» Uncategorized http://battlehymn.com Sun, 20 Apr 2014 03:15:56 +0000 en-US hourly 1 http://wordpress.org/?v=3.5 Russia and Ukraine just ended talks to “de-escalate” the crisis. Here’s what you should know. http://thecrux.com/russia-and-ukraine-just-ended-talks-to-de-escalate-crisis-heres-what-you-should-know/?utm_source=rss&utm_medium=rss&utm_campaign=four-nation-talks-to-de-escalate-the-ukrainian-crisis-just-ended-heress-what-happened http://thecrux.com/russia-and-ukraine-just-ended-talks-to-de-escalate-crisis-heres-what-you-should-know/#comments Thu, 17 Apr 2014 21:13:32 +0000 Justin Brill http://thecrux.com/?p=18904 "The next couple days will be crucial..." Continue reading

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From Bloomberg:

Four-way talks on the crisis in Ukraine ended with an accord aimed at taking the first steps toward de-escalating the conflict, after Russian President Vladimir Putin said he hopes he won’t have to send in troops.

The agreement was announced after talks in Geneva today between Russian Foreign Minister Sergei Lavrov, his Ukrainian counterpart, Andriy Deshchytsia, U.S. Secretary of State John Kerry and Catherine Ashton, the European Union’s foreign-policy chief. Their session lasted more than six hours, longer than scheduled. Kerry said Russia, which the U.S. and its European allies accuse of stoking the conflict, must start implementing the deal within days.

“The Geneva meeting on the situation in Ukraine agreed on initial concrete steps to de-escalate tensions and restore security for all citizens,” the four said in a joint statement. “All sides must refrain from any violence, intimidation, or provocative actions.”

The U.S. and its European allies have threatened to ratchet up sanctions on Russia, their former Cold War enemy, if it doesn’t act to calm the situation in eastern Ukraine. Pro-Russian separatists have seized government buildings and NATO estimates 40,000 Russian troops are massed on the border.

U.S. Skepticism

U.S. President Barack Obama said he remains skeptical about concrete results coming from the agreement, while adding that there remains a possibility that diplomacy can de-escalate the situation.

“I don’t think we can be sure of anything at this point,” Obama said at a White House news conference. “We’re not going to know whether, in fact, there’s follow-through on these statements for several days.”

Putin, who annexed Ukraine’s Black Sea peninsula of Crimea last month, today rejected accusations from Ukraine that he’d already deployed forces in the east of the country and said he would fight to defend compatriots outside Russia.

The Geneva statement called for all illegal armed groups in Ukraine to be disarmed, seized buildings to be returned to their legitimate owners and occupied public places to be vacated. An amnesty will be granted to protesters. A mission from the Organization for Security and Cooperation in Europe will help oversee the measures. A new constitutional process will aim to establish “a broad national dialogue.”

Market Reaction 

As the talks took place in Geneva, Russia’s Micex Index (INDEXCF) of equities extended a two-day advance to 1.4 percent in Moscow, the ruble jumped the most among 31 global currencies and Ukraine’s hryvnia posted the longest rally since August. The Micex has still fallen 11.6 percent this year, while the hryvnia is the world’s worst performer against the dollar, with a 26 percent loss.

U.S. stocks rose and Treasuries fell the most in a month after the accord was announced.

Obama held out the prospect of more sanctions against Russia if Putin’s government continues to interfere in eastern and southern Ukraine and warned that they may be crippling.

“We have no desire to see further deterioration of the Russian economy,” he said.

Speaking at a news conference after the talks, Kerry described the talks as “a good day’s work,” though “just the beginning” and added that “nobody has left behind the issue of Crimea,” the annexation of which has not been recognized by the U.S. and the EU.

Lavrov’s View

“The Ukrainians themselves must resolve this crisis,” Lavrov told a separate news conference. “We have no desire at all to deploy our troops in Ukraine, a friendly state, a territory where a brotherly people lives; this is against the basic interests of the Russian Federation.”

He said Russia continues to be “very concerned at the discrimination by the current authorities against the Russian and Russian-speaking population, the Russian language, Russian culture.”

Ukraine’s Deshchytsia told reporters that “the next couple of days will be crucial” and “will be a test for Russia if Russia wants to really show it’s willing to have stability.”

Deshchytsia said separately that Putin’s reference to the country’s southeast being historically part of Russia raises concern about his intentions.

‘Worrying Signal’

“It is a very worrying signal, because President Putin is now trying to revise the borders, the border that exists and was internationally recognized after World War II and after the dissolution of the Soviet Union,” Deshchytsia told Bloomberg Television today.

Earlier today, Ukrainian police killed three pro-Russian fighters and wounded 13 following an attack overnight on a national-guard base in the southeastern city of Mariupol, less than 60 kilometers (37 miles) from the Russian border, according to Interior Minister Arsen Avakov. Special forces and helicopters were deployed in the operation, in which 63 people were detained and weapons captured, Avakov said.

“We definitely know that we should do everything to help these people defend their rights and define their destiny,” Putin said in a televised question-and-answer session in Moscow, when asked about Russian speakers in eastern Ukraine. “We will fight for this. The Federation Council gave the president the right to use military force in Ukraine. I hope very much that I don’t have to use this right.”

Putin said he didn’t want to discuss what “red line” might trigger Russian military action.

Ukraine’s Response 

Ukraine’s government sent troops this week to regain control of buildings that the government said are occupied by armed “extremists” operating under Russian orders in its eastern Donetsk region. They retook an airfield near Kramatorsk two days ago in a push that stalled yesterday when pro-Russian activists seized armored vehicles and disarmed some soldiers.

Ukrainian Prime Minister Arseniy Yatsenyuk said his government has evidence Russian troops are present in the east of the country.

“There is just one man in the entire world who believes that there are no Russian soldiers in Ukraine’s east: His surname is Putin,” Yatsenyuk told reporters in Kiev. “He is again telling a tale that those saboteurs who shaped a terrorist network in Ukraine are not Russian.”

Putin said the allegations Russian forces are operating in Ukraine are “nonsense” and that he annexed Crimea last month because Russian speakers were facing “real threats.”

The east and south of Ukraine are historically parts of Russia and the former Soviet republic has suffered an anti-constitutional revolution, Putin said.

