Global Energy - Energy and Capital

Pipeline Straight Talk

Here's some rare straight talk about the Keystone XL pipeline, which would carry oil from Alberta's tar sands to refineries and distribution hubs in Illinois, Oklahoma, and the Gulf Coast.

There's been a ton of spin, so I'd like to give you the facts and the best investments for the eventual outcome.

Pipeline Nuts and Bolts

In 2011, after vicious opposition from environmental journalist Bill McKibben, the Natural Resources Defense Council, and the World Wildlife Fund, a decision on the pipeline was delayed until 2013.

At issue were the emissions associated with tar sands and the route of the pipeline, which crosses ecoregions and the all-important Ogallala Aquifer.

Forget Everything You Know About the Bakken

Most estimates for the sweet light crude reserves in North Dakota's Bakken Oil Pool are in the 4-6 billion barrel range.

But the CEO of the biggest Bakken oil company says there's as much as 24 billion barrels.

That means your Bakken oil stock profits are about to get a LOT bigger.

You can watch the incredible video footage HERE.

Waiting until 2013 was too long for pipeline proponents in Congress.

So when they passed the temporary tax cut bill in December, they added a provision giving Obama until February 21st to make a decision on the pipeline.

The president, siding with a State Department announcement made last month, said this week that:

The rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment.

And Obama made clear this wasn't a permanent killing of the project, adding: "This announcement is not a prejudgment of the merits of the pipeline," and further that this decision "does not change my Administration's commitment to American-made energy that creates jobs and reduces our dependence on oil."

What he's saying is that this is a temporary denial, pending submission of an alternate route by TransCanada (NYSE: TRP), which it says it will submit.

This man has an election to win over the next ten months. He can't kill a pipeline that would create thousands of jobs, break a supply logjam in Oklahoma, and carry between 500,000 and 1 million barrels of secure Canadian oil to the States every single day.

It will happen... eventually.

The $350 Billion Dollar Oil Secret

U.S. oil production will rise by 1.2 million barrels a day over the next few years.

At current prices, that's $350 billion in new oil revenue. But much of that revenue will go to small oil companies that currently trade between $3 and $8 a share.

Annual revenue for this top pick will grow 1,790% — this year!

You can get the full report here.

Global Market

Right now, 99% of Canada's crude exports come to the United States.

It has 90% of all proven reserves outside of OPEC.

And as Canada made clear this week, there are plenty of places to sell that oil.

In addition to the Keystone XL, Canada wants to build the Northern Gateway Pipeline, which would take Alberta oil to ports in British Columbia.

Canadian Natural Resource Minister Joe Oliver affirmed this fact when he said the “decision by the Obama administration underlines the importance of diversifying and expanding our markets, including the growing Asian market.”

Billions of barrels of shale oil are going to be sold to someone.

Whether on Main Street, America or the streets of Shanghai, the companies selling it will be equally profitable.

~~nicks_signoff~~

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Politics Killed the Pipeline, Not the Profits: When Elections Outweigh Energy Security
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Oil and Gas Service Stocks: A Different Way to Profit During this Shale Boom
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Gold Buffalo Tribute Proof is a SCAM: Beware of This Gold Coin Scam
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Obama's Hydraulic Fracturing Pledge: The Biggest Promise Obama Didn't Break
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Energy, Agriculture, Metals All Drifting Higher: The Commodity Supercycle
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Yap Has No Gold: Limestone Blocks, the Ultimate Storehouse of Wealth
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Natural Gas Export Stocks: Will This EIA Report Push Natural Gas Stocks Higher?
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The Shale Boom is Giving Birth to Other Bull Markets: Bigger than OPEC
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Gold Coins and Freedom: 32 Miles from Purgatory
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International Oil Investments

Over this New Year's weekend, I mused about India and China increasing their national petroleum reserves and about Israel, Iran, and $150 oil...

Here's a Reuters headline and first sentence from this morning:

Oil above $110 on Iran, China Data

Crude oil rose above $110 a barrel on Tuesday as tension between Iran and the United States stirred fear of a possible disruption to oil supplies from the Middle East and as Chinese data showed economic activity increasing.

That price was for Brent, U.S. crude was up over $102.

And the news is only getting more interesting, with the rhetoric — both governmental and media — only getting stronger.

We're starting to see phrases like “cut off oil exports from the region” and “shut the Strait.”

The Ayatollah's have warned they'll “take action” if U.S. aircraft carriers return to the Gulf.

Iranian Army Chief Maj. Gen. Ataollah Salehi told the world:

The Islamic Republic of Iran will not repeat its warning... the enemy's carrier has been moved to the Sea of Oman because of our drill. I recommend and emphasize to the American carrier not to return to the Persian Gulf. I advise, recommend and warn them over the return of this carrier to the Persian Gulf because we are not in the habit of warning more than once.

In the past week, Iran has produced its first nuclear fuel rod and test-fired two long-range missiles.

France is urging the rest of Europe to join the United States in imposing sanctions such as an embargo on Iranian oil exports and a freeze on its central bank assets.

Dog and Pony

On the financial side, at least, no one's buying it.

I saw a representative from an international Swiss consultancy call it “a public relations show.” The term “saber-rattling” has become hackneyed in three days' time.

But Strait blockage or not... Nuclear tit-for-tat with Israel or not... Embargo or not..

Only one thing is certain and real:

As the same Swiss consultant said, whether they have teeth or not: “In this environment of increasing tensions and rhetoric, global asset managers are unlikely to give up their long exposure to oil.”

~~oil-sign-up~~

Easy Money

It isn't like we haven't seen this show over and over for the past three decades.

The first thing I did this morning after seeing the Iran news was click over to my brokerage account. My investment in Transocean (NYSE: RIG) was up nearly 4% in premarket — almost as high as the Dow went up all of last year.

And Transcocean wasn't alone...

Major oil companies with market caps half a billion or higher were making similar or bigger moves.

By lunchtime, TransAtlantic (AMEX: TAT), Tesco (NASDAQ: TESO), Suncor (NYSE: SU), and plenty of others were marching even higher.

Owning a simple oil ETF like the ProShares Ultra DJ-AIG (NYSE: UCO) would've made you more than 7% richer already this year.

This isn't brain-racking, intensely-researched, needle-in-a-haystack stuff; this is political unrest in oil's most fertile region driving up the commodity's price — and therefore, the value of companies that operate in that sector.

And you should be putting it to use for your bottom line.

Think about your goals...

Are you running for office? Are you the head of an NGO? Are you the chairman of an international non-profit with billion-dollar resources?

If you responded "no" to all those questions (I certainly did), then you needn't take an ideological stand on the issue.

Forget the water cooler chat about how crazy Ahmadinejad is.

Quell that inner monologue debating U.S. policy on Israel.

Unless that stuff has a direct bearing on your day-to-day life and finances, it's a mere distraction.

Always wear your investor's hat.

And always be thinking not of the outcomes and intricacies of international and domestic events, but of how you can put them to financial use for you. And then act on them.

Spending a few minutes buying Exxon (NYSE: XOM), Chevron (NYSE: CVX), or any of the other big names in your IRA this morning would've already been worth the effort.

You would've enrolled in a 2%-3% dividend program that far beats the return on many other “safe” investments out there.

No one is going to capitalize on the opportunities for you...

You have to do it yourself.

~~nicks_signoff~~

Of Israel, Iran, and $150 Oil

Next year is going to be very interesting.

The presidential primaries and general election will be more melodramatic than an episode of Jersey Shore.

MTV producers in their wildest dreams couldn't come up with some of the stuff we've seen already: Ni*gerhead, vaccine-induced retardation, Herman Cain.

Wait 'til it's down to just two.

But 2012 will be interesting for more than the free entertainment of the election...

After all, either winner will be controlled by special interests, as has been the tradition for decades.

It'll be fascinating because oil's already at $100. Brent is at $108.

Better Than Oil? New Energy Technology Could Make Fossil Fuels Obsolete

You knew it would happen, one day. A small tech firm outside D.C. just did the impossible. Not only did they harness the most powerful energy source on earth... they're only days from bringing it to the market.

Don't take my word for it. See it for yourself, right here.

The Wall Street Journal reported last week that both India and China are increasing their reserves, and that will put upward pressure on prices.

India said it's more than tripling the size of its reserve from 39 million to 132 million barrels.

China's going to 500 million barrels from 103 million.

That'll add a nice 490 million barrels of global demand over the next few years...

Oh, and Iran's threatening to block the daily flow of 15 million barrels through the Strait of Hormuz. The Telegraph notes the implications:

If the ayatollahs' carried out their threat, Iran could, at a stroke, choke the main artery for the West's energy supplies.

The Iranians have been planning for such an eventuality for the past twenty years. Unlike the late 1980s, the last time Iran seriously disrupted shipping passing through the Gulf, Iran now has the equipment, in terms of anti-ship missiles, to enforce the threat.

The U.S. Navy, which has two aircraft carrier groups permanently stationed in the area, would, of course, be forced to intervene, thereby leading to open hostilities between Washington and Tehran.

But if you think that is an alarming prospect, just imagine the mayhem that would erupt if Israel decided that it had had enough of Iran's prevarication over its nuclear program and decided to launch unilateral air strikes to knock out Iran's nuclear facilities.

Happy New Year!

Hello $150

High oil isn't the enemy. It's a profit catalyst.

When geopolitics send the price soaring, production costs stay the same for those with access to oil.

And of course, the Bakken comes to mind...

It's awash in oil at a time when global supplies are in question.

It won't be a global panacea, but it will be a hell of an investment as oil ticks higher.

~~nicks_signoff~~

Recession-Proof Secret: Why There'll Be No Unemployment in the New Year in North Dakota
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2012 Energy Stock Predictions: Domestic Oil to Reign in 2012
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Another Date Which Will Live in Infamy?: This Could Be The Big One for the Middle East
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Tesla Electric Car Investing: Is It Time to Buy an Electric Car?
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Taken for a Ride: Year-end Recap and 2012 Anticipation
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Bullish on America in 2012: Don't Worry, Be Happy
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Personal Responsibility: Taking Control and Moving Ahead
Instead of remaining oblivious to global markets and continuing to wallow in a sea of self-loathing while continuing to blame everyone and everything but yourself... Why don't you read up, get invested, exploit tax loopholes, pay down debt, save, and take control of your financial destiny?

Personal Responsibility

I get 12.8 miles per gallon and I love it.

There, I said it.

Why don't I care?

Because I drove all year for just over $3,000. I four-wheeled through snow and mud and corn and soy and wheat fields.

I towed my girlfriend's car. I hauled loads of stone and dirt and mulch.

I helped friends move. I avoided the delivery fee for new appliances.

I took deer to the butcher. I took bulk trash to the dump for free. I took coolers and rods to the beach and the lake and the river, sometimes with a boat in-tow.

Even though it's cost me more than it ever has — $3,087.26 for 886.1 gallons at an average price of $3.47 to drive 11,346 miles — I'd do it all over again...

And I will next year.

Is This the World's Only Predictable Gold Cycle?

Like clockwork, these stocks rise and fall:

Buy and sell at the right times, and you could see yourself making
easy double- and triple-digit gains, year after year...

To learn more about this little-known gold cycle, simply click here.

Hoggin' and Loving It

Yep, I'm still a data hog, tracking every gallon, mile, kilowatt-hour and therm.

You can find my 2009 and 2010 gas use here and here, and the past four years' gas use below:

Year	Total Spent	Average Price per Gallon	Total Gallons Used	Total Miles Driven	MPG
2008	$2,185.47	$3.09	715.71	10,611.3	14.83
2009	$1,947.18	$2.23	871.69	12,707.5	14.58
2010*	$2,364.52	$2.76	856.65	12,305	14.36
2011	$3,087.26	$3.47	886.1	11,346.1	12.8

*Switched from Chevy Silverado 2WD to Ford F-150 4WD in October.

I'm in touch with my energy use, and I know that even if I had a 51 MPG Prius, my annual gas use would cost me $772. ((11,346 miles / 51) x $3.47).

I'd save $2,315.26.

But I couldn't go four-wheeling. And I couldn't tow cars or haul dirt and mulch. I couldn't tow a boat. And, perhaps most important of all, I couldn't help friends move.

All that stuff has a price, whether tangible or not. Towing cars costs money. So does having landscape products and appliances delivered to your house.

For me, it's worth more than $2,315.26 a year. For others, it's not.

I get it.

What I don't get are the stupid articles that try to hammer home pedantic points, like one I came across from MSNBC that described consumer reaction to this year's high gas prices thusly:

When the gifts from Grandma are unloaded and holiday travel is over, the typical American household will have spent $4,155 filling up this year, a record. That is 8.4 percent of what the median family takes in, the highest share since 1981.

The trap has caught Michael Reed of Charlotte, N.C. He hasn't been able to find work since he lost his computer-support job in 2009. Now high gas prices are claiming more of what he has left. He and his wife won't exchange gifts this Christmas.

"I try to drive as little as possible so it doesn't take such a chunk out of my wallet," he says.

In 1981, when the economy was sliding into recession and oil prices were high because of Middle East turmoil, gas ate up 8.8 percent of the typical family budget, says Fred Rozell of the Oil Price Information Service.

Over the past decade, gas has taken up 5.7 percent of the family budget. If families had spent only 5.7 percent this year, they would have saved $1,300.

Excuse me while I get out my violin...

Wrong Focus

You know, I was just telling a colleague the other day about the first week I started as an associate editor here at Angel for a whopping $27,000 a year.

Something happened with my first paycheck, and it didn't arrive as expected. I literally had to call my parents for cash to get me through until it came. I was 23 years old.

A $3,087 gas bill that year would've been 11% of my salary.

The point MSNBC makes — and it's one I hear echoed by Americans across the country — is that high gas prices mean you have to skimp on Christmas or drive less. That high gas prices are the enemy.

This is sophomoric.

The idea that high gas prices are to blame is partly what's wrong with this country.

Those prices are only an honest reflection of commodity supply and demand in the market-based system we all live in. It's an external, individually uncontrollable factor.

If those prices are eating too much of your budget, change the thing you have control over...

Increase your budget.

The Most Disruptive Energy Technology Ever Invented Is

Being developed at this remote location just minutes from Washington D.C.

The mainstream media doesn't have a clue!

But this company is perfecting a new energy technology that could soon put every

electric utility company out of business for good!

Click here to see this ground-breaking technology for yourself...

Today, that $3,087 gas bill is about 2% of my budget.

I've put myself in a position not to complain, but to choose.

I can choose to continue driving my truck or I can choose to pay a premium for a hybrid or electric and reduce my gas bill. But the choice is mine.

You think Michael Reed of Charlotte, N.C., can choose?

He's not even buying Christmas gifts, let alone a new hybrid vehicle.

He needs to fix himself first. All the human interest editorial condemning high gas prices in the world can't do that for him, or for anyone else.

Here's an Idea

Instead of remaining oblivious to global markets and continuing to wallow in a sea of self-loathing while continuing to blame everyone and everything but yourself...

Why don't you read up, get invested, exploit tax loopholes, pay down debt, save, and take control of your financial destiny?

That's what I did. And it's now what thousands of people pay me to tell them how to do.

So oil prices are back near $100 per barrel.

Why didn't you buy an oil ETF and turn the high prices into personal profits? You can do it. You may just need someone to show you how.

That's what I and my fellow editors are here for — not to tell you what to choose, but to put you in a position to be able to.

Expect more broad-themed and hard-hitting editorial to that end in the New Year.

~~nicks_signoff~~

Bullets for Christmas

Not those kind of bullets... bits of information.

To keep it light for the holiday, I'm going to give you three news headlines from the past three days with bullets from each.

If you're not convinced of the Bakken's success and potential by the end, you never will be...

1. The Vancouver Sun: Enbridge's Bakken pipeline approved

The $180-million pipeline will move crude from the Bakken and Three Forks formations in Montana and North Dakota to Cromer, Man., via a new pump station at Steelman, Sask.
Pipeline companies have not been able to keep up with the flood of production, which averaged approximately 400,000 barrels per day on the U.S. side from 2,000 bpd a decade ago.
Enbridge VP: “The growth potential in the region is tremendous — with our existing infrastructure, and the proximity of our main line system, Enbridge is well positioned to capture opportunities created by increasing production.”
Earlier this month Enbridge said it would be investing $145 million to ship up to 70,000 bpd Bakken crude by rail between 2012 and 2013 to U.S. Midwest markets as an interim measure while it completes its Bakken expansion.

2. CBS News: N. Dakota leads 3-state region in oil, gas leases

Federal oil and gas lease sales in the Dakotas and Montana set a record in fiscal 2011, with parcels in Western North Dakota's booming oil patch fetching the most revenue.
Oil and gas lease sales in the three states during fiscal 2011, which ended in September, totaled $109.9 million, with North Dakota accounting for $104.2 million. Montana tallied $5.2 million in lease sales, followed by South Dakota with $364,146.
Leasing revenue in the three-state region shows no sign of letting up.
In North Dakota, "every little nook and cranny" of available federal land is being leased.

3. Reuters: Bakken by the numbers

The magnitude of North Dakota's oil revolution is hard for outsiders to grasp. Superlatives fail to convey the speed and scale of the transformation and its impact on the economy of the state.
On current trends, North Dakota will overtake California as the third-largest oil producer in the United States by the end of Q1 2012. Output is likely to exceed production from Alaska by the end of 2012 or early 2013.
In October, the state's oil output rose to 488,000 barrels per day, up by a stunning 9 percent compared with the previous month (464,000 b/d) and an extraordinary 42 percent compared with October 2010 (344,000 b/d).
The state unemployment rate is just 2.9 percent, compared with 8.6 percent nationwide, which effectively means that there is more than full employment (assuming some level of frictional unemployment due to turnover). In the counties on the western side of the state overlying the Bakken formation, unemployment rates are less than 2 percent and labor shortages are acute.

By 2015 there will be more than 1.3 million electric cars on the road...

And nearly every one of them will require lithium.

Most of it is expected to come from here:

And there's enough at this one spot to boost the value of this company's stock by 3,000%.

But don't take my word for it...

Click here and see the numbers for yourself!

Merry Christmas!

This year, the Bakken is certainly spreading more cheer than Santa...

The North Dakota state employment service reports there were 18,500 job vacancies open in October — and only half that many people looking for work.

The number of new housing permits in the United States has been cut in half since 2007. Permits in North Dakota are up 50%.

The U.S. national debt is over $15 trillion. The North Dakota state budget is expected to have a $300 million surplus at the end of its two-year cycle in June 2013.

North Dakota is now the fastest-growing state in the Union. Its median income is above the national average for the first time in decades. Its GDP is growing three times faster than the rest of the country.

You know any other place enjoying this kind of economic prosperity right now?

It's clearly translating to stocks as well...

Here's Enbridge (NYSE: ENB) — the company that just got Bakken pipeline approval — compared to the Dow Jones for the entire year:

This is going to continue for years. Revenues are exploding.

And there are three drillers in particular you should be aware of as this happens. They'll be the gift that keeps on giving.

~~nicks_signoff~~

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I like the odds and the potential payoff. And I'd be buying shares of Canadian Zinc (TSX: CZN)(OTC: CZICF) ahead of that looming permit decision.

The Shale Gas "Echo Boom" Gains Momentum: More Gains Ahead from Surging Follow-On Growth
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Q1 2012: The Safest Places to Invest: 2012 Stock Market Outlook
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India Energy Investing: The Next Energy Bull Market
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Yes, American Oil Is Coming Back: But Canada is Still America's Largest Supplier
With all the recent brouhaha about America's oil and gas resurgence, I want to remind you that Canada is still the largest foreign supplier of energy to the United States... and that trend will continue as part of the prolific Bakken formation resides in Canada.

Will Euro Slosh Drown Gold?: Nailing the Lid on the Coffin
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Housing Bust in China: Stick a Fork in Her, China's Done
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2012 Economic Forecast: 5 Charts Reveal the REAL State of the U.S. Economy
2012 is shaping up to be a year with many more economic surprises. Be prepared: They may be better than most expect...

Canadian Zinc Permit Looming

On October 21st, I told readers of my Alternative Energy Speculator to buy shares of a company called Canadian Zinc (TSX: CZN)(OTC: CZICF).

On December 9th, we sold it for a 31% gain.

Zinc is a critical metal used for galvanizing iron and steel.

It's used as an anode material for batteries. It's used in alloys to make bronze, machine bearings, and nearly 14 billion pennies to date.

It's part of photocopying products, fire retardants, luminescent pigments, and dietary supplements.

But none of that is why we so easily profited...

And as I'm about to show, you have the chance to make that same kind of gain in the next few days.

Timing

I have an advantage.

I sit in front of two computer screens and read all day. I get to follow multiple markets, stocks, trends, and patterns very closely. And because I'm tuned in, I pick up on a lot of things earlier than most.

A couple months ago, I came across some articles on Canadian Zinc. The story was interesting and promising, so I dug a little deeper...

It didn't take long to learn the company had been pursuing permitting for its Prairie Creek mine since 2009. Delays and bureaucracy ensued, and by August 2010 the latest news was that an environmental permit decision would be issued by March 2011.

I came across the story in October, and still no decision had been issued.

So I dug deeper still.

The First Nations seemed to support the project, which is critical in Canada. The company had done community outreach, and had been developing the project for years. A working mine had existed on the site before.

In other words, I deduced there was no way a negative decision would be issued. Canadian Zinc was going to get that permit.

Since a decision was supposed to be issued in March, I figured it had to be fairly soon. So I alerted my readers:

We've also been talking more about zinc. Specifically, the qualities that make it a good option for grid and electric vehicle batteries and some of the other metals that can be produced alongside it.

As promised, I have a zinc play to release to you today.

The company is Canadian Zinc (TSX: CZN)(OTCBB: CZICF). It has a large zinc mine ready to go in the Northwest Territories.

The final permitting process has been ongoing for years. A decision was supposed to be issued in March of this year. It hasn't happened yet, but it's getting closer. And all signs point to a positive outcome, including starting to incorporate First Nations into the plan.

We're buying Canadian Zinc (TSX: CZN) (OTCBB: CZICF).

We bought in at $0.61.

What happened?

From Reuters on December 9th:

Up to $0.83 from $0.61!

We took the money and ran.

~~eac_rare_earth2~~

It Ain't Luck

You see what happened there?

No mention of Europe, the stalling economy, unemployment, or housing woes. None of that stuff mattered in this case. The bullish scenario was irrefutable.

I have a habit of finding situations like that — and it goes back to when I first got started nearly five years ago.

My readers were in Xantrex (a electric inverter company you've never heard of) before it was bought by Schneider Electric in 2007; Solarfun as it ran from $9 to $19 in five months of that same year (it's not even called that anymore and it trades for $1.00 — but that doesn't take our double away!); BYD Company (PK: BYDDF) as it went from $11 to $55, thanks to Warren Buffett's buying 10% of the company for $230 million...

And on and on.

I clocked 16.4% in 2007 as the Dow only rose 5%.

I reported 46.01% in 2008 — not closing a single loser — as the entire market tanked 31%.

I put up 15.87% in 2009 by closing over 80 winning positions.

My total 2010 portfolio was up 19.01% while the Dow only went from 10,000 to 11,500.

And I've done it by spending eight hours a day in front of two screens — as well as countless trips abroad for further investigation — finding gems like Canadian Zinc.

Your Turn

I know something else about Canadian Zinc...

Environmental approval wasn't the only permit needed, though it was enough to send the stock higher.

Next, the decision goes to the Federal Minister of Aboriginal Affairs and Northern Development, who either accepts or rejects the environmental approval. He has ten business days to do so.

Today is day nine.

If approved (and I think it will be), the project then moves to the regulatory phase managed by the Mackenzie Valley Land and Water Board, with input from territorial and federal agencies for final permitting and licensing (I mentioned the bureaucracy.)

Because this was already an existing mine, the company could be a major producer of silver and zinc very quickly.

Internationally recognized metal analyst Greg McCoach has written that once the permit is received:

[...] this stock could be $10 to $20 very quickly. Remember, this is not an exploration play; this is a story that could be a major producer of silver and zinc within six months of receiving the final permitting.

You don't see too many situations like this; it is very unique.

The measured and indicated resource is capable of supporting a mine life in excess of 10 years at the planned 1,000-tonne-per-day mining rate. With the inferred numbers, you easily have a mine life of over 20 years and still have plenty of extra exploration upside potential.

I like the odds and the potential payoff.

And I'd be buying shares of Canadian Zinc (TSX: CZN)(OTC: CZICF) ahead of that looming decision — just like I did back in October.

~~nicks_signoff~~

North Korea Profit Opportunities

By now, you've probably seen the staged cry-ins in Pyongang.

Dear Leader, Kim Jong-il, went gently into that good night...

And someone decided to pony up a few won to put to put together the North Korean version of a flash mob.

Depressing? Yes.

But mostly because these folks — who would probably do just about anything at this point to put a little extra kimchi on the table — have no idea that below their feet sits a wealth of mineral resources.

And let's face it, mining jobs are much more lucrative than acting jobs.

Of course, my sarcasm doesn't change the fact that a child is now running a country that likes to shoot off missiles like a drunken 15-year-old boy with a case of bottle rockets and M-80s.

Yes, this is an uncomfortable reality that I choose to smother with jokes and dark humor. It helps me get through the day.

But there are some folks who have shrugged this stuff off.

Those are the wildly aggressive profit-seekers that have long been sniffing around North Korea's massive mineral resources — a true treasure worth more than $52 billion.

A Starbucks in Pyongang

No one can say with absolute certainty how the transition of power in North Korea is going to play out.

No one really knows if this 26-year-old kid will be able to hold on to power. And if he can, no one knows if he'll employ the same brutal dictatorial tactics as his father, or if he'll lighten up... maybe open up a little Starbucks at Kim il-sung Stadium or a Whole Foods near the University in Sariwon.

But one thing is certain: If there is an opportunity to get at North Korea's bounty of mineral resources, it will be fully exploited in no time.

As a 2009 report issued by The Chosun Fund notes, North Korea has substantial natural resources and is starved for foreign capital.

Sounds like a pretty enticing combination, if you ask me.

Goldman has also been sniffing around North Korea, noting in a global economics report that the GDP projections of a united Korea could exceed that of France, Germany, and possibly Japan in as little as 30 years, assuming North Korea exploits its rich mineral wealth.

Of course, 30 years is pretty far off.

And the question is, even if foreign investment moved in tomorrow (aside from China and Russia, who have already exploited a small amount of North Korea's mineral wealth), as an individual investor, can you even get a piece of this action?

And if so, would it even be worth the risk?

~~eac_rare_earth2~~

$5.3 Billion Up for Grabs

Look, I'm all for taking a little risk now and again. You know what they say: "Fortune favors the daring."

But North Korea is a place I'll allow the true adventure-seekers to chase. I just don't have the stones for that kind of action — especially since North Korea probably offers one of the least attractive ways to profit from rare earths and precious metals.

And why the hell would I even consider the risk anyway, when just 2,500 miles away sits enough of this stuff to supply the entire world for 100 years?!

I'm serious.

Over the next few weeks, there will be plenty of coverage on North Korea's mineral wealth. And it'll certainly be interesting. We'll hear all about the enormous undeveloped potential of North Korea... and all the opportunities to exploit it.

But meanwhile, right now in Alberta, there's a single company that boasts $5.3 billion worth of rare earths and precious metals.

We're talking more than 612 million pounds of metal wealth spread over 700,000 acres.

At this very moment, the total value of all of this operation's metals exceeds the company's market cap by more than 74,000 percent.

And I could hop on a plane tomorrow and walk the property if I wanted to.

So why would I even consider the “potential” of North Korean mineral wealth (something that China will end up controlling anyway), when with the click of a mouse, I can buy shares of one of the largest rare earth and precious metals operations in the world?

~~eac_rare_earth~~

~~jeffs_signoff~~

Generational Investment Opportunity

Here's the problem with America as I see it: We try to project ourselves as one thing, while internally we're something completely different.

I caught a glimpse of a comedy special this past weekend where the comedian said:

"We all feel divided — conservative or liberal. I want everyone to know I’m both, conservative and liberal. When it comes to my daughter I am a staunch conservative who believes in hard-core conservative values. When it comes to your daughter, I’m liberal. She can be as promiscuous as she wants to be."

Or how about Bill Johnson, the Alabama conservative who ran on a platform against gay marriage only to be found donating sperm to lesbian couples.

Or Nancy Pelosi saying we need to reign in the banks and Wall Street while continually profiting from information only privy to Congress.

And on a more personal level, the friends on Facebook who portray themselves as happy and financially secure when you know they're anything but.

Or the money manager who recommends you buy certain funds because he's incentivized, but wouldn't buy them for himself or family.

Whether for political, financial, or Machiavellian reasons, many of us pretend to be something we're not.

Instead of doing things because we think it will get us ahead or impress our peers or get people to vote for us, I think the world would be much better off if we didn't factor others' perceptions of us into our decision-making process.

Walk Small

Growing up, my grandfather (the American, not the Italian immigrant) always told me to walk small and carry a big stick.

But he wasn't referring to Roosevelt's riff on international diplomacy (I know the original says "speak softly")...

As he taught me to drive a manual-shift 1940s Ford tractor, erect livestock and poultry fences, cut banks with a sickle bar, till land, cut trees, split wood and more, he was trying to teach me how to be the strong, silent type.

Basically, that you don't have to show off and gloat about the things and skills you have. Enjoy them and keep them to yourself (walk small) and use them precisely when needed (carry a big stick).

This went for boyhood and pubescent scraps as well. Don't try to fight, don't start a fight — but certainly be able to finish one.

It's advice that's served me well and that I still employ to this day.

~~eac_nuclear1~~

Big Stick

Thankfully, I haven't had to use my “big stick” too much. Put a few wannabe tough guys in their place in high school and college...

But mostly, the thing I carry is put to use to maximize life's enjoyment in an economic fashion.

I've rescued a few stranded drivers, finished my own basement, added a full bathroom, built my own driveway, tend my own garden, dress my own game, and plenty more.

Those mostly derive from learned skills and are physically applied.

But the best part of a well-rounded big stick is something psychologist Robert Sternberg calls “practical intelligence.”

In his book Outliers: The Story of Success, Malcolm Gladwell describes it like this:

It is procedural: it is about knowing how to do something without necessarily knowing why you know it or being able to explain it. It's practical in nature: that is, it's not knowledge for its own sake. It's knowledge that helps you read situations correctly and get what you want. And, critically, it is a kind of intelligence separate from the sort of analytical ability measured by IQ.

To use the technical term, general intelligence and practical intelligence are “orthogonal”: the presence of one doesn't imply the presence of the other. You can have lots of analytical intelligence and very little practical intelligence, or lots of practical intelligence and not much analytical intelligence, or — as in the lucky case of someone like Robert Oppenheimer [head of the Manhattan Project] — you can have lots of both.

I credit most of my success to “practical intelligence.”

Where does it come from?

It's a set of skills that have to be learned. It has to come from somewhere, and the place where we seem to get these kinds of attitudes and skills is from our families.

I use it in everyday life but, fortunately, I also use it to read macro trends and profit from them in the stock market.

It's the same acumen that allowed me to not get caught or punished in my adolescent years while I was doing things as devious, or more so, than the other kids my age.

It's what allows me to read situations and people in an instant, and decide what to say and how to say it for maximum effect. It's how to get into a store two minutes after they've locked the door and how to get an upgraded hotel room for free just because I feel like it.

When applied to every aspect of life, success is imminent.

Your 1830s Moment

Success isn't all individual. Much of it comes from external circumstances: war, periods of rapid industrial and technological improvement, etc.

Outliers also ranked the 75 richest people in human history, from pharaohs and monarchs to landowners and barons...

The most interesting part? Nearly 20% of them were born within nine years of each other in the mid-1800s — between 1832 and 1840.

They amassed wealth in the trillions of dollars.

Sure, they were bright and ambitious; but they were also born at precisely the right time to profit from the emerging dominance of railroads and Wall Street in the 1860s and 1870s.

Why am I telling you all this?

Because we have a shot at an 1830s moment, maybe not to become billionaires — but definitely to attain safe and secure wealth.

As Forbes noted last week: “The resolution of global balance sheet imbalances will eventually result in complete panic where we’ll likely see yields of 8%-10% on great stocks. Finally, buy and hold will begin to work again — just when most people abandon stocks altogether.”

I've mentioned several times recently that the Dow is trading at the same level it was in 1999.

Forget all the bullshit — politics, the election, "Toddlers & Tiaras," Facebook (unless you jump in and out of the IPO). If you want to be truly financially free, you have to leave the herd behind.

As the bile that's accumulated in the system over the past decade is purged, you will have the opportunity to do just this.

Next year won't be the end of the world, but it will be a major turning point.

The bad assets, loans, and debt are going to come due. The guise of fiat money and printing money will be shed...

And when that happens, we'll be in a prime position to buy stocks at decade lows with high dividends.

Coil your springs now. When the time comes, you'll want to buy some of the strongest names in all the sectors — especially energy.

Until then and while it happens, precious metals will be your friends. Gold's back at $1,600 today.

I'll keep you updated every step of the way as to how to play this shift with stocks.

But I'm not a gold guy. Greg McCoach is, and he's actually offering a free seminar on how to invest in gold in the coming years.

In the meantime, continue to hone your practical knowledge and put your success before the opinions of others.

~~eac_rare_earth~~

~~nicks_signoff~~

"Emergency": A Book Review

I have a confession to make...

I sometimes look at the world through what Neil Strauss calls “apocalypse eyes.”

It's not something I want to happen. I view it as a hope-for-the-best-prepare-for-the-worst kind of thing.

As Strauss puts it in the best-selling book Emergency:

... all it would take is one war, one riot, one dirty bomb, one natural disaster, one marauding army, one economic catastrophe, one vial containing one virus to bring it all smashing down. We've seen it happen in Hiroshima. In Baghdad. In Halabja. In New Orleans.

Our society, which seems so sturdily built out of concrete and custom, is just a temporary resting place, a hotel our civilization checked into a couple hundred years ago and must one day check out of. It's an inevitability tourists can't help but realize when visiting Mayan ruins, Egyptian ruins, Roman ruins. How long with it be before someone is visiting American ruins?

The author didn't always think like this, and neither did I.

He goes on to say people his generation (born 1973 or later) did not have anything serious enough happen to them to consider their country at risk.

The first twenty years of this century saw World War I. Then the Depression. Then World War II. The 50s saw Korea and the 60s, Vietnam.

“And then, from 1980 to the close of the century — nothing. Or at least no war, no national catastrophe, no defining event powerful enough to pull us outside our self-centered, solipsistic world, outside of our preoccupation with ourselves and our financial and emotional well-being, outside of our comfort zone.”

You know what happened at and after the turn of the century...

As Strauss says, “History happened to us. Terrorist attacks. Domestic crackdowns, flooded cities. Bank failures. Economic collapse.”

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The point of the book is to be prepared for every eventuality. Because everyone thinks it can't happen to them.

