The Original UraniumbugOne decade ago we began predicting a...

The Original Uraniumbug

One decade ago we began predicting a real-estate crash and removed from our Supervised Lists all banks, insurance and other financial institutions, luckily anticipating the '08 Crash.

As we pondered how to lead you, we ruled out bonds because of their insultingly low yields that were derived from governments suppressing interest rates so as to "stimulate" business.

In fact, low interest rates robbed the income of people living off their savings, perhaps a reason America's so-called "economic pickup" has been fecklessly small.

Causes of America's stubbornly high unemployment rate are laid out in the Goldbug! book revealing that today's politicians mimic what was done in the 1930s without comprehending that this is not the 1930s again. But that's another story, for another time.

Instead of weathering the coming storm in fixed-income instruments, we figured that massive overprinting of money would mean that more dollars would chase "wealth-in-the-ground" such that mining stocks, and commodities generally, would move up either with or without a strong economy.

There are so many commodities that we had to limit ourselves, so we hunted for the ones that we expected to be in short supply: particularly uranium, Rare Earths and the precious metals that would eventually be seen as an alternative to paper money.

That generally happened, but everything was interrupted by the all-out '08 Crash, aggravated by the margin calls afflicting hedge funds that were forced to dump all their stocks indiscriminantly in order to survive margin calls.

During the '08 Crash everything went down more than almost anyone expected, and that even included our wealth-in-the-ground picks.

But when the crash hit bottom in late 2008, the rebound that we expected occurred with the precious metals leading the way higher, followed in hot pursuit by Rare Earths, titanium and some others, but the uranium stocks conspicuously recovered only slightly and even began to turn down again early this year.

We find this remarkable, because our expectations of tremendous growth ahead for nuclear power is happening just as expected. We also thought that the price of uranium would hold up well, and it has, having risen 1,750% from our recommended price at $8/lb to its current level of around $40/lb for small lots and nearly $60/lb for large quantities.

What had happened, unbeknownst to nearly everybody, since utilities play their cards close to their vests for competitive reasons, was that uranium users had been sufficiently frightened by the spectacular rise of the radioactive metal's September 2006-7 bull market, to have built up their inventories such that they can now stand back and simply watch the market while hoping for lower uranium prices.

Unfortunately for them, prices have not dropped, but absent their buying there has been no rise either. The net result is that miners hunting for uranium are going through their cash so quickly that they are in danger of going broke.

At this point, uranium stocks have been so beaten down that they are eerily reminiscent of the scene when we emerged from out of nowhere in 2000 with our Super Major "Buy" signal on uranium prices at $8/lb that suddenly rejuvenated the industry by bringing capital flushing into it.

We have also been predicting that, while America has been depressingly slow to ramp up its nuclear-power industry, perhaps spoiled by having 20% of its power already derived from yellowcake, that Wall Street's investors simply don't take uranium seriously enough <196> just as they did in 2000.
That is a great pity, because the rest of the world is certainly awakening to nuclear power, at elevating velocities.

Long-term TDLrs might recall, when we first recommended uranium stocks, our repeated predictions that China would eventually build "thousands of nuclear reactors," but that was at a time when China was planning to build only three, so not everybody took our prediction seriously.

That is still our prediction, believe the unbelievable or not, except now we have some exciting new evidence spelled out in the first excerpt at the end of this feature.

We had long been predicting that China's soaring increase in the number of nuclear-powered plants it was building would have to result in sufficient buying of the radioactive metal to send its price much higher.

Instead, despite reports of China's building programs, the price of uranium has been flat since Sep 08 and that is why we had been predicting uranium shortages "around 2014.

" Bloomberg's world-class writeup (again, see first excerpt at the end of this feature) revealed that China was now suddenly stockpiling uranium fuel buying double than what they are using!
One of the keys of leading investors to stock-market profits is anticipating a rise before it's in the headlines, so as to drink upstream from The Herd rather than downsteam, anticipating the future, as there's no reward for reading newspapers a day late.

Only one other reporter in the press picked up on Bloomberg's world-class scoop, Jim Puplava, because people's reactions or non-reactions can be revealing to those who understand Mass Psychology.

One of its secrets that new bull markets are invisible to the general public, press and Security Analysts.

As with a camouflaged animal; people can look at it, but don't seen to see it, although getting in early is crucial to really huge potential profits, of doubling, tripling your money, or much more.

To those listening carefully, the very absence of any significant reaction to the Bloomberg article tends to confirm the bullishness of "The Coming Uranium Bull Market," believe the unbelievable or not.

Another level in the Bloomberg article confirms one of our more shocking predictions, that our planet is using up resources, and that that time is already coming into view later this century, which is why far-sighted nations are already stockpiling many raw materials -- such as China.

Peak oil is another example, also there are just a limited number of copper mines on the planet. As "The Original Rare Earths Metals Bug" TDL predicted that China would begin slashing its exports of Rare Earths metals, claiming that they'll need them for their own windmill building, which is at least partially true.

China is generally accumulating commodities worldwide, not to be sold hopefully at a profit later, but to be kept for China permanently until the commodities are used up for the building China will need all century, and beyond.

The fourth level that emerged from our reading of the Bloomberg article was that there remains concern about global warming, whether it is real or not, but that so-called "alternative energy" would not be more than 10% of the world's needs for decades to come.

Every energy source has problems, for example solar only works when the sun is out, and windmills when the wind blows, and we are shocked at how few people even know that each windmill must have two tons of Rare Earths to get built -- which is why they are primarily being built in China.

China is scrambling to build its own windmills, with awesome foresight that we wish America had, and which we've been trying to awaken. The only realistic answer to our energy crisis is nuclear power, enabling us to get out of the Middle East and let the fanatics all kill each other so that American schools can stopped being closed to pay for them.

America's adults need to grow up and get over Three Mile Island and Chernobyl. The world's energy future is nuclear power, and the only question is how soon, believe the unbelievable or not.

If we are right about "The Coming Uranium Buying Panic" that we have been talking about for a number of years, the second upwave should be beginning fairly soon, especially as China is already beginning to go into accumulation.

We might have more on uranium shares in upcoming TDLs. One thing is for sure, and that they are so depressed now means that all the ones in our Supervised Lists are probably near their lows so this is the time to average down for those who bought higher.

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