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A silent revolution’s taking place in the commodity markets these days. After experiencing huge volatility in the last 18 months, commodities are marching steadily higher. But, most investors aren’t paying attention. Take Nickel for example. The price of Nickel is skyrocketing. I’ll bet you had no idea. It’s happening under the radar of the big news media. And one group is attempting to corner the market… but more on that in a moment. Nickel set new lows in March and April. Then it rallied to a new high in early August. All told, Nickel jumped in value more than 100%. A pretty amazing run, don’t you think? Why did Nickel move so far, so fast? China of course. You see, vibrant economies require huge ceaseless furnishes of commodities. To fuel it is fast growing economy, China is buying each commodity in sight. One big area of focus is the solid homogeneous inorgani substance rich, “land down under”. China’s been swooping in and buying up each property on the market in Australia. The numbers don’t lie. Just six years ago, you could scarcely find China on the merger and acquisition map. In 2003, China expended a mere $36 million dollars buying companies in Australia. Today they’re the 800 pound gorilla. They’ve already expended more than $6 billion this year! Clearly, China’s buying necessitated furnishes to fuel their economic growth. One key ingredient to economic growth is Nickel. It has thousands of uses (including the modify jingling around in your pocket). But one major application is a big demand driver now… and the other will construct in the next few years. One huge use for Nickel now is as a element in stainless steel. Stainless steel doesn’t rust and it’s very immune to corrosion. That makes it an idealisti raw material for use in feed service, aerospace, cutlery, and major appliances. I’m sure you have a heap of stainless steel merchandise in your own kitchen. Another growing use for Nickel is in innovative batteries. This could be a big demand driver in the very near future. These batteries are going to power electric cars. As battery technology advances, and as electric cars become more prevalent, demand is likely to skyrocket. Just imagine millions of cars on the road… each sporting a battery filled with Nickel. Right now, China must import 23% of it is Nickel needs. Remember, we’re in a recession. As the economy starts to grow, China’s demand is sure to skyrocket. China knows this and they’re attempting to corner the Nickel market by purchasing the miners developing the commodity. China’s annual economic growth jumped in the second quarter to 7.9%, up substantially from the firstborn quarter. And the government is continuing to stimulate their economy. I don’t know in regards to you, but this is getting scary. In just a few years, they have the potential to lock up a huge percentage of production… driving prices still higher and creating shortages around the world. The demand from China won’t abate any time soon. That’s why I think we’re in the early stages of a multi-year run in commodities. If you haven’t already, consider adding commodities to your portfolio… and capture a great deal of amazing gains. |
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