by Knut Anderson, Swiss Metal Assets
Each problem has hidden in it an opportunity so powerful that it dwarfs the problem.
“The greatest success stories were created by people who recognized a problem and turned it into an opportunity.”
In the overwhelming amount of Economic Reports and Statistics that we see (or don’t see) on a regular basis, almost every one of them are, and have been, moving in a negative direction in regards to our economy as a whole, and for us as individuals. Almost all of them are moving at an accelerating pace in that negative direction. In fact, most of them are growing at an “Exponential Pace”.
Not only that, but almost every one of these stats are deliberately misrepresented, manipulated or seasonally adjusted, making things seem better than they really are.
Also, the government and the Federal Reserve (which is neither Federal nor has reserves) are using every fiscal and monetary tool and policy at their disposal to artificially prop up the economy.
When we put it all of these indicators together, the eventual day of reckoning will be that much worse because the natural economic and business cycles have been artificially prolonged – mostly by building up more and more debt.
Never in the history of central bankers has the hidden coordination, influenced pressure, gargantuan money creation, doctored statistics, and interference with financial markets been so broad, so deep, and so profound.
The force of a correction is equal and opposite to the deception that preceded it. Never have we faced such a convergence of so many existing, probable and potential crises.
I am not, however, a ‘Doom and Gloomer’. I believe tremendous opportunity still exists. We are rapidly facing a choice:
1) Recognize these dangerous times and dangerous delusions and take steps to avoid their effects, or
2) Remain ignorant and/or uninformed of them and risk losing our lifestyle when the house of cards comes crashing down.
If the sources of information I’ve been reading and studying for many years are right, the next few years could be very rough for the unprepared. That’s why I’ve made it part of my mission to get the word out and to provide some common sense solutions.
STILL NOT CONVINCED? THEN CONSIDER THIS:
The US Dept of Labor States:
Out of 100 Americans age 25 today, when they reach 65…
54 are DEAD BROKE
36 are DEAD
5 are STILL WORKING
4 are COMFORTABLE
1 is WEALTHY
The ODDS are against most of us!
It seems that if we do things according to ‘conventional wisdom’, it’s not going to work out well for the majority.
Gerald Celente / Trends Research said, “I am always amazed that people would listen to the people that didn’t see it coming to say what’s going to happen next.”
My studies, education and experience have shown me quite vividly that the public always chases yesterday’s news (especially when it comes to investing and protecting their own wealth and purchasing power). That is why they have lost trillions of dollars in equity over the last few years with smaller and smaller equity in their homes, stocks and bonds, IRA’s, 401K’s and other retirement accounts. It’s all a matter of not understanding what a “Wealth Cycle” is and being invested in the wrong thing at the wrong time.
Last week a friend (who is a tax lawyer) and me discussed the potential economic malaise:
“I have prepared hundreds and hundreds of tax returns since 2008, when the cracks in our system became obvious. So I’ve had privileged access to both personal and business financial information that most people never see. In almost every case, no matter how intelligent and successful the people may have been, they had major investment losses of between 30 – 50% in their portfolios. One case was especially eye-catching. The client worked for one of the major brokerages on Wall Street and made over $500,000 in salary managing money in retirement accounts for the public. He personally lost over $500,000 (about 40%) in his own personal investments.”
Both he and his clients had failed to move from an over-valued asset class to the under-valued asset class that was starting a new wealth cycle.
These cycles, when one asset class outperforms all the rest, usually last about 14 – 20 years. It can’t go on forever. Eventually that asset class becomes over-valued and the cycle begins to slow or stop altogether. This causes a great wealth transfer and that’s what has happened starting around the year 2000. We are now in the middle of a great transfer of wealth to those invested in the appropriate hard assets.
I’ve actually been privately advising people within my own circle of influence of this for about ten years. Unfortunately, most have not listened to date. But it is now undeniable to me that hard assets are the place to be both now and for the foreseeable future. When they have run their course and the public comes flocking in at the height of the cycle, it will be time for us to move on to the next cycle and do it all over again.
Within the realm of Hard Assets we have identified one especially profitable area: Rare Strategic Metals.
National Geographic magazine calls these strategic metals “the secret ingredient of almost everything.”
They include such rare critical technical metals as rhenium, indium, gallium, hafnium, tantalum, tellurium and bismuth. Other strategic industrial metals include molybdenum, chromium, tungsten, cobalt and zirconium. These metals are all limited in supply or vulnerable to supply interruption, and under increasing demand.
