How to Invest in What China Really Needs

Boom or bust, there is something that the poor of China and the growing number of rich in Beijing just can’t do without...and Chris Mayer has that one investment that you need to know about right now. Chris Mayer explains where the growing power of the Chinese consumer is causing growth...and tells of one business in particular has been growing like crazy for the past few years and is set grow a lot more.

Whiskey & Gunpowder
By Chris Mayer
June 16, 2010
Gaithersburg, Maryland, U.S.A.

How to Invest in What China Really Needs

There must be more communists in Berkeley than in Beijing. That thought crossed my mind as we swept through Beijing’s wide streets, crowded with cars and lined with tall modern buildings. A more bustling capitalistic city would be hard to imagine.

I think most Americans would be shocked to see Beijing today. A friend of mine, well traveled and well-read, told me he thought he would find a city to compare to Mumbai or Managua. Instead, he found a city to compare to New York or Chicago.

I sent back video clips of some of the highlights to another friend. After watching a few clips he wrote: “I suspect that what a lot of Americans are unsure about is the size and scope of what’s really there in everyday life in China. In most memories, it’s a nation of rice scroungers… raking the good earth with fingers crossed.”

One of the clips I sent gave you a peek inside a busy Carrefour, a French retailer running a Wal-Mart-like operation in China. My friend continued, “Yet here there’s a butcher with piles of fresh, red meat out in the open (it MUST be selling fast to be out like that)… and 30 kinds of toothpaste on the shelves… and 60-plus cash registers jammed with customers.”

All of the world’s best-known brand names were on display in brightly lit wide aisles. You almost have to see it to believe it. Even in the five years since I was here last, Beijing has changed a great deal. Surprise, though, has become something of a routine here.

In 2001, consensus opinion had the population of Beijing hitting 14 million by 2040. It topped that by 2003. Today, it has about 22 million people. Also in 2001, experts thought that Beijing would have — gasp! — 1 million cars on its roads by 2010. It also topped that figure in 2003. Today, there are nearly 5 million cars on the road.

China is now the world’s largest car market and is quickly becoming the world’s largest market for a number of consumer goods. It’s also the world’s largest market for mobile phones. We saw plenty of Beijingers chatting away at checkout counters and in their cars just as people do in the U.S.

The whole country isn’t like this, of course. We wandered about 40 minutes from downtown and visited a small village still technically in Beijing. We walked down dusty lanes, past modest dwellings and a small Buddhist temple. Villagers smiled as we passed. They don’t see foreigners here much, but you could stop and get a Coke and a Snickers bar.

We also happened to meet the head of the village, who greeted us warmly and showed us inside his house, a small courtyard home. After snapping a group picture, he asked us to e-mail a copy, and we dutifully wrote down his address. Some of these homes don’t have a private bathroom, but you can still send e-mail.

That’s China for you, in a nutshell. It’s been an uneven advance — and there is still a long way to go.

Back in central Beijing, we visited a Bank of China branch. There were 77 teller windows. In the central foyer was a display case with gold and silver coins for sale, as if they were pens or tote bags. The Chinese buy more gold than anybody else, recently surpassing India.
 

tell you all this to prepare you for this key idea. As CLSA, the Asian investing specialists, put it in a recent report: “The future of Asia is domestic.”

This is an important shift. For a long time now, China’s economy (and Asia’s generally) has been geared toward servicing the West, toward exports. Now begins a transformation, the rise of the Asian consumer.

One key data point here is disposable income. CLSA notes that the number of Asians (excluding Japan) with disposable income of $3,000 annually will rise from 570 million to 945 million by 2015. More than two-thirds of that increase will come from China alone.

As CLSA notes, “The consumption spending of this middle class will rise from US$2.9 trillion to US$5.1 trillion by 2015, with China, India and Indonesia contributing to 69%, 16% and 4% of the increment.” By 2014, about 44% of the population in China will top this $3,000 threshold — a 27% increase over 2009.

These numbers back what I intuitively grasped on my trip. There is a big mass of consumers that want all the things many of us take for granted — like Crest toothpaste and bluejeans and air conditioners. That’s a lot of fresh money in the pool — and companies like Yum! Brands, McDonald’s, Wal-Mart, Carrefour, Starbucks and many others are all jockeying for a share of the prize. And in many cases, they already have substantial businesses here. You can see their presence while you are driving around Beijing.

Servicing this growing middle class is going to be an important investment theme for the next several years.

Regards,
Chris Mayer

P.S.: Our new investment idea focuses on one area that many Chinese think about much more than the typical American: water.

Over the last 50 years, about half of the nonrenewable water in northern China’s huge aquifer has gone. Perhaps more pressing is the fact that so much of the water China has left is unfit for human use.

Beijing declared its reservoirs unfit for drinking in 1997. It’s only gotten worse since then. Earlier this year, China’s government said that water pollution was far worse than first thought. About 70% of China’s source water is unsafe. China now tops the world in stomach and liver cancer deaths — mostly attributed to consuming polluted water. And polluted water transmits the leading infectious diseases in China, such as diarrhea and hepatitis.

It’s an awful situation, but the Chinese consumer is increasingly aware of it, especially that growing middle class. This is why water filtration products are selling so well in China. The market is huge.

The company we’re investing in has a business in China that’s been growing 25% a year for the last five years. It’s been such a success that the company plans to duplicate the model in India, another place with mega water problems. 

Making New Money In the Old World

Today, we’re going to look at another way to profit from the euro’s demise – one that doesn’t involve options.

Old World, New Trouble

Other than Ted, the only people I’ve met who love what’s happened to the euro are a couple of currency traders and anyone planning a summer vacation in Europe. The euro is down 30% against the dollar since last November. They are ecstatic. Investors in European stocks? Not so much.

Eurozone stocks are down 9% year to date in local currencies. And down a whopping 22% in terms of dollars. Compare that to just a 2% decline in the S&P.

And investors are voting with their feet. According to EPFR Global, fund outflows from European equity funds as of May 19 were the worst since April 2008.

The general consensus is that Europe, with its aging demographics, socialistic bureaucracy, and monetary struggles, will be hard pressed to outperform emerging markets in the coming years. But there is an upside to the devaluation of the euro.

A weak euro benefits exporters since it makes a country’s products cheaper for foreign customers. And that’s a boon for international sales. 

The Biggest Beneficiary Of a Weak Euro

The big winner in all this won’t be Spain or Greece. Most of their trade is within the Eurozone. The country that stands to gain the most is the fifth-largest in the world in terms of GDP… the second-largest exporter in the world and the largest, by far, in the Eurozone.

Almost 30% of this country’s GDP comes from exports – the machinery, chemicals, vehicles, and household equipment that they send all over the world. That country, of course, is Germany. 

The Oddball Of Europe

Mountains of debt have been piling up in Europe. The big question is whether the countries that are in trouble will be able to service their debt… let alone pay it off. And too much debt is a drag on GDP. But Germany isn’t like the rest of Europe (or the U.S.) in that regard. Consider these deficit-to-GDP ratios:

Germany has its fiscal house in order. And its stock market has not taken the pummeling the other bourses in Europe have. The Greek market is off 35.9% year to date. Italy’s is down 20.4%. Spain’s is off 27.6%. Germany’s? Down just 2.4%. Still, the German market is undervalued compared to the U.S. and represents a great buying opportunity. 

Where To Invest

A good place to start is with the iShares MSCI Germany Index Fund (EWG). EWG has holdings in 51 companies based in Germany. Its top five positions are in Siemens, E.On, BASF, Bayer, and Allianz – which represent 35% of its portfolio.

At 18%, financials is the biggest sector held by the fund. But 55% of its holdings are in industrials, materials, utilities, and consumer discretionary.

As you can see, the EWG (dark blue line) has dramatically underperformed the S&P 500 (brown line) over the last year:

US Market Decisively Beat German Market Over Past 12 Months

But don’t expect this to continue. Over the last five years, EWG (red line) outpaced the S&P (blue line):

But German Market Outperformed the U.S. Market Over Past 5 Years

There is, of course, more upside in individual companies – particularly those in a position to take advantage of the weaker euro. How do these companies do it? Here’s a hint: They’re already accelerating profits in a market set to soar, thanks to the instability in the EU.

Be Prepared for the Best Short Market in Years

Gary's Note: Last week, I said we'd look at exactly how you can profit from a falling market. So today Dan Amoss returns to tell you exactly what you need to know. Not to be dramatic, but this is information will prove to be vital in the coming weeks and months. The crisis in Greece is just a small sample of the carnage about to work its way through the world's markets. Read on to learn exactly what simple steps you need to take right now in order to be ready to profit instead of being wiped out financially.

by Dan Amoss
June 7, 2010
York, Pennsylvania, U.S. 

Be Prepared for the Best Short Market in Years

Shorting stock is probably one of the most unusual ways to make money on Wall Street. And I think the best way to explain it is with a story. 

Say a friend lets you borrow his brand-new car for an extended time. So for all intents and purposes, the car is yours. 

One day, a complete stranger sees you with the car and says, “I’ll give you $52,000 to sell this car to me.”  Unsure of what to say, you take his phone number and say you’ll think about it. 

You’re very curious, so when you go home, you do some research and discover that $52,000 is a very fair price for the car. But you also learn that the local car dealership is having a big sale in two weeks, so there’s a good chance the car will sell for a lot less than it sells for today. 

You call up the man who wants the car and agree to the sale. You meet him, and he hands you a check for $52,000. That’s a nice chunk of change…but now your friend is out a car. Luckily, you know what you’re doing. 

Two weeks later, the car sale starts, and you’re able to buy the exact same model of car — from its color to its option features — for $42,000. You’ve now replaced your friend’s car and kept a nice $10,000 for yourself at the same time. 

What you’ve done is known as short selling. And short selling a stock works pretty much the same way.

Make Money Selling Something You Don’t Own

When you want to short a stock, you simply call your broker and say how many shares of a company you want to short. 

The broker then “borrows” the stock shares, either from his firm’s account or from other investors. He then immediately sells those shares on the open market. The money from the sale is yours to keep. 

So if you short 100 shares of stock at $50, your broker will borrow 100 shares of the stock, sell them, and then deposit the $5,000 into your account. 

But don’t make the mistake of thinking this is free money. Always remember that you will need to return the borrowed shares at some point. This is called “covering the short,” or “buying to close” your position. 

The goal is to cover your short for a lower price than what you borrowed it for. For instance, if the stock you shorted falls to $40, you can instruct your broker to buy shares to close your position. Your broker buys 100 shares at $40, taking $4,000 from your account to pay for the transaction. The shares he bought are then returned to whom he borrowed them from.

Meanwhile, you’re left with $1,000 of pure profits.  But notice that the lowest a stock can go is to zero. So your maximum gains will never be higher than what you earned when you initially sold the stock. In the example above, you’ll never make more than the $5,000 you got for shorting the stock. 

Now, the downside to this strategy should be clear. 

If the stock rises, you could be in trouble. You might have to buy back the stock at a higher price than you sold it for. For instance, if you cover your short at $60 per share, your broker will need to spend $6,000.  Since you got only $5,000 when you originally shorted the stock, you’ll need an extra $1,000 in your account to pay to close the position.  If the stock goes to $70…$80…$100…you’ll have to pay that much to cover the short. In other words, your risk is theoretically unlimited. 

But it probably won’t come to that. Since you’ll need enough money in your account to cover the short, your broker may ask you to deposit more money.  (This is sort of like a margin call.) 

Short traders know this. So when a stock seems to be on a run, they’ll often race to limit their losses by covering their short positions. Unfortunately, their buying can run up demand for the stock. And as you know from basic economics, increased demand leads to higher prices. 

 

This is called a short squeeze — traders covering their shorts artificially boost a stock’s price.

Another thing to keep in mind is that when you sell someone else’s stock, they are still eligible to receive the stock’s dividends. Since you borrowed their stock, you must pay any dividends the stock pays out. 

So as you can see, shorting the stock itself is a good idea only in very certain situations (situations that will be coming up this very summer, by the way). You are forgoing the biggest gains, but your trade will tend to be less volatile. Often, this is our best route if we are confident that a stock will fall, but less confident about when. 

Also, some good short-selling targets are so small that they have no exchange-listed options. 

See you then.

Regards,
Dan Amoss

P.S. While I recommend shorting stocks only in some situations, a lot of those kinds of situations will be cropping up very soon...

The 20 things you'll need to survive if the economy collapses

From The Economic Collapse:

Today, millions of Americans say that they believe that the United States is on the verge of a major economic collapse and will soon be entering another Great Depression. But only a small percentage of those same people are prepared for that to happen.

The sad truth is that the vast majority of Americans would last little more than a month on what they have stored up in their homes. Most of us are so used to running out to the supermarket or to Wal-Mart for whatever we need that we never even stop to consider what would happen if suddenly we were not able to do that.

Already the U.S. economy is starting to...

Read full article...

Silver Stock Report : Confiscation

Confiscation

(The good news about silver, and gold!)

More of my readers ask me about confiscation than any other issue.  I continue to refer people to my article from 2008, but it's time for an update. 

http://www.ayeel.com/2008/07/confiscation.html

I stand by what I wrote in the past, but there is more to say.

First of all, gold in the hands of the American public has never been confiscated, never can be, and never will be.

confiscate
1.  To seize (private property) for the public treasury.
2. To seize by or as if by authority. See Synonyms at appropriate.
adj. (knf-skt, kn-fskt)
1. Seized by a government; appropriated.
2. Having lost property through confiscation.

The only gold that has ever been confiscated was gold held by banks for their customers !  Let the buyer beware who owns ETF's,  certificates, bullion accounts, or those holding gold in some storage program; again, beware!

The government has never, and will never, send agents house to house, asking you for your gold, at the threat of gun point.  And even if they did, it would be so easy to evade that kind of inquiry, by merely saying, "My gold, I sold that years ago!"  Think about it, they don't even do that to fight the drug war!!

Furthermore, in a nation of gun owners, government agents would likely terminate the program after about the 100th house they searched, due to the people fighting back.

If the government can't win the war on drugs, against laid-back lazy pot heads, do you think they could win a confiscation war against vigilant, anxious, sober, gun wielding 50-60 year olds, many of whom are decorated veterans of the special forces?

In fact, for those people who know of Bible Prophecy, and even for the atheists and agnostics among us, gold ownership should be the key factor keeping people alive through the coming 7 year tribulation predicted in the Bible in Ezekiel, Daniel, and Revelation.  There will be people who will not ever take the mark of the beast required to buy and sell, and it is those people who will likely have silver and gold who will survive to populate the earth after the tribulation and during the millennium, whether believers, atheists, or agnostics alike!

Zechariah 14:16-19.  Revelation 13:16-18, Rev 14:9-12, Rev 15:2, Rev 19:20, Rev 20:4-6
See also http://bibleprophesy.org/666mark.htm
Thus silver and gold are the hardest kinds of property to confiscate, because it is the most easily hidden of all assets that exist!  Not even Satan's ultimate government that forces mankind to accept the mark of the beast to buy and sell or be threatened with being beheaded (Revelation 13) will be able to confiscate all the gold and silver among mankind!

Not even drug sniffing dogs can be trained to sniff out gold, because SILVER AND GOLD DO NOT HAVE ANY ODOR! 

But let's think about this a bit.

Why is confiscation even an issue?  Why are gold buyers being trained to ask me about it?  I believe it's because there are numismatic dealers who make more money, and spend more money advertising, make this an issue to be able to sell overpriced gold.  Let me explain more clearly, by way of statistics.

The honest gold bullion market is about a $2 billion market in the USA, with margins of about 1%, on average.  I estimate that, because gold eagle sales are about 1 million oz/year (record production), and assuming that those represent half of gold purchased in the USA (given my experience as a dealer.) 

Thus, honest gold dealers have a gold profit of about $20 million, total, among all gold dealers in the USA, and out of that, will come ad dollars to be spent on things like this email letter that you are reading now to inform you about the truth of the product that we sell.

Why do I go through all that?  Because I read that the numismatic market in gold is about a $10 billion market.  It is not only 5 times as large, but the profits are much larger, too, with margins of about 50 to 100% or more, and thus, the numismatic market earns perhaps from $2 to 5 billion per year, from which they get to spend on advertising.  So, the numismatic dealers might have an ad budget about 100 to 200 times as large as honest gold dealers.  Think about what that means for the education of the average gold buyer.

