Energy and metals for 2007
In this beginning of year, I wanted to make a sort of small balance on the energy, the metals and their perceptions in the journalistic and economic world, difficult objective …
I. Yesterday :
In 2001, 2002, 2003, to invest in the gold of oil was likened in: incompetence and stupidity. To speak about it, condemned the unfortunate for the disdain and for the mockeries, then, very often his intellectual faculties were questioned to have had the same ideas. Those who had the thoughtlessness to be too much interested early in the gold, the silver, the coal, or still in the petroleum will not contradict me on the icy reception which the investments had at this moment there.
II. Today :
1) The ounce of gold is crossed from $250 to $720, the ounce of silver, it, from 4 dollars to 14 dollars, the barrel of petroleum from $15 to $70, the pound of uranium from $15 to $70, finally the price of the ton of coal doubled. We could artlessly believe that the septic of yesterday cannot deny any more the evidence …
2) Error feeble-minded person it is one not increase, you badly understood it is a Bubble.
This means that this bubble is going to end, to deflate, to disappear, actually the ounce of gold is going to return wisely below its courses of production, the petroleum to spring from underground by a blow of magic wand and that, some supernatural discoveries of a learned madman are going to resolve the energy problems of the world (it is the point of the economists, the scientists = magicians).
III. Tomorrow :
- In 2007, we are probably going to continue to say to you one everywhere that:
Petroleum is going to return wisely to a lower cost thanks to a supernatural increase of the world production.
The big world companies of petroleum are going to discover more petroleum and that the USA, China and India will need no more energy.
Goldmines are not going to close if the price of the ounce of gold falls
The zinc producers are going to find banks to lend them hundred millions dollars to investigate and build mining to produce at a loss.
- We shall explain to you although the increase of the zinc, the coal, the uranium, the petroleum, the lead, the tin, the copper, the nickel, the platinum, of the palladium, the natural gas, the aluminium, the molybdène, the titanium, the iron, the cobalt, the silver are only the work of some somber hedge fund Machiavellian or of one news geopolitical crisis.
- Many rarer will be those who will say to you that raw materials are in a bullish tendency for very long term, to be clearer:
The increase of the petroleum makes interesting all other forms of production from fossil fuels: uranium, gas, most old-fashioned and most polluting as the coal. So, certain renewable energies will become profitable.
All around the world, in every ton of extracted ores, the contents in metal are more and more weak. As a consequence, it is thus necessary to treat more ores to produce the same quantity of metal.
Deposits are situated more and more far (desert regions, need to build roads, long routes) and more and more deep (typical example: golden deposits in South Africa). Therefore, the extraction of metals is more and more dependent on prices of the energy.
The dominant point of view ( journalists, economists ) was, in 2000-2003, that raw materials had no future, today they are far too much expensive and thus always without future.
The contrary investor will thus be delighted but, the message is as often repeated as we can doubt, it own point of view. It is thus necessary to have a very clear idea of the long term (bull in 5, 10, 15 years) not to weaken in the moments of doubt of the medium-term corrections (little waves of decline from 6 to 18 months).The main tendency is always for the increase, the waves of decline are normal but dangerous, thus attention has do not buy not anything and whenever.
For 2007 we do not change course and we consider far in front of, fundamentally nothing changed.
Be careful! This is the opinion of a person who is interested in the raw materials for a long time to be objective.
Dr Thomas Chaize