Strauss cites Hitler, whose goal wasn't to subjugate other countries; but rather “to cleanse them, to wipe out the so-called weak races and speed the evolutions of the human species through the propagation of the Aryan race.”

Doesn't sound like something that could happen in the civilized Western World, but Hitler got away with it for seven years.

“Few of the most brutal periods in medieval history — from the sack of Rome to the early Inquisition — were as coldly barbaric as what happened in our supposedly enlightened modern Western civilization.”

After we fought a global war to end it, the world vowed to never let it happen again.

“In the USSR, Stalin continued to deport, starve, and send to work camps millions of minorities. As the bloody years rolled on, genocides occurred in Bangladesh in 1971, Cambodia in 1975, Rwanda in 1994, and in Bosnia in the mid-1990s.”

All the people affected thought it would never happen to them, either. And as the author keenly notes, it isn't the event that we fear; it's the breakdown of the social contract that would follow if the system broke down, "the snap."

As Philip Gourevitch wrote in his book on the Rwanda massacre, “Neighbors hacked neighbors to death in their homes, and colleagues hacked colleagues to death in their workplaces. Doctors killed their patients, and schoolteachers killed their pupils.”

Just in Case

We've seen the snap happen on our own soil.

Rapes and murders skyrocketed in the lawlessness following Katrina. Police were recently convicted of shooting for sport an unarmed mentally challenged man. Thousands looted the city, many others were starving. It was every man for himself.

It can happen quicker than you want to think.

And it's not just natural disasters and terrorist attacks you need to be prepared for...

Your rights and liberties are quickly being confiscated by your own government.

Consider this erosion of freedom cataloged in Emergency:

2001: 9/11 terrorist attacks; 1,200 people arrested and held indefinitely without charge; Bush signs USA PATRIOT Act, allowing the government to secretly wiretap and search the personal records of citizens without a warrant; war in Afghanistan begins; no-fly list created, eventually growing to over a million names.

2002: Male immigrants and visitors from over 25 countries required to register with the U.S. government; more than 13,000 registrants face deportation; Department of Justice allows FBI to spy on religious and political groups without probable cause; Bush doctrine of preemptive war announced; Homeland Security Act passed; Department of Justice memo authorizes torture up to “serious physical injury” in overseas interrogations.

2003: Iraq War begins; Department of Homeland Security established; Operation Liberty Shield detains visitors seeking asylum from 34 Muslim countries; Bush continues to centralize and expand power through the unprecedented use of executive privilege and signing statements, which enable him to ignore or reinterpret bills that have passed Congress.

2004: Department of Homeland Security begins affixing electronic monitoring ankle bracelets to thousands of illegal immigrants; government outsources domestic intelligence collection to private companies to circumvent laws restricting spying on citizens; US-VISIT system requires all foreign visitors to be digitally photographed, fingerprinted, and checked against a computer database on entry; photos of prisoners tortured in Abu Ghraib prison surface; subsequent Red Cross investigations find evidence of prisoners being sexually abused, set on fire, and forced to eat a baseball at Guantanamo Bay.

There's an undeniable correlation between these actions and the Nuremberg Laws.

It's not paranoia or conspiracy. As you'll learn in the book, plenty of billionaires see the same correlation and are preparing themselves and their families to live without “the system.”

One of the billionaires is Spencer Booth, who refers to himself as a 'B Person.' He and several other billionaires chronicled are already seeking second and third passports from other countries and making ten-year plans for escape and survival.

You should read the book for yourself, but I want to pass along a couple convincing quotes from Spencer before I wrap this up..

“A bunch of other B people are doing similar things right now. Do you know the Walton family? They own Wal-Mart. They just built an underground bunker near their home in Arkansas. They even have a helipad in case they need to evacuate. If something does happen in America, it may be difficult to get out. So we're taking flying lessons in a few months. I'm not taking any chances with my family. I just bought them guns, in case we have to shoot our way to the airport. I'm executing a ten-year plan to make sure everything that could go wrong is protected against. It's about creating revenue sources and residences in multiple locations, so that if you have to flee one country, your daily existence won't change.”

The book ticks up over 400 easily-digestible pages. I read the whole thing during a roundtrip flight to San Francisco and back.

In addition to convincing you (I don't need convincing; I read for support) why such skills and plans are necessary, Emergency provides a good launchpad to learn and enact them.

From acquiring dual citizenship to surviving in the woods for a week with only a knife, Neil Strauss did it — and begins teaching you how to do it as well. He pursues offshore bank accounts and hard metal assets, as well as shooting skills and EMT training.

As Strauss tells readers in the prologue:

Today I can draw a holstered pistol in 1.5 seconds, aim at a target seven yards away, and shoot it twice in the heart. I can start a fire by rubbing two pieces of wood together. I can identify seven hundred types of footprints when tracking animals and humans. I can survive in the wild with nothing but a knife and the clothes on my back. I can find water in the desert, extract drinkable fluids from the ocean, deliver a baby, fly a plane, pick locks, hot-wire cars, build homes, set traps, evade bounty hunters, suture a bullet wound, kill a man with my bare hands, and escape across the border with documents identifying me as the citizen of a small island republic. When the shit hits the fan, you're going to want to find me.

I'll be available, too.

I already have many of those things covered.

And before you write this off as loony, take one last look at a passage toward the end of the tome:

I used to wonder if Kurt Saxon, Tom Brown, Bruce Clayton, and all the other survivalists I met ever regretted dedicating their lives to a skill set they never had to use. But now I know the answer. They use those skills every day. Because after three years of searching and learning and accumulating, I've learned that it isn't actually survival these skills bring. It's peace of mind. I now know that I can take care of myself and my loved ones. But until the day comes when I have to do that, I'm going to be taking care of everybody else.

Being the man — a real man — is a great feeling.

Call it like you see it,

Nick Hodge
Editor, Energy and Capital

P.S. I can't do the entire book justice in this small space, so please read it for yourself.
P.P.S. If want you get a look at some of the products Neil Strauss used — or get them for yourself — click here.

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I have three unknown Bakken plays that are set to explode with the drilling frenzy going on right now in North Dakota. One stock trades for just $7.60 a share... The second trades for less than $2.50 a share... My third Bakken stock might be the biggest blockbuster yet — trading for just $6 a share, it has a total of 74,000 acres in the Bakken... and the company’s insiders have been buying its stock like crazy in the open market. Don't miss your chance to pick these up while they still trade for less than $10!

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When the Shale Revolution Spreads: The Whole World is Watching this Gas Boom
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How Investor's Are Crushing Big Oil: It's Not Too Late to Enter This Energy Bull
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Bond Investing: Beat the Stock Market with Bonds
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U.S. to Steal Oil Crown from Saudis: Thanks to Shale, U.S. on Top by 2017
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Greenland Oil Bonanza: The Arctic Oil That Never Was
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2012 Natural Gas Outlook: The Best Energy Trades for 2012 - Part I
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The Most Powerful Investing Strategy of All Time: The Rule of 72
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African Oil Boom Town: Fastest Growing Region on Earth
Why be in the market at all?

Get Long on Bakken Oil Stocks: Same Day, Different Year... Same Fight
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Ron Paul's Free Market Solutions

The Washington machine mocks him.

The mainstream media ignores him.

His own party seems embarrassed to acknowledge his very existence, and the Democrats continue to label him “extreme.”

Yet when it comes to understanding how a real free market is supposed to operate, there is no presidential candidate with more credibility than Ron Paul.

As well, his approach to international diplomacy is one that should be embraced by all free market thinkers.

As the Congressman wrote yesterday, “Nothing promotes peace better than free trade.”

Now, when I first sat down to write this piece today, I hesitated. I'm not a shill for politicians, and I have zero interest in campaigning for anyone.

But I'm also a concerned citizen who makes no apologies for drawing your attention to the very real connection between free trade and international diplomacy.

Because not only does this connection allow for economic freedom and peace... it allows for prosperity and opportunity — two things that we, as seekers of wealth and security, embrace.

We Don't Need Your Stinkin' Dictators!

When campaigning, there's nothing politicians like to do more than rally their supporters.

History has taught us that one way to effectively do so is to pound your chest behind the safety of our military muscle.

During debates, we hear about replacing old dictators with new ones. We listen to media darlings cackle about how many troops we can send in to “protect our interests.” These are great talking points and make for superb sound bites.

But sadly, they keep to the unrealistic view that we can continue to be the world's police without paying a hefty price.

I brought this point up to a colleague of mine recently, and he quickly pointed out that without some stability in the Middle East, higher oil prices and the potential loss of oil from that region would cripple the U.S.

And his point would only be valid — if we couldn't survive without Middle East oil.

But that's not the case at all...

As I've pointed out in the past, we can end our reliance on OPEC. It can't happen overnight, but it can and will happen. And the cost will be significantly less than what we shell out to secure those supplies today.

Look, we can displace 2.5 million barrels per day by transitioning our domestic fleet of trucks and buses to natural gas. We can displace another 2.2 million barrels per day with the new 54.4 mpg average fuel economy standard. And at full capacity, the new Keystone XL Pipeline will bring in 700,000 barrels per day.

Combined, there's enough new supply and displacement there to kick OPEC to the curb for good.

Yet despite this reality, the jumbled mess in the Middle East continues to wrap itself around the littered illusion that stability will come only with economic sanctions, really big guns, and a lot of tough talk from the comfort of the climate-controlled offices in the Hart Senate Office Building.

~~oil-sign-up~~

Send Starbucks!

Look, you want to bring stability to the Middle East? Don't send more troops.

Send Starbucks (NASDAQ: SBUX)! Send a couple of Whole Foods stores (NASDAQ: WFM), maybe a few Chipotle restaurants (NYSE: CMG) and an Apple (NASDAQ: AAPL) store.

Good luck getting folks to rise up against the “evil empire” if they're sucking down caramel macchiatos while downloading the latest Foo Fighters album on their iPads.

Perhaps I am simplifying things a bit. But the fact is, our economic freedom is eroding as we continue to invest our blood and treasure in the Middle East. This isn't working. And it doesn't take a rocket scientist to figure this one out.

It's acts of capitalism — not acts of war — that will enable both peace and opportunity.

As Congressman Paul has pointed out:

Countries that trade with each other generally do not make war on each other, as both countries gain economic benefits they do not want to jeopardize. China is a massive nuclear power yet it does not seek military confrontation with the United States.

Trade is much more profitable. Also trade and friendship applies much more effective persuasion to encourage better behavior, as does leading by example.

To date, Afghanistan and Iraq have cost us more than $2 trillion. And some estimates put the total cost at close to $5 trillion when you add future veterans' support and the next ten years' interest payments on these debt-financed wars.

Meanwhile, our bold leaders have the audacity to boast the elevation of incompetent committees to incompetent super committees in an effort to cut $1.5 trillion from the deficit over a ten-year period.

Big shocker: The super committee proved to be a super failure!

A real free market — free of special interest influence — is the only rational solution...

And the quicker we can accept this, the quicker we can stop being forced to suffer through unacceptable wars, high unemployment, and economic uncertainty.

To a new way of life and a new generation of wealth...

Jeff Siegel
Editor, Energy and Capital

Energy Stocks Remain Cheap

Energy stocks remain cheap.

They've actually been cheap for the past four years.

The iShares Dow Jones U.S. Energy ETF (NYSE: IYE) is trading 10% cheaper than it was this same week... in 2007.

The Dow itself is down a similar amount.

If you went long energy or the broad market four cranberry sauces ago, you probably feel like a turkey.

Of course, you could argue no money's been made for an entire decade.

The Dow was trading at 11,500 in December of 1999. We're precisely at that level this week — 12 years later.

HERE IT IS...

There's enough lithium right here to boost the value of this company's stock by 3,000%.

But don't take my word for it...

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Proof We're Cheap Here

Louis Simpson just bought $2.7 million worth of Chesapeake Energy (NYSE: CHK). He bought 100,000 at $26.69 per share.

How do I know this?

Because Louis is a Director at Chesapeake, so his purchases are a matter of public record. This one was reported on November 8th.

You have to admit, Louis knows a bit more about Chesapeake's prospects and the inner workings of the markets than you or I do...

He's been a director of VeriSign (NASDAQ: VRSN) since 2005 and of SAIC (NYSE: SAI) since 2006. Before that, he served as CEO of Capital Operations at Geico from 1993 to 2010 and as Vice Chairman of the Board from 1985 to 1993.

All that inside information and insider connections... and he's betting $2.7 million on a stalwart energy stock. He thought it was cheap at $26.69.

You can buy it today for less than $24.00 and get access to the Barnett Shale, Haynesville Shale, Fayetteville Shale, Marcellus Shale, and Eagle Ford Shale all at once.

And Mr. Simpson's purchase isn't an isolated occurrence.

William Hahne, Director at Whiting Petroleum (NYSE: WLL), recently purchased 2,000 shares at an average price of $48.49. With access to Colorado, the Gulf of Mexico, the Permian Basin and more, this stock was trading near $60.00 this summer.

You can pick it up today for less than Mr. Hahne paid.

Same goes for Schlumberger (NYSE: SLB). In late October, newly-appointed CEO Paal Kibsgaard bought 6,000 shares at $69.00 apiece.

You can get in cheaper than the man running the show at today's price below $68.00.

The list goes on and on...

And with oil back up near triple digits, these stocks may not be this cheap for long.

That's why we've prepared a special report to help you take advantage. It details three North American oil plays you should be eyeing up right now.

You can have a look at it here.

Call it like you see it,

Nick Hodge
Editor, Energy and Capital

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Lithium Investment Opportunities: Cornering the Global Market for Lithium
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The Saudi Oil Confession: The Unconventional Road Ahead
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OPEC and Obama Team Up to Fight Major Energy Breakthrough: The Real Future of American Energy Revealed
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Rare Earth Rebirth

Rare earths are back in the news.

As you may know, rare earths are a group of 17 elements crucial to production of energy and modern devices from iPhones and laptops to solar panels and oil refineries.

Nearly every modern comfort and gadget relies on this group of metals in one way or another.

Despite their name, rare earths aren't all that rare...

And that's precisely why you didn't hear much about them until last year.

While these metals aren't “rare” in the traditional sense of the word, they are concentrated in only a few locales around the globe.

It just so happens that 95% of these metals are currently mined in China.

That was fine — until China started using rare earths as a trade weapon last year by cutting export quotas and sending prices soaring higher.

That's the moment the rest of the world began its infatuation with this group of metals.

And for good reason: Not only are they crucial for modern life, as I've mentioned, but they were also creating fortunes for companies with access to them outside of China.

Just one of the 17 elements, lanthanum, cost $5/kilogram at the beginning of 2010. It hit a peak of $140/kilogram in July after China announced production cuts — a 2,700% gain.

And lanthanum wasn't the only one to climb like that...

Here's a chart of rare earth composite prices from Australia's Lynas Corp. (PK: LYSDY), one of the few companies producing rare earths outside of China:

The +2,000% rise in rare earth prices quickly translated into gains for related companies.

Molycorp (NYSE: MCP), Quest Rare Minerals (AMEX: QRM), and others quickly jumped by similar percentages:

The increased prices put the pressure on companies to reduce their rare earth consumption or find substitutes. And in that wake, prices have started to recede.

~~eac_rare_earth2~~

This week, the New York Times reported:

After nearly three years of soaring prices for rare earth metals, with the cost of some rising nearly thirtyfold, the market is rapidly coming back down.

International prices for some light rare earths, like cerium and lanthanum, used in the polishing of flat-screen televisions and the refining of oil, respectively, have fallen as much as two-thirds since August and are still dropping. Prices have declined by roughly one-third since then for highly magnetic rare earths, like neodymium, needed for products like smartphones, computers and large wind turbines.

Big companies in the United States, Europe and Japan that use rare earths in their manufacturing have been moving operations to China, drawing down inventories, switching to alternative materials or even curtailing production to avoid paying the extremely high prices that prevailed outside China over the summer, executives said at an annual conference in Hong Kong on Wednesday.

Even with this fall's reprieve, rare earths could be in for another run in 2012.

The Next Chapter

You have to remember, we're dealing with China here.

And with demand and prices currently falling, many Chinese rare earth companies won't meet their export quotas this year. When that happens, the Chinese Commerce Ministry typically penalizes exporters by giving them smaller quotas the following year.

Not only that, but China's largest producer, Inner Mongolia Baotou Steel Rare-Earth, halted production last month in an attempt to stoke prices. Other companies followed suit.

Even worse (or better for investors), the Chinese Commerce Ministry also blocks companies from exporting rare earths at prices it deems too low, which inherently means we have a price floor. (Cerium, for example, is currently fetching between $45 and $60 per kilogram, but China won't export any for less than $70.)

These latest moves by the Chinese have prompted Congress to start researching the creation of a U.S. strategic rare earth reserve which would serve, at least initially, to foster demand growth.

According to a Financial Times post, several rare earth CEOs have said the creation of a rare earth reserve could potentially create “a rebirth of the U.S. rare earths industry.”

I agree.

With less than a handful of rare earth mines in operation outside of China, continued price fixing games, and the growing use of handheld electronics, any company with access to supply is going to fetch a premium market price.

I happen to know such a company with 600,000 acres of land in Alberta filled with rare earths and other metals. It's part of the same geologic formations that have made the tar sands so successful.

Recently, I went up there and toured the property from a helicopter and on foot. I told you a bit about it last month.

On Monday, you'll be getting the video I made about my trip — complete with aerial footage of the property and the tar sands from my helicopter.

Before then, though, I want you to watch the latest Whiteboard Weekly video, which I made this week to tell you more about the current rare earth investment scenario.

Call it like you see it,

Nick Hodge
Editor, Energy and Capital

Cuban Real Estate Opportunities

The mojitos are especially sweet and the black beans are seasoned perfectly.

This is what I'm greeted with every time I visit my good friend Dalia in Miami.

Although she makes her living as a high school math teacher, Dalia is an excellent cook. She learned the art of Cuban cuisine from her mother, who, along with her father, immigrated from Cuba to the United States in the 1970s.

Her father — a computer engineer — worked tirelessly for decades to provide a good life for his family.

Today, his reward consists of two very happy and successful children, a loving wife, and a solid retirement that allows him to spend his days sipping Cuban coffee and talking politics.

He's a proud man who truly values his U.S. citizenship, something he worked very hard to earn.

And you'll never meet anyone who truly appreciates the gift of home ownership more than this guy...

The New Saudi Arabia

A natural event took place that moved apart two major landmasses...

As a result, over 70 billion barrels of King Saud's oil were lost.

Today, this untouched resource is finally being recovered — and you'll never believe who just bought up the single biggest share.

Click here for the details.

The house he lives in today is the same house he bought in 1988.

He tells me, “Jeff, it was a rundown shack. Cockroaches, dirty water, holes in the roof. Now look. I fixed everything. I built this garage, I built these bathrooms, I planted these key lime trees. I could never have this in Cuba.”

Since the early days of the Cuban Revolution, sales, trades, or gift transactions have been subject to government approval.

And if you were looking to buy or sell a home, you couldn't set the price or move in or out whenever you wanted.

But on November 10, that's all going to change...

A Weekend Getaway in Havana

On November 10, the Cuban government will officially allow the free trade of property.

This is a huge deal that will not only give Cuban citizens the opportunity to become homeowners, but it will also allow for what could potentially be one of the greatest real estate opportunities of the century.

While the new law will only allow the free trade of property for permanent residents, some believe this could open the door for less strict enforcement in areas that would attract foreign investors with deep pockets...

Foreign developers have already been given approval from the Cuban government to open luxury golf resorts. There are currently four such projects underway worth more than $1.5 billion.

That's a lot of pesos for a government in need of some serious revenue.

And while it is uncommon for U.S. citizens to vacation in Cuba, tourist arrivals in Cuba are actually increasing: In 2010, 2.53 million tourists visited Cuba. That's a 10.6 percent increase over 2009, with most of these travelers coming in from Canada, Italy, and the UK.

The opportunity for growth is there.

And foreign investors who have an "in" with the Castro brothers could make a fortune.

For the average retail investor? Well, that's another kettle of fish...

¿Un Oportunidad?

Investing in Cuba has always been incredibly risky — and for good reason. But some have been more than happy to take on that risk.

One way to gain exposure to Cuba is through the Herzfeld Caribbean Basin Fund (CUBA), which seeks to benefit from economic developments in the Caribbean Basin.

Although the Caribbean Basin includes more than just Cuba, this particular fund has often been referred to as the opportunity to profit from the end of communism in Cuba.

Its top three holdings are Seaboard (AMEX: SEB), Coca-Cola Femsa (NYSE: KOF), and Copa (NYSE: CPA).

Not surprisingly, the stock has had a nice ride over the past month, running from $5.40 in early October to $6.97 just last week.

I'm sure some sold on the recent news, and I certainly wouldn't go chasing this thing on a big run...

But if the Cuban government continues to implement these kinds of changes, certainly the Herzfeld Caribbean Basin Fund could benefit.

Of course, any new changes in Cuba could be short-lived. So while the opportunity to invest in Cuba can be tempting, it remains very risky.

Although if this new property law does pan out for the good people of Cuba — and for those who wish to invest in some very undervalued property assets, then we may dip our toes into these unfamiliar waters.

To a new way of life and a new generation of wealth...

Jeff Siegel
Editor, Energy and Capital

Attacks on Iran: The Latest in Cyber Warfare

I'm pretty sure Israel has already unilaterally attacked Iran.

Their single bomb was launched in 2009. It was called Stuxnet.

But it wasn't a bomb in the traditional sense. It was a computer worm — one of the most powerful ever built.

And it was built precisely to attack large-scale industrial facilities like power plants, dams, refineries, and water treatment operations... from the inside.

This worm in particular was used to attack a uranium enrichment facility in Natanz, Iran.

The Stuxnet worm crept in, undetected, to a computer component that controlled the rotor speed of the centrifuges and rewrote its code. It caused enough damage to significantly set back Iran's nuclear program, perhaps by years.

Stuxnet was so powerful the global consensus is that a government was behind it.

I'll give you one guess who it was...

Many say the United States helped them.

Blueprint

Some say it was a good thing. Others see what Stuxnet means for the rest of the world.

If a sophisticated computer worm can be designed to silently infiltrate secret enrichment facilities in Iran, it can certainly be duplicated or modified to do so elsewhere — on any number of critical infrastructure components.

Take it from Michael Assante, former chief security officer for the North American Electric Reliability Corporation:

"It's just a matter of time. Stuxnet taught the world what's possible, and honestly it's a blueprint."

The Department of Homeland Security has arranged a new training program to combat such a threat — a threat that's more likely to become a reality than most people realize.

Duqu

You probably haven't heard of Duqu. I hadn't until just this week.

It's the world's newest and most dangerous computer bug. And it's only been around since late October.

It finds its way in through a Microsoft Word document and exploits a hole in the Windows operating system to spread from computer to computer.

You have Windows, right?

A note on the website of computer security firm Symantec had this to say about it this week:

The installer file is a Microsoft Word document (.doc) that exploits a previously unknown kernel vulnerability that allows code execution. We contacted Microsoft regarding the vulnerability and they're working diligently towards issuing a patch and advisory. When the file is opened, malicious code executes and installs the main Duqu binaries.

What does that mean?

If you open the wrong Word document, you could lose control of your machine.

Six organizations have already reported infection in eight countries.

This week, Reuters called in the “next big cyber threat.”

And what about that Stuxnet-being-a-blueprint talk?

Symantec has also said Duqu shares a source code with Stuxnet. That means the creators of Stuxnet either gave the code away, had it stolen, or also created Duqu...

The scariest part is there is no solution. All you can do is try to avoid getting it.

A recent Homeland Security test pitted Red Team (hackers) against Blue Team (pumping station computer operators), each with their own command center.

Red Team had no problem hacking into Blue Team's network and slowing it down. Then it killed its power, turning out the lights and computer screens, causing Blue Team to fly blind. As Blue Team sat helpless, Red Team overran their entire system, took control, and turned on the pumps.

What if those pumps controlled radioactive waste at a nuclear plant? Or a massive oil pipeline? Or caustic chemicals?

As Blue Team's commander noted during the exercise, “There's nothing we can do. We can only sit here and watch it happen.”

You

Scarier still, we don't know Duqu's intentions.

Is it meant to infiltrate our grid? Or is it coming after your financial data?

One thing's for sure: We need to be as aware and prepared as possible.

Nothing's worse than fighting an enemy you can't see or understand.

~~eac_cyber1~~

Call it like you see it,

Nick Hodge
Editor, Energy and Capital

Water Investment Opportunities

At 11:58 p.m. in a crowded public hospital in Manila, Camille Galura made history.

At five pounds, five ounces, the beautiful, wrinkled child became the seven billionth human occupant on planet earth.

And with her arrival came both excitement and concern.

While baby Camille's family likely celebrated her birth with laughs and tears, researchers tripped a silent alarm.

As Dr. Eric Tayag of the Philippines' Health Department pointed out, with our global population now exceeding 7 billion...

Will there be enough clean water for all these new arrivals?

The Crisis

If you're a regular reader of these pages, you know we've been writing about the water issue for years.

After all, much like energy shortages, water scarcity creates both crises and opportunities.

Now the crisis is obvious, although too often invisible to those of us who are fortunate enough to turn on our faucets and get clean water.

This morning, I boiled some water to make a cup of tea. No big deal... I didn't think twice about it.

Meanwhile, half way around the world, 8-year-old Indian children in Mumbai sniffed out leaks in massive pipes that run through the slums on their way to deliver fresh water to more affluent neighborhoods.

In Sudan, a couple of twelve-year-old kids slurped water through specially-fitted plastic tubes that guard against water-borne larvae that cause Guinea worm disease.

I don't bring this stuff up to upset you, but rather to serve as a reminder that when we talk about water scarcity, we're not talking about lawn watering regulations or the high price of bottled water...

We're talking about life and death.

We're talking about full-blown crises that offer investors an opportunity to help the world's most vulnerable populations while making a few bucks in the process.

And if this sounds crass, so be it. I make no apologies. Because one thing is certain: It will be technological advancements and a free market that come to the rescue — not candlelight vigils and letter-writing campaigns to your senator.

~~solar_2~~

The Opportunity

There are a number of ways to play the water angle.

Perhaps the most obvious is desalination.

Today, 300 million people in 150 countries rely on desalinated water. And that number is expected to more than double over the next ten years, due mostly to the rapid decrease in construction and production costs.

Energy usage is also being decreased dramatically, thanks to hybrid systems, energy efficiency measures, and the integration of alternative energy sources. In fact, most desalination plants in Australia are now powered by wind.

Saudi Arabia, the largest producer of desalinated water, is developing new solar programs. The most recent is a plant that will supply water to about 100,000 people using only solar-powered electricity. This plant will use new technologies developed by a Saudi research group and IBM (NYSE: IBM).

Our top play on desalination, however, is Energy Recovery, Inc. (NASDAQ: ERII), which manufactures pumps for desalination plants.

Africa is Thirsty

Another way to play the water angle is to do so indirectly by investing in energy production that doesn't require huge amounts of water.

A typical 500-megawatt coal-fired power plant, for instance, requires 2.2 billion gallons of water each year. And nuclear power plants are typically built next to lakes, rivers, and oceans because they need the water to absorb the waste heat produced by the plants.

Just as it might not make much sense to rely exclusively on solar in places like Seattle or London, it also doesn't make much sense to rely on water-intensive energy production in regions where water is scarce.

The fact is by 2025, 1.8 billion people will be living in countries or regions with absolute water scarcity, and two-thirds of the world's population could be living in water-stressed conditions. It is also estimated that almost half the world's population will be living in areas of high water stress by 2030, including between 75 million and 250 million people in Africa.

This is not a region that can sustain the operations of coal-fired or nuclear power plants...

Same with India, where nearly 88 percent of the nation's water is already consumed by thermal power plants.

So it's no coincidence that in one year, investments in renewable energy in India and Africa have grown by 25 percent and 104 percent respectively.

It's also no coincidence that some of the world's largest corporations — like ABB (NYSE: ABB), Siemens (NYSE: SI) and GE (NYSE: GE) — are spending billions to lay the groundwork for renewable energy development in Africa.

Yes, China will continue to build nuclear power plants and feed off our massive bounty of coal...

Here in the United States, natural gas will eventually become our primary source of power generation...

But in water-scare regions all over the world — particularly where populations continue to explode — it will be wind and solar that take the lion's share.

You can read more about renewable energy development in Africa here.

To a new way of life and a new generation of wealth...

Jeff Siegel
Editor, Energy and Capital

Undervalued Indeed

Citing the intense merger and acquisition activity in the oil and gas space, and highlighting the record third quarter investment in clean energy, I told you last Friday:

The truth is energy shares — almost across the board — are currently trading at a discount.

And if you're in the mood for some easy longer-term gains (and even dividends), you'd be well advised to go bargain hunting over the next few weeks.

If cheap oil companies with access to North America's fossil fuel rebirth are a good buy for Sinopec and Superior and Statoil and BHP and Kinder Morgan... it stands to reason they're a good buy for you, too.

The logic here couldn't be any simpler or more straightforward. Many oil stocks are undervalued.

All while cleantech stocks had one of their worst quarterly performances ever.

The front page story — Solyndra, Evergreen Solar, etc. — is a stark contrast to the bullish data being buried on the back page.

Like with oil, companies in this sector are cheap as well.

I mentioned that the NYSE Energy Sector Index (^NYE) and the WilderHill New Energy Global Innovation Index (^NEX) had fallen further than the Dow over the last six months... and that I was bullish on Yingli Green (NYSE: YGE), JA Solar (NASDAQ: JASO), and Transocean (NYSE: RIG).

Sorry for the repetition, but I wanted to highlight the value of the insights published in this letter and poke a little bit at the accountability of “mainstream” financial journalism.

Is There Such a Thing as Negative Unemployment?

There's a place in the heart of the United States where there are more jobs than people.

Where a teenager with a blank sheet for a resume can move — and a week later... be working a $90k/year job.

What's driving this boom is bigger than just a small town, a zip code, or a single state.

It's an industrial expansion the likes of which we haven't seen since the early 20th century.

And it's about to change everything.

Click here to learn more about it.

Like I See It

I call it like I see it.

My columns are dedicated to explaining the real factors driving the market — not just regurgitating the PR being put out by companies and analysts.

Was I right about oil and solar stocks being undervalued last week?

Yep. Every index and stock I mentioned has added more value than the Dow over the last five days.

Yingli, the stock I told you I owned personally, has tacked on as much as 25%.

I'm bullish on energy. And I pass along the best ways I see to play it while remaining realistic about technological limitations, the speed of policy, reserves, sustainability, and the broader market.

I have a single thesis and continually update you on it: I'm bullish on energy. I think the entire sector (oil, gas, nuclear, renewable, efficiency) is in for immense appreciation as population explodes and resources remain constricted. I don't waiver from that.

Have You Heard of the "R-4 Trigger"?

In a quiet Baltimore office, one man has done the impossible.

He's unlocked the secret to guaranteed options gains. Every time his "trigger" is activated, investors are guaranteed profits.

To see how it works and what all the fuss is about, click here.

What do you get in a flavor-of-the-day rag like the Wall Street Journal? I'll show you:

Solar-Panel Firms' Outlook Dims by Cassandra Sweet, October 4
Solar Firms Look to Shed Their Gloom by Cassandra Sweet, October 17

In the first, Cassandra tells us:

Solar-panel company stocks have plunged to multiyear lows as slowing demand and a glut of panels from Asia have squeezed margins, creating a cloud that could hang over the industry for some time.

And in the second:

With the bankruptcy and federal probe last month of California solar-panel maker Solyndra Inc. and the free-fall of solar-company stocks over the past several weeks, the view of the global solar-power market may look dim or even grim. But is it?

Based on a WSJ article from October 4, Cassandra, I have to say it is. Though that contrasts sharply with the sector's performance over the last week.

I guess the “cloud that could hang over the industry for some time” burned off pretty quick...

I'm still bullish. The WSJ — and its peers — will continue to not have a clue about what's going on.

Call it like you see it,

Nick Hodge
Editor, Energy and Capital

The Power of a Single Word: Why I Bought This Stock Based on a Name Alone
Sometimes, a single word is worth more than a thousand pages of financial reports and analyst opinions... This little-known management group's last seven projects averaged 10,600% gains. And they've just pulled off their latest — and biggest — deal yet.

The Next Rare Earth Blitz: Introducing a Revolutionary Alloy
Rare earth miners have been on a tear. Some investors have walked with hundreds of percent... but that'll pale in comparison to what this metal has in store. It's a new alloy that will revolutionize everything from nuclear energy to aerospace — and beyond.

Green City Invests in Coal: Up for Grabs: $200 Million in Coal Money
Editor Jeff Siegel discusses the coal industry's latest move to dramatically increase coal exports to Asia.

The Black Gold Rush: These People Are Taking Control of Major Cities
Analyst Ian Cooper takes a look at one part of the country where economic growth isn't a real worry.

Brewing a Chinese Banking Collapse: Hong Kong is Getting Squeezed Dry... Here's Why YOU Care
China accounts for 40% of global growth and 31% of all Foreign Reserves. So there's is no such thing as "just a Chinese crash."

How to Play the Cyber Security Bull Market: America's Achilles' Heel: Defending Against Digital Disasters
Editor Steve Christ takes a look at our growing reliance on military drones and explains how they are vulnerable to the world's cyber warriors.

U.S. Future Oil Supply: The Two Best Investments in U.S. Oil Security
Energy and Capital editor Keith Kohl offers readers two ways to invest in the future of U.S. oil security.

The Pennsylvania Shale Gas Revolution: Why There's No Recession in Western PA
The Bakken is only one of many oil shale formations in the United States... To our west lies a monster. It's so huge, it could supply America with oil for 100 years. Back in 1930, the government tagged this land as federal territory knowing what was under the ground. They put this oil shale rich land away for a rainy day... That rainy day is here.

New Iraqi Dinar: What Muhammad Thinks of Silver
There was a popular song in Indonesia which told of the Prophet Muhammad going to the market with eight dirhams, or silver coins. Along the way, he gives away six dirhams to the needy and uses the last two to buy new clothes.

Wall Street's Secret Behind the Netflix Collapse: How to turn around Wall Street's Biggest Losers
Most investors are giving up on stocks right now... when it's the best time to be an investor.

The Horn River Shale Basin: Canada's Shift in Natural Gas
China is making its next major buyout in Canada's natural gas sector. What investors need to know before the Chinese beat them to the next prized natural gas investment.

Cyber Terrorism and Grid Security: Blackouts are the New Bombs
60 Minutes reported last year that hackers have already disabled critical infrastructure in major cities, disrupted essential services, stolen millions of dollars from banks all over the world, infiltrated defense systems, extorted millions from public companies, and even sabotaged our weapons systems.

Nuclear Opportunities in Japan

They've been quietly campaigning, keeping their meetings relatively secret.

They didn't want to draw too much attention to their agenda.

After all, what they're proposing goes against the wishes of the majority...

In Japan, 70 percent of voters polled backed a call to phase out all of the country's nuclear power plants. And former Prime Minister Naoto Kan announced earlier this year that nuclear power was no longer worth the risk.

But his successor, Yoshihiko Noda, doesn't agree — and in fact has recently suggested nuclear will continue to play a role for decades to come.

Scandalous Emails

While Economy Minister Yukio Edano told reporters that Japan was still committed to developing its solar resources and gas-powered generation operations, he also noted that nuclear is “still under consideration.”

Of course, this announcement comes on the heels of a recent email scandal that further distanced Japan's voters from the nuclear industry.

Last week, Kyushu Electric Power delivered a final report on a scandal that involved the company asking employees to send support comments for nuclear restarts from their personal email accounts to organizers of a government-organized public meeting.

Kyushu's final report was denounced by Yukio Edano, who called it “meaningless” while saying, “I can't understand how they have the nerve to do this.”

To give you an idea of the kinds of emails that were sent, check out this one that was uncovered last month from a man posing as a local farmer:

The Number One reactor has been operating for 30 years and I've never had a problem selling my rice or vegetables because of fears of radiation.

The sad thing is Kyushu didn't really have to go through such extremes.

Because while most Japanese citizens would prefer to phase out all of the country's nuclear power generation, it's not likely to happen anytime soon.

~~eac_nuclear1~~

The Smart Money Loves this Nuclear Play

There is no doubt that Japan is actively preparing to increase its installed solar capacity. And it could be as much as ten times what's installed today. This is huge — and it's pretty much a done deal.

In addition, natural gas imports will continue to rise. LNG imports are already expected to climb 12.2% this year, thanks to low nuclear utilization rates. Today, Japan's top three sources of LNG imports are Malaysia, Australia and Indonesia (although last month we learned Japan may soon be importing LNG from the United States as well).

While Japan is currently unable to import LNG from the United States without approval, Japanese officials have begun negotiations to get the U.S. to promote our exports. If all works out, Japanese utilities would start out by importing up to 3 million tons per year, with the estimated goal allowing U.S. exports to make up 10 percent of Japan's LNG needs.

And nuclear? Well, that's still a tough one...

Certainly Japan has not shown the same determination the Germans have demonstrated with regards to phasing out nuclear.

And given one of the worst nuclear power disasters in history happened less than a year ago on Japanese soil, this tells me that although it is unlikely Japan will ever build another nuclear power plant again, it is also unlikely that its current fleet of operational nuclear power plants will be decommissioned any sooner than 2030.

Truth is, there is a movement in Japan to keep its nuclear power generation in place. And that movement has some pretty well-connected and deep-pocketed supporters.

Now will that be enough to win out over nuclear's bad reputation in the Land of the Rising Sun?

Hard to say...

While anarchist slackers and opportunistic celebrities protest on Wall Street, Occupy Wall Street supporters in Tokyo have taken to the streets in solidarity — but with a different message focused primarily on getting rid of the country's nuclear power generation.

Anti-nuclear sentiment remains strong in Japan. And I don't think that's going to subside anytime soon.

But for nuclear investors, none of this really matters.

Even if Japan does allow its nuclear industry to go gently into that good night, aside from Germany, Switzerland, and perhaps Italy, nuclear power generation isn't going anywhere.

In fact, with a renewed demand for safer nuclear power generation — and at a cheaper cost — new, safer, and cheaper nuclear fuel technologies are ushering in some of the most lucrative investment opportunities we've seen in years. I personally jumped on this one myself.

~~nuclear_signup~~

To a new way of life and a new generation of wealth...

Jeff Siegel
Editor, Energy and Capital

Energy in 2030

When in doubt, I always turn to the military for long-term guidance.

They plan ahead, fund new technologies, and adopt them earliest...

GPS, digital cameras, and a little thing called the Internet all came from the military.

So whenever the energy future looks uncertain (as it does now with oil low in its range, massive albeit contentious natural gas finds, and renewables, quite frankly, failing to launch), I look to see how the uber-planners in defense are going to play it.

A good launchpad is this quote from Sharon Burke, Assistant Secretary of Defense for Operational Energy, which came after it announced a new Operational Energy Strategy in June:

Before, it was assumed energy would be where you needed when you needed it... We hadn’t defined energy innovation as important to military capability. The new strategy is to say that energy is a strategic good that enables your military force.

The new plan is broken down into three parts:

More fight, less fuel – Using less fuel to power the same tanks, jets, and ships with efficient technologies like hybrid and electric engines.
More options, less risk – Solar to power desert bases instead of trucked-in diesel; biofuels to power jets instead of petroleum.
More capability, less cost – Building energy security into the future force by factoring it into all military long-term planning.

Shortly after the plan was announced, Gen. Patraeus sent this memo ordering the immediate conservation of fuel:

“Operational energy” is the lifeblood of our warfighting capabilities and a key enabler of Coalition operations in Afghanistan. Commanders will make energy-informed, risk-based decisions on aviation operations, vehicle operations, power and water generation...

Commanders will push for rapid technology transition of new fuel savings methods to the field, where appropriate, and will pursue existing, proven alternative energy options that reduce the use and transport of fuel.

Microcosm of Our Energy Problem

The Department of Defense uses more oil than any other entity on earth: as much as $18 billion worth per year, plus another $2 billion for electricity.

Half of the American casualties in Iraq and Afghanistan occur while guarding fuel convoys. One out of every 24 fuel convoys has led to the death of a soldier. There are upwards of 6,000 fuel convoys per year.

Gasoline and diesel can cost as much as $400 per gallon to deliver to the battlefield.

It's a perfect microcosm of the greater United States: An egregious amount of taxpayer dollars spent on securing and transporting an increasingly outdated fuel supply that only results in further loss and vulnerability.

As always, the military is adopting a plan that will soon be followed by the entire nation.

How Much Will this Rock Be Worth for You?

This rock is one of millions of gold-bearing pieces that are scattered across a small part of Canada...

Two companies sit on 150,000 acres of this land — and one gold analyst is expecting just one of them to hand investors an easy 127% gain within the next year.

It's all detailed in a free video seminar, which you can view here.

By 2030, the military will be spending $10 billion per year on renewable energy. That's about 50% of its current energy budget.

And that's probably a good gauge of how this thing's going to play out and how you should invest: half fossil fuel and half renewables in the next twenty years.

Funny, that's been our approach all along...

Sometimes I just need a little reassurance when things get as crazy as they are. I'm sure you do, too.

This week's ideas on how to play the ongoing transition below.

Call it like you see it,

Nick Hodge
Editor, Energy and Capital

Why Nuclear is Here for the Long Run: Energy to Enter Decades-Long Bull Run
In the wake of the Fukushima disaster, some people might think I'm crazy to be investing in nuclear... But I am. Specifically, there's a new fuel I'm betting on because of its ability to help any nuclear disaster from ever happening again. I don't think I have to explain the profit potential of a play like this one.

Stalin's Lost Oil: The Story of a Cold War Blunder
Editor Christian DeHaemer shares his insider intel as to why Mongolia is about to ride the Chinese oil craze into a Golden Age.

Energy's Rare Earth Minerals: Now You Know Your ECEs
To be produced, it all relies on a group of rare chemical elements that are not presently mined, refined, or traded in large quantities, and, as a result, their availability might be constrained by many complex factors. Companies that can secure these metals are making a mint in the market, so I thought we should explore this topic further.

Tapping the Marcellus Shale Formation: Staking Your Marcellus Claim
The next stage of the shale boom will come from the Marcellus. This is one investment we don't plan to miss.

Wealth Preservation During Depression: Viral Zombie or Financial Kingpin, Your Shot to Call
Don't fear the coming depression: Leverage it with these and build your financial empire.

China Eyes Fort McMurray: Now is the Time to Invest in Canadian Oil Sands
The Chinese know what I saw with my own eyes two weeks ago when I took a helicopter tour of the booming Canadian oil sands at Fort McMurray... It's time to buy.

Two High-Yield Real Estate Dividend Stocks: The Best Way to Invest in Real Estate
Editor Steve Christ explains how underwater homeowners help create juicy dividends for REIT investors.

Obama Solyndra Scandal Heats Up: Will This Be Obama's Watergate?
Editor Jeff Siegel discusses Solyndra, the Keystone XL Pipeline, and new buying opportunities.

Precious Metals Investing: Slaughter or Opportunity – The Choice is Yours
In reality, QE3 is just another attempt at protecting the banks under the guise of supporting the housing market. You simply have to choose as an investor whether you want to be part of the slaughter or being on top of the financial heap as the consequences for decades of economic and political stupidity come to full maturation.

Government Solar Loans are Imploding: Taxpayers Lose, A Small Handful of Insiders Win
Solyndra, SunPower, and other multi-billion-dollar price tags are nothing compared to coming $1 trillion scandal... But you can still get your cut.

Canada's Oil Dynasty: Our Largest Source for Oil
How Alberta is securing its future oil wealth.

Energy's Rare Earth Minerals

All the stuff we have is cool.

I like my iPod, smartphone, HD TV, and Xbox. I love my laptop, truck electronics, fiber optic crossbow scope, and wireless Internet router.

Electric cars, wind turbines, solar panels, and smart thermostats are cool, too — though I only own one of them so far.

Stuff like this makes life fun and interesting. It makes life easier. It makes life more efficient.

And some of it promises to alter the way we produce energy forever.

But these things have one more thing in common: To be produced, they all rely on a group of rare chemical elements that “are not presently mined, refined, or traded in large quantities, and, as a result, their availability might be constrained by many complex factors.”

I stole that bit from a recent joint report from the American Physical Society and Materials Research Society about “Energy Critical Elements” and how to overcome their scarcity.

Companies that can secure these metals are making a mint in the market, so I thought we should explore this topic further.

Energy Critical Metals and Uses

According to the report:

Energy-related systems are typically materials intensive. As new technologies are widely deployed, significant quantities of the elements required to manufacture them will be needed. A shortage of these “energy-critical elements” (ECEs) could significantly inhibit the adoption of otherwise game-changing energy technologies.

This, in turn, would limit the competitiveness of U.S. industries and the domestic scientific enterprise and, eventually, diminish the quality of life in the United States.

The U.S. already relies on other countries for more than 90% of these elements. Some simply aren't abundant in the earth's crust; others aren't adequately concentrated.

A few are located in only a couple countries (like China), which makes their production and availability susceptible to manipulation.

Rhenium, for example, is rarer than gold by a factor of five. We need it for jet engines and industrial gas turbines.

Tellurium is quite rare, too. And without it, First Solar (NASDAQ: FSLR) couldn't make its famous thin film solar panels.

It's the high demand for these critical elements that has led to their high prices — and therefore the big market returns they've produced so far. Many more big winners are on the way from this situation.

That said, here's a list of energy critical elements and their uses as described by the report:

Gallium, germanium, indium, selenium, silver, and tellurium, all employed in advanced photovoltaic solar cells, especially thin-film photovoltaics
Dysprosium, neodymium, praseodymium, samarium (all REEs), and cobalt, used in high-strength permanent magnets for many energy-related applications, such as wind turbines and hybrid automobiles
Most REEs, valued for their unusual magnetic and/or optical properties: examples include gadolinium for its unusual paramagnetic qualities and europium and terbium for their role in managing the color of fluorescent lighting; yttrium, another REE, is an important ingredient in energy-efficient solid-state lighting
Lithium and lanthanum, used in high-performance batteries
Helium, required in cryogenics, energy research, advanced nuclear reactor designs, and manufacturing in the energy sector
Platinum, palladium, and other PGEs, used as catalysts in fuel cells that may find wide applications in transportation; cerium, a REE, is also used as an auto-emissions catalyst
Rhenium, used in high performance alloys for advanced turbines

It's because of these elements' scarcity and high demand that I flew to Alberta a few weeks ago.

There's a multi-billion ton supply of many of these elements there that could both satiate high-tech demand and make investors a fortune.

I'll be sharing more details about that trip and company's operations in coming weeks.

~~eac_rare_earth2~~

Rare Metal Production and Companies

Before we look at some rare element investment success stories, let's first drill down on how exactly these materials are produced.

To the report one last time:

Many potential ECEs are not found in concentrations high enough to warrant extraction as a primary product, given today’s prices. Instead, these ECEs are obtained primarily as by-products during the refining process of other primary ores, especially copper, zinc, and lead. Joint production complicates attempts to ramp up output by a large factor.

Because they are relatively scarce, many ECEs are available only in low-grade ores, which necessitates the processing of tons of rock for each gram of element recovered, sometimes in ways that do unacceptable environmental damage.

So not only are they rare, but they're exceedingly difficult to extract.

Companies having mining success — or even very near mining success — have already generated big enough gains to send a few investors to early retirement.

Take a look at the chart and I'll list the companies for you below...

From highest return to lowest, those companies are:

Quest Rare Minerals (AMEX: QRM)
Molycorp (NYSE: MCP)
Avalon Rare Metals (AMEX: AVL)
China Shen Zhou Mining & Resources (AMEX: SHZ)

Both Quest and Avalon stock went up thousands of percent as the rare earth bull market took hold.

Rare metal finding is the new oil wildcatting...

We'll continue to bring you the opportunities as we see them.

Call it like you see it,

Nick Hodge
Editor, Energy and Capital

The Government and Bankers Stole America's Wealth

"This act (the Federal Reserve Act) establishes the most gigantic trust on Earth... When the President signs this act, the invisible government by the money power, proven to exist by the Money Trust Investigation, will be legalized... The new law will create inflation whenever the trusts want inflation..."

— Congressman Charles A. Lindbergh Sr., December 1913

We're going to stick mostly to the capital today.

Let's be honest... Wall Street is occupied. The national debt is approaching $15 trillion. Home values continue to slide. Half the country relies on government assistance. The middle class is all but gone.

Energy's not very high on the list these days.

It's not an Obama thing or a Bush thing or a liberal thing or a conservative thing; it's the boiling over of multiple sentiments that have been simmering for quite some time.

The tension has been in the air for years now. It's thick.

I wrote an article last December saying there would soon be riots in the street. Tunisia started just few weeks later and the Arab Spring ensued.

We're next.

Let's explore these sentiments, how we can more accurately identify and articulate them, and how seeing through the ever-darkening government/media veil can be the best thing for your bottom line.

This Kid Gets It

I've heard a lot of things said about these protesters — once they started getting coverage, that is...

They're pot-smoking hippies. They have no coherent message. It's their fault they're poor. They're common criminals.

But if you peel back the layers of spin, you'll see there are actually intelligent people making cogent arguments, some of which reflect even my own feelings about our current state.

I came across a video of a twenty-something straining his voice as he spoke. I don't even think he needs to shave, yet he sums up the anxiety of the majority nicely. The video is quickly gaining traction with over 50,000 views and over 1,000 comments.

Here's a part of what he had to say:

You can't even call it money anymore. Gold is money. Silver is money. Green Dollars are not money. They're using inflation as a hidden tax to f*ck the people.

We need to bring production back to America. End the Federal Reserve. End the fractional banking system. When you invest $100 in a bank, they multiply that by nine and send it out nine different ways. They just don't make money on the initial investment, they make it nine times the initial investment. That's fake money that they printed out of thin air. Fiat money. It's a fiat currency. (Someone shouts 'ones and zeros'.)

1913 this country died – when we adopted the central bank and we got rid of sound money. We used to be able to walk into a bank and redeem our dollars with gold. Can we do that anymore? No.

What's the price of gold now? Almost $2,000. It's gone up $600 an ounce this year. And it's going to keep rising as long as we have bailouts, as long as we have quantitative easing, as long as our government keeps spending our money.

Every time they spend money... that's your money. They bail out Morgan Stanley and Goldman Sachs. When I f*ck up who bails me out? No one. $700 billion in '08... and they want more now?

Get corporations out of our politics. We need to get lobbyists, Goldman Sachs, George Soros, Merrill Lynch, everyone, out of our politics. Why should they be allowed to throw millions at politicians so they do what they want? They're supposed to be our voice, not theirs. States' rights. When you minimize government it is easier to control by the people.

I know more than a few of you have to feel the same way.

The Players Made the Game

I also came across an eye-opening post from The Dollar Vigilante. It was an open letter to the Occupy Wall Street movement. In it, the author claims:

Here is the reality. All of the problems you see are real. But you’ve been misdirected as to their cause – on purpose. Wall Street is, for the most part, corrupt and incredibly damaging to society as a whole. But, they are a SYMPTOM, not the CAUSE of the problem.

If you want to protest the real devils who have caused every major problem in the world, from wars to poverty to oppression, then you shouldn’t be in New York. You should be in Washington D.C. (District of Criminals) in front of the White House, Congress and the Federal Reserve building. That is the source of all of our problems today.

Sadly, because of all the propaganda and brainwashing you are actually asking for more government involvement in the economy as a solution to the problem CAUSED by the massive amount of government involvement in the economy. You have to realize one thing. There is a war on for your mind. At the moment, the side of reality, truth, honesty and self-responsibility is losing. The side of propaganda, corruption, theft (taxes), violence (laws against victimless crimes, wars and cages/jails or death if you do not submit to theft) and outright evil has been winning.

We’ve been told government is good and here to protect us when the only times most of us have been accosted, tased, put in cages (jail) or beaten has been at the hand of a “police officer”.

Wall Street is only doing what most of us would do. They've taken advantage of the circumstances they were given. Granted, some of those circumstances may have been created by bankers... the Fed certainly was.

But the point here is that the problem is both endemic and systemic.

~~oil-sign-up~~

The Establishment has deviated from and even manipulated the constitution. And they've leveraged the system — the entire system: media, education, tax law, foundations — into their own personal profit machine.

I'm not talking about the beloved "job creators" here; small- and medium-sized businesses are indeed the backbone of our economy. I'm not talking about millionaires; this system has made them the new upper middle class.

I'm talking about the string-pullers of the world. The Rockefellers, Morgans, Rothschilds. The Bilderberg contingent.

By creating and dominating a “central banking” system in conjunction with the government, they've been able to concentrate the bulk of the world's wealth in the hands of the very few. And they've done it on the back of the middle class for hundreds of years.

Government either gets money by taxing or borrowing. The super-rich got that way by leveraging the latter. But does anyone really understand how that government borrowing works?

From Gary Allen's famed 1971 classic None Dare Call It Conspiracy:

The public is led to believe that our government borrows from "the people" through savings bonds. Actually, however, only a small percentage of the national debt is held by individuals in this form. Most government bonds, except those held by the government itself through its trust funds, are held by vast banking firms known as international banks. For centuries there has been big money to be made by international bankers in the financing of governments and kings.

The process through which one collects a debt from a government or a monarch is not a subject taught in the business schools of our universities, and most of us - having never been in the business of lending money to kings - have not given the problem much thought. But there is a king-financing business, and to those who can ensure collection it is lucrative indeed.

Whenever a business firm borrows big money its creditor obtains a voice in management to protect his investment. Like a business, no government can borrow big money unless willing to surrender to the creditor some measure of sovereignty as collateral. Certainly, international bankers who have loaned hundreds of billions of dollars to governments around the world command considerable influence in the policies of such governments.

Since the keystone of the international banking empires has been government bonds, it has been in the interest of these international bankers to encourage government debt. The higher The debt the more the interest. Nothing drives government deeply into debt like a war; and it has not been an uncommon practice among international bankers to finance both sides of the bloodiest military conflicts.

But while wars and revolutions have been useful to international bankers in gaining or increasing control over governments, the key to such control has always been control of money. You can control a government if you have it in your debt; a creditor is in a position to demand the privileges of monopoly from the sovereign. Money-seeking governments have granted monopolies in state banking, natural resources, oil concessions and transportation. However, the monopoly which the international financiers most covet is control over a nation's money.

Eventually these international bankers actually owned as private corporations the central banks of the various European nations. The Bank of England, Bank of France and Bank of Germany were not owned by their respective governments, as almost everyone imagines, but were privately owned monopolies granted by the heads of state, usually in return for loans. Under this system, observed Reginald McKenna, President of the Midlands Bank of England, in 1939: "Those that create and issue the money and credit direct the policies of government and hold in their hands the destiny of the people." Once the government is in debt to the bankers it is at their mercy.

It officially started in the United States, as the astute young protester told us above, in 1913 with the creation of the Federal Reserve System. Although it was conceived in 1907 at a secret meeting in Jekyll Island, Georgia, attended by Senator Nelson Aldrich (whose daughter married John D. Rockefeller Jr.), representatives from the Rockefeller-owned National City Bank and J.P. Morgan & Co., the Assistant Secretary of the Treasury, and a few others.

Out of this meeting came the Monetary Commission Report and the Aldrich Bill. When the Republicans failed to get it passed, it was snuck through by the Democrats after Woodrow Wilson took office on a hasty Christmas vote in 1913 as a measure to restrict Wall Street's power.

J.P. Morgan helped fund two presidential campaigns in 1912. The national debt then was around $5 billion. Wilson promptly entered WWI and drove it to $25.5 billion. Roosevelt and Truman drove it from there to $260 billion during the 30s and 40s. After 1965, U.S. debt began to increase faster than GDP...

Reagan and Bush 1 quadrupled it from 1980 to 1992. By the time Bush 2 took office, the debt was $5.7 trillion. He ran it to $10.7 trillion. And Obama has tacked on another $4 trillion in three short years.

There have been Establishment bankers in every single presidential administration since Wilson.

The politicians and banksters have profited by ballooning the debt for almost 100 years now. They've funneled dollars to themselves by siphoning off your dollars through inflation and interest.

And, as if to stick a poker in your eye, the Supreme Court now says corporations can donate limitlessly to political campaigns, officially bringing into the open what's already been happening for decades.

They've sucked the middle class dry and led us to where we are today — with millions fed up, some of them taking to The Street.

The day of financial reckoning is approaching. It could get a lot tougher than it already is.

Now you know how the system is rigged, so play it smart.

Here are a few things you should be doing, summed up in a recent email from Angel Publishing owners to paid members:

1. Get out of debt. Now.

Debt in this country, both public and private, has become a chronic condition. Using debt to finance consumption is suicidal.

2. Build cash.

This goes for investment accounts and for your home. Now is a time to hold large cash balances in your accounts, so that you're liquid enough to take advantage of the bargains that we'll see down the road. We'll be sure to bring many of them to your attention in these pages.

You should also have enough cash on hand to cover your living expenses for a minimum of three months. Have it in your possession.

3. Buy gold and silver.

Right now, a drop in gold prices is a gift because the long-term trend is higher... same goes for silver.

The time to do this is now, when we have a discount window available. Chances of both gold and silver going higher are simply too high to pass up. Look at these holdings as an insurance policy. Your best hope is they become family heirlooms.

Buy it, stash it, and keep it secret.

4. Guns and Groceries

It's a noble and sublime feeling to be confident in your ability to provide for your family.

Get a long-term food storage program in place. At a minimum, you should be 100% confident in your ability to live for a few weeks without having to go to the grocery store. Prepare to the level you feel is practical.

A while back, we took a poll. It turns out that 100% of criminals prefer their victims to be unarmed...

Own a gun and possess the ability to use it under duress.

I'd add one more to that list:

5. Take pride in your liberty.

Let your opinion be heard not through the prism of left or right, but through the lens of right and wrong.

Make your time here what you want it to be, and make sure you're financially secure enough to do it.

Call it like you see it,

Nick Hodge
Editor, Energy and Capital

"I sincerely believe, with you, that banking establishments are more dangerous than standing armies…" — Thomas Jefferson to John Adams