Crisis Opportunities: Precious Metals and Energy Stocks

OK, I’m no trader and have no certification or licence to recommend you do stuff. These are just my thoughts.

The economy has never been more interesting to me. It makes sense to explore sectors one by one, incrementally. While Austrian economics gives us a big picture philosophy, if you are to act on the theory, you have to get economically involved and let your wallet lead your interest. Naturally, like most Austrians I took an immediate long term interest in precious metals. Essentially a savings/protection plan. In order to have savings, one must however be active in the raising of funds. Which is not about protection, it’s about risk. In this article I will go over some recent PM news and break the ice on investing in stocks and shares, specifically in the energy sector.

So as silver takes it’s second 30% plunge since the housing bubble burst now is a good time to restore order to the panic and chaotic histrionics of the primitive and unenlightened.

This recent plunge was possibly triggered by CME margin hikes and by a general stock market fall as Operation Twist and the Euro-crisis hit the headlines causing a rush on the dollar. Operation Twist, aimed at driving down interest rates is only going to further destroy confidence in the banks and ultimately the economy, further driving the long-term demand for safe havens. And needless to say, the BoE news of a fresh 1/2 a trillion pounds of money printing brings added long-term value prospects to our metal investments. As if more help was required.

PM gets dragged down with the stock market in the immediate panic of a confidence crash. But it recovers harder, faster. A physical commodity like PMs is increasingly the first place people look to in the fall out.

That having been said, I can’t help but agree with the trends John Christian (StellaConcepts) points out in this recent v-log. The fall in silver has broken a support line leaving it in no mans land with the next support below being around £17/oz spot.

But the dynamics haven’t changed. Gold and Silver are on a relentless upward path.

Quick note on gold, Egypt has an estimated 6.7 million ounces of unmined gold lying in wait.

So energy! The primeminister has been in talks with the big 5 energy suppliers over the expected rise in prices, supposedly. And Huhne was on the BBC talking about liberalising the energy market. The energy market is now what the telecommunications market was like before the internet and mobile phones became available to the mainstream. Very cartelised and expensive. Long distance calls costing a fortune, as Stefan Molyneux reveals, a point that Steve Jobs criminally capitalised on before starting Apple.

Now Huhne is telling us that we are wasting money on the big 6 energy suppliers. And he could be right. He wants to see more competition in the market he says. Well so do we. Perhaps being more choosey about our energy supplier is something we are still not accustom to since British Gas was privatised. Have we been staring a gift horse in the mouth? Between 50-80% of us never switch providers. But if the other 20-50% of us had found a bargain, you’d have thought they would have let us know.

But there is a bigger picture to energy. We should all know by now that around £80 of our bills are mandated to fund carbon-neutral energy. But there is little to write home about regarding this high-risk government-created fake-green market. Natural gas registered on my radar a while ago. Gas is a good green source of energy to my mind. And it seems we have an awful lot of it.

Unfortunately, actually taking advantage of it would be against the law. It seems there is more likelyhood that we will have to pay for it to be imported. And pay for it we will, one way or another. Without power, life ends.

Peak-oil I think is likely an economic factor and nothing to do about resource depletion. As does this guy, Rick Rule, who recomends oil-services and nuclear stocks. Check out his arguments in this Casey Research vid: