We have been bullish on gold, oil, base metals, India, China and transportation of energy and minerals for a very long time and that bullishness continues.  In a recent email, I stated that we had become more cautious short term about the demand for base metals although continued to be long-term bullish.  Our logic was that a U.S. economic slowdown in demand would impact the prices of base metals…and even though it takes many years to bring on new mines, a slowdown in U.S. demand would impact global prices. 

Now after a few days of deep research and conversations with a number of economists, we have modified our position.  It seems that the ship borne deliveries of many base metals and minerals are almost entirely imported by the fast growing countries like China; ship borne imports of many metals into the U.S. is not a large part of the global market.  With the exception of copper and one or two others, most metals are not imported into the U.S. by ship in nearly as large quantities as they are imported into China and similar countries.

Because we continue to believe that a recession in the U.S. would not lead to anything more than a growth slowdown in the developing countries, we are once again short-term bullish on base metals such as iron ore, nickel, cobalt and others where the U.S. is not a huge importer.  We will buy the companies that mine these metals on dips.


Also, for those of you who think more long-term take a look at uranium, which has suffered a big price decline.  Perhaps not immediately….but over time, uranium prices will once again rise, as demand from nuclear utilities will be growing, due to the fact that more and more nuclear power plants are going to be built worldwide.

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