Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Rare Double-play Opportunity in Crude Oil, Gold and Commodities

Commodities / Resources Investing Aug 31, 2009 - 09:11 AM GMT

By: Money_and_Markets

Commodities

Best Financial Markets Analysis ArticleLarry Edelson writes: Truth be told, I’m even more bullish now on gold, oil and other natural resources than I was when I nailed the start of the massive bull market in commodities nine years ago, in the middle of the year 2000 — before gold prices tripled and before oil rocketed up some 1,030 percent from $13 per barrel to its all-time high of $147.


But despite what you might expect, I am not bullish merely because the Obama administration seems to be committed to lighting the fuse on massive inflation in 2010 and beyond.

True; even in more normal times you’d expect Washington’s mind-blowing $1.8 trillion annual deficits and its plans to sink us even deeper in debt with health care reform and countless other “borrow and spend” initiatives to be massively inflationary.

Record-shattering borrowing by the U.S. Treasury combined with manic money-printing by Bernanke and the Fed — would be a dead give-away that massive inflation and soaring resource prices was a virtual certainty.

I’d be enthusiastically bullish on gold, oil and other natural resources even if the dollar’s buying power wasn’t being gutted by our own government.

But there’s another factor that has convinced me that energy, metals, food, water and construction and manufacturing materials are destined to be among the most profitable investments in the world going forward:

The emergence of China, India and the Asian bloc as the new economic superpowers of the 21st century

It’s not particularly a new story. At least not for me. But this massive global transformation is now a reality. And even the quickest glance of recent facts on Asian economic growth prove it in spades …

  • While credit is still difficult to come by in the U.S., new loans made by China’s banks are exploding higher, more than TRIPLING in the first half of 2009.
  • Through July of this year, auto sales in China increased a record 30.7 percent to 5.4 million vehicles, just slightly below the U.S. at 5.8 million.
  • While U.S. retailers continue closing stores in droves, China’s retail sales in July are off the charts — up 15.2 percent since last year.
  • While the overall U.S. economy was shrinking at annual 3.3 percent pace in the first quarter of 2009, China’s GDP was growing at a pace of 6.1 percent.
  • While the U.S. economy was down 3.9 percent in the second quarter, China grew 7.9 percent. And get this:

Even if you accept Washington’s notoriously rosy estimates, the U.S. economy will not grow at all this year. More likely, it will continue to shrink, albeit at a somewhat slower pace than in the second half of last year.

By contrast, China’s economy is still growing by leaps and bounds — expanding at the breathtaking rate of 8 percent to 9 percent this year.

That’s about DOUBLE the economic growth the U.S. enjoys even in the GOOD times!

Demand explosion

These are crucial facts that have tremendous consequences for your investments. After all: Nearly one in four human beings alive on the planet today are Chinese. And while most of the world is still struggling through the worst recession since the 1930s, their economy is exploding.

And China’s not alone. India’s population is 1.1 billion strong — and its economy is still growing, too. In fact, it’s likely to grow 7 percent this year alone.

Think of it: Nearly one in every two human beings on Earth lives in one of these two countries — and they are growing their economies by leaps and bounds!

Now, think about this: Only about 10 percent of the Earth’s population live in Western Europe and the U.S. — and for the past 200 years or so, our nations drove the lions share of all economic growth on the entire planet.

It was largely OUR demand for gold, oil and other natural resources — growing demand from just 10 percent of the world’s population — that drove their prices ever-higher.

Today, demand for natural resources from the whopping 40 percent of the world’s population in China and India is colliding with our planet’s dwindling supply of natural resources.

That alone would make investment in natural resource stocks a no-brainer. But the fact is the growth in demand from these countries is not the routine, gradually rising demand you see in mature economies.

As I’ve just shown you, these two countries’ economies are positively exploding.

Together, since 2007, the emerging markets of China and India — along with a few other nations that supply them with natural resources — have been responsible for 50 percent of global economic growth.

Their citizens’ incomes are rising by leaps and bounds. More than 80 million new middle-class families are being created in Asia per year.   By 2015, just six short years from now, more than 800 million middle class families will live in these nations — 22 times more than now live in the U.S..

And every one of those new middle class families needs a place to live.  Every one of them wants to enjoy the necessities and little luxuries of Western life.

That means no matter what happens to Western economies, you can expect global demand for oil and gas … aluminum … copper … gold … silver … nickel … rice … sugar … cocoa … coffee … cotton … timber … cattle — you name it — to continue to explode.

And as demand for these things soar, their prices will, too.

That means the companies that produce them will post even greater earnings. And that means you can expect their stocks to shoot for the moon.

Bottom line: Natural resources are a dream “double-play” for investors today

Washington’s run-away deficits and money-printing virtually guarantee sky-high inflation and soaring resource prices as far as the eye can see. And the demand explosion in China and India also means you can expect the stock of companies that produce oil, gold and other resources to skyrocket.

It’s clear that neither of these mega-trends is likely to end soon. To the contrary: Every scrap of data I study tells me that they’re likely to accelerate throughout 2010 and beyond.

The great news is, the advent of exchange traded funds on China, India, natural resources — and on the countries that are getting rich selling resources to the world’s two largest nations — have made harnessing this global sea change as easy as buying shares of IBM and Microsoft.

For a report on these profit opportunities, be sure you haven’t missed the Weiss Global Forum’s full report. To view it, just click this link.

Sincerely,

Larry Edelson

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules