Crude Oil Spikes to Near $94 After Sharp Drop

The price of oil rose to near $94 a barrel on Monday, rebounding after sharp losses last week that were due to concerns over abundant supplies and weak U.S. employment figures.

By early afternoon in Europe, benchmark oil for May delivery was up 97 cents to $93.67 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 56 cents on Friday and was down 5 percent from midweek.

The price of oil last week fell after a weak jobs report cast doubt on the strength of the U.S. economy. The Labor Department reported the economy added 88,000 jobs in March, the fewest in nine months. The slowdown may signal the economy will weaken this spring.

"The latest jobs data provide a useful reminder that this is still an uneven recovery in the U.S. economy," said Caroline Bain, commodities analyst at the Economist Intelligence Unit.

She expects oil prices to average less than $90 a barrel in the second quarter of 2013 "reflecting a comfortable market balance, lower refinery runs and only very modest growth in consumption."

The U.S. Energy Department last week reported that crude in storage was at its highest level since 1990 even though refiners had begun to ramp up gasoline production to get ready for the summer driving season. Now the economy looks like it might not grow fast enough to churn through the nation's high supplies.

What are today's top 50 stocks? This free list will share the big market movers on a daily basis to help you find trading opportunities.

A Special Invitation from The Crude Oil Trader

Over the last 12 months, the price of gold bullion has fallen by about 3%. Gold stocks, however, have been devastated. Even great companies with great projects have lost 50% or more.

By some estimates, upwards of one third of all listed exploration and development stocks are now on the verge of failing. It was in the context of this disaster in gold stocks that our friends at Casey Research assembled an emergency summit of some of the top thinkers in the natural resource sector.

There were three compelling reasons for this meeting, which was videotaped and assembled into an online webinar.

1. To answer the overarching question – is the long bull market in gold and silver over?

2. To specifically discuss the dismal state of the resource stock market and what actions investors should take immediately to reduce further losses.

3. To assess whether the price action of gold stocks in the face of historic, global, central bank money printing has set the stage for explosive upside.

As panelist Bill Bonner commented during the filming, "The time to buy gold stocks is when nobody wants to buy them… when even you don't want to buy them."

With the gold share market in complete capitulation, that is very much the case today.

Downturn Millionaires, the title of this extremely timely webinar, was filmed on location at Doug Casey's La Estancia de Cafayate in scenic northwest Argentina, with video feeds to key players in Vancouver.

Featured guests included legendary resource investors Doug Casey and Rick Rule, as well as Louis James, the globe-trotting editor of the International Speculator. Tackling the macro picture for precious metals was best-selling author of Endgame, John Mauldin, as well as Bill Bonner, editor of the Diary of a Rogue Economist. Casey Research's David Galland acted as program moderator.

The webinar will go live April 8th at 2pm ET.

The webinar is free of charge. However, to ensure adequate bandwidth to accommodate all viewers, Casey Research is asking you sign up in advance by clicking the link below and registering with your email address.

Having listened to the observations and specific recommendations of the program panelists, I can say without reservation that if you own any gold shares or have any interest in learning about what may be one of the greatest contrarian investments of a generation, you'll want to sign up for this free webinar today.

Click here to register for Downtown Millionaires now!

By return email you'll receive confirmation and your link to attend the event, which goes live on April 8th at 2pm ET.

Feel free to pass this invitation to everyone you know who may be interested in a once in a lifetime opportunity to profit as the best of the resource stock sector comes roaring back, while the fiat currencies stumble.

Sincerely,

Ray C. Parrish

President/CEO @ The Crude Oil Trader


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The Long and Winding Gold....Bull Cycle about to Begin

The dramatic 2-3 day take down in Gold Spot pricing action smells and looks like capitulation to us at The Market Trend Forecast. We have been calling this entire 19-20 month consolidation period as a Primary wave 4 correction pattern, though complicated for sure. It has had multiple false rallies and buy and sell signals the entire time. With that said, the pattern is set up for final 5th wave decline which we are seeing now at the beginning of April.

Traditionally, Gold tends to meander or be weak in April anyways on a seasonal basis. This sets Gold up to rally in May into July with another soft patch, followed by a fall rally. However, our technical analysis is predicated on our Elliott Wave analysis, which says this entire 20 month correction is a “Double Three” correction pattern. Essentially its two ABC patterns with an “X” Wave rally in the middle to really confuse everyone.

The X wave took Gold to 1800 last fall before dumping all the Bulls off and eventually working its way down to the 1540’s levels we see today. This last leg down is a 5 wave decline and you know you’re at the bottom of wave 5 when everyone throws in the towel, the Gold stocks trade at multi year lows and relative valuation extremes. We also have insiders buying 7 to 1 over sellers according to Ink Research in the Gold stock sector. Stocks are valued at $923 per ounce equivalent even though Gold is trading north of $1,500 per ounce still.

We say bring it on and are actively accumulating selected Gold stocks with production profiles and growth metrics that are attractive.

See the Gold Elliott Wave analysis chart we sent to our paying subscribers a few days ago to forewarn of one more leg down. The next rally should be a doozy and have very few people on board. We would simply caution that a drop below $1523 spot pricing could lead to a blast down to the 1440-1460 areas, but its unlikely in our current views.

Join us for regular updates at The Market Trends Forecast.com

The 2 Energy Sectors You Should Invest in This Year

Baker Hughes Announces March 2013 Rig Counts

Baker Hughes Incorporated (NYSE:BHI) announced today that the international rig count for March 2013 was 1,268, down 7 from the 1,275 counted in February 2013, and up 76 from the 1,192 counted in March 2012. The international offshore rig count for March 2013 was 316, down 7 from the 323 counted in February 2013 and up 13 from the 303 counted in March 2012.

The average U.S. rig count for March 2013 was 1,756, down 6 from the 1,762 counted in February 2013 and down 223 from the 1,979 counted in March 2012. The average Canadian rig count for March 2013 was 464, down 178 from the 642 counted in February 2013 and down 28 from the 492 counted in March 2012.

The worldwide rig count for March 2013 was 3,488, down 191 from the 3,679 counted in February 2013 and down 175 from the 3,663 counted in March 2012.

Here is the March 2013 Rotary Rig Counts by country worldwide


The 2 Energy Sectors You Should Invest in This Year

 

A Very Important Letter to Shareholders from Transocean RIG

If you own shares in Transocean make sure you read this entire release and make sure you vote. This is a very important vote......

Transocean (NYSE: RIG) today announced that it has commenced the mailing of proxy materials, including a WHITE proxy card and a letter from the Board of Directors, to the company's shareholders of record in advance of the company's 2013 Annual General Meeting ("AGM"), which will be held at 5 p.m. CEST, on May 17, 2013, in Zug, Switzerland. The Proxy Statement and Annual Report are also available through the company's website at http://deepwater.com/ar.

*    The Transocean Board of Directors unanimously recommends that the company's shareholders vote "FOR" a U.S. dollar denominated dividend of $2.24 per share, or approximately $800 million in the aggregate (based upon the number of currently outstanding shares), out of additional paid in capital.

*    The Transocean Board of Directors unanimously recommends that shareholders vote "FOR" the company's five experienced and highly qualified director nominees: Federico F. Curado, Thomas W. Cason, Steven L. Newman, Robert M. Sprague and J. Michael Talbert.

*    The Transocean Board of Directors unanimously recommends that shareholders vote "FOR" the granting of Board authority to issue shares out of the company's authorized share capital. This authority was originally granted at the May 2011 AGM and will expire on May 13, 2013.

*    Shareholders are encouraged to support the Board's recommendations by voting promptly using the company's WHITE proxy card.

*    The letter from the Board of Directors, which follows, discusses Transocean's highly qualified slate of director nominees and reiterates the reasons the proposed $2.24 per share dividend will maximize long term shareholder value. Furthermore, the letter addresses the importance of having the flexibility to pursue value-enhancing opportunities by granting the Board the authority to issue additional shares out of the company's authorized share capital. The Board currently has no plans to exercise this authority.

April 4, 2013....Dear Fellow Transocean Shareholders > Read the entire letter to shareholders


The 2 Energy Sectors You Should Invest in This Year

EIA Weekly Natural Gas Update for April 4th

Marketed natural gas production in the Gulf of Mexico federal offshore region falls to 6% of national total in 2012. Continuing a long term trend of decline, the contribution of marketed production of natural gas from the Gulf of Mexico federal offshore region accounted for 6.0 percent of total U.S. marketed natural gas production (4.2 billion cubic feet per day (Bcf/d) in 2012, according to data published in the Energy Information Administration’s (EIA) Natural Gas Monthly. In contrast, in the period from 1997 to 2007, marketed production from these same waters provided, on average, over 20 percent (11.7 Bcf/d), of U.S. marketed production.




Among the contributing factors to this decline:

• Increasing amounts of domestic, on-shore production, primarily from shale gas and tight oil formations. In 2012, nearly 40 percent (over 26 Bcf/d according to Lippman Consulting, Inc.) of U.S. dry natural gas production came from production in shale plays, increasing over 20 fold from 2000 levels. In 2012, the two most productive shale plays were the Haynesville play in Louisiana and Texas, and the Marcellus play in Pennsylvania. In the Marcellus play, despite reduced drilling activity, production increased by almost 70 percent in 2012 over year ago levels. Increased drilling in tight oil plays like the Eagle Ford play in Texas has contributed to increased associated natural gas production. 

• Relatively low natural gas prices. Low natural gas prices in recent years have diminished the economic incentive for off shore natural gas directed drilling. However, relatively high crude oil prices continue to support oil directed drilling and the production of associated gas, particularly in deep waters. New large deepwater projects directed toward liquids development are projected to reverse the decline in natural gas production from the Gulf of Mexico in 2015, according EIA's Annual Energy Outlook 2013 Early Release.

The 2 Energy Sectors You Should Invest in This Year

Is Investing in Electric Cars the Best Way to Invest in Crude Oil?

The United States alone consumes 18.9 million barrels of oil every day, rain or shine. And China's appetite grows more ravenous by the minute, with daily consumption doubling from 5.5 million barrels in 2003 to nearly 9.8 million in 2011.

Aside from a brief downturn during the recession, global oil consumption has been moving inexorably higher.

Worldwide oil consumption passed its pre-recession 2007 peak in 2010 and continues to rise. It is projected to reach 90.2 million barrels per day this year. Meanwhile, the world's oil companies will only produce 90 million barrels per day.

In other words, demand will outstrip supply by 200,000 barrels per day, or by about 73 million barrels this year.

We can barely feed our energy appetite today. And we're getting hungrier. Per-capita consumption in China and India is still less than one-tenth that of the United States, but these growing middle classes are catching up fast. In fact, 18 million new cars hit the road in China last year -- compared with 14.5 million in the United States -- stretching oil supplies even thinner.



Meanwhile, most production grounds have been in a steady decline for decades. Future oil exploration activity will be focused in deep offshore basins, which are expensive to tap.

That's why I'm advising readers to invest in the "Oil of the 21st Century."

I call it this because no other precious resource in the world can do what it does. Businesses are willing to pay hundreds of millions a year for its unique qualities -- it is a key ingredient in a wide range of products, from pharmaceuticals to rocket fuel. But its real magic is that, pound for pound, this featherweight metal can store more electric energy than just about any other material.

I'm talking about lithium.

You see, lithium is the battery maker's best friend. Rechargeable lithium-ion batteries have twice the energy density of yesterday's outdated nickel-cadmium technology, making them indispensible in everyday products from digital cameras to portable video game consoles.

You've probably got some lithium within reach right now. If you own an iPad, iPod or iPhone, you definitely do.

But electronic gadgets aren't why I'm so excited by lithium.

The real action is in cars -- electric cars, to be specific.

President Barack Obama wants to put 1 million electric cars on the road by 2015, and 10 times that amount by 2018. The government is bankrolling the transition with some heavy incentive dollars.

GM is going electric with the Volt. Ford is planning a battery-powered car based on the Focus. And, of course, Toyota has the Prius... Honda the Insight... and Nissan the Leaf.

But car makers won't be the biggest winners from the craze for electric vehicles. Instead, I think there's another way to make even more money from the transition to battery power.

Unlike gold, silver and other metals, it is virtually impossible to invest directly in lithium. The Global X Lithium Exchange Traded Fund (NYSE: LIT), however, is the next best thing.

The fund's three largest positions, or roughly half its portfolio, is invested in companies engaged in lithium mining and refining. These companies have diverse business lines, so these aren't pure plays. But collectively, this trio accounts for the majority of the world's lithium production. The rest of the fund's assets are invested in a well rounded mix of battery makers.

