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Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Social, Economic and Energy Trends

Economics / US Economy May 24, 2007 - 01:53 PM GMT

By: David_Vaughn


Uranium remains the most exciting commodity moving strong on the markets. 

Uranium has so far stayed out of the political mainstream so there has not been a coordinated drive to suppress its price. Uranium continues to be influenced by the simple powers of supply and demand. And the demand for uranium is definitely there. Just in the United States alone a new renaissance in nuclear power is dawning. This fact is probably one of the strongest and most powerful of trends as we move deeper into the 21 st century.

“Especially affected is the nuclear power industry, which is girding for a revival after a decades-long construction hiatus following the 1979 Three Mile Island partial meltdown. The 33 nuclear reactors on the drawing board "will not get built as quickly as we want," says Dale Klein, chairman of the Nuclear Regulatory Commission. "You'll see regions where there are shortages of electricity" that trigger blackouts or brownouts.” Click

Are we seeing more oil or less oil? Is gasoline cheaper now or higher? The following info below is very important and is outlining a trend gathering momentum. Digest it well.

“The average American motorist is driving substantially fewer miles for the first time in 26 years because of high gas price…” “The growth in miles driven has leveled off dramatically in the past 18 months after 25 years of steady climbs…” "For the first time in recent history, the rate of vehicle miles traveled is not increasing at the rate it was for 25 years. It's having an effect and is changing in subtle ways the way people think about their driving." “Americans are driving about 200 million to 300 million fewer miles a day…” Click

And below is more text confirming this significant and powerful new trend of higher gas prices developing. Let your imagination think of the ways this will play itself out over time. Definitely the cry for more nuclear energy will be heard as oil prices continue to slowly climb higher. A very, very important trend to be studied.

“U.S. families paid $1,000 more on average for gasoline last year than in 2001, as higher prices at the pump ate up a hefty portion of the increase in their paychecks, two consumer groups said Wednesday.” “The average U.S. household paid $2,277 for gasoline in 2006, up 78% from 2001, according to estimates from the Consumer Federation of America and Consumers Union, the publisher of Consumer Reports .” "It's a big bite out of the household budget," says Mark Cooper, director of research at the Consumer Federation of America.” “…the increase in gasoline prices comes on top of higher costs for heating and air conditioning, which have stressed some household budgets.” "Gas prices are causing Americans significant financial hardship," Rep. Bart Stupak, D-Mich., said at a hearing Wednesday of the House Judiciary Committee on gasoline prices.” Click

Can you say “nuclear energy?” The following below is an interesting bit of trivia that helps us to see just how much has changed in our world in just a short order of time. And folks, we have not even begun to experience the momentous and life changing events yet awaiting us over the horizon and just around the corner. 

“First century A.D. Rome had a million people; Alexandria 750,000; Athens and Marseilles 300,000 each. By 400 A.D. Constantinople had possibly half a million.” After the fall of the Roman Empire, cities experienced a very severe shrinking. “No post antiquity European city reached a population of a million people before 1820.” Norman F. Cantor, Antiquity

And because cultural change occurs so hastily is more the reason to be paying attention to 2007 and the progressing trends of the next 10 years. As I always say – you snooze, you lose. And let's look at another trend threatening our financial security for the next decade. Read on below.

“Economic growth has dipped to dangerously slow levels…” "Since the early '80s, the only time that we had five quarters of below-average growth, it included recession," says Ken Mayland of ClearView Economics. "It is unusual, and typically, you would think that after some period of time, there would be a Fed response."

Tell me if the following below does not parallel our own age.

“Times were hard, the price of food inflated, Roman pressures omnipresent and dangerous.” “ … (the) solution was to debase the Alexandrian coinage.” Colleen McCullogh, TOH

And the same practice continues today as evidenced below by a Fed Governor.

Fed Governor Ben S. Bernanke – “Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar…” Click

Did precious metals make a difference to the wealth and standing of a country 2,000 years ago?

“The discovery of rich silver deposits…gave Athens a sudden surplus of wealth.” Norman F. Cantor, Antiquity

How really different is today from yesterday?

“BY THE EARLY TWENTY-FIRST CENTURY, THE AMBIENCE OF American urban life resembled that of the Roman Empire's cities, with lavish displays of wealth standing alongside cruel poverty…” Norman F. Cantor, Antiquity

And what is happening on the immigration front? Pay attention here because this is a very important trend that will change the face of this country and create more people chasing the same jobs.

“…led by Senator Ted Kennedy…” “President Bush praised the plan…” "I really am anxious to sign a comprehensive immigration bill as soon as I possibility can.” “The compromise includes a proposal to deal with the estimated 11 to 12 million undocumented workers in the United States as well as future immigrants.” “Under the deal, illegal immigrants already in the United States would come forward and obtain a probationary card that would let them live and work legally in the United States. They could eventually get on a path to permanent residency and citizenship…” Click

I am just curious here but where are George Bush and Ted Kennedy going to find the money to fund these 12,000,000 new US citizens?

I love to see new immigrants coming into this country because that always has been what this country represented…a land of new arrivals from all four corners of the globe. But to admit 12,000,000 in one bold new law I believe is really going to stretch the US treasury. It looks like we may eventually have to start borrowing some of those one trillion US dollars being held in Asian Reserves. And is immigration changing the face of this country? Read below.

