Welcome to the September Edition of your Swissmetal Inc. newsletter.
You might have noticed we didn’t have a newsletter in August. But, starting this month, we are stepping up our editorial calendar to two emails per month.
This edition of the newsletter will discuss how the connection between China and Russia will almost certainly drive the price of strategic metals higher, and why. This is in addition to the normal factors of supply and demand.
But first… As you may know, SMI just released it’s new E-Basket in early July. As part of that launch, we purchased 200 baskets. A few of these baskets remain, and as of tomorrow (Sept. 18th), we are offering them with 5 years of free storage. You can find more information by clicking the link here. Note, the presentation mentions the baskets are available at the pre-launch price. That deal is only available for existing customers, so when you talk to an account representative, be sure to let them know if you are an existing client. The free storage is available to all our subscribers and customers. Only a couple remain, so you’ll need to act fast. Click the link here for more details.
Next, I want to let you know about a conference we’ll be at in November in the beautiful Grand Cayman Marriot Beach Resort. If you value your liberty, this is definitely a conference you might be interested in visiting.
THE GRAND CAYMAN LIBERTY FORUM
Grand Cayman Marriot Beach Resort, Grand Cayman
November 16-20, 2014
The Grand Cayman Liberty Forum unites independent and establishment luminaries from Europe and North America to discuss and debate, first, today’s critical global financial issues, and subsequently, alternative global investment opportunities and challenges.
Mainstream and contrarian thinkers will help a maximum of 120 investors think through their own conclusions and strategies on topics ranging from The Future of Key Political Economiesto Specific Investment to Asset Protection Opportunities. Asset classes of particular focus include currencies, rare and precious metals, resource investments, lifestyle, income, agricultural property, and leading-edge technology opportunities.
In addition, onsite experts in International Law & Reporting Requirements, Property Investment, Physical Asset Acquisition and Storage, Residency and Passports, Offshore Financial Services, Contrarian Investments & Strategies, and other important asset protection services will be available for discussion, consultation, and personal inquiries.
For our full forum website and to sign up for the conference: click here.
I hope you enjoy the newsletter, and as always, if you have any topics you would like discussed, please email me at
Why Russia and China’s Cozy Relationship Will Raise the Price on Rare Strategic Metals
As an investor, it’s not your job to stop the war machine. Nor is it your responsibility to change how the U.S. handles foreign policy. It is however your duty to protect your family. And understand how global conditions move the price of various assets so you can affect the things you can control.
To make good investment and wealth protection decisions, it’s imperative you understand what different investment options are available. And how current events intermingle with them. The world may have never seen a time free from crisis. But if you’ve watched the news lately, it’s impossible to ignore the global level changes raining down on us.
The crisis in the Ukraine is only one of one countless conflicts shaping our world. However, because of the cooperation between Russia and China, it might be one of the most important. In addition, while the coming conflicts could be deadly for the U.S. dollar, there are asset classes that could benefit their owners immensely. If added to your portfolio before it’s too late. One of these is a new asset class known as Rare Strategic Metals.
If you’ve never heard of Strategic Metals, you’re not alone. This strategically chosen group of elements is used in 95% of all products manufactured today. But because of the vast quantities normally traded, they were outside the scope of individual investors until recently.
A full discussion of rare metals is outside the scope of this article. But it’s enough to understand they’re vital in military equipment, LCD monitors, pharmaceuticals, air, sea, and land craft, cell phones, computers, clothing, and more. You should also know, most of the supply is controlled by China.
China and Russia Are Working Together – Against the U.S.
It’s no longer a secret China and Russia are becoming powerful allies. This was made even more obvious recently; Thanks to a new natural gas deal between the two countries. This 400 Billion dollar agreement has been in the works for decades… But its signing indicates a major disruption to the value of Petro-Dollar.
The catastrophe in Ukraine is heating up tensions between the U.S. and Russia. And it’s naive to think it couldn’t lead to yet another war. Or, at least a new Cold War. One in which Russia is in a better position to win.
If you doubt Russia’s attitude to the West is hostile, consider this… Alexander Dugin, who’s better known as “Putin’s Brain” calls America, the “kingdom of the Antichrist.” He goes on to say, “The American Empire should be destroyed. And at one point, it will be.”
Many in Russia feel war with the U.S. in inevitable. But Mr. Dugin isn’t just a random citizen. He’s a professor at Moscow State University. And head of the Center for Conservative Study. He’s also one of Russia’s most visible personalities… Indicating Putin agrees with his strong sentiments.
Make no mistake, China and Russia aim to destroy the U.S. dollar. Regardless of whether or not they’re successful, it’s my opinion the price of strategic metals will increase due to their attempts.
The War Machine is Growing by Leaps and Bounds
For starters, Strategic Metals are critical in almost every type of military device used today. From jet engines to armaments… From the coatings on armor piercing bullets to night vision scopes, computers, and communication gear.
Even if we ignore the Ukraine / Crimean crisis, the U.S. war machine ramps up yearly. President Obama has sworn to pull troops out of Afghanistan… But with the increase in sectarian violence in Iraq, moving back there seems likely. Not to mention Syria and a host of other countries the U.S. is making waves in due to the war on terror.