Click here to get your FREE Trend Analysis for LIT

Risks to Consider: In many respects, this industry is still in its infancy. So it's difficult to say which technologies will emerge victorious and which will become historical footnotes. That means there will be some spectacular winners in this field, but also some big losers.


The 2 Energy Sectors You Should Invest in This Year

Don't Touch the Refiners Until You Understand a Few Things About Their Future

The refinery stocks are in the news, here is a great ThomsonReuters article that will give you a good perspective on how to approach trading the refiners. Obviously they are going down hard, have they hit bottom?

"Inland U.S. oil refiners stung by renewable energy credits"

By Krishna N Das and Swetha Gopinath April 3 (Reuters) - Landlocked U.S. oil refiners short on capacity to blend ethanol are bracing for a spike in costs, unable to export their way out of a sudden rise in the price of renewable energy credits needed to comply with government requirements.

CVR Energy Inc and HollyFrontier Corp, inland refiners with limited capacity to blend biofuels into the pipeline, are suffering from a jolt to investor confidence while stocks of their coastal peers continue a two year upward march.

Along with some East Coast refiners like PBF Energy Inc , they are at the sharp end of the uneven distribution of pain resulting from a hundred-fold surge in the cost of ethanol credits.

Refiners are caught between the U.S. ethanol mandate, which requires ever-higher volumes of ethanol to be blended into the domestic gasoline pool, and the limited amount of the corn-based fuel that some cars can safely run.

To offset the difference, refiners must either export gasoline to markets not requiring the blend or buy up ethanol credits that can satisfy government requirements without forcing higher volumes of ethanol into gasoline.

The price of these credits, or Renewable Identification Numbers (RINs), has spiked to more than $1 in recent weeks from 1 cent in December due to concerns of a looming shortfall.

That price rise may prove a serious drag on the bottom line of CVR Energy, for example, whose refineries in Oklahoma and Kansas have neither easy access to foreign markets nor integrated systems to blend ethanol into gasoline themselves.

"If you are in the middle of the country with no access to waterborne markets, and don't own any blending component of the value chain, it could be a disadvantage," said John Williams, investment analyst at T. Rowe Price in Baltimore , Maryland.

The ethanol mandate was conceived during the administration of President George W. Bush, when domestic gasoline demand was projected to grow steadily, increasing the need for foreign oil.

Since then, however, the U.S. shale boom has seen domestic production boom, while gasoline demand has been in decline.

Refiners are therefore obliged to blend more ethanol into a smaller gasoline pool. Older cars face possible engine damage if fuel contains more than 10 percent ethanol, creating a "blend wall" that refiners are loath to exceed for fear of incurring liabilities.

The ethanol requirement is set to grow every year until 2022. Many oil companies have complained about the mandate, and warned that more costly RINs will drive up prices at the pump. "This failed federal program is already costing consumers and taxpayers dearly," said Tina Barbee, spokeswoman for Tesoro Corp, the largest independent refiner on the West Coast.

West Coast refiners are better placed to export than their East Coast peers, which typically refine imported oil. Tesoro's strong retail presence has also helped shield it from higher RIN costs, said Raymond James & Associates analyst Stacey Hudson. "(East Coast refiner) PBF, on the other hand, does not have a retail presence and that could be seen as a disadvantage for generating RINs," she said. "If you produce more fuel for domestic consumption than you blend, you will be short on RINs." PBF declined to comment.

Its shares have fallen 11 percent in the past month. Tesoro's stock has fallen less - 3 percent - but is still underperforming shares in companies with refineries on the Gulf Coast , which export more gasoline.

Natural Hedge

The Thomson Reuters U.S. Oil & Gas Refining and Marketing index, which includes shares of almost all U.S. refining companies, has risen 28 percent over the past two years as cheap shale crude has propped up margins.

Refiners in the U.S. heartland have seen the benefits of easy access to rising volumes of relatively cheap domestic crude. But CVR and HollyFrontier have started to buck this trend; both stocks are down 10 percent in the last month.

Macquarie Research cut its ratings last month on both companies. RIN pricing, it said, was a big enough issue to warrant longer-term concerns.

"The refiner stocks have performed exceptionally well for two years running, thus we recommend taking profits on those with the greatest RIN risks," Macquarie analysts said in a note.

Refiners with blending facilities to help offset RINs risk, or which can export more gasoline, are seen as better protected. Marathon Petroleum Corp's stock has risen 6 percent and Phillips 66 is up 9 percent in the last month.

