This News Out of China Supports Higher Silver Prices in 2013
A new report this week by the Beijing Antaike Information Development Co, an information center on the Chinese metals and industries markets, provided some good news for silver prices.
According to the company, analysts forecast China's silver demand to increase as much as 10% in 2013 from investors looking to preserve their wealth.
In an Oct. 22 Bloomberg News interview, Shi Heqing, an analyst at Beijing Antaike, said silver's demand could increase to 7,700 metric tons next year after incurring a 6% to 8% rise in 2012.
Where's the demand for silver coming from? Around 33% is from jewelry and coins, with the remainder in industrial use for photography, solar and electrical appliances, said Antaike analysts.
This is a record level for Chinese silver demand – and good news for silver investors since China is the world's second-biggest user of the metal.
2013 Natural Gas Price Forecast: Higher Prices Mean an End to the Bear Market
After a sustained plunge, the 2013 natural gas price forecast shows the six-and-a-half year bear market may be finally coming to an end.
In all, over the course of the current downturn, natural gas prices declined from a high of $15.78 per million btus (mmbtu) in Dec 2005 to a low of $1.90 in April 2012 — a breath-taking nosedive of 88%.
The reason was an enormous supply glut driven largely by major new unconventional shale plays like the Marcellus and the Bakken where hydraulic fracturing (fracking) has revolutionized the industry.
In fact, fracking helped drillers to produce over 24 trillion cubic feet of natural gas last year, with over 70 billion cubic feet coming from the Bakken Shale alone.
These new finds meant the U.S. natural-gas market was flooded with an average of three billion cubic feet more natural gas every day than the United States consumed.
But those days are coming to an end as supply and demand begin to balance out, setting the stage for rising natural gas prices.
In fact, natural gas prices have already rallied to $3.40 per mmbtu, up 79% in just six months
But regardless the day-to-day movements, the long-term outlook for natural gas prices remains bullish, particularly in light of a steady increase in demand.
"It's Like Gold On Steroids"
Gold remains the favorite of precious metal investors, but silver is the metal you want to double down on right now.
After wallowing around in the mid-20s for months, silver prices have shot back over $30 an ounce.
And thanks to some wildly misguided government policies, silver could soon blow through its 2011 high of $50 an ounce, giving investors an easy double.
Even better, thanks to three huge catalysts, silver is primed to make a huge run-up over the next 12-24 months. It will be like investing in "gold on steroids."
Are you ready for $250 silver? Or more to the point, are you ready to profit from it?
In a moment, you'll see how a simple move can help you reap extraordinary profit from silver.
But first, let me show you the three catalysts that will propel silver much, much higher over the coming months and years…
Investing in Emerging Markets: Don't Miss this Reliable Choice
South America, broadly speaking, is a dichotomy for investors.
On one hand, the continent's history is hard to forget. The Argentine currency crisis and Colombia's reputation for nefarious exports are just two black marks on South America's past. A third is a rap sheet littered with leftist, socialist governments with penchants for chasing away foreign investment.
On the other hand, South America has offered investors some spectacular returns in recent years – and not all of those returns are attributable to Brazil.
Brazil grabs much of the attention paid to the Latin American investment thesis because it is the region's largest economy, but there are other countries there with stories worth listening to.
Colombia and Peru stand as two examples of South American countries that are not only easily accessible for U.S. investors, but also offer the potential for some pleasant surprises.
For example, since the market bottom in 2009, the Global X FTSE Colombia 20 ETF (NYSE: GXG) is one of the best-performing exchange-traded funds (ETFs) of any kind. Over the past decade, Colombia has worked hard to shed its image as the cocaine capital of the world. These days, the country is known as a growing oil producer, among other favorable traits, and one of the more open, progressive nations in the region.
However, there's another country that tells South America's best story.
A Liberty Investor's Guide to Latin America
Words, indeed, are powerful things. As an Englishman in America, my personal favorite is freedom.
It's embodied by those words penned so long ago by a young Thomas Jefferson…
It's the idea that "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."
That's not only the foundation for what I believe, but it's also the basis for how I invest.
It's a technique I call "Liberty Investing."
As such I like to invest in countries and companies whose operations are compatible with freedom, as defined by the Founding Fathers and the best U.S. political and economic traditions.
To me, this is ultimately the right way to run both societies and companies. And when we follow them, our returns will be consistently superior over the long term.
The Foundation of Liberty Investing
Using my general Liberty Investment principle, I often look for a number of characteristics in the countries where I invest.
For instance, market signals should be paramount and government participation in the markets should be relatively low. The Heritage Foundation Index of Economic Freedom is a good measure of this.
Each country should also have a high level of integrity-meaning they follow the rule of law. A good score on Transparency International's Corruption Perceptions Index is a good measure of this.
They should also be generally free and democratic, and should have a fairly small government and moderate taxation. Interest rates also should be above the level of inflation, so they don't deprive their economies of domestic savings.