Crimea however, takes the threat of world conflict to an entirely new level. What may have started out as peaceful protests quickly escalated when on the 21st of February President Victor Yanukovych fled. And the interim government was declared illegitimate by Russia. Now, Ukraine has asked the U.S. and NATO for assistance in this crisis.
If NATO takes military action against Russia, and Russia get supported by China, over 35 countries could be spending billions of dollars, and countless lives, on yet another war.
The fact is, the higher the demand for military equipment, the more demand there is on metals needed for manufacturing.
China Controls the World’s Rare Metal Supply
There’s more than just the demand of rare metals causing the price to skyrocket though. There’s also an extremely tight supply, approximately 90% of which is controlled by China. In the last few years, China has already squeezed supply several times.
Even though Miao Wei, the Minister of Industry and Information Technology told the Xinhua News agency its policy on exports doesn’t target any specific country, there’s reason for concern. With such a powerful tool at their fingertips, it’s likely they’ll use supply control as a tool in an economic war with the West. The U.S., European Union, and Japan have already complained to the World Trade organization over “unfair” price controls.
Cozying up to Russia puts a massive wrench in the United States’ ability to secure the metals needed for both military and civilian applications.
In the past, China relied on the U.S. as the world’s largest economy, but that strength is fading. China will soon surpass the U.S. in GDP, and Russia is becoming an economic powerhouse. This allows China the luxury to ramp up more brazen attacks on the U.S. Economy.
They’ve recently created a new organization called the Rare Earth Association. The association is going to have powerful control over whom mines can sell to, how much metal they can release, and other quotas. It’s naive to think the operation of that organization won’t be affected by the new economic war.
The U.S. Dollar Position as the World’s Reserve Currency is in Peril
If the U.S. dollar loses its status as the world’s reserve currency, the value of the dollar will plummet. There’s no doubt, that’s China and Russia’s end goal. In a very public speech, Putin recently said the U.S. is, “… living like parasites off the global economy and their monopoly of the dollar.”
According to financial analyst Keven Freemen, Russia and China are in a position to completely cripple the U.S. financial system. He should know, he was the analyst hired by the Pentagon to investigate the 2008 recession… He believes that disaster was a purposeful attack.
He told the Blaze, Russia is preparing to fight World War 3 by attacking the U.S. dollar. The U.S. defeated the U.S.S.R. by nearly bankrupting them. China and Russia appear to be mounting, and winning, the same type of attack.
Anyone who thinks these are idle threats or saber rattling needs to take a hard look at some of the statements made by Sergei Glazev, the Kremlins Economic aide. He stated firmly if the U.S. imposes sanctions on Russia, it would end in a crash of the United States financial system. He called it an end of domination for the United States.
He threatened to stop using the U.S. dollar. And create their own payment system.
China hasn’t been shy about admitting their desire to take down the U.S. as the world’s reserve currency either. They’re mounting an assault by loosening controls and internationalizing the Yuan, also known as the renminbi, in an attempt to compete with the dollar.
The 400 billion dollar natural gas deal between Russia and China mentioned earlier is a massive step in that direction. So is a recent deal between China and Japan, the world’s number 2 and 3 economies.
If other countries continue joining the movement, which countries like Singapore and England already have, it will be devastating to the U.S. dollar. It would be prudent for any investor to diversify out of U.S. cash and securities. And into solid assets.
Currency Volatility is Almost Certain
The potential crippling of the U.S. dollar, the never-ending war machine, and China’s monopolistic control over rare metals all indicate enormous price increases for rare strategic metals. Russia and China may not be successful in their threats to collapse the U.S. financial system. However, they’re certainly poised to disrupt the value of the dollar. Volatility is one more reason to consider rare metals in your portfolio, since you can liquidate them in any currency worldwide.
Even if the Chinese government moves away from Russia, it is still in their economic best interest to control rare metal supply and raise prices. So values are certain to increase.
Strategic Metals Offer Many Investors a Way Out of Fiat Currency into Solid, Inflation Proof Assets
The cuddly relationship of China and Russia is just one of the driving forces making Strategic Metals a powerful wealth preservation tool. But it would be irresponsible to say it’s an instrument for everyone. Or every investor. While there are both conservative diversified options, and more aggressive single metal plays available, every individual’s asset protection needs are different. You need to do your own due diligence to determine if strategic metals have a fit in your portfolio.
The prospect of World War 3 with China and Russia is terrifying. And everyone hopes for a quick resolution to the war on terror. Unfortunately, hope is often misplaced. And none of us has any control over the seemingly never-ending war machine… Or foreign policy.
All we can do is watch what’s happening in the world… And make the right decision to protect our family through any crisis thrust in our direction.
David Morgan is a precious metals aficionado armed with degrees in finance and economics as well as engineering, he created the Silver-Investor.com website and originated The Morgan Report, a monthly that covers economic news, overall financial health of the global economy, currency problems, and the key reasons for investing in precious metals.
As publisher of The Morgan Report, he has appeared on CNBC, Fox Business, and BNN in Canada. He has been interviewed by The Wall Street Journal, Futures Magazine, The Gold Report and numerous other publications. If there is only one thing to teach you about this silver bull market it is this… 90% of the move comes in the last 10% of the time! Where will you be when this happens?
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