Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold Stocks Still Correcting - 27th Oct 20
Gold and Crypto: Is This How Charts Look Before A Monetary Collapse? - 27th Oct 20
Silver's Coming Double Trigger Shotgun Price Explosion - 27th Oct 20
The $126 Billion Gold Opportunity in Australia - 27th Oct 20
Tips to Breeze through Your Spanish Classes Online - 27th Oct 20
Try The “Compounding Capital Gains” Strategy Today - 26th Oct 20
UK Coronavirus Broken Test and Trace System, 5 Days for Covid-19 Results! - 26th Oct 20
How the Coronavirus is Exacerbating Global Inequality, Hunger - 26th Oct 20
The Top Gold Stock for 2021 - 26th Oct 20
Corporate Earnings Season: Here's What Stock Investors Need to Know - 25th Oct 20
�� Halloween 2020 TESCO Supermarkes Shoppers Covid Panic Buying! �� - 25th Oct 20
Three Unstoppable Forces Set to Drive Silver Prices - 25th Oct 20
Car Insurance And Insurance Claims and Options - 25th Oct 20
Best Pressure Washer Review - Karcher K7 Full Control Unboxing - 25th Oct 20
Further Gold Price Pressure as the USDX Is About to Rally - 23rd Oct 20
Nasdaq Retests 11,735 Support - 23rd Oct 20
America’s Political and Financial Institutions Are Broken - 23rd Oct 20
Sayonara U.S.A. - 23rd Oct 20
Economic Contractions Overshadow ASEAN-6 Recovery - 23rd Oct 20
Doji Clusters Show Clear Support Ranges for Stock Market S&P500 Index - 23rd Oct 20
Silver Market - 22nd Oct 20
Goldman Sachs Likes Silver; Trump Wants Even More Stimulus - 22nd Oct 20
Hacking Wall Street to Close the Wealth Gap - 22nd Oct 20
Natural Gas/UNG Stepping GAP Patterns Suggest Pending Upside Breakout - 22nd Oct 20 -
NVIDIA CANCELS RTX 3070 16b RTX 3080 20gb GPU's Due to GDDR6X Memory Supply Issues - 22nd Oct 20
Zafira B Leaking Water Under Car - 22nd Oct 20
The Copper/Gold Ratio Would Change the Macro - 21st Oct 20
Are We Entering Stagflation That Will Boost Gold Price - 21st Oct 20
Crude Oil Price Stalls In Resistance Zone - 21st Oct 20
High-Profile Billionaire Gives Urgent Message to Stock Investors - 21st Oct 20
What's it Like to be a Budgie - Unique in a Cage 4K VR 360 - 21st Oct 20
Auto Trading: A Beginner Guide to Automation in Forex - 21st Oct 20
Gold Price Trend Forecast into 2021, Is Intel Dying?, Can Trump Win 2020? - 20th Oct 20
Gold Asks Where Is The Inflation - 20th Oct 20
Last Chance for this FREE Online Trading Course Worth $129 value - 20th Oct 20
More Short-term Stock Market Weakness Ahead - 20th Oct 20
Dell S3220DGF 32 Inch Curved Gaming Monitor Unboxing and Stand Assembly and Range of Movement - 20th Oct 20
Best Retail POS Software In Australia - 20th Oct 20
From Recession to an Ever-Deeper One - 19th Oct 20
Wales Closes Border With England, Stranded Motorists on Severn Bridge? Covid-19 Police Road Blocks - 19th Oct 20
Commodity Bull Market Cycle Starts with Euro and Dollar Trend Changes - 19th Oct 20
Stock Market Melt-Up Triggered a Short Squeeze In The NASDAQ and a Utilities Breakout - 19th Oct 20
Silver is Like Gold on Steroids - 19th Oct 20
Countdown to Election Mediocrity: Why Gold and Silver Can Protect Your Wealth - 19th Oct 20
“Hypergrowth” Is Spilling Into the Stock Market Like Never Before - 19th Oct 20
Is Oculus Quest 2 Good Upgrade for Samsung Gear VR Users? - 19th Oct 20
Low US Dollar Risky for Gold - 17th Oct 20
US 2020 Election: Are American's ready for Trump 2nd Term Twilight Zone Presidency? - 17th Oct 20
Custom Ryzen 5950x, 5900x, 5800x , RTX 3080, 3070 64gb DDR4 Gaming PC System Build Specs - 17th Oct 20
Gold Jumps above $1,900 Again - 16th Oct 20
US Economic Recovery Is in Need of Some Rescue - 16th Oct 20
Why You Should Focus on Growth Stocks Today - 16th Oct 20
Why Now is BEST Time to Upgrade Your PC System for Years - Ryzen 5000 CPUs, Nvidia RTX 3000 GPU's - 16th Oct 20
Beware of Trump’s October (November?) Election Surprise - 15th Oct 20
Stock Market SPY Retesting Critical Resistance From Fibonacci Price Amplitude Arc - 15th Oct 20
Fed Chairman Begs Congress to Stimulate Beleaguered US Economy - 15th Oct 20
Is Gold Market Going Back Into the 1970s? - 15th Oct 20
Things you Should know before Trade Cryptos - 15th Oct 20
Gold and Silver Price Ready For Another Rally Attempt - 14th Oct 20
Do Low Interest Rates Mean Higher Stocks? Not so Fast… - 14th Oct 20
US Debt Is Going Up but Leaving GDP Behind - 14th Oct 20
Dell S3220DGF 31.5 Inch VA Gaming Monitor Amazon Prime Day Bargain Price! But WIll it Get Delivered? - 14th Oct 20
Karcher K7 Pressure Washer Amazon Prime Day Bargain 51% Discount! - 14th Oct 20
Top Strategies Day Traders Adopt - 14th Oct 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Tsunami May Sink the U.S. Dollar and Uranium Sector

Stock-Markets / Financial Markets 2011 Mar 15, 2011 - 02:30 PM GMT

By: Jeff_Berwick

Stock-Markets

Best Financial Markets Analysis ArticleWhat a few days it has been. It was and continues to be a humanitarian disaster of grand proportions - and one that happened on an island where there is more high end video and cellphone cameras than almost anywhere in the world - bringing us photos and videos that are both shocking and incredible.


The Bank of Japan has plunged in as all central banks are wont to do in this day and age, thinking it is somehow "helping" by counterfeiting trillions of Yen, but no amount of money printing can change reality - in fact it can only make things worse at it distorts price signals which investors use to make decisions on where to allocate scarce resources.

We, like most, are dependent on the Japanese Government and major news media for our information on events on the ground in terms of the ongoing nuclear situation in Japan. Things look bad at the moment but may not necessarily be as bad as they seem. This write-up seems to indicate that things are still under control but at this point it is difficult to gauge.

The Uranium Sector

The Dollar Vigilante has had 5% of our portfolio in the uranium sector but the events of the last few days leave our investment thesis for this small part of our portfolio at risk.

Our one main holding, a Uranium Fund, was until recently up 110% since our purchase in September, but with a dip in the price of uranium over the last few weeks and now this ongoing crisis in Japan, it is only up 56% after falling 16% Monday.

The question now is, how do we invest or divest in this sector?

The answer to that remains nebulous and changes on an hour-by-hour basis at the moment.

To put it in its briefest terms possible, from an investment perspective, if there are no major deaths or sickness resulting from this nuclear situation then this should be a major buying opportunity in the uranium sector. However, if things continue to worsen and result in significant deaths or sickness we could be looking at a collapse of a significant percent of the uranium industry. Already environmentalist groups in the UK, US and Germany are lobbying hard to ban all new nuclear reactors.

It really shouldn't be this way. No matter what happens the general public should realize that it was foolish of the Japanese Government to license and subsidize nuclear power stations on one of the most active faultlines on the planet - within striking distance of a tsunami no less. It also will likely go without notice that most of these plants are four decades old and were already set to be decommissioned.

But no one said that anything to do with the nuclear industry has ever been rational. Three mile island caused a total of zero deaths and yet it almost destroyed the entire nuclear industry. Even Chernobyl, which was the only really serious nuclear accident in history, caused only 57 immediately attributable deaths - although many more deaths are attributable after the fact mostly due to countless errors by the Ukrainian SSR at the time.

The point is, however, that Three Mile Island, alone, with zero attributable deaths, nearly shuttered the entire industry. And so, with disaster on a razor's edge in Japan at the moment, a large percent of the industry, at least for the next decade or two, lies in the balance.

As investors, our educated guess just turned into a roll of the dice. Luckily, for us, our investment in this sector was only 5% of our portfolio so even a total loss - something we don't expect - would not be devastating.

Each investor has to make their own decision. We have not sold our uranium holdings and have been adding to one holding in particular today which we just released to TDV subscribers. It is a company with "uranium" in its name which has seen its stock knocked down from $1.23 to $0.91 just because of its name. However, the company itself actually holds cash and stock in a lithium company worth $1.20 per share and recently picked up a high grade silver property in Argentina - all of which you can currently buy at a 25% discount solely due to investor panic.

Repercussions for US Treasuries and the Dollar

All major markets including gold are down significantly today as investors become skittish.

The most important aspect of this entire situation, however, is that the Japanese Government will need to sell a large quantity of its horde of US Treasuries to pay for reconstruction.

With China not adding to its holdings of US Treasuries, the Arab oil exporters looking more volatile every day and now Japan looking as though it may be an active seller that doesn't leave many buyers left for US Treasuries except its biggest holder and sole-buyer of nearly all new issuances from November until at least June - the Federal Reserve.

We'll be covering this in much more depth in the April issue of TDV but with the Bank of Japan printing trillions of Yen and the US Treasury market becoming even more of a one-buyer market (the Federal Reserve itself), the investment positions we hold in gold and gold stocks look to be set for further major gains once the short term panic subsides.

The Dollar Vigilante is a free-market financial newsletter focused on covering all aspects of the ongoing financial collapse. The newsletter has news, information and analysis on investments for safety and for profit during the collapse including investments in gold, silver, energy and agriculture commodities and publicly traded stocks. As well, the newsletter covers other aspects including expatriation, both financially and physically and news and info on health, safety and other ways to survive the coming collapse of the US Dollar safely and comfortably. The Dollar Vigilante offers a free newsletter at DollarVigilante.com.

© 2011 Copyright Jeff Berwick - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules