Sam Hopkins - Angel Publishing

Investing in Currency ETFs

Today's market is agnostic in its preference for currency vs. precious metals, so here's a way to play the other end of the see-saw with currency ETFs.

Dollar doomers got their way with a bad employment report coming out of Washington on Friday, and spot gold rode upwards as that bad economic news and the plummeting Dow pushed more investors back to precious metals.

But then, as we've come to expect over recent weeks and months, schizophrenic market sentiment brought the mid-day spike of over $20 per ounce back down to just over $800 per ounce by close.

Part of that is explained by the dollar's recovery against a newly announced 6.1% August unemployment rate and consequent recession worries.

Of course, a day's back-and-forth between the dollar and gold doesn't change our long-term bullishness on bullion, but seeing this scenario over and over does lead intelligent investors to ask what they can do to pare losses on either end of the see-saw.

Rydex's CurrencyShares exchange-traded fund series and a couple of other sponsored funds give you a great way to gain exposure to paper money, both on the long and short side.

Let's start with the gold bull's nemesis, the dollar...

Hedging Gold with Currency ETFs

AMEX:UUP is the PowerShares DB U.S. Dollar Index Bullish ETF, and AMEX:UDN is the ticker for the U.S. Dollar Bearish Fund run by PowerShares and Germany's Deutsche Bank.

While UUP is not exactly the inverse of the SPDR Gold Trust ETF (NYSE:GLD), there is a clear opposite trend when we see the chart of both over the past quarter:

As for UDN, the bearish counterpart to UUP, the chart is a mirror, as it should be due to the funds' opposite objectives.

And you've probably seen not only gold but also the euro posed as a foil to the dollar. CurrencyShares manages ETFs for eight foreign currencies, including the euro.

Here we see AMEX:FXE, the CurrencyShares Euro Trust, paired with GLD. Notice the general convergence:

What all this means for you is that some allocation of money against gold's momentum and in favor of the dollar's short-term rise may be prudent, and that you can delve into euro holdings for a loose tandem with gold prices.

In this day and age, it's easy to use exchange-traded funds to diversify and stabilize your portfolio.

ETFs are very liquid and, in the case of stock-based funds, multiple company holdings mean that one firm's bad earnings won't kill a sector-wide uptrend.

As we've shown you in recent articles on international gold ETFs, the appetite for fund tickers backed by precious metals keeps increasing, and today you see the other end of a comprehensive hedging strategy with currency funds.

Regards,

Sam Hopkins

www.goldworld.com

Chinese Renewable Energy

Chinese leaders can finally breathe, now that the Olympics have gone by with relatively little trouble and more blue skies than many observers anticipated. Yet there is plenty of work to be done, and tons of money to be made in Chinese renewable energy.

This week, U.S. trade officials estimated the value of China's clean technology market at $186 billion by 2010, soaring up to over half a trillion dollars by 2020.

Why such whopping estimates?

Well, after the athletes headed home, on August 29 the Communist Party leadership in Beijing passed what's known as the Circular Economy Law, which will stimulate national cleantech spending through efficiency and emissions regulations.

The essence of the Circular Economy Law is very simple and familiar to green enthusiasts around the globe: Reduce, Reuse, Recycle.

But energy progress isn't just something you can legislate. As we've learned the hard way here in the U.S., the greening of our economy requires cultural change and economic oomph behind it.

The Circular Economy Law (C.E.L.) had been in the works for over a year, and after it takes effect on Jan. 1, 2009, the C.E.L. should set the country on a more sustainable path towards national wealth and power.

China can't do that alone. So China and the U.S. inked a decade-long energy and environment cooperation agreement back in June, including American firms in the circular, sustainable economy that is developing.

U.S.-China CleanTech Trade

Now, Deputy Commerce Secretary David Bohigian is leading a mission of 19 clean energy and environmental protection companies through Beijing and the provinces of Guangdong (Canton) and Shandong.

The companies range from small, unlisted start-ups to giants like G.E., and they're getting an on-the-ground look at how they can make money in the Middle Kingdom in the next ten years.

The main points of this summer's bilateral framework for cooperation are:

Transportation (China is home to the world's fastest trains and fastest-growing car market)

Clean energy technology (China has the potential to leapfrog developed countries by building brand-new grids optimized for renewables)

Water (China has 17 of the 20 most polluted streams in the world)

Air (China's official "blue sky" rating system falls far short of E.P.A. standards)

Forests/Wetlands (Deforestation is estimated to contribute 20% of the carbon man has added to the atmosphere, speeding global warming)

In all of these areas, General Electric (NYSE:GE), 3M (NYSE:MMM), Honeywell (NYSE:HON), and other companies with worldwide wherewithal can help China reach its goals while boosting their own shareholder value.

We'll keep you up to date with the best bets on U.S. companies doing business in China's booming market for cleantech and efficiency improvements.

Regards,

Sam Hopkins

www.greenchipstocks.com

P.S. - For those of you in the Jackson Hole area, my colleague Jeff Siegel will be speaking at the Modern Energy Investor Forum on September 24. Here's a link to the conference website.

Israel Renewable Energy

I've been tracking the flow of dollars and shekels into Israeli clean energy ventures for years now, looking for opportunities. This week, a multi-million dollar deal may have signaled the start of a profit chain reaction. Here's how a few listed companies will benefit.

Israel Corp. is the New Jersey-sized country's largest holding company, specializing in chemicals and fertilizers, but also diversified into energy, shipping, and transportation investments.

And as you know, companies from BP (NYSE:BP) to GE (NYSE:GE) are moving billions of bucks into renewable power and related technologies to get a leg up and out of the fossil fuel economy.

So it's not surprising that in Israel, where I reported last year on a slew of start-ups in solar, desalination, cleantech and even algal fuel, the conglomerate Israel Corp is kicking off an investment spree.

HelioFocus, founded just a year ago in the Israeli town of Nes Tziona, got a more than $5 million shot in the arm this week from Israel Corp.'s renewable energy arm.

Israel Corp., for its part, has launched a division called IC Green Energy to spread money into lucrative renewable power ventures. As is the case with many Israeli start-ups, the science behind HelioFocus was incubated in the military's high-tech training environment and in the Weizmann Institute of Science located in the country's center.

These high-tech hotbeds led directly to the development of instant messaging, major biotech advances, and caused Intel to build its largest international R&D center just outside of Haifa in the north.

Perhaps most impressive, Israeli entrepreneur Shai Agassi is joining with national leaders in making Israel a pioneer in electric cars, with Project Better Place.

Israel Corporation Green Energy

So Major General (res.) Yom-Tov Samia is leading IC Green Energy by seeking out investment targets all around Israel's booming green industry, tapping into Israel's small-country, big-idea atmosphere...

Why is Samia going after HelioFocus? Well, in its short lifetime, HelioFocus has already made a name for itself by building systems that harness and convert concentrated solar power (CSP) into household electricity.

That short time to success is explained by the important business minds leading HelioFocus. Co-founder Sasson Somekh previously served as a senior manager at Applied Materials, and Weizmann Institute Professor Jacob Karni says HelioFocus's technology has been in the works on campus since 1990.

From potential biodiesel and ethanol heavyweights like Algatech to solar companies such as HelioFocus, Maj. Gen. Samia has loads of Israel Corp.'s loot to dispense, and a plethora of local engineers and scientists are eager to attract IC Green Energy's money and credibility.

But it won't just be Tel Aviv-listed Israel Corp. that profits as HelioFocus and other Israeli renewable energy firms grow.

Capstone Turbine Corporation (NASDAQ:CPST) leads the world in cleantech microturbine systems, and in late July Capstone and HelioFocus closed a deal for modified turbines that will run on concentrated solar energy.

Capstone has been a top gainer in the Alternative Energy Trader portfolio, as subscribers got in for just $1.50 a share. CPST is now trading at around $2.75 after rising as high as $4.32 this July, but AET readers are still sitting pretty.

As Capstone's Executive Vice President Mark Gilbreth says of the HelioFocus partnership, "This combined system leverages existing Captone technology and continues to broaden the range of renewable fuels that are able to power our microturbines."

With majority control now in the hands of Israel Corporation, more money should flow through HelioFocus to Capstone, and Capstone will benefit from the ongoing relationship with IC Green Energy.

IC Green Energy's momentum will just continue to build as time goes on, and from Tel Aviv to Wall Street, we're keeping an eye on the top stock plays that will ride that current of renewable energy investment flowing through Israel.

Regards,

Sam Hopkins

www.greenchipstocks.com

Investing in AIG Stock

Three years ago this week, Hurricane Katrina's storm surges devastated New Orleans and surrounding areas. But the disaster also had financial effects that extended far beyond the region's floodwaters and relocation centers.