“Let me remind everyone, this is New Russia, using the terminology of Czarist Russia,” Putin said, adding that regions including Kharkiv, Luhansk, Donetsk, and Odessa weren’t part of Ukraine until last century. “These are the territories that were passed to Ukraine in the 1920s by the Soviet government. God knows why they did that.”

The U.S. will provide nonlethal military aid to Ukraine including “medical supplies, helmets, sleeping mats and water-purification units,” Defense Secretary Chuck Hagel said in Washington.

The U.S. already has provided ready-to-eat meals to the Ukrainian military. Some American lawmakers have criticized the Obama administration for not providing weapons and ammunition.

 

More on Russia and Ukraine:

Ukraine update: Chances of a civil war just increased

If you don’t know where Ukraine is on a map, chances are you’ll want to send U.S. troops

Get ready… The crisis in Ukraine could return with a vengeance

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This could be the most important news of the year. And you probably haven’t heard it. http://thecrux.com/news-quiz-have-you-heard-this/?utm_source=rss&utm_medium=rss&utm_campaign=news-quiz-have-you-heard-this http://thecrux.com/news-quiz-have-you-heard-this/#comments Thu, 17 Apr 2014 19:10:21 +0000 Clark Stephens http://thecrux.com/?p=18873 "The mainstream media has completely ignored the most important stock story of this year..." Continue reading

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The mainstream media has completely ignored the most important stock story of this year…

But if you’ve been reading my DailyWealth Trader service, you’ve not only heard this story… you’ve been making good money on it. And there’s much more to come…

What’s the story? I’ll tell you in a moment…

First, let’s review a story the mainstream press has been all over:

Over the past 18 months, some of the world’s most-watched stocks have skyrocketed… Online retailer Amazon climbed as much as 85%. That was nothing compared with 3D-printing pioneer 3D Systems, which soared 310%. And even 3D’s move couldn’t match the 657% gain in movie streamer Netflix.

Social-media network Facebook climbed 280% since November 2012. Its cousin Twitter nearly tripled from its initial public offering (IPO) in November 2013.

These stocks climbed to valuations beyond all reason. Amazon was trading at more than 600 times trailing 12-month earnings. 3D Systems hit 171 times earnings. Facebook at one point last January traded at 1,623 times earnings.

And Twitter… Well, Twitter doesn’t have positive earnings yet. It lost $645 million in 2013. But it peaked at 75 times annual sales… which is an outrageous number.

When valuations are that high, it’s hard to imagine a scenario where shareholders are going to make money… except by selling to a “greater fool.” And it looks like greater fools are getting scarce…

As you no doubt have heard, the “glamour” stocks are falling… hard. What you probably haven’t heard about is the price strength in some of the world’s greatest companies…

You can see what I mean below. Soda- and snack-maker PepsiCo (PEP) is up 9% over the last two months. In DWT, we’ve traded Pepsi twice this year. We’re averaging 3% per trade… 15.6% annualized.

Meanwhile, Amazon is down 9%.

 

Pepis co v Amazon

 

Tech-services giant IBM (IBM) is up 3% over the last two months. We’ve traded IBM three times this year. We’re averaging 3.3% returns… 22.8% annualized.

Meanwhile, Netflix is down 22%.

 

Ibm v Netflix

 

Beverage giant Coca-Cola (KO) is up 5% over the last two months. We’ve traded Coke three times this year. We’re averaging 3.5% per trade… 20.4% annualized.

Meanwhile, 3D Systems is down 35%.

 

Coco-Cola v 3d

 

Newspapers love to write about meteoric rises and gruesome collapses, like we’re seeing in the glamour stocks. What they won’t write about is a 3% gain in a big, safe, “boring” stock like IBM or Wal-Mart.

But if you’re looking to build wealth in the market over the long term, this is a much more important story.

Stick with trades on stocks that have great brands… that bring in billions of dollars of cash earnings… that have decades-long track records of rewarding their shareholders. This isn’t a “sexy” strategy, but it works.

If you want cocktail-party conversation-starters, go ahead and buy IPOs at 75 times sales. You might get lucky.

But if you want a lifetime of trading success, stick with a proven formula. That’s the story I’m writing.

Crux note: You can learn exactly what strategy we use to get regular, safe double-digit annual income from blue-chip stocks, right here.

 

More from Amber Lee Mason:

Amber Lee Mason: The Three-Minute Trading Expert

Amber Lee Mason: The answer to a BIG question you’re probably asking about stocks

Amber Lee Mason: A world-class way to profit from the next big rally in silver

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What you don’t know about South Korea’s largest maritime disaster in 20 years http://thecrux.com/what-you-dont-know-about-south-koreas-largest-maritime-disaster-in-20-years/?utm_source=rss&utm_medium=rss&utm_campaign=what-you-dont-know-about-south-koreas-largest-maritime-disaster-in-20-years http://thecrux.com/what-you-dont-know-about-south-koreas-largest-maritime-disaster-in-20-years/#comments Thu, 17 Apr 2014 19:00:48 +0000 Jarod Baker http://thecrux.com/?p=18815 "It became a nightmare as passengers... were clinging to the ferry's sinking hull..." Continue reading

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The capsized South Korean ferry is the country’s largest maritime disaster in over 20 years.

There were 475 passengers and crew… mostly high school children and teachers on Spring Break. Almost 300 people are still missing… and four confirmed dead.

Passengers recall a loud bang… before the ferry completely submerged several hours later.

An announcement told the passengers to stay still… while the ship was already sinking. Some students ignored the message and jumped through windows… but the majority of students stayed put. One rescued student said, “We asked if we should escape now, but the announcement kept telling us to stay still. I’m so worried about the students in rooms.”

Survivors on the ship are sending text messages to friends and family. One text message says, “I’m not dead… there are still people inside the ship.” Rescue operations are continuing despite rain and strong currents. Victims trapped inside the ship and the anguished families at shore can only wait.

 

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More on disasters:

Last week’s mudslide disaster could happen again. Here’s what you need to know.