Thus, I believe that the largest gold dealers in the USA teach lies about confiscation so they can sell you over priced gold that is marked up by over 100% more than it should be!

We sell double eagles, old gold coins around 100 years old, when we get them, for about 10 to 15% over the price of gold. 

No major wholesaler has ever offered us anything significant over the spot price, and we've called around!

Yet those same coins are often sold to the unsuspecting public for up to 100% over the price of gold, to naive clients who are trying to buy "non confiscable" gold.  And thus, by buying the wrong kind of gold, from liars, they end up not only having half of their wealth immediately confiscated, due to their own foolishness and irrational fears, but they end up funding the businesses, and ads, of the liars who continue to spread their lies about non confiscable gold.

This issue really bugs me, as you can tell.  I don't cover this often, because there is the other side of it, of course.  If wealthy buyers wish to buy overpriced gold, or bid high insane prices for rare coins, that's entirely their own business, and there's nothing wrong with that, it's their money, and they can spend it as foolishly as they wish, and there should never be any laws passed to prevent them from doing what they want with their own money. 

Furthermore, why should I expose a $10 billion fraud, when the fraud of selling phantom silver is a $200 billion fraud, and much, much, much worse?  To be rational, I should write about 20 articles on the paper silver fraud for every article I write about overpriced numismatics, and so I do. 

Now, my comments do not exactly address the issue of the 1933 gold recall, or some say, "confiscation", where collector coins were theoretically exempt.  Collector coins were also undefined.  Some say there might be a new law passed where if you pay 15% over spot, then it could be defined as a collector coin, and so, some more honest numismatic dealers will hype up unwanted gold that would otherwise go to the smelter, and sell it at 15% over spot, to satisfy the overly paranoid buyers, rather than sell it at outrageous 100% premiums.

Now, I'm sure I'm going to be slandered by the $10 billion numismatic industry, and forgive me if I don't care to respond for another two years from now. 

But let me put it another way.  New and popular old Eagles represent about 1/2 of the gold we sell.  All other forms of gold are the other half, and so, each of the other forms represent a tiny portion of the other half of gold sales.  This would include bars, Krugerrands, Maples, foreign gold, fractional gold, and old US gold coins. 

Now, if you wanted to be an honest dealer, and saw that some gold was not selling, then you have to realize that it might end up in the smelting pot with your scrap gold and you get less than spot for it due to the refining charge, or, since you recognize that there is next to "no" market for that gold, you could go out and scare the newbies into paying outrageous premiums for that gold.  Or, you can take the middle ground, and be patient, and sell it at reasonable bullion prices, which is what we do.

There's another form of gold, the new "collector" gold that consists of two toned or reverse toned proof strike gold Eagles.  I could mint something similar for the cost of about $600 in new dies, but why bother.  If collectors want to pay outrageous premiums for shiny new two toned gold, let them, but I'm not joining that party.

Likewise, when it's my money, I don't have to buy old comic books at outrageous prices, I don't have to buy old stamps at outrageous prices, I don't have to buy antiques at outrageous prices, and I don't have to buy old or new gold at outrageous prices either.  And I won't.

This works to the advantage of people who think they know the collector coin, rare coin, or numismatic trades, who can find "real bargains" at real bullion shops, where things are not marked up to outrageous prices.

Now, allow me to summarize a few arguments from my last letter on confiscation.

http://www.ayeel.com/2008/07/confiscation.html 

The real confiscation is inflation.  At a 20% inflation rate, that's worse than the government stealing everything in every 5th home in America, including the home and all the investments.  I'll say it's worse because that kind of inflation creates economic distortions that create bad investment decisions by the remainder of the population.

But think about this!  Government is not likely to confiscate silver and gold, when the government is making and selling silver and gold Eagles coins!

The US government makes 30-40 million silver Eagles per year now, and 1 million gold Eagles.  At $20/oz., that's about $800 million in silver, and $1200 million in gold.

Government is not likely to confiscate silver and gold for the budget when the budget deficit is in the trillions, which is over $1,000,000 million, or a million million.  The value of silver and the gold is simply not even remotely close to being enough to help.  Silver and gold prices would have to be about 100 to 1000 times higher for confiscation to even begin to help plug the current government deficit, let alone pay the entire budget.

The US annual budget is $3 trillion, and all the gold in all the world is barely $6 trillion.  The government would have to confiscate every single gram, ounce, and kilo of gold in the entire world, and it would barely fund the US government for two years, and then the government would be bankrupt all over again!  This is why gold cannot help our government, not at today's low gold prices and not at today's huge government size.

Are "collector" coins not confiscable?  It's a common question.

In reality, everything is confiscable, and nothing is confiscable.  Let me explain.

In the legal sense of today's insane world, the US government has executive orders ready to be put into effect, that in the case of a national emergency, say they can confiscate your home, your car, your investments, and even your body to be put into government work camps.  Do you think that if you had collector coins, that you would be exempt from the work camps when the  time comes?  The only thing standing in the way of that is the second amendment, and the fact that too many of us own guns, and would never go for it.  So, in that sense, even your lawn chair and your bed sheets are confiscable, but not really, since they can try to take them, but won't get very far!

On the other hand, in the Godly legal sense, nothing you own is confiscable, because your things belong to you, and nobody else.  It's absurd beyond reason that some government thugs, if they ever could get their hands on your gold, which they cannot, would go through it piece by piece, sorting out what they can take and cannot take.  Absurd beyond reason. 

Finally, don't trust any sort of third party storage program, as even if they do have the gold, because then all of that will be the first to be confiscated if the government does issue a confiscation order.  And that's the only kind of gold that has ever been confiscated.

One last point.  The issue of confiscation is a big issue to the billionaires of the world.  As individuals, they are easy to prosecute, or raid, or make an example of.  But I know one multi billionaire who has a security force of 80,000 different people, most of whom do not know one another, and can't be traced.  That billionaire is you, my collective readers.  Your gold and silver cannot be confiscated; you are too numerous, too well armed, and too well hidden among a nation of 80 million gun owners!

Another big point that the Bible makes.  Righteous people, by their very presence in the world, end up restraining evil.  That's my reading of 2 Thessalonians Chapter 2. 
http://bibleprophesy.org/2thessalonians2.htm

The mere action of not buying into paper money fraud, and by buying real silver and gold, limits government tyranny via theft of people's money through the printing press.

So, to sum up.  If you don't want the government to steal your wealth, get bullion gold close to the spot price.

Our prices typically range from 5-10% over the spot price, which is much more reasonable than 15-100% premiums over the spot price.

We run no scams.  We run no storage program, we offer no certificates, we offer no leverage programs.  When you call our staff, they will patiently answer your questions about all our bullion products, and help you place an order for real silver and gold that we will ship to you usually the same day that your wire transfer will arrive.
A few promotions:

Ted in Oakland has 200 Indian head 1 oz. rounds at 5% over spot:
http://www.youtube.com/watch?v=hBNRT96dtQ4

We have an abundance of all major silver products at the JH MINT, we have 100 oz. bars, 10 oz. bars, 1 oz. rounds, 1 oz Silver Eagles, and 90% silver US coinage dated from 1964 and earlier.

Sincerely,

Jason Hommel 

China Govt's Secret  New Gold investment could pay  500% over next 2 Years  

Gold Rallies to New 2010-High as Investors Doubt Effectiveness of the Bailout Plan

Comex gold price rallies to a new 2010-high at 1219.4, one more step closer to record high of 1227.5 made in December, as fears over sovereign crisis resurfaces. Moody's said it may cut Greece's rating to 'junk' in the coming month amid 'dismal' economic prospect. Silver also grinds higher to 18.6 while PGMs reverse gains.

Risk assets' massive relief rally loses steam as investors worry that the stability package may not be sufficient to contain European sovereign crisis. Market sentiment is further dampened after receiving strong Chinese inflation data as it signals more tightening. WTI crude oil price plunges to 75.6 in European session while Brent crude falls below 80 again.

Growth in China remained robust in April. Although industrial production missed market expectations and expanded +17.8% y/y, CPI soared +2.8% y/y, the fastest pace in 8 months. Despite the government's policy to curb lending, property prices rose +12.8% y/y while new lending also exceeded consensus and reached RMB 774B.

