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Energy Investing

How to Profit From Obama's War on Coal

Since President Obama climate change speech at Georgetown University last week, Republicans and critics have accused Obama of engaging in a "War on Coal."

This isn't the first time that the President's statements on coal-fired power plants have raised questions about his energy policies. He even campaigned on higher electricity costs in 2008 when he suggested that costs would "necessarily sky rocket" to prevent the construction of new coal plants.

Obama has repeatedly argued for more spending on green investments in energy, despite multiple scandals involving campaign bundlers and billions of taxpayer dollars wasted on Department of Energy loans to companies like Fisker Automotive, Solyndra, and Beacon Power.

Now, as the President seems eager to double down on the "green" policies of 2009, which couldn't come close to creating the promised five million green jobs, the President wants to spend more of your money and execute new environmental and alternative energy laws and regulations by fiat.

But despite the stark reality that green technologies still haven't caught up with the free market solutions when it comes to bang for your buck, there's good news for investors looking to cash in on the President's War on Coal.

Just follow the money on the biggest trend in energy policy today.

It's All About Energy Efficiency

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Energy Investing

The Best Investments for the Next Phase of the U.S. Oil Revolution

The U.S. oil industry has been reborn, with oil flowing from new fields like North Dakota's Bakken at rates not dreamed of just a few years ago – and it has created a new crop of best investments for those hunting for energy profits.

U.S. oil production climbed from a low of 5 million barrels a day in 2008 to 7.2 million barrels per day in February of this year.

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Trend Watch

Watch for Record Rain-Driven Corn Prices

Last year's crippling drought has led to a spike in global corn prices and tightened available supply stocks, as U.S. farmers experienced staggering crop destruction from the sweltering heat.

But this year, Mother Nature seems to be making up for lost time.

Farmers have been inundated with so much rain in the planting season months that just 54% of the Iowa corn crop is rated good or excellent as of last week. The 10-year average of the state crop is 74%, which is raising concerns given that the planting season recently ended.

Nationally conditions are improving following a recent rush by farmers to complete corn planting to beat crop insurance deadlines. As of last week, 65% of the U.S. corn crop is currently rated in good or excellent condition, down 3% from the 10-year average.

Ongoing storms across the Northern Corn Belt have made it increasingly difficult for farmers to get seeds into the ground. The slower-than-normal pace of plantings has fueled concerns that U.S farmers would plant less corn than earlier USDA estimates, reducing the size of this year's crop.

Now, with more unpredictable weather on the horizon, all eyes look to Friday with big announcements by the USDA on planted acreage and the quarterly figures for corn stocks.

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Energy Investing

How to Invest in Oil in 2013: The New U.S. Profit Plays

The latest annual Statistical Review of World Energy from energy giant BP PLC pointed out how the U.S. energy landscape has changed in just a few short years – which changes how to invest in oil for maximum profits.

In the Review, BP said that the expansion of both oil and natural gas production in the United States was the fastest in the world in 2012.

In fact, U.S. oil production in 2012 grew at the quickest pace since BP began keeping track of the global oil scene in 1965.

The increase of about one million barrels per day was due, of course, to the exploitation of unconventional sources such as shale and tight oil.

Pair the increasing production numbers with where oil prices will be trading in the near term, and we get a clearer picture of how to invest in oil in 2013… here's why.

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Now is the Time to Buy the "New Gold"

On May 15, Christie's auction house sold a huge diamond to the Harry Winston firm for $27 million, setting a new record price for a colorless diamond in the process.

And while diamonds have been a girl's best friend long before Marilyn Monroe crooned those words, it's always been tough for investors to get into the game. Diamonds are considered one of those esoteric fields; an area of investing too small, complex, and exclusive to bother with for most.

Let's face it, up to now, there's much more subjectivity in rating diamonds than gold. And that makes it more challenging for investors if they want to hold the physical asset.

But it's worth the effort: Historically, diamonds have proven themselves to be very price stable – with a growth kicker. What's more, technology is making standardization of gemstones easier, making valuations more transparent.

That means diamonds are becoming an increasingly popular store of value.