The U.S. insurance industry was shocked by the record 2005 hurricane season, just as it had been by the attacks of September 11 four years earlier.

Damage was far-reaching, shredding previous risk assessment models and calling into question future insurance policy writing for coastal areas.

Today, a look back yields valuable lessons not just for local citizens and officials, but also for investors who can find value plays through crisis investing.

As a case in point, the post-Katrina stock market response for insurance holding company AIG wasn't what you might expect.

Crisis Investing, From Katrina to Subprime

American International Group (NYSE:AIG), which operates in over 130 countries as an insurer and financial services provider, was one of the first companies to estimate Katrina's impact on its balance sheet.

Less than a month after the storm, on September 21, 2005, AIG and Warren Buffett's Berkshire Hathaway (NYSE:BRK) each estimated about $1.1 billion a piece in after-tax losses for that filing period.

Yet AIG continued a share price climb that had begun in the spring, going from an April 1 low of just above $50 per share up to $60 when Katrina claims were estimated, and maintaining its trajectory to hit $70 by January.

That was a handy 40% gain in eight months for those who hung with AIG despite the gloom.

However, since then, AIG has come up against another crisis and is now trading at a 13-year low under $19.

The storm this time is manmade, and like so many other places in the financial world, the origin is within AIG.

Stock Projections for AIG

For insurance companies, risk is everything. That's why it's ironic that today Swiss bank Credit Suisse (AMEX:GOE) forecast a huge upcoming loss for AIG and lowered its stock price target from $30 to $22 per share.

Credit Suisse foresees a potential $6.5 billion hit for AIG in the third quarter of this year, due to a "heightened risk profile owed to uncertainty regarding ratings, the size of a potential capital raise and the ultimate cost of a de-risking strategy especially in its credit default swap (CDS) business."

$6.5 billion for Q3 2008 absolutely dwarfs the Q3 2005 blow dealt by Katrina, and shows us that stormy weather on Wall Street isn't always accompanied by wind and rain.

Back in 2005, adjustments were made to prepare for the 2006 hurricane season, which in the Atlantic runs from June 1 to November 30.

Today's models for credit-related risk don't give any time for winter recalculations, which explains why AIG, Lehman Brothers (NYSE:LEH), and an endless stream of other financial majors are all trying to sweep losses under the rug.

It will take a real change in the way business is done and ratings are rendered to restore market confidence, but at a 13-year low like AIG's stock is, you can't help but lick your chops.

But if you're looking to go long AIG, I say hang tight on this stock for now. In the meantime, check out Ian Cooper's Options Trading Pit, which is delivering consistent triple-digit gains by taking a cold look at subprime-related risk.

Next week, I'll highlight an international financial stock that has benefited by steering clear of the credit crunch, even though a natural disaster in its home country scared many away. Those who got spooked missed out on double-digit gains in mere months by not capitalizing on this example of crisis investing.

Regards,

Sam Hopkins

Geothermal Energy in Australia

The Aussies have a head, and a continent, full of steam.

This week, geothermal energy enthusiasts in the Australian government are throwing out some astounding projections of how much potential underground steam-based power the continent-country possesses.

Enter Google, the world's # 1 search engine... and why founders Sergey Brin and Larry Page should head down under.

Anthony Budd, an official at national agency Geoscience Australia, told Reuters on Wednesday that "One percent of [Australia's] reserves would produce 26,000 years of energy supplies."

You read that right. 1%=26,000 years.

That's a massive number that puts into digits what Australia's leaders are already putting into words and policy action.

Australia's Geothermal Energy Push

Australia Resource Minister Martin Ferguson vigorously stands behind geothermal as bearing "huge potential... both as a solution to climate change and in terms of national energy security." And Prime Minister Kevin Rudd made his first move as head of state to sign his country onto the Kyoto Protocol to mitigate global warming.

Up here in the Northern Hemisphere, Google.org, the charitable wing of the search engine company that has already changed the way the world works, annonced this week that it is pursuing "hot rock" geothermal energy research with a planned investment of $11 million.

Of course, it's not just about philanthropy for Google and its non-profit arm. While the company's motto is "Don't be evil," Google's data centers host ever-proliferating racks of servers that whir at dizzying speeds, 24/7/365, and make the company one of the top energy consumers in the world.

Geothermal could help Google buffer a lot of that energy impact.

In Google's neck of the woods in western U.S., geothermal resources already provide some 3,000 megawatts of power to residences and businesses.

Yet underground energy is woefully underutilized... And that's something Google hopes to change.

Scientific American quotes geothermal drilling entrepreneur Lou Capuano as saying that out of "roughly 1,900 drilling rigs in the U.S., seven, maybe up to 11 now, are geothermal."

Now consider that by using 5,722 existing holes across Australia's vast landscape, Geoscience Australia's Anthony Budd and his colleagues have appraised the national natural resource that could and should take the country away from dependency on coal-fired electricity.

Those holes were all there because of previous mineral and fossil fuel exploration, and that's the Transitional Energy Economy we at Green Chip International have seen develop around the world. Old offshore oil rigs, drill holes, and other engineering feats of the hydrocarbon industry are providing a bridge to clean, renewable power.

Putting Money into the Ground

The Australian Geothermal Energy Association's research says that up to 40% of the government's 20% by 2020 renewable energy capacity goal could be reached with steam generated by injecting water deep into the earth.

And appropriators in the capital of Canberra are digging deep into the national coffers, putting $43 million into advanced geothermal power plant creation.

Washington, for its part, is now officially outpledged by Google.org in its geothermal energy exploration funding. That may change with a new presidency here, but it's clear that the combination of efforts by Google.org and Australia could put American geothermal far ahead of where it is now.

Google.org is putting its first dollars down in California's AltaRock Energy ($6.25 million) and deep drilling specialist Potter Drilling ($4 million).

Paul Thomsen of Green Chip Stocks holding and global geothermal heavyweight Ormat Technologies (NYSE:ORA) says drilling is key to advancing geothermal on a national scale.

"The deeper you drill, the more expensive it is," Thomsen says. "Geology brings magma and heat closer to the surface in the western U.S. If we could drill deeper, then we could move east."

Moving east in the U.S. with geothermal projects entails first looking south to Australia, north to Iceland (where most of that tiny country's electricity already comes from geothermal sources), and wherever else it takes to get the best cooperative technology.

Then we'll see the emergence of a strong worldwide geothermal industry, spawning more technologies and companies to invest in.

Regards,

Sam Hopkins

P.S. - With Green Chip International we're constantly on the lookout for companies that spread out all over the world to explore renewable energy opportunities. In geothermal, Ormat's run by Israelis, based in Reno, and operates on almost every continent. Jeff Siegel has geothermal credentials dating back to before Google was in most people's vocabulary, and long before Google.org's recent foray that netted AltaRock Energy and Potter Drilling several million bucks a piece. To get the jump on the next international geothermal profit play, check out GCI today.

Gold ETFs

It was starting to seem like the only gold anyone would want to hold this August was the kind you win at the Olympics. Ironically, down in Hong Kong, where the Beijing Olympiad's equestrian events are being run, a new gold ETF got off to the races in July.

In Hong Kong, the World Gold Council is behind July's launch of the first HK-listed gold ETF, the SPDR Gold Trust. Under the ticker 2840, it's set up to take advantage of increasing commodity interest on the part of Chinese and regional investors.

According to the Council's CEO James Burton, local demand for gold at the retail level doubled in 2007.

Then, like a busted leg on a thoroughbred, things took a turn for the worse in the middle of last month. Gold spot prices lost a fifth of their value in just a couple weeks, hurting gold-backed funds too.

But this Thursday, with US-Russia tension sending oil up over five bucks in a day, the New York-traded Gold Miners ETF (AMEX:GDX) and other gold-related plays got back on track.

International funds that hold physical gold are also set to enjoy a resurgence, confirming Gold World's standing global recommendation.

The Hong Kong gold ETF's American counterpart, which shares the SPDR Gold Trust name (NYSE:GLD), has been listed on the New York Stock Exchange since 2004 and on the NYSE Arca options platform since 2007.

And in July of this year, the SPDR Gold Trust became the most actively traded call option on the Chicago Board Options Exchange, indicating massive interest. Once gold pulled back hard a couple of weeks into July, some started discounting that heavy futures contract volume as mere speculative activity...

Now it's apparent that a long position in physical gold is justified as a hedge against global instability and currency volatility.

More Gold ETFs on the Upswing

Taking a look at other international gold-backed ETFs, London's PHAU physical gold fund holds markers for bullion in the vaults of HSBC bank (NYSE:HSBC). HSBC, the world's largest bank by assets, is also where you can find the gold behind SPDR Gold Trust's international listings.