While the Chinese government aims to keep inflation at 3%, recent data shows that it's hard for this target to be achieved. Escalated inflationary pressure indicates more tightening measures are needed. It's likely the government will resume RMB appreciation soon, probably in June.

Crude oil imports rose to 21.17M tons in April. With exports remained sluggish, net imports reached a record high of 20.98M tons during the month. However, there are concerns that demand will slowdown as China accelerates tightening.

In its monthly report, OPEC upgraded its global demand forecast modestly. The organization controlling 40% of oil in the world expects demand will rise to 85.38M bpd in 2010 from 84.4M bpd last year. This was slightly higher than last month's forecast of 85.2M bpd. According to OPEC, China has been among the main drivers behind oil demand growth so far this year, which should continue for the rest of the year. On the supply side, non-OPEC supply will rise to 51.7M bpd, compared with 81.53M bpd projected in April. This signals less oil is needed from OPEC.

Demand/supply in oil market is again in focus and analysts anticipate US crude inventory rose +1.1 mmb in the week ended May 7 with Cushing stocks surging for another week. Gasoline and distillate stockpiles probably climbed +0.8 mmb and +1.3 mmb, respectively. American Petroleum Institute will release its estimates after market close today.

China Govt's Secret  New Gold investment could pay  500% over next 2 Years  

---

Why are people buying silver and gold?

(& Will the real Fear Mongers please stand up?)

Many people today are cashing out their CD's to buy silver and gold.  Why?

The obvious. 

The CD's pay next to zero interest, and gold and silver continue to head up by 20-30% per year. 

Most of our gold and silver buying customers have completely lost faith in the government's ability to "run" the economy, but more than that, there is a real fear of the government today, that it will turn dramatically totalitarian and that we will lose nearly all of our freedom.

The best time to own gold is when the government starts taking more of your money.  Silver and gold ownership prevents government from confiscating your wealth through inflation, and more and more people see the inflationary threat of massive $2+ trillion deficits, which are being met by printing more money.

A typical first time customer comes into our coin shop at the JH MINT, and says, "Hey this place looks really nice!"  We designed it to look a bit upscale, with plenty of room to hang out, with nice couches to be able to sit down to talk.

They typically say, I've been doing a bit of research online about silver and gold, but I really know nothing about silver and gold, so what can you tell me?

To answer in person, I must get to the point quickly, as other customers will soon come in next.

So I like to show them, and let them hold a gold coin, and let them compare the heft and weight compared with a silver coin.  Gold is twice as dense as silver, and the difference is easily discerned when you hold them.  A 1 oz. gold coin is just a tad thicker than a half ounce silver coin, which is a bit thinner, and much, much lighter.  Since silver is 1/2 the weight, a similar sized silver coin, gold plated, would be about 1/4 of the weight of a gold coin!

Thus, the brass or copper core, gold plated, "authentic replicas" as old on TV make a beautiful comparison to show how difficult it is to counterfeit gold.

So when they hold gold, they know it's something real, and real special.

People continue to ask, "Which is better, silver, or gold?"

I tell people, we like silver best, because it's a much smaller market.

World annual silver mining is about $10 billion, but world annual gold mining is about $80 billion.

But most of the silver market is consumed by industry, as silver is used in all sorts of electrical contacts and devices.  In fact, industry consumes more silver than world annual mine supply, and the gap is being met by recycling.

So the amount of silver left over for investors is shockingly small, perhaps only $2 billion.

The silver story is surprisingly simple.  The entire world once used silver as money, but today, no nation on earth has silver circulating as currency.  This reduced monetary demand has created a very low price.

But silver remains a better store of wealth than ever, due to the increased scarcity, and the growing awareness of silver ownership as a way to make money.

Money is more than a currency or medium of exchange, it's also a store of value.  As demand for silver, as a store of value, increases, so will the price, and this demand will continue as a positive feedback loop that will eventually destroy paper money.

But the real shocking fact of the silver market is that 99% of silver investors are getting scammed by paper silver, that is basically all fraud. 

The proof of this is the BIS report, from the Bank of International Settlements, here:
http://www.bis.org/statistics/otcder/dt21c22a.pdf

The proof is in the numbers.  The BIS keeps track of the derivatives of the banks worldwide.  It shows that the notional value of "other precious metals" over the counter derivatives, which are mostly all silver, increased from $100 billion to over $200 billion in six months.

When the entire annual physical silver investment market is only $2 billion, and when the paper silver investment market increased by $100 billion in six months, there is only one way that can happen.  The paper must be all fraud.

So those are the basics, it's really simple.

I had an insight this week that I wanted to share with my readers, since you, like me, try to convince others to own precious metals, and we usually are ignored, scoffed at, or slandered.  A common slander is that we are fear mongers.

Will the real fear mongers please stand up?

We live in an age dominated by banking.  Bankers own the Fed, the Fed funds the government, and the government funds the schools.  So who ultimately writes the schoolbooks?  Bankers.  A typical college textbook on economics is merely apologetics for central banking fraud.  Thus, there is no need to overtly command propaganda to the media, when the media is trained correctly in college, they think silver and gold investors are "backwards", "fear mongers", etc.  It is actually harder to convince a college educated investor to buy silver and gold than a person who has not paid to be brainwashed in college, where the kids are sleep deprived by final exam pressures and distracted by college parties.

So, we are called fear mongers.  A "monger" is simply a salesman.  It is said that we prey on people's fears, scaring them with visions of an economic meltdown that supposedly never comes.

But in truth, bankers are the fear mongers.  Bankers play on people's fears.  What does a banker do?  He holds your money for you, primarily for two reasons.  First, it's because you are supposedly not responsible enough to invest it wisely, that's the banker's job, so they just give you a small percentage in interest.  Second, your money might be stolen if you keep it at home, which is supposedly not a very safe place, even though it's safe enough for you to sleep there in peace at night.

In truth, I have to convince my customers to be brave.  I have to convince them that they are intelligent enough to wisely invest their money.  I have to convince them that the safest place for their money is at home, in a vault that they can easily buy with a tiny portion of their own money.

The objection is always raised, "What if someone comes to my home and threatens me like in the movies?"  I have to reply, that usually happens only in the movies! 

Today, 20% inflation rates would be as if thieves robbed 100% of all the assets of every 5th home on the street, and got all their financial accounts, too, every year.  Nobody should put up with that.  Common robbery is far less common than that.  Homes are mostly a safe place!

The most common robbery, therefore, is the inflation of the paper money in your wallet!

I have to convince them that the silver and gold of 10,000 different investors, in 10,000 different vaults in 10,000 different homes, all owned by gun owners, who live in a nation that has 80 million gun owners, is far, far safer than pooling 10,000 different investors money into one place, guarded by just a handful of low-paid security guards.  It's an easy sell, because the point is irrefutable.

Furthermore, if the government ever does make silver and gold illegal to own, it's those places that "hold" it for you, that will have to give it up to the government, or who will be let out of their obligations to pay you anything, because they don't have any silver or gold to pay you to begin with.

But note, I'm not the fear monger.  I sell courage in the face of fear. 

The bankers fear silver.  The bankers fear their own bankruptcy.  That's why they created the Federal Reserve in the first place, to bail them out in case of their own failures, so they would be able to continue their scams, even after they failed, rather than be shut down and be out of business after a real bankruptcy!

So, it's amazing that bankers and banker trained media slander precious metals advocates as fear mongers, when the bankers are the real fear mongers.  Also, I'm amazed that it's taken me 10 years in this business to see this insight.  How dumb am I?  But then again, the bankers have been at this business for thousands of years.  I've had to relearn and discover most of the timeless truths about precious metals by reading the Bible, or by thinking deeply about these things, or by reading what is available out there on the internet.  

I strongly advise you to get real gold and silver, at anywhere near today's prices, while you still can .

Sincerely,
Jason Hommel

What Happens to You When a Barrel of Oil Costs Hundreds of Dollars?

By Gary Gibson
April 6, 2010
Geneva, Florida, U.S.A.

What Happens to You When a Barrel of Oil
Costs Hundreds of Dollars?

Dear Shooter,

Before this year is out, oil could be a lot more expensive. How expensive? Our expert Byron King is calling for $220 per barrel.

You probably have similar notions yourself. But have you positioned yourself? Are you ready to profit as it happens?

Because if you’re not, then you’ll be ravaged by the fallout: inflation, shortage...the usual fun stuff.

