.

Whilst George Bush may have set a realistic time goal to try and wean the US off of its oil addiction, the fact is we have already wasted 4 years by not addressing this problem sooner and implementing the mother of all Manhattan projects and Lunar goals with Kennedyesque bravado, that says unequivocally, that we can and we will have a hydrogen based economy before this decade is out, and we still can...

It's not too late and even to start the move to a hydrogen based economy right now, even if we have to transition our way there through the mass use of hybrid vehicles in the interim. With various universities at the cutting edge of development of electrically enhanced hybrids that can improve gas mileage from 60 Miles per Gallon to as much as 260 mpg, buying a hybrid becomes beyond compelling, especially in Europe. The technology not only exists for this now, it's being improved upon every day that such numbers could become main stream.

While GB's remarks were the subject of late night humor, talking about wood chips and switch grass as alternative fuels, the blindingly obvious alternative to Oil based energy is staring at us right in the face and no-one seems to want to mention this bonanza. How much more real and genuine applause would there have been, had he mentioned the USA is the Saudi Arabia of Coal and that we can and we will create the Ultra Clean Fuels of the future from coal, that magically, can potentially not only power conventional engines, but could also be the fuel of the future that will power the next generation of fuel cell powered cars. Necessity is not the only mother of invention. Nature itself is too and it may have granted the World a temporary reprieve to a World running out of oil, by showing Brazil how they can run their cars on ethanol or (mixes of various fuels in their latest and most popular 'Ford' manufactured cars) that are flying out of showrooms down there. Or, the more recent and almost miraculous reprieve, in the emerging reserves of Alberta Tar Sands said to contain 2 Trillion barrels.

Both of these developments may buy the World the time it needs to effect a near perfect transition to alternative fuels, but there's still no time to waste or be complacent. Matthew Simmons, of Simmons International doubts the World can sustain even the current output of 85 Millions per day at a stretch, let alone 135 Million barrels per day in the future. The time has come to act now. Just as the World is only just now starting to figure out that there may be less than a decades supply of Gold left at current levels of consumption now approaching 4,000 tons per annum, the same could happen with Oil as the United States sized middle classes of China and India begin to adjust their lifestyles more to what we are used to here. Add to that the One Billion increasingly consuming populations of Europe, Russia, Eastern Europe and Latin America combined and growth could exceed projections quite markedly. The record billions of dollars that Shell, Exxon and the numerous other oil companies out there just made in their latest quarters should be totally redirected towards ultra clean fuels.

Not only can such fuels potentially outperform Gasoline, some variants could be made inert and thereby save untold lives through being less combustible, but they could ultimately improve and even save our own lives, by ridding much of the world of Carbon based toxins...

Earlier last week, we also commented on the growing Global discontent that may have been prescient ahead of unfolding events, but the fact remains we are in a World where Oil and Gold are not only rising because of their scarcity, they're also a barometer of Global unrest.

Trade Well
From the Desk of Savant

Greetings
News out this morning confirms the undervalued nature of Gold even as we continue to make new highs. NEWS
Our Gold strategy has been ranked the 1 Performer by Ameritrade Research as well as others. For details, vist CFRN. A report is available in PDF Format. We will also continue to update you via - "Trading Markets" - the one stop shop for savvy investors.

Trade Safe
From the Desk of CT

bailout   Basic Materials SPDR (XLB)   bond trading   bond yields   capitulation   climactic   commodities   credit crisis   Currency ETFs   day trading   Deron Wagner   DJIA chart   economic data   Emini's Nas 100   emini's S&P 500   emini's S&P 500e   ETFs (exchange trade funds)   ETFs (exchange traded funds)   Gold Miners ETF (GDX)   Japanese Yen ETF (FXY)