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October 22nd, 2017

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editorials

 
Will Crude Oil Drop under $50 in Coming Week?
Przemyslaw Radomski  Oct 05  

Sharp Decline in Crude Oil and Its Consequences
Przemyslaw Radomski  Aug 16  

Jericho Oil raises C$5.7M from cornerstone investors
  Aug 13  

Will Crude Oil Extend Gains?
Przemyslaw Radomski  Jul 29  

Molori Energy Ready to Explode Higher
Bob Moriarty  Jul 20  

»» more editorials in the archives

market data


Ux U3O8 Price (Uranium)Oct 9th, 2017
$20.30 +$0.05 www.uxc.com



»View Commitment of Traders.

expert analysis & newsletter briefs

NexGen Energy Ltd.

"My top pick for 2016 is NexGen Energy Ltd. . . Arrow is an emerging world-class deposit that is still in the early stages of discovery. The state—it being so early in the delineation and development process—means a lot of upside still remains. . .the company just closed a $21M financing, which means the company has enough cash to carry through 2016 and beyond." (12/23/15) - Gwen Preston, Resource Maven

NexGen Energy Ltd.

"My top pick for 2016 is NexGen Energy Ltd. . . Arrow is an emerging world-class deposit that is still in the early stages of discovery. The state—it being so early in the delineation and development process—means a lot of upside still remains. . .the company just closed a $21M financing, which means the company has enough cash to carry through 2016 and beyond." (12/23/15) - Gwen Preston, Resource Maven

Fission Uranium Corp.

"Fission Uranium Corp. announced it entered into a binding letter of intent with China's CGN Mining, a subsidiary of nuclear giant China General Nuclear Power Group, to acquire 19.99% of Fission as part of an CA$82M strategic investment, along with a potential future offtake agreement on production from Patterson Lake South (PLS). . .we urge investors to bolster positions in Fission as the deal derisks development financing, and in the interim, should fund PLS through full feasibility and permitting." (12/22/15) - David Sadowski,

Energy Fuels Inc.

"Energy Fuels Inc. is the only conventional uranium producer in the U.S. and the second-largest producer overall. It has the potential become #1, given the projects and mines it has on standby or that are close to being in development. At full ramp-up we expect the company to be able to produce 5–7 Mlb/year, in a country currently producing 4–5 Mlb/year. The U.S. consumes 55 Mlb/year, but only about 10% is supplied domestically. U.S. utilities seeking security of supply will greatly prefer U.S. producers over those from Kazakhstan, Russia or Africa. This company is well positioned to benefit from higher uranium prices. We have a Buy rating with a target price of $11.85/share." (12/22/15) - The Energy Report Interview with Rob Chang

Fission Uranium Corp.

"Fission Uranium Corp. announced it entered into a binding letter of intent with China's CGN Mining, a subsidiary of nuclear giant China General Nuclear Power Group, to acquire 19.99% of Fission as part of an CA$82M strategic investment, along with a potential future offtake agreement on production from Patterson Lake South (PLS). . .we urge investors to bolster positions in Fission as the deal derisks development financing, and in the interim, should fund PLS through full feasibility and permitting." (12/22/15) - David Sadowski,


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from the publisher
  Robert J. Moriarty

Welcome to 321energy.



Is the Declining Dollar Causing High Oil Prices?


Doug Casey
The Casey Energy Speculator
January 31st, 2006

The article below originally appeared in the January 15, 2006 edition of the Casey Energy Speculator, a monthly newsletter, written by best seller and renowned investor Doug Casey, which focuses on junior exploration energy stocks with the very real potential for 100% or better growth within 12 months. To learn more about a risk-free trial subscription, click here.

All kinds of theories have been floated over the past few years to explain the rapidly rising price of oil. But few analysts have noted that expensive crude might not be a function of supply and demand, but rather a simple function of inflation.

Since the younger Bush took office, the U.S. has been frantically printing money to stave off recession and keep the bloated American economy from collapsing. Fiat dollars have made their way around the world and now constitute the major foreign currency holdings of most countries. Central banks in China and Japan hold an estimated combined total of $1.3 trillion. With the modern equivalent of printing presses going flat-out, the world supply of money has almost doubled since 2000, from less than $2.5 trillion to just below $4.5 trillion.

Interestingly, as money supplies have increased, so too have oil prices. While there are certainly other factors at work, it is hard to ignore the correlation between the doubling of the money supply and the rise in crude.

Money Growth over IP and Oil Price moved together

Is it just coincidence, or could soaring energy prices be more a function of Alan Greenspan's whims than of Saudi Arabia's geology? The increase in oil has indeed come at a time when prices for almost everything else have headed skyward. Houses, copper, Starbucks coffee... you name it, and chances are it's a lot more expensive than it was five years ago. (The exception is Wal-Mart consumer goods, which have become ridiculously cheap because of pennies-an-hour Chinese labor... itself a symptom of the over-inflated dollar.)

All of which suggests that inflation may be a much larger factor in the current crude price than most investors realize. Reports in mid-2005 from the Shanghai Securities News, in fact, suggested that China was already "exploring ways to use some of its huge foreign exchange reserves to buy imported oil."

Given that the U.S. shows no sign of curbing the torrent of new bucks flooding the market, we expect the money supply to keep exerting upward pressure on oil. In fact, the rise may accelerate as the American fiscal situation deteriorates further. Just this month, Nobel Prize winning economist Joseph Stiglitz and Linda Blimes of Harvard forecast that the war in Iraq will ultimately cost the U.S. upwards of $2 trillion... an almost unimaginably large overrun from the $50 billion cost of war previously estimated by the administration. A lot of new money will be needed to pay debts like these, as well as to pay for cleaning up the Biblical level of hurricane damage to the Gulf Coast -- meaning there will ultimately be a lot more money chasing the same amount of oil.

The other implication is that real supply-and-demand problems may not yet be fully priced into the oil market, even with crude at $65. In fact, the ratio of the oil price to world money supply currently sits near its historical average (represented by the green line). That is, crude is not overly expensive, given the amount of money in the world.

Crude Price is not High Compared to Money Growth

Contrast this with the 1970s, when a major supply disruption - the Arab oil embargo - caused the crude-to-money ratio to spike to more than double where it sits today. If the ratio were to return to historic highs - due to a disturbance such as a war with Iran - the oil price would be sitting well north of $100 a barrel.

While much of what is currently driving investment into the resource sector is, frankly, bad news for the broad economy, there is nothing you and I can personally do to stave off the bad news. It's coming whether we like it or not.

Therefore, the only intelligent thing to do is to rig for stormy weather by laying in a portfolio full of high quality precious metals and energy stocks.

Doing it now, ahead of the masses, could very well result in life-changing profits. Don't miss out, subscribe to the Casey Energy Speculator now.

 

Doug Casey
The Casey Files
Casey Energy Speculator



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