To find out how to be ready, just read on....

Sincerely,
Gary Gibson
Managing Editor,

The Murder That
Changed the World
...And Could Soon Rocket
Oil Past $220 a Barrel
by Byron King, Editor

You'll either go broke as inflation explodes... or you could get rich while protecting yourself...as oil rockets to $220 and gasoline soars to $8 a gallon...

Imagine you're at a dinner table.

How could you have known the meal on the table was about to change the world?

Some say it was goat. Others say it was lamb. Either way, it was poisoned.

When the guest of honor took his first bite, nothing would ever be the same again.

That guest of honor was Mohammed... warrior, radical, and the founder of Islam. And the fact that he was the one who was about to die changes history.

Not just then, but now. In a radical way.

And in a way that could soon change everything you think about your own financial security. How so?

You see, even though Mohammed immediately tasted the poison that would kill him... and even though he spit it out... he would still die soon after.

His movement's followers weren't ready.

They fought bitterly over who should take over. So bitterly, it's a deadly divide in Islam that still rages — between the headlines and behind the scenes — today.

You barely see much about it in the mainstream media.

But that doesn't change the fact that this centuries-old divide looks ready to re-emerge as the powerful new force behind a whole "new" all-out OIL WAR in the Middle East.

Possibly very soon.

And with a re-energized, nuke-packing Iran at the center of the storm.

If I'm right about what I'll reveal, you could soon see as many as eight Islamic nations go turn on each other with rockets and gun muzzles blazing... setting the world's most critical oil-producing area on fire... and sucking our own military deeper into the mess than anyone at the Pentagon or the White House ever imagined.

Even if I'm only half-right, you know what that could do to oil.

You could soon see oil prices soar as high as $220 a barrel... with gasoline topping out as high as $8 a gallon... sparking a whole new wave of financial upheaval and inflationary threats to the U.S. dollar.

How?

To understand, you only need to finish our look back into history...

How the Next Oil War Began

Long before $147 oil... long before either Iraq War or the Iranian Revolution of 1979... long before OPEC and the oil embargo or the founding of Israel...

These events were set in motion.

The memory of that fateful night in the year 629 had barely faded... and the divide over who should take Mohammed's place had evolved into a blood-soaked holy war.

On the one side, you've got the Sunni Muslims. The Sunnis run Saudi Arabia, Egypt, Jordan, and many of the other countries in the Middle East.

On the other, you've got the Shia Muslims. It's the Shia that run Iran. Today, they also run Iraq. And have a lock on power in Lebanon and Syria.

How bitter is this fight? Think Protestants and Catholics in Northern Ireland... Serbs vs. Croats in Bosnia... or even the religious Thirty Years War that ripped apart Europe in the 16th century.

Only, here's the big difference...

This Sunni-Shia split has raged in one way or another for the last 1,354 years.

For fourteen centuries, there have been small wars and executions, torture and countless plots... but it's only now this pressure has found ultimate release...

In an Iran-driven Shia uprising smack dab in the middle of EXACTLY where you would never want something like this to happen, in the center of the most dangerous place on Earth — the oil-soaked Middle East.

With over 66% of the world's key oil reserves fall into the crosshairs, of course this is a crisis everyone will feel around the globe. And of course, this could also slam the dollar.

With soaring energy costs, you could also see a crushing new wave of inflation... unmatched by anything we've seen since the last great energy crisis in the 1970s.

But I'm not just writing to warn you.

I'm also writing to tell you there are ways you can protect yourself financially, even as this unfolds. I'll name three of these strategic money moves for you right now.

I'll also show you how you can take away some of the risk of turbulent times... and at the same time, protect yourself with all kinds of protective and impressive gains.

Here's just a small sample of what we've been able to do in recent years...

Our Strategic Gains in Turbulent Times
137% gains on KeyWest Energy	174% gains on PetroChina
151% gains on Wheaton River Minerals	270% gains on the July silver calls
162% gains on Intrepid Minerals	104% gains on the ICON Energy Fund
332% gains on Glamis/Francisco Gold	108% gains on Norsk Hydro
668% gains on Metallica Resources	118% gains on Anglo American PLC
105% gains on Gentry Resources	160% gains on Western Oil Sands
151% gains on Tocqueville Gold	182% gains on Talisman Energy
228% gains on Niko Resources	142% gains on BG Group
263% gains on Coeur d'Alene Mines	177% gains on Coeur d'Alene Mines again
116% gains on Cameco

Even today, some of our open positions have already shot up 37%... 45%... 46%... 53%... 64%... 70%... 75%... 128%... 146%... 155%... 160%... 200%... 403%... and 466%.

Over the next four minutes, I'll show you what we're doing and how we do it.

But before I do, take a close look at this map...

The Deadly Sunni-Shia Divide — 2010-2011

If it's black in this map, it's Shia ground. It's also mostly oil heartland
and some of the most strategic territory in the entire Middle East!

One terrorist with a grudge can do a lot of damage.

Iran, all by itself, could even be a deadly force.

But can you imagine what millions of Shiites with a 1,354-year old ax to grind could do?

The 162-Million-Man March

Nobody knows exactly how many Shia there are right now in the Middle East. That's because in all but four Middle Eastern countries, Sunni leaders don't bother to count.

Sunni schools teach that Shiites aren't real Muslims. Shias don't get a seat in government. They can't become judges or even testify in high courts. In Sunni-run Saudi Arabia, Shias and Sunni can't even marry.

For centuries, the Shia have been the underclass.

But now, for the first time in history, they see this as their chance to turn the tide. And how big a tide is it? Hands down, saber-rattling Iran has the most — 70 million Shia.

But then you've got the "liberated" Shia of Iraq — 22 million. Plus as many as 2 million Shia in Iran-backed Lebanon. And up to 4 million Shia in Iran's top ally, Syria.

Then you've got another 700,000 Shia in Kuwait... up to 500,000 Shia in Bahrain... up to 400,000 Shia in the United Arab Emirates... 300,000 Shia in Oman... and around 100,000 Shia in Qatar, according to the Pew Research Center in Washington.

On top of that, as many as 10 million Shia in Yemen... another 7 million Shia in Azerbaijan... and 11 million Shia in Turkey... not to mention the combined 30 million Shia in Afghanistan and Pakistan.

Not all Shia want a revolution.

But out of between the 147 million to 162 million Shia spread from Pakistan to Lebanon and Azerbaijan to Yemen, enough do that this is the river of "Secret Revenge" and common blood running through the entire Middle East.

The Sunnis are worried.

Especially in Sunni-run Saudi Arabia.

And especially now.

Here's why...

"New" Oil War Flashpoint #1:
The Real Reason Iran
Wants the Bomb

Don't forget, Iran used to be Persia.

At one point Persia was the biggest and most powerful empire in history!

Iraq, Syria, Turkey, Egypt — even Israel — the Persians controlled them all. Along with all of Afghanistan and Pakistan and most of the oil-rich coast of the Caspian.

For 300 years, Persian armies held off the Roman Empire. Their scholars walked with Aristotle and Plato. And influenced Greek art.

It was the Persians who invented chess. And the windmill.

Not to mention bricks, algebra, trigonometry, and wine.

The bottom line is... no Empire forgets its past glory.

The Iranians resent losing theirs.

But now they see a chance to get it back.

The nuclear bomb? Tehran's crackpot leaders don't just want it to scare Israel. They want it so they can throw a dark shadow over their Sunni Arab neighbors, too!

Take a look at this...

Iran's First Move...

With total control of the Hormuz "oil chokepoint" in the Persian Gulf
and new power in "liberated" Iraq, the Iranians have a brand new foothold
for kicking off the long-awaited "Shia Revolution."

You'll notice two things.

First, you'll see how Iran's Shia influence has spilled across the border into southern Iraq. Southern Iraq is where you'll find six of Iraq's eight "Supergiant" oil fields. It's also where you'll find a key border with Shia Islam's mortal enemy — Saudi Arabia.

Saudi Arabia is Sunni.

For eight years back in the 1980s, Saudi Arabia helped Iraq wage a bloody war against Iran. Along with other Sunni governments, the Saudis even gave Saddam over $47 billion to launch missiles and nerve gas attacks over the Iranian border.

Iran hasn't forgotten. Or forgiven.