Doc Eifrig: The story you haven’t heard about this week’s Philippine disaster

What you read here about last weekend’s West Virginia disaster could save your life

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What if a bar treated your beer the same way a bank treats your money? http://thecrux.com/what-if-a-bar-treated-your-beer-the-same-way-a-bank-treats-your-money/?utm_source=rss&utm_medium=rss&utm_campaign=your-bank-just-opened-a-bar-and-it-didnt-end-well http://thecrux.com/what-if-a-bar-treated-your-beer-the-same-way-a-bank-treats-your-money/#comments Thu, 17 Apr 2014 17:00:24 +0000 Jarod Baker http://thecrux.com/?p=18811 At least a bank would never drink your cocktail... Continue reading

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Regular Crux readers know big banks have no problem charging you and taking money wherever they can find a way. Banks are clever… and you rarely ever see 100% of the hidden fees you end up having to pay.

TransferWise is a company that doesn’t appreciate bank fees. They were sick and tired of paying at least 5% in fees with every transfer amount. They found a way to circumvent the fees… and a business was born.

To illustrate their contempt for banks… they decided to put the message right in people’s faces. There’s no hiding the fact the person you’re doing business with is skimming off the top. The eventual end is the same… they both get sloshed on the spoils.

 

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More on big banks:

New battle over banks shows Obama and Wall Street are on the same side

Must-see list details the “jaw-dropping crimes” of the big banks

The little-known reason Canadian banks are so much safer than U.S. banks

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Are you ready for World War III? Russia is… http://thecrux.com/this-is-why-the-u-s-is-crazy-to-mess-with-the-russians/?utm_source=rss&utm_medium=rss&utm_campaign=this-is-why-the-u-s-is-crazy-to-mess-with-the-russians http://thecrux.com/this-is-why-the-u-s-is-crazy-to-mess-with-the-russians/#comments Thu, 17 Apr 2014 15:10:41 +0000 Clark Stephens http://thecrux.com/?p=18824 "We could be on the verge of a very different war..." Continue reading

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From Amanda Zappacosta of Stansberry Radio:

Einstein said, “I don’t know how the third World War will be fought, but I can assure you the fourth will be fought with sticks and stones.”

In this clip from Stansberry Radio, listen in as Gerald Celente, publisher of The Trends Journal, explains why we could be on the verge of a very different war… a war of suitcase-sized nukes, cyberterrorism, and who knows what else…

 

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More from S&A:

Porter Stansberry: This chart says a new bubble is forming right now

Doc Eifrig: If you’re worrying about the economy, you need to see this now

Steve Sjuggerud: This was the worst mistake of my career… and it’s happening again right now

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New report says Obama is “cooking the books” on Obamacare http://thecrux.com/cooking-the-books-liberal-media-makes-a-shocking-admission-about-obama-and-obamacare/?utm_source=rss&utm_medium=rss&utm_campaign=cooking-the-books-liberal-media-makes-a-shocking-admission-about-obama-and-obamacare http://thecrux.com/cooking-the-books-liberal-media-makes-a-shocking-admission-about-obama-and-obamacare/#comments Thu, 17 Apr 2014 14:21:26 +0000 Justin Brill http://thecrux.com/?p=18830 "No, I'm not kidding. I wish I was..." Continue reading

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From Bloomberg:

For several months now, whenever the topic of enrollment in the Affordable Care Act came up, I’ve been saying that it was too soon to tell its ultimate effects. We don’t know how many people have paid for their new insurance policies, or how many of those who bought policies were previously uninsured. For that, I said, we will have to wait for Census Bureau data, which offer the best assessment of the insurance status of the whole population. Other surveys are available, but the samples are smaller, so they’re not as good; the census is the gold standard. Unfortunately, as I invariably noted, these data won’t be available until 2015.

I stand corrected: These data won’t be available at all. Ever.

No, I’m not kidding. I wish I was. The New York Times reports that the Barack Obama administration has changed the survey so that we cannot directly compare the numbers on the uninsured over time.

The changes are intended to improve the accuracy of the survey, being conducted this month in interviews with tens of thousands of households around the country. But the new questions are so different that the findings will not be comparable, the officials said. 

An internal Census Bureau document said that the new questionnaire included a “total revision to health insurance questions” and, in a test last year, produced lower estimates of the uninsured. Thus, officials said, it will be difficult to say how much of any change is attributable to the Affordable Care Act and how much to the use of a new survey instrument.

“We are expecting much lower numbers just because of the questions and how they are asked,” said Brett J. O’Hara, chief of the health statistics branch at the Census Bureau.

I’m speechless. Shocked. Stunned. Horrified. Befuddled. Aghast, appalled, thunderstruck, perplexed, baffled, bewildered, and dumbfounded. It’s not that I am opposed to the changes: Everyone understands that the census reports probably overstate the true number of the uninsured, because the number they report is supposed to be “people who lacked insurance for the entire previous year,” but people tend to answer with their insurance status right now.

But why, dear God, oh, why, would you change it in the one year in the entire history of the republic that it is most important for policy makers, researchers, and voters to be able to compare the number of uninsured to those in prior years? The answers would seem to range from “total incompetence on the part of every level of this administration” to something worse.

Yes, that’s right, I said “every level.” Because guess who was involved in this decision, besides the wonks at Census?

The White House is always looking for evidence to show the benefits of the health law, which is an issue in many of this year’s midterm elections. The Department of Health and Human Services and the White House Council of Economic Advisers requested several of the new questions, and the White House Office of Management and Budget approved the new questionnaire. But the decision to make fundamental changes in the survey was driven by technical experts at the Census Bureau, and members of Congress have not focused on it or suggested political motives.

Sarah Kliff of Vox says we shouldn’t freak out, because these are the numbers that the census collects for 2013, so the change is actually giving us a good baseline. But I’m afraid I’m not so sanguine. As Aaron Carroll says: “It’s actually helpful to have a trend to measure, not a pre-post 2013/2014. This still sucks.”

The new numbers will suffer, to some extent, from the same bias that the old questions suffered from: People are better at remembering recent events than later ones. Quick: On what day did you last get your oil changed? What month was the wedding you attended last summer? If it was in the last few months, you probably know. If it was someone you’re not that close to … well, the summer months kind of blend into each other now that you’re a grownup, don’t they?