Tokyo, another key international market, also now has a SPDR Gold Shares listing.

Though we're long gold, we recognize that monitoring volatility is important for investors.

So we're happy that the CBOE now has a gold price volatility index, much like the famous VIX that investors worldwide refer to as the market's "fear gauge."

We're seeing more dramatic swings in daily gold prices these days, like Thursday's $20 jump. A couple of years ago, single-digit changes were much more common.

The launch of the Gold VIX (ticker:GVZ) confirms the rise in volatility, and we'll be keeping a close eye on it. For long-term investors, we say buying on weakness is a winning strategy.

You can learn more about the Gold VIX on the CBOE site, here: http://www.cboe.com/micro/gvz/introduction.aspx

Regards,

Sam Hopkins

Nigerian Solar Power

In renewable energy development, the world's least developed countries should have the highest access to solar power.

From rural villages in Africa and Asia to backwood towns right here in the U.S., green energy options are providing wide-range assistance for disadvantaged regions.

Consider Nigeria, which is an OPEC member and until recently, Africa's largest oil producer. I say, "until recently," because a combination of political turmoil in the country's petroleum heartland - the Niger River delta with criminal gangs, and siphoning from pipelines by poor citizens has made output sporadic. Plus, on Thursday Nigeria handed over control of the oil-rich Bakassi Peninsula to neighboring Cameroon.

This chaotic situation has allowed Angola, and soon Libya, to skip to the continental lead in oil production.

But out in the countryside, local newspaper This Day reports that solar energy is gaining traction.

22 rural communities in the state of Zamfara, totaling 70,000 people, now receive electricity from photovoltaic cells.

Among the 59 projects already underway, there are 29 health care centers serving basic medical needs, and 20,000 young people will receive job training related to the solar modules.

So in just one area we see solar power bringing all-hours access to medical care and vocational training, in a vibrant economic sector that has immediate local impact.

Clean Power in Urban and Rural Areas

Now, Nigeria has the largest population of any country in Africa, projected to reach over 350 million by the middle of the century. It would be foolish to pretend that solar alone will meet the needs of every citizen, but energy options are essential in nations where population and consumption are roaring forward.

From 11% of the population living in cities in 1950, the United Nations projects that 65% will live in urban areas by 2030. That's a tremendous strain on power generating capacity and the infrastructure needed to convey electricity.

We hope to see Nigeria, which gets much of its oil from offshore platforms, transition into an offshore wind powerhouse.

Of course, Africa isn't the only place where the flux of migrants from villages to metropolises is apparent.

Global Renewable Energy

In rural China, far away from the mega-cranes and Olympic fervor, parabolic water heaters are keeping families from having to spend their days gathering wood that will burn dirty and lead to breathing problems. Still, the opportunities that come with more time for education and leisure often lead the upwardly mobile away from home.

I've seen the transition with my own eyes, and the rural-urban wave is one major point of modern life you have to grasp along with the changing energy economy.

We're tracking plays like World Water and Power (WWAT.OB), which has co-generating mechanisms to pump water from solar devices. Such technology is increasingly necessary not only in the boondocks but in crowded slums that develop when there isn't enough housing for rural immigrants.

You may be hearing about renewables more and more from leaders of the world economy and government these days, but don't forget it's the individual consumers who need change the most, and who can deliver the highest returns on investment.

Regards,

Sam Hopkins

Green Chip International is looking for companies that know cities aren't the only place where renewable energy becomes reality. GCI has already found firms with know-how and connections to get energy to may even be getting electricity for the first time. To learn more, click here: http://www.angelnexus.com/o/web/7281

Russia and Georgia at War

Dear Reader:

Here at Wealth Daily, we take no joy in predicting wars. But to get global markets, you have to understand the relationship between peace, conflict, and money.

Two years ago, the "frozen" conflict between Georgia and its Russian-backed breakaway regions wasn't even a blip in most western news outlets. But that's when our international editor Sam Hopkins brought the region to your attention as a potential flashpoint with major geopolitical and economic significance.

As Sam said back in 2006, Georgia is a major transit point for Caspian Sea oil and gas—through pipelines that bypass Russia. "The Oil War No One Sees Coming" lays out a case that is still obscure in much of today's coverage even though there is now heavy fighting in the Caucasus.

I urge you to read that excellent piece of research and forecasting if you want to really grasp what's going on. And today, Sam's picking up with the newest facts and how your money is affected.

Good investing,

Brian Hicks, Publisher

Understanding the War in Georgia

From Chechnya to Kosovo to South Ossetia and Abkhazia, it's difficult to sort out Russia's stance on independence movements. High in the Caucasus Mountains, a patchwork of ethnic enclaves confounds the former Soviet republics of Russia, Georgia, Armenia and Azerbaijan.

Joseph Stalin, himself a Georgian, knew the area's complexity well. That's why he started as the Soviet Union's Commissar of Nationality Affairs, wrangling disparate peoples into Moscow's communist corral.

Today's Russia is capitalist, but Prime Minister (until recently President) Vladimir Putin pines for the days when Moscow's power extended solidly into the "near abroad," from Finland all the way to the Pacific.

So the Russian Federation has taken the autonomous Georgian regions of Abkhazia and South Ossetia under its wing, sending in military peacekeepers to prevent Georgian government incursions while issuing Russian passports to local residents.

This sponsorship understandably irks Georgian leaders, who are close with the Bush administration. Russia's support for Abkhazia and South Ossetia also seems to run counter to Russia's backing of Serbia over the issue of Kosovo, a majority Albanian section of former Yugoslavia that recently declared its independence.

Further complicating things, Russia fought hard through the 90s to assert its control in Chechnya, a Caucasian part of Russia with a militant independence movement.

No matter what would seem to make sense, hypotheses are now out the window and Russia is at war with Georgia.

Down to Business in the Caucasus

Though there have been battles in the Caucasus since time immemorial, modern economic conditions change the spoils of war and the methods by which they are gained.

Georgian government websites have reportedly been targeted by Russian hackers in the past few days, a real show of force that can be equal in economic damage to a blockade in the Information Age.

In other recent regional squabbles, most of which have transpired without a volley of mortars, Russia has used its substantial oil and gas reserves as leverage to get former Soviet republics and satellite states to capitulate.

Ukraine found its gas supply cut by Moscow when it refused a price increase in 2006, and European states to the west cried foul since the drop in pressure to Ukraine also threatened supplies in NATO countries.

The energy equation is different when it comes to Georgia, though, which may be why we've seen Russia ban imports of Georgian mineral water and wine, as well as employing cyberwarfare, to inflict financial wounds.

Georgia is a key player in moving oil and gas from the Caspian Sea basin westward to the Mediterranean. The country has gained the support of the United States in the form of military consultation (we have a couple hundred troops on the ground there now even as Russia and Georgia are fighting), and with engineering expertise to move natural resources safely.

The $4 billion Baku-Tbilisi-Ceyhan pipeline, named for the capitals of Azerbaijan and Georgia and a Turkish province, passes within 100 miles of the South Ossetian capital of Tskhinvali.

image: BP

Carrying a million barrels a day, the BTC pipeline is separated from the Russian-backed region (which Monday is said to be totally under Russian control) by over 10,000 Georgian soldiers. It has also been buried underground for most of that stretch to prevent attacks by saboteurs.

The U.S. Department of Energy says there are two energy priorities for Caucasus countries: to diversify their energy supplies and to cash in on transit revenues.

Energy diversification and profit are indeed the top motivators for many policy moves these days, from Eastern Europe all the way to the United States. Russia, for its part, has moved to re-nationalize companies such as Yukos and projects led by BP while using energy leverage in neighboring states like Ukraine as mentioned above.

Russia opposes the BTC pipeline, which was purposefully built to skirt Russia's transit routes. Moscow's opposition to a trans-Caucasus route puts them at odds not only with Georgia but also with Azerbaijan and Turkey, the other BTC hosts.

As you can see in the BTC map above, Armenia would have provided a more direct path from the Caspian to the Mediterranean, but Armenia is tighter with Russia and has frosty relations with Azerbaijan over a majority-Armenian territory deep inside Azerbaijan.

Economic Fallout to Come

When I first started covering international energy issues and how tension in the Caucasus could affect supply, oil cost less than half what it does today.

That means the stakes are ever-higher, and what seems to be a matter of autonomy and ethnic affinity has become more economic.

Russia is also under scrutiny for moves outside the energy arena. Investors in NYSE-listed Mechel Steel (NYSE:MTE), previously worth over $15 billion, got spooked by comments that seemed to threaten top shareholder Igor Zyuzin. Putin also hinted that the government's anti-monopoly service and state prosecutor should get involved in accusations that Mechel is selling materials abroad at a discount to the Russian price.

Mechel's stock price swiftly dropped, and so did the Moscow Stock Exchange benchmark index.

The Georgia affair may not do Russian stocks any favors either, but then again Israel's leading share index actually rose during its 2006 war with Lebanese terrorist group Hizbullah.

So far this summer, it seems that Putin's comments on Mechel did more to harm investor confidence than the developments in Georgia, with the most precipitous decline coming in late July after the PM's menacing words.

Since Russia invaded South Ossetia over the weekend, seized a base inside Georgia near South Ossetia, and now has paratroopers in Abkhazia, the Market Vector Russia ETF Trust (NYSE:RSX) is down by 6%, compared to a nearly 27% decline in the past 3 months together.

No Georgian stocks are available in the U.S., but the European Bank for Reconstruction and Development is already revising its growth estimates for the country.

"The frozen conflict in South Ossetia has always been a worry for foreign investors in Georgia and if that is ultimately removed as a result of this, it could become more appealing," analyst Michael Davey told Reuters. "If there is a final conclusion then the slowdown may not be that pronounced ... but there will be one."

If you own any Russian stocks, watch them closely. Energy shares should be held, but be wary of Putin's new aggressive language towards Mechel as well as the hit the market could take with continued fighting in the Caucasus.

Regards,

Sam Hopkins

P.S. - As Brian said, you can't make money in hot international markets without understanding the risks and benefits together. Global Growth Stocks subscribers have reaped several triple- and double-digit gains by getting solid, well-researched intelligence you can invest in. Learn more here: http://www.angelnexus.com/o/web/7230

U.S. Biofuels Market

The Bush administration is standing strong on its intensive ethanol push. So why is a top American company shifting its emphasis to Brazil? The answer is that there are too many political question marks in the developing U.S. biofuels market.

Let's look at what went down in Washington this week. None other than Dubya's successor, Texas Governor Rick Perry, had filed a request with the Environmental Protection Agency to halve ethanol requirements because he says they are causing severe economic harm to his state's ranchers and food producers.

Livestock ranchers and farmers are hog wild at the dizzying swings in corn prices. The commodity spot price for the grain dropped off a cliff in July alone after more than doubling since last August. Those who utilize corn as a primary feed blame the price jump on the sevenfold increase in ethanol's contribution to the national fuel supply.

Under law, the EPA can change mandates if the damage is seen to be severe.

But the feds rebuffed Texas, sticking to the Renewable Fuels Standard that sets the following targets for ethanol as part of the nation's gasoline mix:

7.5 billion gallons of renewable fuel (ethanol and biodiesel) per year by 2012, and
36 billion gallons by 2022

Responding sharply to the administration's intransigence on Thursday, Governor Perry said, "Any government mandate that artificially props up a single industry to the detriment of millions of Americans is bad public policy."

What about the price decline we're witnessing now? Well, the wheels for Texas's protest were already in motion by late April, well before the time corn dove back down in the past month. Plus, many market observers and worried politicians think we're locked in a long-term uptrend as long as ethanol decouples corn from traditional grain demand sources.

ADM Making Biofuel Moves in Brazil

Archer Daniels Midland Company (NYSE:ADM), the top grain processor in the world, is kicking off a major project in Brazil's sugar-based ethanol industry after suffering a 58 cent-per-share profit drop on Wall Street this week.

London's Financial Times reported that ADM has found the U.S. market to be more of a hindrance than a help when it comes to turning biofuels into bucks.

Executive VP John Rice said that a combination of higher input costs from corn, labor, and even steel for facilities are slamming ADM's balance sheet, which helps explain the new focus on Brazil.

"We don't see the margin out there right now and finding capital is also very tough."

In the U.S., where a phalanx of lobbyists and legislators have created one of the heartiest subsidy regimes in the developed world, finding capital is very tough?

For Pete's sake, ADM alone spent $330,000 on lobbying in the second quarter of this year alone...

And that got them and other players like Monsanto, Deere, and Dupont a nice chunk of future income from the $300 billion farm bill this year.

The point is that biofuel isn't just big business, it's big politics.

John McCain is against subsidies for ethanol and all other farm subsidies, but Barack Obama knows that in his home state of Illinois and throughout the central states there are entire towns—and potentially millions of voters—banking on biofuels.

As for ADM balancing Brazil and domestic U.S. production, CEO Patricia Woertz says investment in sugar ethanol directly and through partners is of strong interest to the company. She also played off a possible win for Brazil at the World Trade Organization that would call foul on U.S. corn subsidies.

Perhaps ADM would be better served by developing the best technology rather than spending tons on propping up sources like corn that are proven to be inefficient.

BP is working both ends, saying this week that along with Verenium Corp., they're developing cellulosic ethanol technology that would use plant waste instead of straight grain feedstock.

We're keeping an eye on the entire international biofuels scene here at Green Chip Stocks and Green Chip International, and not throwing the baby out with the bathwater. There is a good chance that winning biofuels will come out of this period of investment and experimentation.

We'll let you know about the best opportunities for investment as they emerge.

Regards,

Sam Hopkins

South African Gold

Dear Gold World Reader,

This week you'll start receiving regular commentary from Sam Hopkins, international editor and research analyst at Angel Research. Sam has accompanied me deep into gold mines in the Mexican Sierra and ventured by himself into the heart of Israel's copper industry, which he highlighted for Wealth Daily readers last summer.

Sam's a big-time international bull, and with emerging economies like China and India sending materials demand through the roof, you've got to be up on the global trends to make money in metals these days.

Until next time,

Luke Burgess

Editor, Gold World

South Africa Can't Catch a Break

The South African currency is down after a big rally, and so is gold. And even though the rand is for all intents and purposes a resource currency, the two aren't directly linked in their drop. Energy factors in big-time, and leads us back to the bullish long-term case for gold.

A witches' brew of profit-taking on South Africa's money exchanges after the rand hit about 7.20 per dollar, and falling industrial output due to striking and power shortages are pushing the local paper's value down.

As for gold, energy has dropped and brought more investors out of their cellars, which in many cases means lessening gold holdings that had served as a last resort.

The Congress of South African Trade Unions, or Cosatu, has sway not only over mines but also factories and other major industrial bulwarks. What this biggest national union is protesting is a huge electricity price hike (27.5%) that will give the national utility funding for a major expansion project.

That undertaking by Eskom is itself a response to devastating power shortages that shut down mines and smelters for a full business week in January. Now, AngloGold Ashanti has been shut for three days due to the Cosatu strike, and Anglo American reported only half the normal attendance by its workers nationwide.

So on one hand we have mine shutdowns because of energy shortfalls, and on the other hand production is stopping because workers are upset about the remedy to the very dilemma that kept them home this January.

In either case, production will squeeze new gold supply starting in the medium term, and we should see a recovery off support levels around $860 per ounce and kick back into the long term uptrend we've seen roar forward over the past decade.

Buy Physical Gold

So what's the play on South African gold?

Don't play it, buy gold itself and wait for the combo of power cuts, labor issues, and restored market demand to send your physical gold further up in value.

As Greg McCoach told you at the end of July, borderline criminal short-sellers and panic selling by investors who don't have the stomach for corrections have hit junior mining stocks hard, and that carries through to even the giants who own Africa's prolific mines.

So check out your options for purchasing physical gold, and skirt the problems that keep surging to the surface in South Africa. Also, you should be aware of London's growing market for metal exchange-traded funds that handle solid bars.

It's an intermediate step between holding bullion and buying stock in companies that will face credit, energy, and labor challenges for years to come. Plus, many online brokerages now let you trade London shares just as easily as you would swap on Wall Street.

LSE:PHAU is the ticker for a fund run by ETF Securities, a British firm. It's backed by physical gold held in HSBC, a top-notch custodian bank that just reported strong first-half earnings despite turmoil in the banking world.

As you already know, the more barriers you have between your money and a global financial market meltdown, the better off you'll be.

Regards,

Sam Hopkins

Chinese Renewable Energy

We'll see if 8 is really China's lucky number when the Olympics begin this week on 8/8/08. As it happens, in the mad dash to get ready for the games, China's energy problems are catching up to it. Here's how you can play Chinese renewable energy to win.

It's been a bad summer for China's national electrical supply. Record consumption has spread from the eastern industrial heartland around Beijing, Shanghai, and Tianjin all the way out to the boondocks of central China.

Shaanxi province, where I reported from the ancient capital of Xi'an last fall, is part of China's primary coal resource area. It has long been home to mom-and-pop collieries that were seldom inspected and prone to disaster. Indeed, just today a tremendous cave-in trapped nine miners there.

The central government has been hard at work trying to root out the bribes and code violations that make accidents frequent. But they're also trying to keep China's coal industry going steady to power the country's industrial growth, and to avoid brownouts and blackouts.

Still, record high consumption has combined with coal shortages (and some reports of inferior quality coal when it does come out), and declining government subsidies to make power plants relatively impotent.

With 75% of China's electricity currently coming from coal, this all spells heartburn for utilities.

Over a dozen provinces are in rationing periods, with rolling power losses hitting factories and homes alike. It's the country's worst energy crisis in four years, and with the whole world's eyes on China, it's come at exactly the wrong time.

But the Chinese government doesn't accept failure as an option. Through a 21^st-century combination of Communist Five-Year Plans and stock market offerings, China is charging forward.

China's Energy Future

China's sheer size has, or is about to, put it on top of a lot of lists...

It's expected to have both the largest Christian and largest Muslim populations of any country within a generation.

It's the largest solar cell producer, but also the leading greenhouse gas emitter.

And a report just released by the Climate Group, an industry and government coalition, says China's on track to be the top player in solar power, wind power, and low-emissions technology (cleantech), within a few years.

The government is behind these goals for developing non-fossil energy answers, but it can't just wave a wand and make it so.

Beijing planners want energy intensity (energy use per unit of GDP) to come down by 20% in 2 years. That's a lofty goal considering double-digit GDP growth.

The top brass also want 23% of all electricity to come from renewable sources by 2020, in line with many developed countries' "20% by 2020" plans.

But they include hydroelectricity, which by some standards is not a true green energy source, in that renewable figure. Especially given that the crowning Three Gorges Dam generation project displaced some 1.3 million people, Chinese hydro's responsible energy credentials are dubious.

Nevertheless, the Chinese government has put billions into renewables in the past year to try to avoid the downside of a coal-based energy economy.

$12 billion in 2007, to be exact...

Yet the Climate Group says this is woefully underweight since China really needs to put $33 billion a year towards its 2020 target. That's nearly 400 billion bucks altogether.

Chinese Renewable Energy Stocks

Having turned Maoism on its head in favor of leader Deng Xiaoping's economic reforms, China reached its current world standing. We're now at a point where China, India, and Brazil are able to successfully fight EU and United States trade pressure (as happened last week at the WTO talks).

We're also at a point where Chinese stocks have already gone through a boom-bust cycle in the past few years, and the downturn phase may not be complete.

With energy concerns just below China's short-term goal of not having any marathon runners collapse from smog inhalation, there are a slew of listed companies inside and outside of the major mainland exchanges trying to capitalize on the transition to renewables.

Suntech Power (NYSE:STP), which trades in the U.S. as an American Depositary Receipt, markets solar photovoltaic cells and systems around the world from its eastern Chinese HQ.
And Trina Solar (NYSE:TSL) is part of China's renewable energy leadership as well.

Too bad, though, that Suntech and Trina are down 60% and 50% on the year, respectively. That's worse than the droopy Dow and most major Chinese indexes, too!

That's why with Green Chip International, we're looking elsewhere, to countries who have a more measured approach to renewable energy progress. They're operating in China from foreign bases, as well as a variety of other countries, and frankly, they're run better than these fresh listings that came to the NYSE with a nudge from the Chinese government and a promise of riches from U.S. investment banks.

I'll also reiterate my top worldwide energy recommendation, Switzerland's ABB (NYSE:ABB). ABB makes automation systems for power plants to run more smoothly, and it's been involved in major undersea and overland grid hookups that allow countries to share juice when shortages threaten supply.

If you're looking for an angle on China's energy demands, ABB's made equipment for public transportation in Beijing, Shanghai, and other cities, and it's set to employ 12,000 workers in China by the end of this year. Ranging from the Three Gorges Dam to wind-farm hookups to major grids, ABB's got the leg up on other contractors.

And 11 of ABB's Chinese divisions and joint ventures were among the top 100 electric companies in China in 2007.

If you're in the mood for a medal count, ABB's already winning in China.

Regards,

Sam Hopkins

Food, Energy & the WTO

You may have heard that the latest round of World Trade Organization talks just collapsed. The main sticking point was agriculture. Yet energy is easily on par with farm goods at the top of everyone's economic worries.

So what's the WTO doing on energy, and biofuels in particular?

China and India helped scuttle this round of WTO talks, dubbed the Doha round after the capital of Qatar where it originated back in 2001. The Middle Kingdom wants to keep up its Great Wall of tariffs to fortify domestic agriculture and avoid shortfalls in staples like rice and wheat. That's the same tune we've heard from developed countries and other emerging markets like India and Brazil.

But the flipside of one country gaining market access is, well, that country allowing market access. In 2001, China gained admission to the WTO by lowering major trade barriers, and in return it got to unload its cheap goods on the West.

Now, domestic protectionism and rising food prices are pushing China, India, and Brazil to demand less free flow in agricultural goods, even while they want trinkets and cars to move without obstacles. Of course, it takes more than one party to cause an impasse, and the U.S. trade representative Susan Schwab told reporters that China's desired increases could have put new tariffs on soybeans in 8 out of the next 10 years.

Too bad, because agreements on farm goods were a necessary first step in getting to real debate on the food-fuel question.

Brazil is even threatening a "blockbuster" WTO case against the United States over our propping-up of corn ethanol against superior Brazilian sugarcane fuel. The U.S. is the world's largest ethanol producer, but Brazil is the largest exporter even with American resistance. Under the framework of the Doha round, this dispute was supposed to be settled. Now all bets are off, and all grievances are back out in the open.

You see, the interplay between food and fuel isn't just about riots when tortillas get too expensive (Mexico) or petrol is so dear that truckers block highways in protest (Spain).

A breakthrough on the U.S. corn subsidy would net billions for Brazilian ethanol market movers like national oil company Petrobras (NYSE:PBR), and it's not accidental that the government-backed company is being supported in international trade talks by friendly federal negotiators.

Brazilian trade hawks also have nature on their side.

Brazilian Ethanol for the U.S.? Better, Not the Best

Floods in the Midwest this summer caused bottlenecks in ethanol shipments to the coasts, prompting calls to remove the 54-cent-per-gallon ethanol import tariff for the sake of our own energy security.

The U.S. already lost a 2005 WTO case brought by Brazil which charged that American cotton subsidies hurt producers in other countries by depressing prices. As important as cotton is to the world economy, trade distortions in fuel markets have more impact mentally and at market. The U.S. will have to acknowledge its domestic crutch as a major point of inefficiency in global trade.

Trade chiefs all around the world are scrambling to rescue the Doha round now, and the world press is touting the stand of China, India and Brazil as the dawn of a new era where the U.S. and European Union can't simply impose their will on meeker members of the WTO.

I'm personally fine with a new world order emerging, but it has to be a real world where global problems can be addressed with minimal bellyaching and much more political maturity than we've seen. Rioters don't know about hushed trade discussions in their capitals, and ministers are often too far removed from the man on the street to notice anything but demonstrations. By the time sparks fly, it's too late.

And without ongoing dialogue about food and fuel issues in the WTO, a real worldwide solution will only come piecemeal and slowly.

Regards,

Sam Hopkins

P.S. - We're not waiting around for trade czars to get it together at the WTO. There are bilateral and internal measures already in place that push winning solutions to food and fuel crises—often both at the same time through seed science. The Green Chip International portfolio is doing biofuels right, and profiting. Learn more today. http://www.angelnexus.com/o/web/7135

International Growth Stocks

As the saying goes, there's no rest for the weary...

That's true for me as I'm back in America after a 3-week research trip in Europe, and it's true for investors tossed back into the market gauntlet to start this week.

I've got to tell you, it doesn't feel any safer watching Wall Street from across the ocean. Today's interconnected global economy means that markets are linked, for better or worse.

So as I checked in with my colleagues back in Baltimore and watched London and Frankfurt's trading days give way to New York action, I knew it would be difficult for overseas exchanges to really separate themselves from the downward pressure of the U.S.-led equity nightmare.

Germany's DAX benchmark is down slightly less than the Dow, but it's still double digits in the red. Hong Kong's Hang Seng index is relatively buoyant, down nearly 40% from its late-October peak but still at break-even over 52 weeks.

That's why you need to look at specific international stocks, real value players with long-term growth strategies and secure financing to weather a tighter credit market.

I told you about some of those from Europe like Spain's BBVA (NYSE:BBV) and a few Swiss investments, so let's do a quick follow-up on BBVA here as we get into second-quarter earnings season.

International Growth Stocks

It's amazing the random and fortunate encounters you can have when you keep your eyes and ears open. Last week about this time, I was sitting outside a Vietnamese restaurant in Berlin's Kreuzberg district when I struck up a conversation in German.

My interlocutor turned out to be a Spanish banker, in town to work on his German for the sake of clients who own vacation homes in the southern city of Malaga.

We continued on in Spanish, talking about the mortgage crisis as we drank southeast Asian coffee and slurped pho soup. "The Spanish banks are much stronger than American banks, and they have to have more cash on reserve" he told me with an inside perspective.

Though BBVA missed analyst estimates in its Q2 reporting as many companies (especially banks) are doing these days, analysts agree that a strong cash position will benefit BBVA moving forward.

The Spanish property market looks frightful, with deep discounts across the board. That's hurt BBVA in the recent quarter because of non-performing loans, which are up to 1.2% of all outstanding issues.

Yet this was lower than rival Banco Popular, and doesn't take into account real growth we're seeing in Latin markets and forays in China and India that can buttress a Spanish slowdown.

Sound familiar? This is the strategy U.S.-based companies are pursuing as well: fight domestic losses with overseas growth, while keeping debt to a minimum.

We're seeing it with General Motors (NYSE:GM), which posted a 12.7% sales jump in China vs. 16% decline Stateside in the first half, Yum! Brands (NYSE:YUM, owners of Pizza Hut, KFC, and Taco Bell), and of course more nimble internet enterprises like eBay (NASDAQ:EBAY) which can jump borders at lightspeed.

The point is that true international profits are obscured by negative sentiment today, much of which is justified. But that doesn't mean there aren't good companies out there.

In fact, the stock market is taking its lumps because of earnings estimates that weren't sufficiently revised downward. If everything is so bad, then why are analysts still keeping their pre-meltdown suppositions on how the numbers will come in?

Lowered Expectations, Higher Share Prices

We should look forward to a few quarters of lower expectations, because at that point the listings that treaded water will perform like all-stars.

It's a sad state of affairs, but taking a broad view time-wise and in where profits will develop is essential right now. Whether it's more Chevys sold in Beijing or more Spanish banks drawing growth from old Spanish colonies, this is an international market.

Same goes for investors. If you're content to tie your portfolio's fate to the U.S. and its financial ailments ($482 billion budget deficit for 2009 announced today!), then just hang around Wall Street.

If not, take a look at Global Growth Stocks and see where tomorrow's leaders are trading today.

Regards,

Sam Hopkins

German Renewable Energy

BERLIN, GERMANY: There's still Russian graffiti from 1945 on the walls of the German parliament. In a room listing Germany's past lawmakers, a black space marks where Hitler's name would be. But in a building filled with such history, the energy future is being created.

A long week of intermittent severe storms broke long enough for Barack Obama's Thursday visit to the reunified capital city, which was hot on everyone's lips.

But this American was more interested in Germany's Renewable Energy Sources Act and other goings-on under the clear glass dome of the Reichstag building.

German Renewable Energy

The first thing to understand is that while all politics is local, energy affairs are the most pervasive global concern these days.

Energy prices and uncertainty are driving inflation in fuel prices, food, and "core" consumer price indexes that account for everything from tennis balls to ball bearings. The rise and fall of national and personal fortunes can be linked to power costs, and that's a trend that will only gain momentum with time.

In Germany, where there are still major imbalances from east to west (not far outside of Berlin, the unemployment rate reaches 15%—double that of places like Frankfurt and former West Germany).

So to create jobs in states like Sachsen-Anhalt, where I paid a visit to one of Germany and the world's most successful green energy companies on Wednesday, the government has introduced tax credits and feed-in tariffs, which guarantee a fixed above-market price for people and companies that install renewable energy generators like solar panels.

If you're German, putting a solar array on your roof means you stimulate production in factories down the road where old Soviet-backed industries collapsed in the early 90s and left tens of thousands of skilled workers without jobs.

It also means you get guaranteed income from national utilities for a predetermined amount of time, and for a fixed price of 8.49 eurocents per kilowatt-hour.

I've seen first-hand how that commitment has turned the factory floors of the old East into hotbeds of renewable energy development. In 1989, right as the two parts of Cold War Germany were about to become one again, the German government passed its "100 MW of wind" support program, which later turned into a 250 MW target.

Germany now produces about half of all the wind turbines in the world, and a third of all solar PV cells. The government says that since 2000 solar technology has gone from a 450 million euro-per-year business to a 4.9 billion euro money machine in Germany.

Re-investment levels are high, and more than 50,000 Germans have jobs from the highest research levels down to factory support staff.

But even given the obvious benefits of renewable energy in Germany, my contacts in government and industry point out that there's still plenty of playing politics in Berlin's decision-making bodies.

Renewable Energy Politics in Germany

The automotive industry (DaimlerBenz and BMW) in Germany is very strong in its lobbying efforts, as is the energy-intensive coal sector. Both were vocal in their opposition to this month's fresh renewable energy and carbon limit legislation.

The law passed in the Bundesrat (Germany's upper house of parliament) on July 4^th puts the renewable energy target for total generation up to 30% by 2020.

That's up from 14% today, and far beyond the "20% by 2020" plans passed in even the most progressive green energy hotbeds.

Germany's carbon cuts are also ahead of the pack, with a 40% reduction from 1990 levels targeted by 2020. The broader European Union target is 20% reduction.

When the parliament comes back from summer recess, another major package is expected to pass that focuses on consumption reduction in private homes.

As we've always said at Green Chip Stocks, consumption reduction should be first in the order of operations for bringing us into a new energy reality, since renewable advances will be for naught if we don't bring down our appetite.

Germany's parliamentary factions have some disagreement on how rapidly feed-in tariffs should come down, to take the training wheels off the renewable energy industry. This because of the rapidly declining costs of renewable energy, making them even more competitive with traditional sources—a phenomenon known as grid parity.

As it stands, between 7% and 10% cuts are set for each of the next few years, so residential and corporate clients are locking in their fixed rates now if they can.

On the corporate end, the reduction means we're about to see a shakeout of companies that can really make it without a government crutch. At Green Chip International, we think we've found just that kind of company in Germany.

Speaking frankly, this company is the largest manufacturer of solar panels in the world, will be one of the first to reach grid parity, and will be one of the first solar companies to join the gigawatt club, when output climbs to over 1,000 MW next year.

Of course, its revenues are slated to grow just as quickly.

Regards,

Sam Hopkins

In fact, the landscape is about to change across Europe, revealing the technologies and business plans that have real staying power.

Subscribers now have access to a full range of reports on firms we've carefully selected from face-to-face meetings and intimate knowledge of these renewable energy sectors.

Take a look at GCI and find out more today.

Renewable Energy in Germany

BERLIN, GERMANY: West Berlin wasn't just the free half of this city during the Cold War; it was an island. All around the reunified capital today, there are reminders of East Germany's economic past, and signs that Europe's largest economy can do more to bring the East into the future.

The Bauhaus school of design made the eastern city of Dessau its home in the 1920s and early 30s. Then the Nazi regime and the Iron Curtain shut Dessau and its environs behind an industrial and political airlock.

What you see in the picture below is actually an old coal mine just outside of Dessau. Following reunification, the pit that had been dug there to extract low-grade lignite (also known as brown coal) was flooded to create a small lake. Now the gigantic machines get most use as lit-up backdrops for the Melt! music festival each summer, and the site is called Ferropolis, or, "city of steel."

It would be short sighted to only shut down industrial facilities like the brown coal mine above and turn them into museums or fairgrounds, without creating an alternative for employment.

But, bringing the East back to capitalism and into the European Union hasn't been as smooth as many would have liked. And as a matter of fact, anti-Nazi movements are very vocal in Berlin as a counterbalance to right-wing nationalism that preys on unemployed eastern youth (the jobless rate here is twice that of western states).

In 1961 West Germany invited thousands of guest workers from Turkey to help rebuild the economy after the country lost its young, male workforce in the war.

And it's that population of guest workers and their descendants whom many extremists blame for their own unemployment and continuing East-West imbalances.

But in Ferropolis and Dessau, there is hope on the horizon in the form of renewable energy...

Renewable Energy in Germany

Just across the manmade lake from Ferropolis you can see an array of wind turbines, churning to give government-subsidized electricity to hundreds of local homes.

Germany produces nearly half of all the wind turbines in the world, and a third of all solar (photovoltaic) cells. The government sees renewable energy as an inevitable trend and wants to put Germany at the top of the international market.

This Wednesday, I'll meet with representatives of one of Germany's top solar energy companies. Based smack-dab in the middle of the former German Democratic Republic (GDR, as East Germany was officially known), this firm is one of many that is making the old eastern industrial heartland its home.

In fact, Germany has become a global role model for how renewable energy industries can be encouraged on a national level.

The United States, Japan, and Germany are the top economies in the world—an amazing fact considering the horrible war all three fought just two generations ago—but Germany is lightyears ahead of Japan in its clean energy development.

In Ernst & Young's latest Renewable Energy Attractiveness Index, Germany is second only to the United States, and Japan is #20 on the list of overall renewable progress and future profit potential.

That includes solar power, offshore and onshore wind projects, biomass, and the infrastructure to tie it all to homes and companies to create a new energy reality.

And in today's market, energy is the main driver...

Investing in German Solar Energy

You may feel poorer when you fill up the gas tank, but the countries and companies that have solutions at hand will benefit greatly. Public listings are abundant, but what my colleagues and I have found is that the hottest opportunities are trading overseas.

That's why we launched Green Chip International, where this week I'll be giving subscribers the first on-location look at our top German solar power holding from its production line all the way to marketing and revenue.

It's a company that's trading down these days, like so many, but where optimism is hard to come by in the broader market filled with doubts on value and consumer sentiment, Germany's solar power players are set to pop hard to the upside once the storm clears.

And when the sun shines, this solar power winner will shine even brighter.

Don't miss out, subscribe to Green Chip International today and get the latest on-location report.

Auf wiedersehen,

Sam Hopkins

Global Green Energy

BERLIN, GERMANY: The number crunchers have it wrong. Energy isn't a chart; it's a culture.

Sure, Amsterdam is flat as a pancake. Still, yesterday I couldn't believe I saw more bicyclists in the Dutch capital than I ever had in my time in China, where filmstrips we all saw for years portrayed throngs of Beijing denizens pedaling the streets full.

Nary a car to be found in Amsterdam in 2008, and the Chinese capital is clogged with Buicks and SUVs.

It's taken me two weeks from Portugal to Germany, watching wind turbines blink and spin slowly as I sit aboard trains that have entire wagons devoted to bikes.

You see a lot of guys in suits on CNBC and such talking about their usually incorrect predictions for oil supply and demand: how much is speculation and how much is pure market movement...

But what I'll tell you, and what you can put your money on, is that the world's elite investors are going green.

The Global Greening of Energy and Investments

Investment powerhouse Merrill Lynch and leading consulting firm Capgemini released their World Wealth Report in June, which showed among other things that the world's most successful people are going green in ever greater numbers.

Among the high net-worth individuals—people with more than $1 million in value where their homes are not included—half say they're putting money into clean and renewable energy business opportunities.

What's interesting, though, is that the world's wealthy didn't cite the melting of the icecaps or food price concerns as their reasons for betting on sectors from tidal energy to biodegradable plastics...

They want the filthy lucre. Euros, pounds, dollars...

And like bicyclists in Europe are much more common than in the States, American investors in the World Wealth Report are a long way off pace.

Only 5% of HNWIs in the U.S. said they invest in green initiatives of any kind—a meager 10% of the worldwide average.

Of the Yankees who did say they're going green, profit potential wasn't even at the top of the list. Instead, it was for social concerns, which of course are valid.

After all, aside from taking investors' pulse, I've spoken to working people on the street in Lisbon, Madrid, Marseille, and of course here in Berlin about what renewable energy means to them... Trabalho, trabajo, les boulots...

Green Energy: Creating Jobs and Profits

Jobs.

They answer me the same way, in whatever language we're speaking. It's another major point for clean energy as part of a new global reality. That's why governments are helping to cultivate home-grown industries where they have comparative advantage. In Spain it's the sun, Portugal's got wind and waves, and here in Germany it's a blend of scientific expertise and an old industrial base that is turning former Communist East Germany into a hotbed of solar energy activity.

The stock market can only yield feel-good dividends after earnings and share prices actually rise. Plenty of ethanol investors who banked on either the inevitability or responsibility of biofuels have gotten singed in the past year of oil turmoil, which is why we've steered you away from those stocks with very few exceptions.

Indeed, the international investors who are going green are making more educated decisions. That's what we've found with our new Green Chip International service, where we invest in foreign-listed new energy stocks.

The fact is that Wall Street is no longer the only field for the best international equities players. London, Hong Kong, and even Madrid are attracting more listings because of less burdensome accounting and because as I say, the business culture outside of New York is more receptive to hearing real strategies for long-term energy options.

These days the NYSE and Nasdaq are more known around the world as the place where 20th century fortunes were made and bubbles burst.

Indian, German, Israeli and African investors I talk to all the time have their money spread around the globe, and with lightning-quick internet trading and a world's worth of information in your computer, the only risk is keeping your money in one place.

It's a new culture free of boundaries...

Green Chip International: A Global Look at Green Stocks

And as I sit here looking out the window just blocks from where the Berlin Wall stood until 19 years ago, I'm reminded of how freely innovation and investment flow in 2008.

This past weekend, French President Nicolas Sarkozy convened an impressive array of 42 European, North African, and Middle Eastern countries in an effort to establish a new Mediterranean Union.

Rumblings are widespread that this new network around the Middle Sea will be heavy on renewable energy cooperation, sharing technology and economic growth.

With Green Chip International, we're already delivering returns in markets around the world where few Americans have even thought to venture. But the intrepid ones are smiling and riding the wave of wealth that's pouring into international clean energy.

And they're happy to count themselves in the head of the pack while those stuck to Wall Street are biting their nails to the quick.

Take a look at Green Chip International. It's a stone's throw away from our tremendously successful Green Chip Stocks service, but with a decidedly more global focus.

And we know we're not alone in thinking that such a focus translates to a real advantage in today's market.

Bis spaeter,

Sam Hopkins

Renewable Energy in Europe

MARSEILLE, FRANCE: As beautiful as the South of France is, landscapes alone don't make the future look promising. The economies of Portugal, Spain, and southern France are feeling the pinch of the global recession more than many developed countries.

Yet all across southern Europe, from the westernmost spot in Portugal at Sintra (which is also the farthest-flung spot on the Continent) to the remarkable blue French Mediterranean coast, renewable energy is right on the horizon.

Below you see the Moorish fortress at Sintra, where the Atlantic seems to tell you there just has to be something beyond the sea. While I took in this view, it immediately made sense to me why the small Portuguese nation had such a great appetite for exploration in times past and in the present, too.

And, as reported in this article on Portuguese renewable energy, Energias de Portugal (LISBON: EDP) and Spain's Iberdrola (MCE: IBE) both launching new renewable energy divisions point towards a reinvigorated desire to move to new frontiers.

(If you look closely in the photo below, you can see wind energy turbines churning just before the continent's end at Roca...)

Renewable Energy in Europe

But the discussions I've had in Lisbon, Madrid, and Marseilles direct my attention to new local reasons for the rise of renewables.

It's got a lot to do with unemployment and the quality of life here in southern France... home to ports that date back to Roman times and more recent factory-based industries that leave kids asthmatic and groundwater poisoned.

Add to that the large numbers of immigrants from North Africa and former French colonies around the world who come to France (continuing a theme seen in Portugal and Spain), and there are major social challenges that locals have to confront.

Marseilles is a multi-ethnic, working-class city known as the "melting pot of France," where smells of couscous and kosher meats blend with baguettes and West African delicacies, and on a clear day some say you can see all the way across the Mediterranean.

But local flavors are one thing, and money is quite another.

Median income in Portugal dropped by 2.6% in the latest numbers released by the Organization of Economic Cooperation and Development, the last in the "rich countries' club." Spain's not much better off, with a drop of .7%, and though France logged a .9% rise, that barely treads water against price inflation and doesn't account for disparate regional economies like Marseille's.

There are also cuts in benefits coming under the center-right President Nicolas Sarkozy, which means getting back to work is a must, no matter what the pay...

And renewable energy installations that are subsidized by the government would be a shot in the arm to energy demands and employment shortfalls at the same time.

French Renewable Energy

So we're looking at Areva, a French nuclear energy provider that is now going in the same direction as our Spanish and Portuguese favorites EDP and Iberdrola. Areva's wind energy division taps the company's considerable coffers and grid connection capabilities to take French renewables to the next level.

There's also EDF/Gaz de France, the national utility which has been at the center of a years-long European controversy that asks the question: Just how free should cross-border energy cooperation be?

Some consider EDF, Italian energy companies like Enel, and even the Iberian powerhouses I've mentioned before, to be "national champions," and therefore companies that should stay in the hands of native executives and operate only at home.

But today's energy economy demands solutions, and so do the people. Workers are increasingly mobile, not just as migrants taking ferries back and forth from here to Algeria, but also people like me who can work from anywhere with the help of the internet.