(Imagine if Canada or Mexico had given money to Japan to help them bomb Pearl Harbor. Iran has waited to make the Saudis pay — and now they have their chance.)

"Iran is clearly seen as a very serious threat by those on the other side of the Gulf front." — Gen. David Petraeus, Jan. 31, 2010

The second thing you'll see in the map above is that Iran has almost total control over the Strait of Hormuz.

Hormuz is the tight waterway that connects the Persian Gulf to the Mediterranean. Over 17 million barrels of oil have to pass through Hormuz every day.

That's 40% of all the oil shipped in the world.

And 90% of all the daily oil shipments from the entire Middle East.

With Hormuz alone, Iran could cripple the world overnight.

Today, Iran backs Shia militants in Iraq. They give them money and guns. They've even helped Shia politicians take over the Iraqi government. Why?

Because gaining control in Iraq takes the Iranians one step closer in their twisted plot for secret revenge. For another one of those steps, just look further south... to Yemen.

"New" Oil War Flashpoint #2:
Yemen's Ugly Secret

The Pentagon has just tripled its budget on Yemen.

Top U.S. General Patraeus just had a not-so-secret meeting with Yemen's president.

And our own State Department calls Yemen a “threat... to global stability.”

What gives?

Even ABC News just called Yemen the next "top target" in the terror war and a "near-perfect haven for terrorists." Obama just sent Yemen our troops, ships, and weapons.

Here's what's happening...

The Shia Revolution's Next New Front...

Yemen's on/off Shia revolution gives and "Gate of Tears" oil chokepoint
could soon give Iran a strategic "backdoor" attack point into Saudi Arabia...

Yemen might be a failed country... with a collapsing government, a shrinking oil supply, an exploding population and not much of anything else but lawlessness and chaos.

But what Yemen does have is position.

It sits just on the tip of the Arab peninsula... south of another key Saudi border and on the coast of another key oil strait called Bab-el-Mandeb.

That name means the "Gate of Tears."

How Islam's Next "New" World Oil War Will Begin "Nature," goes the old saying, "abhors a vacuum." For instance, when a failed assassin's bullet burst a blood vessel in Vladimir Lenin's brain in 1922... madman Josef Stalin quickly stepped in to fill the void. Likewise when the Weimar Republic collapsed in 1933... and Hitler stepped into power. Today there's a new void about to be filled — in the ravaged Middle East — and the lethal force that's stepping up to fill it could plunge the entire region into a "new" Islamic war. If that happens, nearly 66% of the world's oil supply will get caught in the crosshairs. Soaring energy prices can hit almost every aspect of life... and pummel any economy... but there are ways you can protect yourself, financially. Read on to find out how...

And like Hormuz, most oil states on the Red Sea can't get a drop of oil out without shipping it through the Bab-el-Mandeb. Over 3.3 million barrels go through every day.

Blocking this chokepoint alone could slap a $30 "political premium" on the price of every barrel of oil... but there's an even bigger threat taking shape.

For the last six years, Yemen has fought a vicious and bloody war with Shia rebels. These rebels are poor. There's no way, says a Yemen general, these rebels "could fund and fight this war with pomegranates and grapes... no doubt there is Iranian support."

Could it be true? Absolutely.

Iran loves to buy loyalty.

Take the $1 billion Tehran now "donates" every year to Hezbollah terrorists in Lebanon. Or the billions they gave Syria's Shia president to build cement factories, car factories, power plants, and storage silos.

In return, Iran gets Hezbollah's Arabic-speaking terrorists to run militant Shia training camps in Iraq. And gets Syria to distribute Iran's money and weapons to others in the Shia network.

The secret money Iran sends to Shia rebels in Yemen could soon have a payoff too — by opening up another route for "backdoor" Shia access into Saudi Arabia.

Yemen's rebels have already hit towns across the Saudi border. And the Saudis have hit back, losing dozens of troops in the process. We’re just in the first innings of this one.

How bad is it? 

So far, 50 Saudi schools along the border have had to close. Another 240 border towns have already been evacuated. And Saudi jets have already dropped bombs in Yemen.

What exactly has the Saudis running scared?

Final Oil War Flashpoint #3:
Iran's Final Prize — Saudi Oil

Don't think for a minute that I think Iran's plot for "secret revenge" could succeed.

But the threat alone could be enough to kick oil much higher.

And sooner than you might think.

For instance...

• Our CIA, Britain's M16, and other top spy agencies say Iran could have a working nuclear bomb as soon as April 2011...

• The Times of London uncovered a confidential document that says Iran already has a "neutron initiator" ready to test. That's the part you need to trigger a warhead.

• And Der Spiegel, the German magazine, says Iran may even have the tech and material to build a simple nuclear bomb before the end of THIS year.

But the Bomb is just a beginning.

Even if the go ahead to build a nuke never comes from Iran's top cleric, the more immediate danger is a wildfire of Shia-Sunni unrest... starting in Iran's new hotbeds of Shia support... and spreading across the rest of the Sunni-run oil states... with the richest oil fields in the world's richest oil nation as the final battleground.

Take a look at this last map...

The Final Battleground — Saudi Arabia!

Suddenly, Iran has its mortal enemy, Saudi Arabia, surrounded —
millions of Shia even live on top of the Saudis OWN biggest oilfields.

As you can see, Saudi Arabia looks like a sitting duck.

Iran has a Shia network that reaches from Afghanistan to Lebanon once again... more connections building along the Persian Gulf... Yemeni Shias to the south... and Shia connections along the oil rich Caspian Sea.

You could see this spread to the nearly two million Shia that live and work on Saudi Arabia's oil fields very soon. Even though that's exactly what the Saudis — and our own Pentagon — hope will never happen.

As you read this, big and small Gulf states are piling up weapons, stocking anti-missile batteries, and sandbagging their oil terminals, ports, and water desalinization plants...

Abu Dhabi alone has already bought $17 billion worth of U.S. anti-missile hardware. And the United Arab Emirates and Saudi Arabia just splurged on weapons, to the tune of $25 billion.

As you read this, our own F-16 fighter jets, Patriot missile systems, giant cruisers and up to 20,000 more U.S. troops are quietly digging in for an epic fight... that could spread past Iraq and Yemen... and even into Qatar, the United Arab Emirates, and Bahrain.

All to get ready for what could be the fight of a lifetime...

Say Hello to the "Jihad Generation"

It's not just our experts saying it.

Leaders in all three of America's biggest Middle East allied countries — Egypt, Jordan, and Saudi Arabia — claim the epic Sunni-Shia showdown is in the cards.

It could start from any one of the flashpoints I just named.

But no matter how it starts, Saudi Arabia is where it's most likely to end up. Why?

Not only is Saudi Arabia home to Mecca, Islam's holiest place... but it's also home to the corrupt and U.S.-allied Royal House of Saud, considered an insult to all Islam.

Think about it.

In a country where they'll cut off your hand for stealing and whip you for holding a glass of whiskey... Saudi princes gorge on cocaine and prostitutes, gambling, palaces, and more.

All while the vast Saudi underclass starves on just $6,000 per year and 30% unemployment. And as many as two million of that underclass is Shia. With a 1,354-year-old ax to grind and billions of dollars in oil revenues as the prize.

It's a near-perfect formula for a FULL-ON war.

And the fuse is already lit.

Iran is ready to assert its place in the world. Think Japan or Germany in the 1930s. The threat is there, it's large, and it's not going away anytime soon.

How the world responds, we can't know. 

But I can tell you how oil could respond... by exploding to new record highs. Possibly as high as $220 per barrel by spring of the coming year... with gas not topping out until it hits as much as $8 per gallon.

That's very bad news for millions around the world.

And yet...

Defensive Energy Power Play #1:
The Single Best Energy Stock
to Own Over the Next 20 Years
(Hint: it’s 6,859 miles from the Mid-East…)

One easy way to "get out of the way" and still gain as oil goes up... is simply to go outside of the Middle East to find the best oil providers.

In 1973, the smart money ran from OPEC oil... and into oil opportunities in Canada, Mexico, and the UK. Today you've got even more smart energy "safe havens."

Today that strategy can work even better.

But that's only part of the reason I believe this first major "defensive energy" stock could be the single best oil company opportunity for you to own over the next 20 years.

How so?

Let me take you to a place that's thousands of miles from the Middle East... and well beyond the reach of any crackpot dictator or terrorist.