And what has been happening in the most recent months? A whole lot of change! Policies were canceled, benefits changed, people shifted around their coverage in anticipation of the new law. That doesn’t make for a very good baseline. It will be a very good measure of who has insurance right now, in 2014, but it’s not where I’d want to start my 2013 baseline for our new law. That’s why they should have done this for 2012 – or waited until 2016 – to give us actual comparable data for the transition period. So by your leave, I think I’ll continue to freak out for a bit.

I find it completely and totally impossible to believe that this problem didn’t occur to anyone at Census, or in the White House. It would be like arguing that the George W. Bush administration might have inadvertently overlooked the possibility that when the U.S. invaded Iraq, there would be shooting. This is the biggest policy debate of the last 10 years, and these data are at the heart of that debate. It is implausible that everyone involved somehow failed to notice that they were making it much harder to know the effect of this law on the population it was supposed to serve. Especially because the administration seems to have had a ready excuse as soon as people reacted to the news.

Even if the administration genuinely believes this is defensible, why would they give anyone reason to believe that it is cooking the books? Because those charges are being made, and they’re a lot harder to dismiss than the complaints about birth certificates or dark intimations that the administration has simply made up its enrollment figures out of whole cloth.

I just don’t get it.

I mean, I can certainly think of explanations, but I can’t quite bring myself to believe the worst of them. Which leaves me with the only slightly-less-utterly-appalling conclusion: At some point, very early on in the process, folks noticed that asking the new questions would make it difficult to compare Obamacare’s implementation year to prior years, and decided that assessing the effects of the transition wasn’t nearly as important as making urgent changes to … questions we’ve been asking basically the same way for a decade and a half.

No, wait, that doesn’t make any sense, either. Let’s go back to inexplicable, shall we?

If the administration is really serious about transparency and data-driven policy, as I’ve been told for a year now, then it will immediately rectify this appalling mistake and put the old questions back into circulation double-quick. But we’re more likely going to hear the most transparent and data-driven administration in history citing these data – without an asterisk – to tout the amazing impact of its policies.

To contact the writer of this article:  at mmcardle3@bloomberg.net.

To contact the editor responsible for this article: 
James Gibney at jgibney5@bloomberg.net.

 

More on Obamacare:

Meet the doctor who is single-handedly taking down Obamacare. Learn where he can treat you.

“Real life” example shows what Obamacare really does to small businesses

Doc Eifrig: Finally, a little bit of good news from the Obamacare debacle

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Gold bear takes on bug: ‘You’re miles off base’ http://www.cnbc.com/id/101586205?__source=yahoonews&par=yahoonews&utm_source=rss&utm_medium=rss&utm_campaign=gold-bear-takes-on-bug-youre-miles-off-base http://www.cnbc.com/id/101586205?__source=yahoonews&par=yahoonews#comments Tue, 15 Apr 2014 20:48:04 +0000 Content Keyword RSS copy http://battlehymn.com/?guid=e36705505d330a4e2f4d56fc7de8e0f1 Is gold going to $1,000 or $5,000? Peter Schiff and Paul Krake are doing battle over that question. Continue reading

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Is gold going to $1,000 or $5,000? Peter Schiff and Paul Krake are doing battle over that question.

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Resource master Rick Rule answers the 12 most important questions on precious metals today http://battlehymn.com/resource-master-rick-rule-answers-the-12-most-important-questions-on-precious-metals-today-2?utm_source=rss&utm_medium=rss&utm_campaign=resource-master-rick-rule-answers-the-12-most-important-questions-on-precious-metals-today-2 http://battlehymn.com/resource-master-rick-rule-answers-the-12-most-important-questions-on-precious-metals-today-2#comments Thu, 27 Mar 2014 11:00:12 +0000 Justin Brill http://thecrux.com/?p=17049 "We are in a very strange situation..." Continue reading

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From Henry Bonner in Sprott’s Thoughts: 

On March 18th, Rick Rule, Chairman of Sprott Global Resource Investments Ltd., answered the most important questions on natural resources and precious metals today.

Rick has recently warned investors not to become too bullish too soon – there will be more pullbacks and sell-offs ahead, he says.

Where is gold headed in the next one-to-five years?

“I believe that the gold price bottomed in 2013,” Rick begins. “Between 2011 and 2013, traders drove the gold price down, unwinding leveraged bets on gold. For most of that period, there were forced sellers and not much buying.

“In the middle part of 2013, we saw a stalemate between exhausted sellers and buyers. As the forced selling by leveraged traders passed, gold began to find a bid, taking the price higher so far in 2014.

“The gold price rally will not necessarily continue through 2014. But as an investor with an outlook of three-to-five years, I believe ownership of gold will be critical to maintaining your wealth in the next few years.”

Are institutions intentionally driving down prices by shorting the metals?

“The situation is different depending on the metal you are talking about,” says Rick. “In platinum and palladium, for instance, there are almost no short-sellers of the metals.

“On the gold side, traders are now covering their short positions, which could indicate that downwards momentum has subsided.”

Was there a concerted effort to drive down the metals?

“I believe that any potential manipulation is disappearing,” said Rick. “The banks’ and other major institutions’ ability to manipulate metals prices is under increasing regulatory scrutiny.”

How long will the Fed keep interest rates low?

“As long as they can get away with it,” says Rick. “Suppressed interest rates take money from savers, who receive an artificially low return, and rewards spenders with the ability to borrow more at lower rates.

“Because spenders outnumber savers, elections and political powers tend to favor low-interest-rate policies like the current ZIRP (zero-interest-rate policy) in the United States.”

So far, a weak recovery has prevented low interest rates from causing high inflation, he adds.

“We are in a very strange situation – a jobless recovery with little new investment in production. The demand for capital has been muted as a result, which has prevented easy money from translating into greater inflation.

“Because the economy remains anemic, interest rates could stay low for the next two or three years. But markets always win in the end. Eventually, I would expect inflation and higher interest rates to arise.”

Will there be a ‘meltdown’ in the metals sector before a new bull market takes off? 

“I don’t think that we will see another move down like the one from 2011 to 2013, where gold dropped 30 percent and mining stocks fell by over 50 percent. But this is still the most volatile sector in the world. Just as gold went up by over 1,000 in only a few months, we could see it return to around 1,150 at some point before the year is over.

