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Gold Stock
Trades will not regale you with the growing presence of nuclear facilities
throughout the world despite the German (EWG) and
Japanese (FXY) negative stance. It is well known that reactors (NLR) are
going to come online in increasing numbers and that uranium will be in rising
demand. In fact, several reactors (PKN) are being built right here in
the United States as well as all over the world.
I wrote to my readers back in early
October, “In relative performance to the S&P(SPY),
the Uranium sector (URA) returned to 2009 levels, extremely oversold and
demonstrating negative divergences for several months. Keep your hands on the
nuclear plow. If one has not invested in this sector, this is a chance
to buy wholesale. The coming months will give geometric gains as safe,
modern, clean and affordable nuclear reactors come online.
Stay steadfast to reap the coming rewards.” Over the past three months
the uranium miner etf is up 6.1%, while the gold
miner etf (GDX) is down 7% and the rare earth miner
(REMX) is up 1.3%. This phenomenon may continue as the uranium miners are
rebounding regaining its long term 200 day moving averages.
The U.S. Nuclear Regulatory Commission
is scheduled to approve Southern Co.’s (SO) application
for the first construction permit to build modern nuclear reactors in
more than 30 years. Southern is planning to build two new generational
reactors and the NRC is considering a license to build additional newly
designed reactors in South Carolina. Nuclear power accounts for 20% of
all electricity being produced in the United States and is expanding with the
construction of new safer, efficient and cleaner nuclear reactors. This is
being done all over the world.
The once in a millennium earthquake and
tsunami in Japan has triggered a knee jerk panic driven reaction from
politicians especially in Germany and Japan. However, the U.S. Nuclear
Regulatory Committee released a study nearly a year after Fukushima stating
“Public health consequences from severe accidents are very
small…successful implementation of existing mitigation measures can
prevent reactor core damage or delay or reduce offsite releases of
radioactive material.” The study, called the State-of-the-Art
Reactor Consequence Analyses (SOARCA), looked at worst case scenario
situations and its impact on health. This means the U.S. is going full speed
ahead on nuclear while Germany and Japan continue with skyrocketing
electricity costs.
It is to be noted that four of the giant
Japanese nuclear builders are aiming their sights to countries all over the
world especially the emerging nations, which are constantly seeking
inexpensive and clean electrical energy. They are responding to this global
need by sending teams of experts to sell the building of a new generation of
reactors.
Japan wants to sell nuclear reactors
abroad to boost their exports. The companies that are participating are
Hitachi and Mitsubishi Heavy Industries among others. The Japanese
claim that emerging nations can learn from the Japanese Nuclear Experience.
The Giants do have a vocal opposition at home who are criticizing this outreach
by calling it hypocrisy and the setting up of double standards.
Japan is impaled on the horns of a
nuclear quandary, weighing their thirst for exports against their own
domestic naysayers. Money talks. The Japanese Nuclear Industry posted an
annual profit of over $3 billion dollars which made a welcome addition to
their balance of exports.
They have gone so far as to offer
interested emerging nations not only the building know how, but they are
offering them loans to assist them in this pursuit. It’s almost
an offer that these young nations will find hard to resist in their search
for efficient and affordable, clean electricity.
Moreover, there are reports that Germany
and Switzerland are fast coming to the awareness that the costs of locking up
their nuclear plants will cost large amounts of capital. Siemens published a
report that it would cost Germany more than $2 trillion dollars to wean off
nuclear by 2030 causing major deficits. Imagine they are placing their
trust in foreign providers. It is going from wholesale to retail at
great costs to their economies. Capital will flow to countries that make
sane, rational decisions with regard to nuclear.
Recently, Russia and the United States
have taken a page from this Japanese imperative. Formerly at loggerheads
during The Cold War, they are now uniting cordially to ensure that nuclear
fuel is available for the growing number of new generation of nuclear
reactors.
We have remained steadfast in
highlighting the importance on our select list of uranium miners
right here in the United States. This means jobs and new ancillary
industries rising to accommodate the increasing uranium output. We are
speaking about new cranes, highways and even cities. We are talking about a
U.S. nuclear revival.
How does all this relate to our
subscribers? It is evident that nuclear power in not only here to stay
but will proliferate as world demand keeps on growing. Our select
uranium stocks have been rebounded considerably after being left for dead
only weeks ago with one of our recommendations up 220% after hitting lows in
early October.
The German and the Japanese liberals
will reconsider their knee jerk political reaction as their policies weaken
their once proud credit rating and economic standing. Investors are
returning to undervalued uranium miners in a dramatic fashion and this is
characteristic of the uranium market which has a history of powerful rises.
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