"They have a natural hedge through that (blending), and they also have access to export markets through their Gulf Coast operations," said Williams, whose firm owns Phillips 66 shares.

Though the company has not explicitly linked its expansion to RINs, Phillips 66, the refining company spun out from ConocoPhillips, has said it will have the infrastructure needed to raise exports by about 40 percent within three years.

Material Costs

Leading independent refiner Valero Energy Corp -- also in the T. Rowe Price portfolio -- says it expects its RIN-related costs to jump to as much as $750 million this year from $250 million in 2012.

Unlike CVR and HollyFrontier, Valero has the option of raising exports from its Gulf Coast refineries. But the company is also a significant spot seller of unblended gasoline in the United States ; its stock is down 7 percent in the last month. Macquarie said the large volumes of unblended gasoline in the company's Gulf Coast system, which it estimated at 2.2 billion to 2.3 billion gallons in fiscal 2013-14, threatened to overshadow its exports.

Further inland, meanwhile, CVR Energy is limited in what it can export. The company, controlled by billionaire investor Carl Icahn, said in a regulatory filing last month that its RIN costs were likely to be "material".

"There's no way that the RINs cost will not get passed on," Chief Executive Jack Lipinski said on a post-earnings conference call. "Eventually somebody has to pay it." At $1 per gallon, RIN credits adds 10 cents per gallon to gasoline prices, which cost about $3.68 per gallon on an average for March, compared with $3.39 in January, according to the U.S. Energy

Ultimately, much is likely to depend on how successful those refiners short on RINs will be in passing on costs to consumers. Valero spokesman Bill Day said: "We expect to see prices of gasoline go up across the country." Bradley Olsen, analyst at investment bank Tudor Pickering & Co, said comparatively high gasoline prices on the East Coast were at least helping refiners there to balance their RIN costs.

"The U.S. market still needs close to 9 million barrels a day of gasoline. The short term solution is to export to avoid the RIN obligation but, ultimately, increased exports reduce the supply domestically," he said. "You are going to see prices rally."

Posted courtesy of ThomsonReuters


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Recent Action in Silver ETFs Is Bad News for Precious Metals Bears

From Author Jeff Clark, Senior Precious Metals Analyst.....

Two weeks ago we looked at the difference between gold ETF outflows vs. physical gold purchases, and showed that most sales were coming from the former while aggressive buying was coming from the latter.


This week we examined the same data for silver – and discovered a rather striking trend. Not only are silver ETFs seeing no net outflows, their holdings are increasing. Bearish investors who treat the two precious metals as being the same, interchangeable thing, and sell silver along with gold are at risk of missing the boat.

Here's how holdings in SLV, the world's largest silver ETF, compare to those of GLD…

The divergence between gold and silver funds is clearly evident. As of March 28, SLV holdings stand at 344,128,478 ounces, up 5% so far this year and just 7% below 2011's record high.

It's not just SLV. As a group, silver exchange-traded products (ETPs) have seen their holdings rise for four consecutive months.

Why the stark divergence between the two precious-metals funds?

As most readers know, silver has a dual nature, serving as both a precious metal and an industrial metal. As a precious metal, it's a store of value like gold – but since roughly half of its use is devoted to various industrial applications, its performance has a strong correlation to economic growth. And since most mainstream analysts are bullish on the global economy, the current surge in silver ETFs is likely a result of this optimism. After all, if you see economic recovery ahead, industrial demand for the metal will grow and the price would be expected to rise.

Further, these massive inflows are occurring at a time when the silver price is mostly flat, whereas the previous peak in holdings took place when the price was soaring (spring 2011). Here's a picture of SLV holdings since January 2012, along with the silver price.

What's interesting is that the increase in SLV holdings has not had a significant impact on silver's price – yet. Since the price usually receives a boost when industries start buying more of it, many of these "paper" buyers are likely adding silver in anticipation of economic recovery, the very reason others are selling gold.

Let's take a look at physical demand.

As with gold, buyers of physical silver tend to have a long-term investment horizon and buy mostly from a currency standpoint. With prices near the bottom of their 22-month range, many investors continue to see opportunity: January sales of American Eagle silver bullion coins spiked to an all-time record of 7.5 Moz, and February's demand was 3.4 Moz, up 126% from last February's sales of 1.5 Moz. Cumulative silver coin demand for the first two months of this year already hit 10.87 Moz, a full third of total coin sales in 2012.