“In fact, I believe the market will mostly move sideways over the next 18 months with intermittent rallies and subsequent sell-offs. Once this period is passed, we could see a major bull market truly take off.”

Is there any store of wealth that cannot be manipulated?

“The biggest threat to your wealth is not the government, the banks or market manipulators,” says Rick. “It is almost always your own lack of conviction, courage, or knowledge.

“Everyone wants to be a contrarian, but only when it’s popular. That is why lots of people wanted to invest in 2011 when precious metals had enjoyed an unprecedented rise. Meanwhile, nobody wanted to invest in 2012 and 2013, when both the precious metals and the mining stocks were much cheaper.

“If you believe in the precious metals in the long term, then manipulation by financial or government institutions to drive the price lower is an opportunity. You can buy the assets you want at an artificially low price.

“So don’t fear manipulation. Fear your own mistakes due to emotional decision-making and prejudices set by your experience in the immediate past.”

Where are platinum and palladium headed?

“We have recently seen an increasing popularity of platinum group metals among financial institutions, who are now speculating in the price of the metal. I believe they could now begin to unwind these positions now, which could drive the price lower in the short term.

“But in the longer-term, I see them going higher,” he adds. “Mining companies are losing money on their platinum production, which could force them to shut down. But platinum and palladium are extremely useful to modern society – primarily because they help prevent smog.

“For these reasons, the price has to go up,” he believes.

What about silver?

“We often joke that ‘silver bugs’ are ‘gold bugs on steroids,’” says Rick. “Moves in the price of silver tend to be more dramatic than in gold. So if gold moves up, silver can move up even more – and fall by a lot more too.

“The problem with silver is that a lot of it comes as a by-product of producing some other metal. So in order to predict the silver production from mining you need to understand the economics of the other metals, where silver is mined as a by-product.

“Another hitch is that estimates vary widely on how much silver really exists in circulation today – especially in places like India, Sri Lanka, Bangladesh, or Pakistan.”

Is the general stock market in for another crash?

“It seems the general stock market has been driven by artificially low interest rates. If interest rates were to rise, as I believe they will eventually, it could severely adversely impact most stocks.

“There is no real economic recovery going on to justify higher stock prices today. Few jobs are being created and there is little capital investment. It looks like a recovery ‘on paper’ – but it is a confidence recovery driven by low interest rates.

“If confidence wears off and interest rates start to rise, I believe it could be extremely damaging to the overall stock market,” he concludes.

If the resource sector recovers, how will we know when to get out?

“Remember back to 2010 and 2011 – and how well your portfolio was performing. Many investors were seeing their portfolios rise by double-digits each month. That is when we felt the smartest and the most aggressive.

“As the height of a bull market, investors confuse a bull market with brains. So when we become most fearlessly bullish it is time to begin to sell stocks. The easiest sign of a top is really that you begin to see solicitations everywhere to invest in that sector – from the media and publishing companies.

“In contrast, publishers begin to cancel their publications that have to do with natural resources when we are in a bear market. It is a harbinger of a bottom.”

What effects will Russia’s annexation of Crimea from the Ukraine have for investors?

“I believe that the impact for investors of what is happening in the Ukraine should be fairly small. The events in the Ukraine are part of the natural resources narrative, and have been used as a reason for the rise in precious metals prices. I believe that gold and other metals would be rising regardless of the situation in the Ukraine, because the buyers are simply overtaking the sellers.

“One important effect may be to diversify the supply of natural gas in Europe – resulting in greater production in Western Europe and fewer exports from Russia.

“Additionally, lawmakers in the United States could use ‘energy security’ for Western Europe as a pretext to allow oil and gas to be exported there – which seriously scares non-US energy producers. The crisis could provide a useful excuse for oil and gas interests in the US to bring production to the world market. And Western Europe would likely favor an alternate supply of oil and gas.”

What impact will the Mexican mining tax have on the industry?

“Politicians and governments frequently turn to mining and oil and gas to increase their tax revenues because the assets are fixed. They cannot be moved elsewhere.

“I believe the new tax will not be beneficial to Mexico. State ownership of the oil industry has severely impeded the oil and gas industry there. Now, they are turning their attention to mining, which is certainly not a positive development.

“The mining industry has been a stellar contributor of revenues for the government and jobs for the Mexican people. It will only be weighed down by this tax, which is very unfortunate.”

What will happen to the price of uranium in the near and long term?

“In the near-term, the market is still working through the excess supply caused by Japan’s shutting down its nuclear power plants and selling supplies onto the market,” says Rick.

“But in the long term, I believe uranium is a ‘no-brainer.’ Uranium miners spend 70 dollars per pound to produce the green metal, but it only sells for 35 dollars. They lose approximately 50 percent on every pound of uranium produced.

“As a result, the industry is using up the capital it raised during the bull market from 2004 to 2011.

“Once they run out of capital, they will have to shut down their operations unless the price of uranium has risen to a profitable level. This will cause nuclear power plants to shut down – a tremendous drain on electrical production capacity.

“Because so much energy can be produced from a small quantity of uranium relative to oil or gas, the cost of uranium represents a small portion of the costs of producing electricity from a nuclear power plant. Therefore, nuclear power generation will remain competitive as an energy source even if the cost of the metal were to double, which I believe is likely as utilities will pay what they must to ensure a supply.”

Where should an investor in natural resources put their money today?

“Personalized investment advice is only available to clients. The full depth of our research and expertise at analyzing natural resource stocks is available through your Sprott Global broker.

“The best investments for your portfolio will depend on your individual situations and willingness to tolerate risk. If you would like to know what are favorite companies are today, I urge you to either contact your Sprott Global broker or become a client of Sprott Global.

Rick concludes: “Investing in natural resources and precious metals is attractive today because the sector is so much cheaper than it was three years ago. Many of the stocks are trading at a 90 percent discount to their prices in 2011. For a contrarian investor, I believe that we are seeing a historic opportunity now.”

Rick Rule is the Chairman and Founder of Sprott Global Resource Investments Ltd., a full-service brokerage firm located in Carlsbad, CA. Sprott Global is an affiliate of Sprott Inc., a public company based in Toronto, Canada. Mr. Rule leads a team of earth science and finance professionals who form an intellectual pool for resource investment management. He and his team have experience in many resource sectors including mining, oil and gas, water, agriculture, forestry, and alternative energy.

