Tuesday, January 10, 2012

Rare Earths, Uranium And Precious Metals Will Likely Lead Recovery

Commodities In Characteristic Selloff

Yet again at the end of 2011 we heard the voices of negation sounding the fear of the bursting with the commodities bubble. The naysayers create their Cassandra calls whenever commodities get into a characteristic and salubrious selloff. They never really discover how to respect the need for gold (GLD) and silver's (SLV) role actually range secular multiyear ongoing rise.

We emphasized
the need for avoiding knee jerk reactions when precious metals experience healthy pullbacks. The initial week of January 2012 saw commodities (DBC) rising across the board as they return in the premature grave that the naysayers have assigned them.

One wonders
how a short sellers are enjoying this periodic resurrection in vital metals including gold, silver, rare earths (REMX) and uraniums (URA).






Transparent Horizon Of Record
Low Interest Rates

Attendant
to an alternative rise in these vital commodities, the cost-effective base ought to be prepared to receive them. On January 24th-25th the government Open Market Committee will likely be meeting again in Washington. One of the areas on which they shall be focusing could be the travails of the U.S. housing marketplace and new solutions to bring down the high unemployment rate. The Fed is promising a transparent horizon of record low interest rates to provoke banks to lend money.
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It is crucial that the Eurozone malaise undergo corrective measures as a way to restore Europe to health. Recently Christine Lagarde, Head from the International Monetary Fund, has expressed broad generalities toward require fiscal reforms. It is hoped that Lagarde will never be a laggard inside the birth in the "EuroTarp" by whatever stimuli to get applied.

Euro Hitting New Lows

The weak euro is attracting foreign capital
to acquire cheap European natural resource assets. Our research team is looking for undervalued gold assets inside the Eurozone as these countries wish to rapidly develop mines to deliver high paying jobs and growth. The euro has broken this year's lows as Merkel and Sarkozy meet to rescue the moribund Eurozone economy.

It is essential that a coherent strategy be formulated rather than the indiscriminate printing of euros (FXE), which we are currently witnessing. The euro is rapidly losing value. This process of currency devaluations is counter-productive unless corrective measures are instituted for example serious spending restraints, permanent tax rate cuts and regulatory relief. In plain language, the Europeans and also the Americans can't print more dollars (UUP) without building on a base of budgetary restraint.
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Recovery In Rare Earths, Uranium and
Gold and silver coins

How does this affect our selected
gold and silver coins stocks (GDX), rare earths and uraniums? Now the rare earths are emerging from their second half 2011 slumber. It is felt that they'll lead the upcoming recovery. This week certain of the rare earths are producing impressive percentage gains being an augury of what to come.

China is playing a dual role
not merely for their own domestic needs but in establishing a quota system for exports along with other nations. This emphasizes the importance for the West and Japan to determine an independent role in their own personal destiny. No matter what happens in the pending appeal with China on the World Trade Organization, free airline has learned a priceless lesson in geopolitics because the external industrial nations recognize the significance of rare earth independence.

The uranium sector is
having a profitable week as well. No other area has already established to come up from having a count so many times. The press has obscured, misrepresented and sensationalized the story concerning the role of nuclear energy (NLR) inside a modern, industrial world. The media has relegated uranium mining on the status of promoting newspapers and TV commercials. Reality be damned. Imagine if the true story is finally told. Not once hold the talking heads mentioned that reactors which are being built are portable, economical and safe. The facts can not be suppressed forever.
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Swiss Franc Scandal Highlights
Purchasing Tangible Assets

Important news
is merely coming within the wire. The Swiss National Bank Chief has resigned in shame after it really is revealed his wife was selling Francs (FXF) to get U.S. dollars some time before the central bank sold Francs to slash the significance. The Swiss franc is booming against the dollar. One wonders what number of others were involved with that trade to push the weak dollar higher?

In summary, our sectors and recommendations are once more emerging from other long bases. Reiterating the long ascendance of these sectors specifically in light of all bullish forces, patience is the vital thing albeit painful. Were advising our readers that this correction in commodities would be far from terminal and that it represents an antique buying opportunity.

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