Finally the local bureaucracy should be reasonable to deal with. The World Bank has an Ease of Doing Business Survey that tells you this.
You see how this freedom-based investing technique works?
Investing in Emerging Markets with U.S.-Traded ADRs
For most of the past decade, the name of the game in worldwide equities has been investing in emerging markets.
If you don't believe me, just take a look at the performance of the iShares MSCI Emerging Markets Index Fund (NYSEArca: EEM).
It is an exchange-traded fund (ETF) that tracks MSCI's Index of major stocks in 21 emerging countries. Since its inception in April 2003, EEM is up 264.6%, not including the dividend.
By contrast, the S&P 500 gained just 55.7% over the same period.
That's a substantial difference in performance – one well worth pursuing for almost any investor.
But what's the best way to invest in emerging markets?
You might think the answer is just to buy EEM or a similar fund, like Vanguard's MSCI Emerging Markets ETF (NYSEArca: VWO).
However, there are some drawbacks.
T. Boone Pickens Loses "Big" in Alternative Energy
No, he didn't lose a donkey.
But T. Boone Pickens lost a synonym for the animal and a whole lot of money in the wind industry.
"I'm in the wind business…" said Pickens yesterday on MSNBC's Morning Joe. "I've lost my ass in the business."
Pickens didn't blame his own investment for the current situation. He acknowledged that the technological shift in shale oil and gas development has greatly changed the game for American energy, and has made drilling more practical and affordable.
But the statement was just a precursor to his observations that Washington has little priority to setting a national energy policy that is both sustainable and affordable to Americans.
On the show, Pickens hammered home the point that the current administration not only lacks an intelligent energy policy. "They don't have an energy policy."
Why this statement is shocking to anyone, especially the hosts, shouldn't confuse anyone.
Investing in Emerging Markets: Is it Time to Invest In Thailand?
There is a good reason investors have been clamoring to invest in emerging markets.
With the West spinning its wheels, the truth is there's a good deal of money to be made in these markets in 2012.
One emerging market I like is Thailand.
That's true even though Thailand has only been in the news recently for its terrible floods, which have disrupted supply chains worldwide.
That's understandable; the floods drove down Thai gross domestic product by no less than 9% in the fourth quarter of 2011.
Nevertheless, the level of global disruption caused by these floods indicates just how crucial Thailand has become to the world economy.
And since the place is now well run, and looks to be set to have a nice catch-up year in 2012, with further decent growth in 2013, as investors we'd be wise look carefully there.
Thailand: A Real Emerging Market
Here's why things have changed for the better in Thailand.
The Hunt for Higher Yield: Investors Pour into Emerging Market Debt
The never-ending hunt for higher yield is leading investors to bet record amounts on emerging market debt.
In just the first two weeks of 2012, governments of undeveloped economies from Asia to Africa sold more than $30.6 billion in dollar-denominated bonds according to Bloomberg News.
That's up from roughly $19.9 billion in the same period last year and the most since 1999, when Bloomberg began collecting data.
Typically, investors shun emerging market bonds during times of uncertainty in favor of "safer" assets like gold and U.S. Treasuries.
But that has started to change.
The Big Move Into Emerging Market Debt
In fact, investor demand is overwhelming supplies as orders have outstripped the amount of bonds being sold.
During a recent auction, the Philippines received $12.5 billion of orders for $1.5 billion of 25-year bonds, pushing the yield down to a record-low 5%. Indonesia sold 30-year bonds at a record-low yield of 5.375% and Colombia sold $1.5 billion of 29-year bonds at 4.964%.
Analysts say the debt crisis in Europe, along with record low yields on U.S Treasuries, has investors on the hunt.
They are now buying the debt of undeveloped nations like Indonesia, Mexico and Brazil, even though credit-rating firms rank them as more risky than their European counterparts
"What we're seeing is a re-evaluation of sovereign-credit risk, increasingly being driven more by fundamentals than by classifications," Eric Stein, a portfolio manager at Eaton Vance Corp. (NYSE: EV) told The Wall Street Journal.
According to the J.P. Morgan Emerging Markets Bond Index, investment-grade sovereign emerging-market bonds are yielding an average of 4.7%.
By contrast, Italian 30-year debt yields 7%, while Spanish 30-year debt yields 6.1%.
One reason emerging market bonds are attracting interest is…
Emerging Markets Forecast 2012: Forget the BRICs! Here Are the Best Emerging Markets of 2012
Don't let the headlines fool you, there's lots of money to be made in global investing in 2012.
You're just going to have to be careful – more so than in years past – because right now the line drawn between successful markets and markets that are in danger of collapse is treacherously thin.
Take the fashionable growth markets, the BRICs – Brazil, Russia, India and China – for example.
It's been 10 years since Goldman Sachs Group's Chairman of Asset Management Jim O'Neill coined the BRIC acronym. His recommendation was certainly effective – one of the best of all time, even. But today, all four BRIC countries face problems, and their troubles illustrate the dangers of following investment fashions.