 

More on the resource sector:

URGENT: A master trader’s update on gold stocks

Porter Stansberry: Two critical lessons every commodities investor must know now

Resource master Rick Rule: The one thing you must know about commodities now

The post Resource master Rick Rule answers the 12 most important questions on precious metals today appeared first on .

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From Henry Bonner in Sprott’s Thoughts: 

On March 18th, Rick Rule, Chairman of Sprott Global Resource Investments Ltd., answered the most important questions on natural resources and precious metals today.

Rick has recently warned investors not to become too bullish too soon – there will be more pullbacks and sell-offs ahead, he says.

Where is gold headed in the next one-to-five years?

“I believe that the gold price bottomed in 2013,” Rick begins. “Between 2011 and 2013, traders drove the gold price down, unwinding leveraged bets on gold. For most of that period, there were forced sellers and not much buying.

“In the middle part of 2013, we saw a stalemate between exhausted sellers and buyers. As the forced selling by leveraged traders passed, gold began to find a bid, taking the price higher so far in 2014.

“The gold price rally will not necessarily continue through 2014. But as an investor with an outlook of three-to-five years, I believe ownership of gold will be critical to maintaining your wealth in the next few years.”

Are institutions intentionally driving down prices by shorting the metals?

“The situation is different depending on the metal you are talking about,” says Rick. “In platinum and palladium, for instance, there are almost no short-sellers of the metals.

“On the gold side, traders are now covering their short positions, which could indicate that downwards momentum has subsided.”

Was there a concerted effort to drive down the metals?

“I believe that any potential manipulation is disappearing,” said Rick. “The banks’ and other major institutions’ ability to manipulate metals prices is under increasing regulatory scrutiny.”

How long will the Fed keep interest rates low?

“As long as they can get away with it,” says Rick. “Suppressed interest rates take money from savers, who receive an artificially low return, and rewards spenders with the ability to borrow more at lower rates.

“Because spenders outnumber savers, elections and political powers tend to favor low-interest-rate policies like the current ZIRP (zero-interest-rate policy) in the United States.”

So far, a weak recovery has prevented low interest rates from causing high inflation, he adds.

“We are in a very strange situation – a jobless recovery with little new investment in production. The demand for capital has been muted as a result, which has prevented easy money from translating into greater inflation.

“Because the economy remains anemic, interest rates could stay low for the next two or three years. But markets always win in the end. Eventually, I would expect inflation and higher interest rates to arise.”

Will there be a ‘meltdown’ in the metals sector before a new bull market takes off? 

“I don’t think that we will see another move down like the one from 2011 to 2013, where gold dropped 30 percent and mining stocks fell by over 50 percent. But this is still the most volatile sector in the world. Just as gold went up by over 1,000 in only a few months, we could see it return to around 1,150 at some point before the year is over.

“In fact, I believe the market will mostly move sideways over the next 18 months with intermittent rallies and subsequent sell-offs. Once this period is passed, we could see a major bull market truly take off.”

Is there any store of wealth that cannot be manipulated?

“The biggest threat to your wealth is not the government, the banks or market manipulators,” says Rick. “It is almost always your own lack of conviction, courage, or knowledge.

“Everyone wants to be a contrarian, but only when it’s popular. That is why lots of people wanted to invest in 2011 when precious metals had enjoyed an unprecedented rise. Meanwhile, nobody wanted to invest in 2012 and 2013, when both the precious metals and the mining stocks were much cheaper.

“If you believe in the precious metals in the long term, then manipulation by financial or government institutions to drive the price lower is an opportunity. You can buy the assets you want at an artificially low price.

“So don’t fear manipulation. Fear your own mistakes due to emotional decision-making and prejudices set by your experience in the immediate past.”

Where are platinum and palladium headed?

“We have recently seen an increasing popularity of platinum group metals among financial institutions, who are now speculating in the price of the metal. I believe they could now begin to unwind these positions now, which could drive the price lower in the short term.

“But in the longer-term, I see them going higher,” he adds. “Mining companies are losing money on their platinum production, which could force them to shut down. But platinum and palladium are extremely useful to modern society – primarily because they help prevent smog.

“For these reasons, the price has to go up,” he believes.

What about silver?

“We often joke that ‘silver bugs’ are ‘gold bugs on steroids,’” says Rick. “Moves in the price of silver tend to be more dramatic than in gold. So if gold moves up, silver can move up even more – and fall by a lot more too.

“The problem with silver is that a lot of it comes as a by-product of producing some other metal. So in order to predict the silver production from mining you need to understand the economics of the other metals, where silver is mined as a by-product.

“Another hitch is that estimates vary widely on how much silver really exists in circulation today – especially in places like India, Sri Lanka, Bangladesh, or Pakistan.”

Is the general stock market in for another crash?

“It seems the general stock market has been driven by artificially low interest rates. If interest rates were to rise, as I believe they will eventually, it could severely adversely impact most stocks.

“There is no real economic recovery going on to justify higher stock prices today. Few jobs are being created and there is little capital investment. It looks like a recovery ‘on paper’ – but it is a confidence recovery driven by low interest rates.

“If confidence wears off and interest rates start to rise, I believe it could be extremely damaging to the overall stock market,” he concludes.

If the resource sector recovers, how will we know when to get out?

“Remember back to 2010 and 2011 – and how well your portfolio was performing. Many investors were seeing their portfolios rise by double-digits each month. That is when we felt the smartest and the most aggressive.

“As the height of a bull market, investors confuse a bull market with brains. So when we become most fearlessly bullish it is time to begin to sell stocks. The easiest sign of a top is really that you begin to see solicitations everywhere to invest in that sector – from the media and publishing companies.

“In contrast, publishers begin to cancel their publications that have to do with natural resources when we are in a bear market. It is a harbinger of a bottom.”

What effects will Russia’s annexation of Crimea from the Ukraine have for investors?

“I believe that the impact for investors of what is happening in the Ukraine should be fairly small. The events in the Ukraine are part of the natural resources narrative, and have been used as a reason for the rise in precious metals prices. I believe that gold and other metals would be rising regardless of the situation in the Ukraine, because the buyers are simply overtaking the sellers.

“One important effect may be to diversify the supply of natural gas in Europe – resulting in greater production in Western Europe and fewer exports from Russia.

“Additionally, lawmakers in the United States could use ‘energy security’ for Western Europe as a pretext to allow oil and gas to be exported there – which seriously scares non-US energy producers. The crisis could provide a useful excuse for oil and gas interests in the US to bring production to the world market. And Western Europe would likely favor an alternate supply of oil and gas.”

What impact will the Mexican mining tax have on the industry?

“Politicians and governments frequently turn to mining and oil and gas to increase their tax revenues because the assets are fixed. They cannot be moved elsewhere.

“I believe the new tax will not be beneficial to Mexico. State ownership of the oil industry has severely impeded the oil and gas industry there. Now, they are turning their attention to mining, which is certainly not a positive development.

“The mining industry has been a stellar contributor of revenues for the government and jobs for the Mexican people. It will only be weighed down by this tax, which is very unfortunate.”

What will happen to the price of uranium in the near and long term?

“In the near-term, the market is still working through the excess supply caused by Japan’s shutting down its nuclear power plants and selling supplies onto the market,” says Rick.

“But in the long term, I believe uranium is a ‘no-brainer.’ Uranium miners spend 70 dollars per pound to produce the green metal, but it only sells for 35 dollars. They lose approximately 50 percent on every pound of uranium produced.

“As a result, the industry is using up the capital it raised during the bull market from 2004 to 2011.

“Once they run out of capital, they will have to shut down their operations unless the price of uranium has risen to a profitable level. This will cause nuclear power plants to shut down – a tremendous drain on electrical production capacity.

“Because so much energy can be produced from a small quantity of uranium relative to oil or gas, the cost of uranium represents a small portion of the costs of producing electricity from a nuclear power plant. Therefore, nuclear power generation will remain competitive as an energy source even if the cost of the metal were to double, which I believe is likely as utilities will pay what they must to ensure a supply.”

Where should an investor in natural resources put their money today?

“Personalized investment advice is only available to clients. The full depth of our research and expertise at analyzing natural resource stocks is available through your Sprott Global broker.

“The best investments for your portfolio will depend on your individual situations and willingness to tolerate risk. If you would like to know what are favorite companies are today, I urge you to either contact your Sprott Global broker or become a client of Sprott Global.

Rick concludes: “Investing in natural resources and precious metals is attractive today because the sector is so much cheaper than it was three years ago. Many of the stocks are trading at a 90 percent discount to their prices in 2011. For a contrarian investor, I believe that we are seeing a historic opportunity now.”

Rick Rule is the Chairman and Founder of Sprott Global Resource Investments Ltd., a full-service brokerage firm located in Carlsbad, CA. Sprott Global is an affiliate of Sprott Inc., a public company based in Toronto, Canada. Mr. Rule leads a team of earth science and finance professionals who form an intellectual pool for resource investment management. He and his team have experience in many resource sectors including mining, oil and gas, water, agriculture, forestry, and alternative energy.

 

More on the resource sector:

URGENT: A master trader’s update on gold stocks

Porter Stansberry: Two critical lessons every commodities investor must know now

Resource master Rick Rule: The one thing you must know about commodities now

The post Resource master Rick Rule answers the 12 most important questions on precious metals today appeared first on .

]]>
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The post Resource master Rick Rule answers the 12 most important questions on precious metals today appeared first on .

]]>
From Henry Bonner in Sprott’s Thoughts: 

On March 18th, Rick Rule, Chairman of Sprott Global Resource Investments Ltd., answered the most important questions on natural resources and precious metals today.

Rick has recently warned investors not to become too bullish too soon – there will be more pullbacks and sell-offs ahead, he says.

Where is gold headed in the next one-to-five years?

“I believe that the gold price bottomed in 2013,” Rick begins. “Between 2011 and 2013, traders drove the gold price down, unwinding leveraged bets on gold. For most of that period, there were forced sellers and not much buying.

“In the middle part of 2013, we saw a stalemate between exhausted sellers and buyers. As the forced selling by leveraged traders passed, gold began to find a bid, taking the price higher so far in 2014.

“The gold price rally will not necessarily continue through 2014. But as an investor with an outlook of three-to-five years, I believe ownership of gold will be critical to maintaining your wealth in the next few years.”

Are institutions intentionally driving down prices by shorting the metals?

“The situation is different depending on the metal you are talking about,” says Rick. “In platinum and palladium, for instance, there are almost no short-sellers of the metals.

“On the gold side, traders are now covering their short positions, which could indicate that downwards momentum has subsided.”

Was there a concerted effort to drive down the metals?

“I believe that any potential manipulation is disappearing,” said Rick. “The banks’ and other major institutions’ ability to manipulate metals prices is under increasing regulatory scrutiny.”

How long will the Fed keep interest rates low?

“As long as they can get away with it,” says Rick. “Suppressed interest rates take money from savers, who receive an artificially low return, and rewards spenders with the ability to borrow more at lower rates.

“Because spenders outnumber savers, elections and political powers tend to favor low-interest-rate policies like the current ZIRP (zero-interest-rate policy) in the United States.”

So far, a weak recovery has prevented low interest rates from causing high inflation, he adds.

“We are in a very strange situation – a jobless recovery with little new investment in production. The demand for capital has been muted as a result, which has prevented easy money from translating into greater inflation.

“Because the economy remains anemic, interest rates could stay low for the next two or three years. But markets always win in the end. Eventually, I would expect inflation and higher interest rates to arise.”

Will there be a ‘meltdown’ in the metals sector before a new bull market takes off? 

“I don’t think that we will see another move down like the one from 2011 to 2013, where gold dropped 30 percent and mining stocks fell by over 50 percent. But this is still the most volatile sector in the world. Just as gold went up by over 1,000 in only a few months, we could see it return to around 1,150 at some point before the year is over.

“In fact, I believe the market will mostly move sideways over the next 18 months with intermittent rallies and subsequent sell-offs. Once this period is passed, we could see a major bull market truly take off.”

Is there any store of wealth that cannot be manipulated?

“The biggest threat to your wealth is not the government, the banks or market manipulators,” says Rick. “It is almost always your own lack of conviction, courage, or knowledge.