Yes, it's also an oil field.

Nobody even knew much about it until 2006, the first year they cracked through the field's overlying layer of salt — more than a mile of it — and into dense carbonate rock — and about eight billion barrels of oil.

That's more than the entire proven reserves of Norway.

But then they kept looking and found — in a deposit almost 500 miles long and 100 miles wide — what could be as much as 100 billion barrels of oil.

Easily, that's the biggest single oil-bearing zone anywhere in the world.

Bigger than almost all the oil fields in Iraq, combined. Bigger than all the reserves in Russia. Or Iran, for that matter. Bigger than the Saudi's legendary Ghawar.

Yet, until just recently, nobody even knew it was there...

The Greatest Energy
Discovery in 100 Years

See, here's the thing...

This massive new find I'm telling you about — they call it the Tupi Field — isn't really what you picture when you think of a "field" of oil at all.

You can't drive past it. You can't see it. In fact, no human can actually get close to it... and live. You see, the Tupi Field is hidden some two miles below the blackest, roughest seas just about anywhere on the planet...  as far as 240 miles off the coast of Brazil.

It is, in fact, so far below the surface of the ocean that the water pressure alone would crush a steel-fortified Navy sub like you could crush a soda can.

And that's just the ocean floor. You need to go even deeper — 19,000 feet through multi-million year-old anthracite and salt deposits — to get to the beds of ancient limestone that hold the oil.

Crews go out on massive ships to set up the rigs. They use satellite images to find the deposits and then automated underwater robots to lock the drilling equipment into place.

Just tapping the deposit can take as many as three months to set up... at a cost of as much as $600,000 per day. Even to hire a helicopter to fly to the offshore drilling sites can take as long as two-hours over open water and up to $50,000 for the fuel and pilot... for each flight.

"A tip of my hat to you... yesterday, I followed your recommendation and bought 1,000 shares of The Andersons Inc., now up more than 8% in less than 24 hours... congratulations." — Bruce B.

You can see why this massive oil deposit took so long to discover.

It wasn't long ago that we had the technology.

Then again, it wasn't long ago that anybody but the energy industry pros understood just how desperate we are to find and tap more and more remote oil discoveries like this one.

They call this kind of oil opportunity "deepwater crude."

This company I'm telling you about dominates this new field. They also have their geologists and engineers looking for even more breakthrough offshore energy discoveries just like this one.

Of course this isn't the only deepwater crude fortune-maker in town.

I've got three more I'd love to show you.

In fact, you'll find the full story in just one of the five special reports I'd like to send you, called Deepwater Crude Bonanza: Four Ways to Get Rich on the New Oil Frontier.

It's included with your free 2010-2011 Crude Awakening Countdown Library.

Inside, not only do I name the single best energy stock of the next 20 years... but I also give you all my research on three other must-own "deepwater crude" plays, including...

• The cutting-edge American deepwater technology company that has oil majors worldwide lined up to use their specialized rigs. Only a handful of companies worldwide can do what they do. And with up to 300 new deepwater rigs to come online by 2012, this company is lining up contracts by the score — this could be an easy 50% gainer over the 12 to 18 months ahead.

• A trusted family-owned company that you already know, but what you might not know is that they're sitting on top of a second huge "deepwater" deposit almost as big as the one I just mentioned. They're also one of the few companies with the tech-savvy to drill the now-famous Bakken Oil Formation here in the U.S. This one has matched rising oil prices dollar for dollar before... and could triple from where it sits today.

• And finally, what my readers and I now call the "most important oil equipment company in the world." Why? Because right now they're the single largest deepwater equipment supplier not only to the top offshore company I mentioned, but also to the other majors now crowding in — including Exxon Mobil, Shell, Chevron, BP, and more. What they make, nobody else can quite do. You'll see why in your free copy of my newest "deepwater" report.

Remember, I don't come at these opportunities like a broker trying to make commissions. This area is my trained specialty. I've spent years as a working oil exploration geologist. I study these opportunities with an understanding of the science and discoveries they're talking about.

And even when you factor that in, I'm convinced this new era in deepwater crude technology is a game changer. Not just the future of Big Oil, but also the single best way for you to get rich during the radical shift in energy politics headed down the pipe.

Once you let me rush you a free copy of Deepwater Crude Bonanza: Four Ways to Get Rich on the New Oil Frontier — one of the five special FREE reports in your 2010-2011 Crude Awakening Countdown Library — you'll quickly see why.

And then there's more...

Defensive Energy Power Play #2:
Two More Ways to Get Rich...
As Shanghai Goes Dark!

Obviously, it's not just the U.S. with an eye on oil anymore. 

Even through the worldwide financial bust, China's kept on growing at a record clip... with oil and other energy needs to match.

Some of what they've done is make deals for more power, including multi-billion dollar deals with our enemies in Iran.

"China is preparing to build three times as many nuclear power plants in the coming decade as the rest of the world combined..." — The New York Times

But even then, booming China could go bust if they don't fix their growing energy problems. Take China's situation with coal —– at one point during the winter of this year they were down to a 10-day supply.

The problem for China is that the country uses coal to crank out 80% of its electricity.  For over 1 billion customers, that's a lot of coal. They can't get it out of the ground fast enough. Or safely.

So they're ramping up to go nuclear instead.

As you read this, China has 11 nuclear reactors producing electricity.

They're already building 17 more.

But they want to rocket that number to 124 full capacity reactors over the next several years. By the year 2030, that could pump up their demand for uranium 10 times over.

The last full year on record, China used 769 tons of uranium.

Beijing's new plan would call for 20,000 tons per year.

Yeah, but what about wind, solar, or geothermal?

Not one is nearly as ready for prime time as nuclear.

Think about it. Right now around the world, you've got 436 nuclear reactors up and running. Plus another 50 being built. And another 137 reactors in the blueprint stage. Along with 295 more new reactors on the table for approval.

The U.S. just announced plans to start building more — on top of the 104 reactors we've already got going. In fact, the U.S. already gets about 20% of its power from reactors. And we're on track to make more.

"Nuclear energy... has the power to light a city in a lump the size of a soda can." — Wired

Even Belgium, Sweden, South Korea, Switzerland, Japan, Spain, the U.S., the U.K., and France all get between 23% and 75% of their power from nuke plants. And those numbers are going up too.

According to a study by researchers at MIT, power demand could triple over the coming decades — and a huge portion of that new demand will be met with nuclear power!

That makes the next big question easy...

Who Has Uranium?

First, guess who doesn't. Uranium deposits are hard to come by in the Middle East. Instead, you've got Australia, the U.S., Canada, France, Argentina, Brazil, and India dominating the market. Along with South Africa, Nigeria, Algeria, and Gabon.

I'm sure you remember, uranium stocks more than doubled from 2003 to 2007, during the first half of the second Gulf War. Uranium also shot up from $10 to $130 a pound.

Along with everything else, it crashed in 2008.

Now it's at a bottom price... new uranium production has flat-out stalled... yet all the surging power demands are still there. Especially from China.

Take a look at this chart...

It's not hard to do the math.

China has $1 trillion parked in U.S. dollar reserves. Most of the time, those dollars are a wasting asset. Meanwhile, cheap uranium can meet China's exploding energy needs many times over... compared to increasingly expensive oil.

In their shoes, what would you do?

Shanghai alone has already sucked up most of the energy output of the massive Three Gorges Dam. China's other enormous cities are hungry for cheap power, too. So is their massive industrial machine. And India, with plans to up their nuclear power output eight times over during the next decade, isn't far behind.

That could easily make 2010 the "year for uranium."

And that's why I'd love to share two easy ways for you to gain from the coming reawakening in uranium and nuclear-driven stocks.

One gives you a simple way to move on every uranium sector that could jump higher over the year ahead, from miners and storage, to nuclear equipment, plants, enrichment, and transportation.

It's a single play, tracking the whole uranium boom. Including moves that get you outside of the dollar. Yet you can act on this without sending a nickel outside the U.S.

I'm already sharing this same research with my paid-up Outstanding Investments subscribers. But I'd like to send it to you right now, as part of special invitation, FREE.

You'll find both this special move and a second one in another brand new report I call China's Next Big Crisis: Two Ways to Get Rich... As Shanghai Goes Dark!