According to the Financial Times, between 1999 and 2011, three-carat diamonds have risen in value by 145% while five-carat diamonds have risen 171%, as measured by the Rapaport Diamond Trade Index. The thinking is the relative price stability of diamonds is due to the fact that there's little speculative capital in this sector, estimated by some at no more than 1% of the market.


As Economy Heats Up, Will Commodities

Thanks to the life support of $12 trillion and 515 rate cuts by the world's central banks since March 2009, the global economy's heart is beginning to beat again.

As the market senses a robust economic recovery is underway, expectations are climbing that this growth will continue. Even the Federal Reserve has hinted that it may taper quantitative easing because of the improved economic situation. As a result, interest rates are increasing.

Europe was the lone wild card, but following Germany's change of heart away from austerity, a positive outlook for growth, and therefore, rates, is rising in that area of the world as well.

Top News

Oil Price Manipulation Awakens Libor, Enron Ghosts

Last July, we warned you that oil prices could potentially be manipulated in similar fashion to the London Interbank Offered Rate (Libor), and now a recent raid of major oil companies highlights this growing danger to the $3.4 trillion-a-year crude market.

The European Commission last week stormed the offices of Royal Dutch Shell PLC (NYSE ADR: RDS.A, RDS.B), BP PLC ( NYSE ADR: BP), and Statoil ASA (NYSE ADR: STO) as part of the ongoing investigation to find out whether companies are manipulating oil prices and, if so, how long it has been going on and the possible ramifications.

"The commission has concerns that the companies may have colluded in reporting distorted prices to a price reporting agency (PRA) to manipulate the published prices for a number of oil and biofuel products," the EC said in a statement.

Besides major oil companies, big banks are active in the energy market and would likely benefit from any manipulation, David Frenk, director of research at the financial reform group Better Markets and a former commodities analyst, told CNN.

The ordeal has brought back memories not only of last year's Libor scandal but also of the actions taken 12 years ago by Enron to control energy prices.

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These Commodities Traders are Hoarding Copper for the Ultimate Profit Play

The only thing that investors have heard recently about the copper market is that there is vast oversupply ahead as evidenced by a buildup in copper warehouse inventories globally.

Inventories at LME (London Metals Exchange) warehouses have risen in excess of 190% since October alone. Inventories are now at levels not seen since 2003 at more than 590,000 tons.

LME inventories are closely watched by traders and economists alike as a key indicator of global economic strength and activity. Normally, such rising levels of copper in warehouses would be a flashing red light warning about economic weakness ahead globally.

According to the Commodity Futures Trading Commission (CFTC), traders have jumped on this inventory number and have accumulated the highest level of net short positions on copper in over six months.

Precious Metals

If You're Worried About Gold Prices, You Need to Read This

When stocks fall by 20% or more from their peak, it's labeled as a "bear market."

With gold prices down 26% from their record close back in August 2011, the "yellow metal" has entered a bear market of its own.

It took an especially ugly day on Monday to get us to that point.

Two days ago, gold prices plunged as much as 9.7% – the biggest decline since 1980 – and continued a sell-off that saw the yellow metal fall by 4.7% last week, including a 4.1% drop on Friday.

The metal has now fallen 26% from its Aug. 22, 2011 settlement record of $1,888.70.

To get some expert insights on this sell-off, I telephoned Peter Krauth, our resident natural resources expert and editor of our Real Asset Returns research service. Peter based himself in Canada to be closer to the miners and natural-resources companies he covers for his subscribers.

I asked Peter for insights on the following three questions:

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The Best-Performing Commodity of 2013 is Just Heating Up

Gold and silver are in the midst of an ugly selloff, but the best performing commodity of 2013 continues to ramp up.

Believe it or not, it's natural gas.

After increasing 1.2% Wednesday, natural gas prices now stand around $4.20/mmbtu- up more than 120% from a year ago and almost 30% this year alone.

By comparison, gold prices are down 18% and silver prices are off over 23% since the beginning of 2013.

The good news for natural gas investors is that there are still plenty of reasons why natural gas will continue its recent run.

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