“Everyone wants to be a contrarian, but only when it’s popular. That is why lots of people wanted to invest in 2011 when precious metals had enjoyed an unprecedented rise. Meanwhile, nobody wanted to invest in 2012 and 2013, when both the precious metals and the mining stocks were much cheaper.

“If you believe in the precious metals in the long term, then manipulation by financial or government institutions to drive the price lower is an opportunity. You can buy the assets you want at an artificially low price.

“So don’t fear manipulation. Fear your own mistakes due to emotional decision-making and prejudices set by your experience in the immediate past.”

Where are platinum and palladium headed?

“We have recently seen an increasing popularity of platinum group metals among financial institutions, who are now speculating in the price of the metal. I believe they could now begin to unwind these positions now, which could drive the price lower in the short term.

“But in the longer-term, I see them going higher,” he adds. “Mining companies are losing money on their platinum production, which could force them to shut down. But platinum and palladium are extremely useful to modern society – primarily because they help prevent smog.

“For these reasons, the price has to go up,” he believes.

What about silver?

“We often joke that ‘silver bugs’ are ‘gold bugs on steroids,’” says Rick. “Moves in the price of silver tend to be more dramatic than in gold. So if gold moves up, silver can move up even more – and fall by a lot more too.

“The problem with silver is that a lot of it comes as a by-product of producing some other metal. So in order to predict the silver production from mining you need to understand the economics of the other metals, where silver is mined as a by-product.

“Another hitch is that estimates vary widely on how much silver really exists in circulation today – especially in places like India, Sri Lanka, Bangladesh, or Pakistan.”

Is the general stock market in for another crash?

“It seems the general stock market has been driven by artificially low interest rates. If interest rates were to rise, as I believe they will eventually, it could severely adversely impact most stocks.

“There is no real economic recovery going on to justify higher stock prices today. Few jobs are being created and there is little capital investment. It looks like a recovery ‘on paper’ – but it is a confidence recovery driven by low interest rates.

“If confidence wears off and interest rates start to rise, I believe it could be extremely damaging to the overall stock market,” he concludes.

If the resource sector recovers, how will we know when to get out?

“Remember back to 2010 and 2011 – and how well your portfolio was performing. Many investors were seeing their portfolios rise by double-digits each month. That is when we felt the smartest and the most aggressive.

“As the height of a bull market, investors confuse a bull market with brains. So when we become most fearlessly bullish it is time to begin to sell stocks. The easiest sign of a top is really that you begin to see solicitations everywhere to invest in that sector – from the media and publishing companies.

“In contrast, publishers begin to cancel their publications that have to do with natural resources when we are in a bear market. It is a harbinger of a bottom.”

What effects will Russia’s annexation of Crimea from the Ukraine have for investors?

“I believe that the impact for investors of what is happening in the Ukraine should be fairly small. The events in the Ukraine are part of the natural resources narrative, and have been used as a reason for the rise in precious metals prices. I believe that gold and other metals would be rising regardless of the situation in the Ukraine, because the buyers are simply overtaking the sellers.

“One important effect may be to diversify the supply of natural gas in Europe – resulting in greater production in Western Europe and fewer exports from Russia.

“Additionally, lawmakers in the United States could use ‘energy security’ for Western Europe as a pretext to allow oil and gas to be exported there – which seriously scares non-US energy producers. The crisis could provide a useful excuse for oil and gas interests in the US to bring production to the world market. And Western Europe would likely favor an alternate supply of oil and gas.”

What impact will the Mexican mining tax have on the industry?

“Politicians and governments frequently turn to mining and oil and gas to increase their tax revenues because the assets are fixed. They cannot be moved elsewhere.

“I believe the new tax will not be beneficial to Mexico. State ownership of the oil industry has severely impeded the oil and gas industry there. Now, they are turning their attention to mining, which is certainly not a positive development.

“The mining industry has been a stellar contributor of revenues for the government and jobs for the Mexican people. It will only be weighed down by this tax, which is very unfortunate.”

What will happen to the price of uranium in the near and long term?

“In the near-term, the market is still working through the excess supply caused by Japan’s shutting down its nuclear power plants and selling supplies onto the market,” says Rick.

“But in the long term, I believe uranium is a ‘no-brainer.’ Uranium miners spend 70 dollars per pound to produce the green metal, but it only sells for 35 dollars. They lose approximately 50 percent on every pound of uranium produced.

“As a result, the industry is using up the capital it raised during the bull market from 2004 to 2011.

“Once they run out of capital, they will have to shut down their operations unless the price of uranium has risen to a profitable level. This will cause nuclear power plants to shut down – a tremendous drain on electrical production capacity.

“Because so much energy can be produced from a small quantity of uranium relative to oil or gas, the cost of uranium represents a small portion of the costs of producing electricity from a nuclear power plant. Therefore, nuclear power generation will remain competitive as an energy source even if the cost of the metal were to double, which I believe is likely as utilities will pay what they must to ensure a supply.”

Where should an investor in natural resources put their money today?

“Personalized investment advice is only available to clients. The full depth of our research and expertise at analyzing natural resource stocks is available through your Sprott Global broker.

“The best investments for your portfolio will depend on your individual situations and willingness to tolerate risk. If you would like to know what are favorite companies are today, I urge you to either contact your Sprott Global broker or become a client of Sprott Global.

Rick concludes: “Investing in natural resources and precious metals is attractive today because the sector is so much cheaper than it was three years ago. Many of the stocks are trading at a 90 percent discount to their prices in 2011. For a contrarian investor, I believe that we are seeing a historic opportunity now.”

Rick Rule is the Chairman and Founder of Sprott Global Resource Investments Ltd., a full-service brokerage firm located in Carlsbad, CA. Sprott Global is an affiliate of Sprott Inc., a public company based in Toronto, Canada. Mr. Rule leads a team of earth science and finance professionals who form an intellectual pool for resource investment management. He and his team have experience in many resource sectors including mining, oil and gas, water, agriculture, forestry, and alternative energy.

 

More on the resource sector:

URGENT: A master trader’s update on gold stocks

Porter Stansberry: Two critical lessons every commodities investor must know now

Resource master Rick Rule: The one thing you must know about commodities now

The post Resource master Rick Rule answers the 12 most important questions on precious metals today appeared first on .

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