2013
I have been a Real Stockbroker for over 55 years now and I love it! One reason for my longevity is that I have learned to look at the whole picture. Not just the good looking lady in the center. Others tend to concentrate on their specialty and are often blindsided by an “unforeseen event”.
The good news is that the economy is in a rebuilding process, despite the greedy players in the market place.
Our main growth will come from natural gas and exporting it to Asian and European countries. Stem cell research will pay huge dividends in the health care area. I will write more about these situations later and the investment opportunities available to the patient investor.
There is a pattern that is just developing and is very disturbing because of the implications. Gold bullion is being taken to their home countries because, I believe, that we are not trusted as much as we were. We have a weak dollar and have not passed a budget for years, and worse yet our debt ratio to GDP is over 90%. First it was Venezuela and then Iran wanted their gold bullion shipped to them. Then the Queen of England did a tour of the Bank of England’s vault with big smiles. Why would they drag the Queen down to their bank vaults for the whole world to see?
Is it because J P Morgan Chase bank is flouting the law by illegally manipulating the price of gold and silver in the commodity market?
Has Germany, with a very strong economic balance sheet, asked for their deposits back? After WWII their gold was deposited in various countries as a safeguard. This is just the tip of the iceberg.
What is it that the central bankers fear? Collapse of the dollar or devaluation? That is a distinct possibility if our Congress does not settle down to do it’s own business. ( The House creates a budget and the senate approves and then it is sent to the President- this is part of the checks and balances built into our system of government.)
Are they worried that the President will confiscate their holdings to suit his needs? Charles Krauthammer on FOX TV once editorialized “that do not listen to him, but WATCH what he does”. Presidents since Ronald Reagan have had disillusioned second terms.
Now that I have used up my disclaimers here are my predictions for 2013.
OPEC cartel will come crumbling down. History has proven that cartels do not last, but this one has lasted a long time supported in a way by the United States. Why? There has not been an oil refinery built since 1974!
Despite what our government can do, it is powerless in controlling the American entrepreneurship. The hydraulic fracking of shale oil has unleashed billions of metric cubic feet (Mcf) in natural gas fields. We are now the Saudi Arabia for natural gas. As we convert from oil to gas , the loss of OPEC’s biggest customer will raise havoc among cartel members and some will begin to cheat. As the price drops, some oil companies will find it tough sledding on the interest rate slopes. They will find it very tough to service their debt obligations at lower prices. These fields could last for centuries. There is a field that starts in Pennsylvania through New York State well into our borders in Canada.
This will be boom for companies that are energy dependent for cheap fuel.
A new industry has been kick started. Converting natural gas to Liquid natural gas. Right now there is one company that built a plant in the 1980’s to IMPORT natural gas. They reversed the process and are the only US company that has approval for exporting. They own 2 tankers that are running at full capacity. It takes time to build the ships and time to build the plants but eventually our balance of payments problem will reverse. With natural gas selling for under $3.50 mcf here and in Europe and Asia north to $7.00 plus; it will be a no brainer unless the government muddies the waters with inane provisos.
Right now there are 6 companies awaiting the President’s approval to begin building the plants.
The world as of today has copied or bastardized our ability to borrow or print money. The problem is that they do not have people power or natural resource capabilities to maintain the lifestyles they desire now.
China, Japan, Russia AND Europe have declining populations. In Japan they sell more adult diapers than baby diapers. Only in Asia do they have expanding populations. That means growth. Kids need many items in order to survive. One should look to Asian countries that have governments for investment ideas.
Pension plans face a disaster if they have been currently buying US Government bonds. There will come a day when interest rates will have to rise and that will cut their prices in half or more. The only way out of this heroin addicted low interest rates is devaluation. If the government devalues by 20% that means you will have 20% more dollars and prices of everything will drop by 20%. Except silver and gold. They should rise by 20% .
It is reported, using government agencies figures, that JP Morgan Chase is short 45% of silver stored in COMEX warehouses worldwide. This equals 25% of the known world production. (When one sells short they sell something that they do not own and hope to buy it back at a lower price. ) Thus the price of silver could explode above the price of gold in a short covering rally because there are no stockpiles of silver like there is for oil.
There are four companies one can purchase to protect their hind quarters.
Stems cells are going to be the real game changer. Don’t fret – they are not made from human embryos.
These companies can work with vaccines which is far cheaper than drug research. For a few million dollars they can work on a vaccine and determine if it is doable in just six months. If the mass population is involved then they must seek FDA approval. But here the waiting period is short.
An example of this is Nannovercides (NNVC $.50) which has developed a pill for the flu vaccine. It supposedly is more effective than the flu shot, but since it involves millions of people the FDA is cautious about approval.
There are companies that can regenerate body organs, restore sight, monitor blood sugar and all kinds of sterile non harmful injections.
Many of these companies are being financed by major drug companies so they have staying power. The problem is that it takes time for fruition, but it is there I believe.
There is a major drug company that is researching over 200,000 different compounds but not a single vaccine.
The bottom line here is that this industry will extend the average human life and the average age will be over 110. This means extending social security retirements to 80, then 85 and eventually 100. Governments are going to reform or go broke.
The entitlement programs that are around today will become late night jokes on TV. This change will be both smooth and bumpy depending upon which social adjustment will be effective.
INSURANCE COMPANIES WILL HAVE TO READJUST ALONG WITH ALL KINDS OF AGE RELATED INDUSTRIES. Imagine taking an early retirement at 85 so you can visit the moon!
My point is start thinking about star treckie stuff. Don’t get caught in the “I remember when” trap. Always look forward.
Do not tie your funds in non-liquid investments. Do not speculate because no one can tell you when and where the hammer and axe will fall.
Use common sense and always look around you and observe what is going on.
Those of us seeking income better have an attitude change. Income securities are fine when you can truly find them, but eventually interest rates have to return to normal and that spells losses for bond holder and income stocks. Eventually this will happen so it is wise to invest in solid companies and to sell some shares when income is needed.
As we grow older and mature more, and hopefully wiser, we must also change our preconceived ideas of wise management.
An example of this is that one buys a home to live in and prosper in the community – not to make money.
So today, January 2013, Precious metals, Natural gas stocks and associated businesses along with stem cell securities and CASH. Not money market funds – cash. Cash is King!
We are entering an era that will be challenging and exciting and fortunes can be made, but when and where is still to be determined.
Cheerio !~!!