Nicolas Sarkozy is promoting the idea of a Mediterranean Union that would include North African and Middle Eastern countries, and the Trans-Mediterranean Renewable Energy Cooperation coalition is already hard at work promoting knowledge-sharing and grid connections across the region.

International Millionaires Go Green

Power, ideas, and progress don't know any bounds these days.

Often, politicians take a while to catch up...

Actually we'd say that's almost always the case. Remember just a few months ago when corn ethanol was the hot topic on Capitol Hill? We steered you away from it, and now a justified backlash has Americans turning to better solutions.

And it looks like we're ahead of the curve in European renewable energy too, at least from the standpoint of most American investors.

The Economist magazine recently published the results of a study that found half of the world's high net-worth individuals invest in green investments for high return potential.

In the United States, only about 5% of those who have over a million in non-real estate assets are greening their portfolios, and among that number most said their motivation was environmental.

It's an astounding statistic but one that we think exemplifies why our Green Chip International service is extremely important to people who really want to make money in a burgeoning industry the rest of the world's wealthy have already woken up to.

I'll fill you in next week with more on Europe's renewable energy progress and the companies that are tapping surging worldwide investment in clean energy opportunities.

In the meantime, take a look at Green Chip International and see why it makes sense to go green globally.

Vive le Vert,

Sam Hopkins

Swiss Investments

LAUSANNE, SWITZERLAND: "The other European armies just tell us, keep our money safe and we'll leave you alone." That's Swiss history according to Luc, a young French-speaking banker I spoke to the other night in front of the city's 13th century cathedral.

While what's going on in the States with Freddie Mac and Fannie Mae looks even scarier from abroad, I'm getting a sense of just why Swiss investments are the strongest fortress of any portfolio.

Swiss Investments

Swiss bank accounts are the hallmark of financial safety, and companies like Swiss Reinsurance (OTC:SWCEY) are the final line of defense in the risk management world.

Swiss Re, as it is known, was founded in 1863 in Zurich, and since then it's become the world's largest reinsurer.

Just the other day the company announced a 1 trillion British pound venture into managing risk in pension funds, which as you know is a hot topic these days. Swiss Re's CEO Richard Farr says the pension buyout market is worth a solid 2 trillion pounds in the U.S., and another trillion or so in Holland and Germany.

From Norway to Detroit, retirement fund managers bought up mortgage-backed securities they thought were sliced up thinly enough to eliminate serious risk. That turned out to be a false assumption created by financial wizards who were too crafty for their own good.

So guess who's going to take the weight? The Swiss.

Swiss Re is trading at under 7 times earnings just below 3-year support at around $63 per ADR share, making it an attractive value buy in an uncertain financial landscape. The company has had to absorb some major writedowns as a result of the global credit market turmoil, and reinsurance rates have come down again after spiking in the wake of Hurricane Katrina.

But Swiss Re is still a gainer for the year, compared to an average drop of around 10% for Bloomberg's Insurance Index of 500 companies.

And it's not all about sitting at home and playing backstop to the global financial system in Zurich... There are plenty of Swiss companies that are exerting their influence around the world.

Swiss Companies That Will Stay Strong

ABB Ltd. (NYSE:ABB) is a Swiss and Swedish joint venture that Global Growth Stocks subscribers have ridden to triple-digit gains in the past couple years. Even with the down market, this infrastructure provider is cranking out products like power systems and grid connections while continuously adding to its order log.

Maybe Swiss companies just have a penchant for picking industries that won't wave in the wind as equity markets drop. It's not speculation to say that people and companies want a backup plan, and it's not conjecture to say developing countries want to make their cities and factories perform at a high level.

That's just what ABB accomplishes, and that's why it's been a mainstay of the GGS portfolio.

Silly as it may sound, chocolate is also about as bulletproof of a demand target as you'll find. That's why I like Nestle (OTCBB:NSRGY), which makes Crunch bars, bottled water, and even health and beauty products through its Galderma division.

With its diversification, Nestle has turned its headquarters down the road here in Vevey, Switzerland into a bunker against the damage that's been done to many consumer-oriented stocks anticipating a recession.

There are also big-time pharmaceutical companies like Ciba and Roche based in Switzerland, leading the way with life science advances that are known to deliver great long-term returns as R&D spending turns into successful trials and efficient time to market.

All in all, if you want to bunker down with diversified international blue chips, Switzerland may just be the investment destination you're looking for.

Regards,

Sam Hopkins

Investing in BBVA

Publisher's note:

"You're going where for July 4?!?"

That's the puzzled question I asked Sam Hopkins when he told me he was about to board a plane for Europe a day before America's Independence Day.

"Wealth doesn't wait for hot dogs... or fireworks," he replied.

He's right. Across the pond, an investment boom in renewable energy assets is occurring.

According to a recent Economist article...

"The number of high-net-worth individuals (people with net assets of at least $1m, excluding their homes) stood at 10.1m in 2007, with total assets of $40.7 trillion, according to an annual report. The study also found that investments in financial vehicles that back green initiatives were becoming more popular. Half of HNWIs worldwide said they put their money into such investments because of higher returns. Only 5% of HNWIs in North America allocated part of their portfolio to green investments, but the primary motivation there was a concern for the environment."

The world's wealthiest are taking the lead and making a mint in green investments, and as usual Americans are behind the curve.

But not for long. In his latest Wealth Daily dispatch below, and in coming issues from a multi-country research junket, Sam will reveal exactly what's happening in Europe.

Good investing,

Brian Hicks

MADRID, SPAIN: You can't blame Spaniards for playing to win. They're on a roll, with a European soccer championship and Wimbledon title in just the past few weeks. Now Spanish players are surging into games of chance, and their top opponent is the slowing economy.

The Bank of Spain says savings growth in Spanish families and businesses has ratcheted down to half the 2007 rate.

Yet spending on the National Lottery, the continental Euromillions pool and sports betting is up over 130 million euros through the first half of 2008, compared with last year.

In the recession years of 1991 and 1992 (which many observers think we are replicating now, or set to revisit in the near future), Spanish lottery inflows grew by 12% and 8.4% respectively.

That means that the corner lotto stands, and even informal betting on bullfights, may undergo a boom, as worried consumers try to multiply their incomes to combat inflation and bearish stocks.

But I'm not recommending that you lay your money down on any gambling stocks today.

Instead, I want you to take a look at those sluggish savings numbers... and one beaten-down Spanish bank that is a long-term investor's dream.

It's Banco Bilbao Vizcaya Argentaria S.A. or BBVA (NYSE:BBV), based in the northern Spanish city of Bilbao.

Investing in BBVA

This winner pays a 5.1% dividend, and it's trading at a ridiculously low 7 times 2009 forecast earnings.

Banks from Bilbao to Beijing have gone into a tail spin over the shady mortgage mess in the United States and a sort of perfect storm of overlapping boom-bust cycles elsewhere.

Here in Madrid, the Sunday edition of El Pais newspaper tracked Spain's real estate woes from brick manufacturers all the way to real estate agents. One survey of property managers said fully 57% are lowering sale and lease prices across the board, with one promoter coming down 17% in 5 minutes on a central apartment in the capital.

Throughout Spain, the rising euro currency has hurt some exports but helped national purchasing power for consumer goods. Of course, dollar-based businesses and consumers (including your correspondent) are experiencing the opposite phenomenon—big-ticket U.S. exports are cheaper globally but a plate of Paella can burn a hole in your wallet.

That's exactly why the time to buy foreign value stocks is now.

I've seen BBVA's branches all over the Spanish-speaking world, and even next door in Portugal.

In mid-June, the bank's top brass announced plans to establish itself not only in places like Colombia and Mexico, but also in places where conquistadores never set foot.

BBVA is talking about the world's most momentous emerging markets: Brazil, India, and especially China since the bank recently doubled its holding in the Middle Kingdom's #7 financial institution CITIC.

So even though it looks like the Spanish economy is down in the dumps, the longstanding Spanish tradition of foreign exploration will serve BBVA and its investors well.

The stock is down more than 21% over the past six months, even though Q1 profits were unchanged from a year before. BBVA treaded water and offset credit defaults with rising revenue, showing itself to be a robust force even when negativity rules Wall Street.

Folks, plenty of people are sitting on the sidelines these days and watching the market move without them, but to make money you have to play to win.

Saludos,

Sam Hopkins

P.S. - As Brian said, much of what's going on in Europe these days revolves around a new energy economy that will balance against the property downturn from which Spain and other countries are suffering. Spain, along with Portugal, is entering a new Age of Exploration and leading Europe into a future of energy options and prosperity. Green Chip International investors are already profiting from renewable energy companies based here, and there are more Spanish winners to come. Learn more in this new report: http://www.angelnexus.com/o/web/6591