“The nation's minority population has topped 100 million for the first time and now makes up about a third of the USA…”

"Two-fifths of why our population is growing is from people being drawn to our nation." Click

How much has our world changed in just a very short order? Penicillin and a cure for Polio were just discovered around 50 and 75 years ago.

“The polio vaccine was made pubic in April, 1955. Drawing from previous findings of other scientists, Dr Jonas Salk discovered a vaccine…” Click

And when was the first major antibiotic, Penicillin, discovered?

“In 1928, Alexander Fleming, a bacteriologist at London's St. Mary's Hospital, found that a mould on a discarded culture plate had an antibacterial action.” “The first antibiotics were prescribed in the late 1930s…” Bacterial infection, as a cause of death, plummeted. Between 1944 and 1972 human life expectancy jumped by eight years - an increase largely credited to the introduction of antibiotics.” Click

How amazing that in our generation discoveries have been made reducing so much mass suffering and at the same time in one fell swoop increasing the natural lifespan of everyone all in one blow. Yet, even today we take these events for granted. Another inescapable fact is the gradual diminishing of US power and prestige around the world. This trend began when the US lost the financial symbol of American economic might, the World Trade Towers. The World Trade Center Twin Towers are forever gone and it looks like the US influenced World Bank is now under attack, facing credibility problems and experiencing competition for the first time.

“Even as the bank has taken on missions far removed from its original infrastructure focus, such as promoting gender equality and fighting disease, it has been challenged by the emergence of alternative sources of capital for the developing world.” “Last year, the bank lent China an additional $1.45 billion, even as Beijing holds reserves of more than $1 trillion.” Click

Just who and what is the World Bank?

“The World Bank has long been criticized by a range of non-governmental organizations and academics…” “The Bank's own internal evaluations have drawn negative conclusions. Critics argue that the so-called free market reform policies — which the Bank advocates in many cases — in practice are often harmful to economic development…” “In Russia, for example, some have suggested that it was an apparent shock therapy policy that has raised poverty from 2 million to 60 million, a 3000% increase. UNICEF noted that this resulted in 500,000 'extra' deaths per year.” “One general critique is that the Bank is under the marked political influence of certain countries (notably, the United States) that would profit from advancing their interests. In this point of view, the World Bank would favor the installation of foreign enterprises, to the detriment of the development of the local economy and the people living in that country.” Click

The point is the World Bank is an important banking and financial organization working primarily for the interests of the United States. And its US influence and prestige within the world order is beginning to diminish. Even petty scandals are now occurring with girlfriends. Very petty and damaging to credibility.

“Paul D. Wolfowitz yesterday resigned as president of the World Bank over his role in arranging generous pay raises for his girlfriend, ending a prolonged, extraordinarily charged battle that some officials say has badly damaged the poverty-fighting organization. He will step down June 30” “…the drawn-out affair was beginning to raise questions about the bank's future effectiveness.” Click

There are 7 primary trends we have covered overall here.

  1. The first trend is the projected long term growth for the nuclear power industry.
  1. In the second trend we are beginning to see the affects of a finite oil with gas prices starting to slowly rise to new levels never before breached.
  1. Another trend is that economic growth is dropping to dangerous levels.
  1. Inflation is not going away.
  1. The precious metals will maintain their roles as anchors in future financial storms.
  1. Immigration is shaping up to become a giant scandal and political mess for both political parties.
  1. The US continues to lose its once impenetrable prestige in the world's financial markets.

But through thick and thin uranium will continue its long and exciting run.

  • The world will need greatly increased energy supply in the next 20 years, especially cleanly-generated electricity.
  • Nuclear power provides over 16% of the world's electricity, almost 24% of electricity in OECD countries, and 34% in the EU. Its use is increasing.
  • Nuclear power is the most environmentally benign way of producing electricity on a large scale. Without it most of the world would have to rely almost entirely on fossil fuels for base-load electricity production. Click

Recognizing that we are in a new investment era that is changing the way we invest Gold Letter, Inc. reviews undervalued gold, silver, uranium and other resource stocks under valued and poised to rise in this time of increased demand for all resources. Gold Letter's 10 best performing stocks are up over 2,000% and GL's top 50 performing stocks are up over 500%. GL charts are computer generated and updated every hour while markets are open. 

“The Worldwatch Institute, an organization that focuses on environmental, social and economic trends, says the current rate of global demand for resources is unsustainable.” Click

I didn't hear from you last week. Send me something interesting to post for others to read.

By David Vaughn
Gold Letter, Inc.
Click here to order Gold Letter

The publisher and its affiliates, officers, directors and owner may actively trade in investments discussed in this newsletter. They may have positions in the securities recommended and may increase or decrease such positions without notice. The publisher is not a registered investment advisor. Subscribers should not view this publication as offering personalized legal, tax, accounting or investment-related advice. The news and editorial viewpoints, and other information on the investments discussed herein are obtained from sources deemed reliable, but their accuracy is not guaranteed. © Copyright 2007, Gold Letter Inc.

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