To see a video about these metals and the usages, click here.
WHO ARE SWISSMETAL INC?
Schweizerische-metallhandelsag.ch (SMH) is the parent company, based in Switzerland, this company has been interviewed by respectable news sources like the Financial Times Germany, Deutsche Welle, Foonds, Evonik and many more. In the USA, rare strategic metals are offered by SMH’s American sales arm, SwissMetal INC (SMI), which works in partnership with SMH Germany.
SMI offers an opportunity to own these specialty metals, in physical form, stored in duty free zones in Switzerland or Panama.
A world without these specialty metals would be a world without cell and smart phones, computer chips, iPods, LCD monitors, surgical lasers, and jet engines, to name just a few.
However, supplies of these elements are increasingly uncertain. China accounts for more than 90% of the supply of these metals. And in 2010, that country imposed drastic restrictions on their export quotas.
The outcome was predictable. Prices have risen dramatically. But it’s not too late to capitalize on what could be the biggest natural resource crisis of the century. You can still diversify out of faltering paper currencies and physically own your own portfolio of rare strategic metals.
The fact is that only limited amounts of these Rare Metals are refined every year. Current and emerging industrial nations’ manufacturing demand is outstripping the available supply. This is a problem for manufacturers, but it has been very beneficial to the participants in SMI´s RIM´s stockpile in Switzerland, whose metals have inherited the exponential increase in value while they were sitting in our vaults for the past 2 years.
China and India currently have almost 400 million people receiving electricity for the first time. These people want all the products and conveniences that their counterparts in the West have enjoyed and taken for granted for years. What this means is that, even if something happened to reduce the demand for Rare Strategic Metals in Europe and the USA particularly, it would be more than made up by demand coming from these and other emerging countries in Asia and South America.
Furthermore, if a large sector of any population experiences financial hardship, they will not stop using all the electronic gadgets that have become essential to their daily lives. They will switch to less expensive items that still use Rare Strategic Metals.
If you are wealthy, you might buy a Lexus, an Apple computer, a Swiss watch and go to private hospitals, if you are in the middle class, you will buy a Toyota, a Samsung, a Citizen watch and go to public health care. Poor people will buy Chinese imitations, take public transportation and may not be able to afford a doctor. Regardless, all of us use the same metals in different products, cheap or expensive.
To give you an idea of how the metal prices might eventually affect the end price, let’s look at the humble laptop. If the laptop today costs $500 and within a few years the metal used in the lap top increases by 500%, the same laptop might then cost $20 more. The reason is simple: manufacturing uses trace amounts of each metal, and is absorbing the increased rare metal costs in their already wide profit margins.
This probably would not stop you from buying it, or for the manufacturer to stop making them. But as an owner of the metals, if you saw an increase in value of even 150%, during this same time period, you would be more than pleased.
Early in 2012 the USA, Japan and the EU issued a formal World Trade Organization (WTO) complaint against China regarding the Chinese reductions in exports of rare, strategic, industrial, and tech metals like the ones we have mentioned previously.
These countries need these metals to initiate and complete their strategic economic plans over the next few years. In the past two years China has reduced exports of these metals around 40%.
These countries, their manufacturing sectors, and military, have small or no stockpiles of these crucial materials to meet their strategic needs over the next 3 to 5 years, let alone over the next 10 to 20 years.
Most tech metal experts who have studied the WTO complaint feel that China will not comply because they will argue that these governments need the materials for their high tech military applications, and that a WTO complaint cannot be filed around materials used for the military.
They further believe that if the WTO orders China to increase exports of these raw materials, so that these countries can meet their strategic economic goals, China will simply refuse, as they need most of these materials to fuel their own economic strategy.
Unfortunately for these countries, the WTO has no teeth, and the only enforcement of their decisions is a series of Ping-Pong ball embargos, back and forth to try and get Chinese compliance. I think we all know the Chinese are masters at Ping-Pong.
The second significant event that occurred in September of 2012 came out of Beijing in an AP, and CNN news report that China was consolidating the metals market inside China by closing all of the independent smaller mines, refineries, and smelters. They are doing this so that the Central Committee takes over complete control of this sector, controlling pricing, and eliminating a black market that has existed up until now. This will cause another, immediate 20% reduction in exports.
This is bad news for the USA, Japan, Korea, Taiwan, the EU, Sony, LG, Toshiba, Panasonic, Samsung, BMW, the US Military Industrial Complex, and all other manufacturing sectors that need these metals now. The metals that China does release to them will cost more, and they may have to locate their production facility in China, to get access to the metals.