You can see that silver is being sought by both paper and physical buyers.

Whether it's mainstream investors buying in anticipation of economic recovery or physical buyers loading up due to currency concerns, investors collectively see big potential for silver.

Investor Implications: Is Silver a No-Lose Proposition?

 

It's a simplistic conclusion but not necessarily inaccurate: silver rises if the economy improves and industrial demand grows – or it rises if the world's major currencies continue to be debased, regardless of whether the economy is on the mend. Two different reasons, the same investment solution.

What if we get both outcomes: a robust economy and high inflation? That, of course, would be music to the ears of silver owners... the demand from industry strains supply, while bullion owners refuse to sell. Prices would go ballistic.

Does this mean silver is a no-lose proposition? Of course not. No investment comes without risk. An outright depression would be destructive to industrial demand. Roughly two-thirds of silver is used in industry and jewelry, so Doug Casey's Greater Depression could severely impact the biggest portions of current demand. The same events would increase monetary demand for silver, but the two trends may not have equal weight on the price of silver at the same time. We thus wouldn't make silver our sole investment, but we see a lot of upside in the metal under current market conditions.

At the end of the day, we're more inclined to buy silver for the same reasons we buy gold. While a case can be made for an improving economy, there's an overwhelming one already built for government money-printing to result in a massive loss of purchasing power, and that argues for seeking the safe haven of precious metals – both of them.

Don't miss this opportunity: Prices are low right now, and that makes it time to buy.

It's an even better time to buy gold and silver producers – especially select junior mining companies. Right now, the sector is so badly beaten down that even the best-of-the-best outfits are selling at discounts of 50% or more, giving you a rare opportunity to get in at the bottom of what could be the next great investment bubble.

To help you more fully appreciate the magnitude of this opportunity – and to give you concrete investment strategies – some of the world's top natural-resource speculators and economic minds will appear in a special, online video event on April 8, titled Downturn Millionaires. They include: contrarian investment legend Doug Casey; Agora Inc. publisher Bill Bonner; Sprott US Holdings Chairman Rick Rule; Mauldin Economics Chairman John Mauldin; and Casey Research Chief Metals and Mining Investment Strategist Louis James.

The event is free and is a must-see for serious investors. Get more information and register today.


The 2 Energy Sectors You Should Invest in This Year
 

The Chess Game of Capital Controls

From Jeff Clark, Senior Precious Metals Analyst

The best indicator of a chess player's form is his ability to sense the climax of the game.

–Boris Spassky, World Chess Champion, 1969-1972

You've likely heard that the German central bank announced it will begin withdrawing part of its massive gold holdings from the United States as well as all its holdings from France. By 2020, Bundesbank says it wants half its gold reserves stored in its own vault in Germany.


Why would it want to physically move the metal from New York? It's not as if US vaults are not secure, and since Germany already owns the gold, does it really matter where it sits?

You may recall that Hugo Chávez did the same thing in late 2011, repatriating much of his country's gold reserves from London. However, this isn't a third-world dictatorship; Germany is a major ally of the US. So what's going on?

Pawn to A3

On the surface, it may seem innocuous for Germany to move some pallets of gold closer to home. Some observers note that since Russia isn't likely to be invading Germany anytime soon – one of the original reasons Germany had for storing its gold outside the country – the move is only natural and no big deal. But Germany's gold stash represents roughly 10% of the world's gold reserves, and the cost of moving it is not trivial, so we see greater import in the move.

The Bundesbank said the purpose of the move was to "build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold-trading centers abroad within a short space of time." It's just satisfying the worries of the commoners, in the mainstream view, as well as giving themselves the ability to complete transactions faster. As evidence that it's nothing more than this, Bundesbank points out that half of Germany's gold will remain in New York and London (the US portion of reserves will only be reduced from 45% to 37%).

Sounds reasonable. But these economists remind me of the analysts who every year claim the price of gold will fall – they can't see the bigger implications and frequently miss the forest for the trees.

Check

What your friendly government economist doesn't reveal and the mainstream journalist doesn't report (or doesn't understand) is that in the event of a US bankruptcy, euro implosion, or similar financial catastrophe, access to gold would almost certainly be limited. If Germany were to actually need its gold, regardless of the reason, any request for transfer or sale would be… difficult. There would be, at the very least, delays. At worst such requests could be denied, depending on the circumstances at the time. That's not just bad – it defeats the purpose of owning gold.