It's included as one of five FREE reports you'll get when you give me permission to send you my new 2010-2011 Crude Awakening Countdown Library.

You'll find everything you need inside, from more on how and why uranium could hit over $60 this year... to why some call for $250 uranium in the near future... plus everything about the only two uranium moves you'll need to make to see huge gains on this, over the months and years ahead.

In just a moment I'll show you how to send for this special report, along with the rest of your FREE library. But first let me ask you an important question...

What's the Single Biggest Secret
Behind History's Greatest Fortunes?

Oscar Wilde once said, "Ordinary riches can be stolen, real riches cannot."

"Over the past 12 months, Outstanding Investments is up 49.98% by Hulbert Financial Digest count, compared to a 28.3% gain for the dividend-reinvested Wilshire 5000 Total Stock Market Index.... over the past five years, the letter has achieved an 18.3% annualized gain... over the past 10 years, the letter has achieved a 14.88% annualized gain, compared to a negative 0.27% annualized for the total return Wilshire." — Peter Brimelow, Marketwatch

I don't need to tell you, between plundering banks and blundering bureaucrats, a lot of regular Americans have watched their 401k and retirement "riches" stolen right out from under them, these past couple of years.

But when push comes to shove... in times of historic growth and epic crisis... what's the one thing that's endured? For as long as anybody's kept track, it's "stuff"... real, tangible, usable, tradable, blatantly valuable wealth.

In short, the raw resources you need to thrive and survive.

It's really that simple. It's no accident that's where the smart money flocks in good times and bad. It's also no accident that this is the story of one great fortune after another.

Think about it...

• John D. Rockefeller built a staggering fortune  — worth $212 billion in today's dollars and nearly four times bigger than Bill Gates stash of $57 billion — with Standard Oil.

• Just before the crash of 1929, Rockefeller and other mega-rich investors like J.P. Morgan, Joseph F. Kennedy, and Bernard Baruch ALL shifted out of stocks and into gold — getting even richer in the process.

• Andrew Carnegie — who also crushes Gates with a fortune worth nearly $112 billion in today's dollars — got that rich making steel.

• Frederick Weyerhauser, worth more than $72.2 billion in today's money, made all of that after starting out with timber, land, and saw mills.

• Andrew Mellon and his brother Richard each made about $36 billion, in today's terms, by branching out from banking and into oil, steel, aluminum, and coal.

Real assets are more than just the building blocks of great family fortunes, they're also the backbone of history. Not just with oil and the Middle East, but the timber riches that made Europe... the aqueducts that fed Roman fields... and Aztec gold and silver...

Forests that became armadas... coal and iron that made behind England an industrial power... steel that made America... the list goes on. And this has never been more true than right now.

Nearly 42,000 people read my research letter Outstanding Investments and they're already mastering those same cycles, watching resource riches pile up — even now.

This is the #1 Performing Stock Letter of The Last Five Years -Mark Hulbert Outstanding Investments was ranked by respected and impartial industry watchdog Mark Hulbert as the #1 performing advisory letter over a five-year period in 2005 and again in 2006 and 2007. That's quite an honor. Here's a glimpse at how we did it... In 2002, our readers locked in 84% gains on Corner Bay... 96% gains on EOG Resources... 75% gains on American Water Works... 136% gains on R.J. Reynolds... and 137% gains on Key West Energy... plus another 151% gain on Wheaton River Minerals... 162% gains on Intrepid Minerals... a solid 332% gain on Glamis/Francisco Gold... and 668% gains on Metallica Resources. In 2003, our readers socked away another 88% gains on Northgate Exploration... plus 105% gains on Gentry Resources... 151% gains on Tocqueville Gold... 228% gains on Niko Resources... and 236% gains on Coeur d'Alene Mines... just to name a few. For 2004, Outstanding Investment readers closed out PetroChina with a solid 174% gain... plus another 55% on Atacama Minerals... 116% gains on Cameco... 24% gains on the Canadian Oil Sands Trust... 32% gains on Southwest Water... and 270% gains on the July 2005 silver calls... plus a slew of other small and fast winners. In 2005, we took in another 60%, 44% and 45% gains on Harmony Gold, Schlumberger and Petro Kazakhstan Inc... and posted 51% gains on CONSOL Energy just a few weeks later. We hit with a fat 70% gain on both SUEZ SA and Petro-Canada... and 73% gains on Wheaton River Minerals and Anadarko Petroleum Corp.... plus 85% on Precision Drilling... 86% on Kerr-McGee... 88% on the INVESCO Energy Fund... 104% gains on the ICON Energy Fund... 108% gains on Norsk Hydro... 118% gains on Anglo American PLC... 160% gains on Western Oil Sands.... and an impressive 179% gain on Talisman Energy. In 2006 and 2007, we closed out 147% gains on BG Group… 83% on Placer Dome… 78% on OMI Corp.… 87% on Walter Industries… and 177% on Coeur d’Alene Mines. In 2008 and 2009, we saw 33% on Foundation Coal Holdings... 40% on Alleghany Technologies... 43% on Consol Energy... 96% on Goldcorp... 166% on Newmont Mining... And now in 2010, we're posting open positions that are already up 37%... 45%... 46%... 53%... 61%... 64%... 70%... 75%... 128%... 146%... 155%... 160%... 200%... 403%... and 466%! I'd like to send you a set of nine FREE gifts so you can see what I'm recommending you do right now. Plus, up to a full trial year — at no charge — of this top-ranked, award-winning advisory letter. Read on for more details...

Independent industry watchdog, Mark Hulbert, has even ranked us as the #1 Performing Investment Letter of the Last FIVE YEARS... not once but three times, in 2005... 2006... and 2007.

I'm proud of that record.

I'm even more proud of what some of my readers say...

What Others Say

Outstanding Investments reader Jeff Burke wrote in,

"It's difficult to be unhappy when all of the recommendations I hold from Outstanding Investments are up a minimum of 36%!"

Then there's reader Charles Bowman,

"I made a 140% gain with Tocqueville Gold - great pick! And 64% on Northgate, another winner!"

And paid-up reader Garry Coyne wrote,

"On Monday, I sold my last coffee contract for a net profit of 560%... [today] I took another net gain of 652% on two of the soybean contracts you recommended... and a profit of 205% on two soybean oil contracts... I'm absolutely wrapped, as I have never traded commodities until now."

My publisher has a whole pile of reader letters.

Here's a sample from just a few more...

"My stock portfolio has increased 52% in eight months as a result of the insight of Outstanding Investments. I plan to be a subscriber for years to come..."  — paid-up subscriber Fred Hanson.

"I made back the cost of the subscription on my first buy, within about a week... Your newsletter is a great deal!" — paid-up subscriber Adam Dillard.

"Thanks for all the good analysis. Subscribing to Outstanding Investments is one of the best investment decisions I've ever made." — paid-up subscriber Wade George.

I'd love the chance for you to see what everybody's talking about, too. That's why I'd like to invite you to try my research letter Outstanding Investments for yourself.

And you can start FREE, by letting me rush you the entire 2010-2011 Crude Awakening Countdown Library we talked about. That's yours to keep, at no charge.

Once you've had a chance to look that over, I've got an even better invitation for you. One I think you'll like very much. You'll find the details at the end of this letter.

But first, let me give you another small sample of what you'll discover...

Defensive Energy Power Play #3:
The Gold Secret Nobody's Telling

What's the single best money move you could have made, from 1999 until now?

You must already know... it's gold.

With the yellow metal alone, you could have quadrupled your wealth.

While S&P stocks fell 9.7%... gold shot up 323%.

If that sounds like a fluke, go back over the last 25 years.

You'll find the single best year for stocks was just 31%... while gold's best year topped 100.2%... and precious metal coins did even better, up 198.8%!

But you've got to wonder now...

Has Gold Had Its Run?

From 1979 to 1982, during the Iranian hostage crisis and the worst inflation the U.S. has seen yet, the yellow metal surged 2,329%.

At 323%, we haven't even covered a fraction of that ground.

hope that sounds fair to you. I also hope it's something you'll decide on quickly. See, a lot of investors think that this last soaring cycle of the commodities market was all we get. We believe there's a whole lot more ahead. But you don't want to wait too long to get in position, or you'll miss out. So don't wait too long to make up your mind.

Sincerely,
Byron King, Editor
Outstanding Investments
April, 2010