China is not asking anything outrageous. They simply want to receive the true market value for these metals now that there are so many new applications for them developed over the last 10 years.
Again, this is good news if you are a participant in a stockpile of these metals outside of China, as you will reap the benefits of these increased values in the metals in the coming years.
Furthermore, demand will continue to rise for the products which use these metals, as over 1 billion people are emerging from poverty in places like China, India, and South America, and entering the lower and middle classes, and they will demand products that we in the West and the developed East take for granted.
To illustrate in numbers the expected increase in demand for some of the aforementioned metals, a February 2012 Metal Report from Deutsche Rohstoffagentur shows that production levels for indium are already not meeting demand, and demand will increase from 580 metric tons in 2010 to over 1,800 metric tons by 2030. Gallium production will need to increase from 180 metric tons to 600 metric tons to meet increased demand. Tantalum production will need to increase from 600 metric tons to 1400 metric tons to meet demand.
This is simply not possible as the production levels of most of these metals are finite, as they are byproducts from base metal production.
In early July, Japan set a premium price for solar energy that was three times the rate of conventional power. This meant utility companies would be paid three times more for electricity sourced from solar. It’s widely expected that the premium will ignite the use of solar power.
Japan is just one of many countries making such moves – India, for example, recently decreed that all government buildings should be equipped with solar panels; this is a country with 1.2 billion people, so that is a lot of solar panels.
Realistically, production will not be able to increase to the necessary levels to meet this expected demand, so solutions like increased recycling and more efficient use of the metals will need to be initiated. These solutions, and especially the high costs of recycling, will not be able to meet the growing need, or slow the increases in the values of the metals, in the near future.
To see a video of how the world would look like without these metals, click here.
Swissmetal INC (SMI) is in the Americas providing ‘turnkey’ rare strategic and precious metal acquisition services combined with anonymous allocated and segregated storage in Switzerland and Panama at prices, and in quantities, appropriate for individuals and institutions.
SMI ‘baskets’ of critical strategic metals, beginning at just below $7,000 USD, are ideally suited for the long-term preservation of purchasing power as a defensive investment to counter the negative effects of inflation and economic downturns.
Owning these baskets also adds a significant upside potential to your portfolio, given they have appreciated an average of 16.5 % a year for the past three years consecutively, during what most will admit have been very tough investment markets.
SMI has also developed a cost-effective and efficient, fully IRS-compliant method of utilizing individual retirement accounts (IRA) in combination with an offshore LLC to own these strategic metals. This allows IRA owners to use previously unavailable alternative investments, worldwide, to diversify and potentially increase the investment returns in their IRA. Very significant liability protection is an additional benefit of the offshore LLC included in this program.
The individual ownership of these critical strategic metals is a truly ground floor chance for you to purchase metals within a wealth cycle which is only in the early stages and which has proven over the last 5 years to be safe and secure with intrinsic growth of the assets.
Before this program was developed 5 years ago, even if you knew about rare strategic metals and wanted to own them, you would have had to start with hundreds of thousands of dollars (maybe even millions) to buy in, likely in a long-term purchase contract, and you’d have to find a competent broker, deal with packaging, shipping, storage, assay values, import and export duties, custom fees, paperwork, taxes and various other miscellaneous expenses at each stage – costs called ‘ex-works’ that often end up doubling or more the initial wholesale metal price. This is not very likely to attract individual investors!
SUPPLY AND DEMAND ISSUES
Industrial buyers are quickly trying to gain control of the supply chain as demand and prices increase, and supplies decline. Governments are also involved in a ‘control of supply’ issue. Korea, in June 2011, placed Indium, a metal in three of SMA’s baskets, on their critical substances list to protect Samsung and LG, two very large electronics manufacturers.
The USA, through Congressman Mike Coffman and others, has passed the RESTART ACT 2011 to stockpile rare metals to protect US industry and the military from shortages. China, of course, restricted supply of these metals significantly in late 2010 and continued decreasing its exports of these metals throughout 2011 and now again into 2012, hoarding them for their own use and using their monopoly of the supply of these strategic metals as a political and economic weapon internationally.
Given that these are technology metals, the demand is constant and increasing. There may be fewer homes being built lately in the USA, but if you watch the sales of Apple and the millions of technology devices being produced and used worldwide, all with these critical technology metals inside, you will quickly realize the huge profit potential.
Contact us today using the form below to learn more about protecting your assets with strategic metals.