But this still doesn't capture the greater significance of this action. First, it reinforces the growing recognition that gold is money. Physical bullion isn't just a commodity, a day-trading vehicle, or even an investment. It's a store of value, a physical hedge against monetary dislocations. In the ultimate extreme, it's something you can use to pay for goods or services when all other means fail. It is precisely those who don't recognize this historical fact who stand to lose the most in an adverse monetary event. (Hello, government economist.)
Second, here's the quote that reveals the ultimate, backstop reason for the move: Bundesbank stated it is a "pre-emptive" measure "in case of a currency crisis."

Germany's central bank thinks a currency crisis is really possible. That's a very sobering fact.
We agree, of course: history is very clear on this. No fiat currency has lasted forever. Eventually they all fail. Whether the dollar goes to zero or merely becomes a second-class currency in the global arena, the root cause for failure is universal and inevitable: continual and perpetual dilution of the currency.

Some level of currency crisis is inescapable at this point because absolutely nothing has changed with worldwide debt levels, deficit spending, and currency printing, except that they all continue to increase. While many economists and politicians claim these actions are necessary and are leading us to recovery, it's clear we have yet to experience the fallout from spending more than we have and printing the difference. There will be serious and painful consequences, sooner or later of an inflationary nature, and the average person's standard of living will be greatly reduced.

And now there are rumblings that the Netherlands and Azerbaijan may move their gold back home. If this trend gathers steam, we could easily see a "gold run" in the same manner history has seen bank runs. Add in high inflation or a major currency event and a very ugly vicious cycle could ignite.

Checkmate

If other countries follow Germany's path or the mistrust between central bankers grows, the next logical step would be to clamp down on gold exports. It would be the beginning of the kind of stringent capital controls Doug Casey and a few others have warned about for years. Think about it: is it really so far-fetched to think politicians wouldn't somehow restrict the movement of gold if their currencies and/or economies were failing?
Remember, India keeps tinkering with ideas like this already.

What this means for you and me is that moving gold outside your country – especially if you're a US citizen – could be banned.

Fuel would be added to the fire by blaming gold for the dollar's ongoing weakness. Don't think you need to store gold outside your country? The metal you attempt to buy, sell, or trade within your borders could be severely regulated, taxed, tracked, or even frozen in such a crisis environment. You'd have easier access to foreign-held bullion, depending on the country and the specific events.

None of this would take place in a vacuum. Transferring dollars internationally would certainly be tightly restricted as well. Moving almost any asset across borders could be declared illegal. Even your movement outside your country could come under increased scrutiny and restriction.

The hint that all this is about to take place would be when politicians publicly declare they would do no such a thing. You could quite literally have 24 hours to make a move. If your resources were not already in place, even the most nimble of us would have a very hard time making arrangements.

Once the door is closed, attempting to move restricted assets across international borders would come with serious penalties, almost certainly including jail time. In such a tense atmosphere, you could easily be labeled an enemy of the state just for trying to remove yourself from harm's way.

The message is clear: storing some gold outside your country of residence is critical at this point, and the window of time for doing so is getting smaller.

Don't just hope for the best; do something about it while you still can. The minor effort made now could pay major dividends in the future. Besides, you won't be any worse off for having some precious metals stored elsewhere.

If you're moved to take action, know that you're not alone. It's critical that you take these first steps now, while you still can. The best chess players in the world aren't that way because they can see the next move. They're champions because they can see the next 14 moves. You only have to see the next two moves to "win" this game. I suggest making those moves now before your government declares checkmate.

There's another "great game" when it comes to the precious metals market: the junior mining sector. The truth is, these stocks aren't for every investor – junior miners are more volatile than any other stock on Earth. However, for those who can stomach sudden price swings and are willing to bet against the crowd, right now junior explorers are offering the profit opportunity of a lifetime.

If you've ever wanted a realistic shot at making a fortune, you owe it to yourself to sign up for the upcoming Downturn Millionaires free online video event. It will feature famous speculators, including Doug Casey, Rick Rule, and Bill Bonner, who will detail how everyday investors can leverage junior miners to fantastic profits… just as they have done time and again over the years. Get the details and sign up now.


The 2 Energy Sectors You Should Invest in This Year