RADIOACTIVE PROFITS — Big Money Opportunity!!! - Fun!!!

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Wed, 1 Mar 2006 15:30:20 -0800 (PST)

— RADIOACTIVE PROFITS — Big Money Opportunity!!! Fun!!! - -

So is there also a RICIN Market???

 

 

 

The Daily Reckoning PRESENTS: Most people are in the dark

when it comes to nuclear energy, and all this talk of uranium

enrichment programs leaves people scratching their heads. Well,

never fear, Kevin Kerr will do his best to explain the uranium markets...

 

 

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RADIOACTIVE PROFITS

by Kevin Kerr

 

The Uranium market is one that is like a wild roller coaster,

and many of the equities associated with it can make investors

queasy from the ride. These equities are no different from

many mining stocks; they have to be looked at very closely.

Uranium trading was starting to become more stable, or so it seemed.

Then, just as fast as it calmed down - bam! - it went right back up.

In two the uranium price surged $5 to $29

in just twoweeks last year.

 

After the market woke up and new buying came in, the ultra-precious

metal's price climbed another $4, which set the highest uranium price

since the early 1980s. The new speculation was triggered by growing

expectations that China, India and Russia were planning to build new

reactors and more reactors would cause a run on the limited supply of

uranium. This speculation may well be right, if the International Atomic

Energy Agency (IAEA) stats are even close to true.

 

According to a report by the IAEA, 130 new nuclear power plants may be

built in the next 15 years. Who are the big players? The usual suspects,

of course: China, India, Europe, Russia, etc. Nuclear power provides about

16% of the planet's total annual electricity generation and 34% of the

European Union's needs. Trust me, they need it - a lot. When my wife

Katrin and I were in Estonia recently, it was frigid cold. Likewise,

people are freezing to death in Moscow, right now. Nuclear power is a key

component to economic survival in both Eastern Europe and the European

Union.

 

I couldn't believe some of the stats for other countries that I found in a

great nuclear energy report called Uraniumletter International:

 

" China: Announced that it plans to build up to 40 nuclear reactors within

the next 15 years. Some experts feel this will increase the amount of

electricity generated by nuclear power from 2.4% to 4%.

 

" India: Also getting aggressive and wants to increase mining of uranium

ore at four mines, including the existing Jaduguda mine in Jharkhand. The

country recently signed a nuclear energy agreement with the United States

and could generate 40,000 megawatts of nuclear power in the next 10 years,

compared with current production of 3,120 megawatts.

 

" France: Receives 78% of its electricity from nuclear power.

" Belgium: Gets almost 56% of its power from nuclear plants.

" Sweden: Close to 50% of Sweden's power is nuclear.

" Switzerland, Japan and the United States:

Nuclear power provides 40%, 25% and 20%, respectively.

 

" Korea: Currently uses about 40%, operating on 19 nuclear reactors,

and isexpected to increase its dependence on nuclear power

up to 60% in threedecades.

 

" Asia: Nuclear energy is becoming more

and more vital to the growing economies. Without it,

Asia's Bazillion factories would come to a grinding halt. "

 

I'm not a historical scholar by any stretch, but I am a big history

buff and the he history of atomic energy fascinates me.

In the 1940s, the U.S. government began buying large amounts

of uranium in the effort to produce the world's first atomic bomb.

 

I mean, a country didn't simply go down to Wal-Mart in those days

and buy some. So, it was a major undertaking. Don't laugh, maybe

someday we will all have little nuclear reactors in our backyards,

and instead of going to get some more wood for the fireplace,

you'll have to run to Wal-Mart to get a bag of uranium.

 

Nuclear power plants, as we know them, fired up in 1959.

That was when the first privately funded nuclear energy plant

came on-line, in Illinois. Fast-forward, and by the 1970s that number

had exploded (pardon the pun) to 250 nuclear reactors

that were planned across the United States

- but the dream train of cheap, easy energy derailed a bit.

 

The disaster in Pennsylvania changed all that. I was just a kid,

but I remember that accident. Three Mile Island was a nightmare.

My wife Katrin was just a kid when Chernobyl happened.

She lived in nearby Estonia.

They had to stay inside for days, she told me.

 

Anyway, the Three Mile Island nuclear power plant accident

came close toArmageddon in 1979. Remember that movie?

The China Syndrome?

In the movie, Jack Lemmon works

in a nuclear power plant that is going to have a meltdown.

This movie is the kind of hysteria that made the public fear

nuclear energy, and basically put the brakes on new construction.

Peopledidn't want it near their homes, and I can't say I blame them.

 

Public ignorance and fear of nuclear power changed the course

of nuclearenergy, as we've known, it for a very long time.

Starting in the 1980s,utilities were canceling plants hand over fist.

This resulted in the almost complete collapse of the uranium market.

 

And then, to beat down the market even further, uranium got hit

square inthe jaw. This second blow came when the Soviet Union

fell apart in 1991. Enriched uranium that was removed from

Russian bombs was blended down to reactor-grade fuel

and put on the market.

But, it gets worse.

 

The third punch came when the Clinton administration

dumped 55 million pounds of " yellowcake "

(uranium in the form of a yellowish powder) on the market,

via a government-owned uranium enrichment program.

This was what really caused the freefall for uranium prices - until now.

 

American uranium production peaked in 1980 at 43.7 million pounds,

according to the U.S. Energy Information Administration.

That was theproverbial nail in the coffin for the exploration of uranium.

New researchand development ground to a halt, as mines

could no longer afford to operate, and exploration was basically

a waste of time, energy and money. According to Uraniumletter

International, Wyoming once had eight uranium operations,

which produced 12 million pounds per year. Today, things are

different - a lot different. Wyoming now has none. Ouch!

 

I could go through each state and many countries around the world

and citeexamples just like that from reports I have read.

It seems clear that because of these widespread shutdowns,

the once-overflowing uranium supply dwindled in just five to 10 years.

 

Things didn't seem so bad during the 1990s; the lack of new supply

fromfunctioning mines has been supported by other sources.

There were excessinventories, for example, and there was also

the dismantling and recycling of nuclear weapons, especially

from Russia. Also, reprocessed reactor fuel was added to the mix.

 

But many of those quick fixes are no longer available.

 

The president's State of the Union address was a rallying cry

to uraniumproducers to get moving...finally, reality is setting in.

The dwindling supply of oil and spiraling high prices of fossil fuels

are driving interest in nuclear energy as the possible power source

that will be used to meet current and future global demand.

 

Three Mile Island and Chernobyl, unless you lived there, of course,

are distant memories to most Europeans and Americans.

On their minds are the prices at the pumps and their home heating bills.

 

Bottom line:

New supplies of uranium will come at a much higher cost,

which in turn, will continue to put upward pressure

on the future price of uranium.

 

Regards,

 

Kevin Kerr

for The Daily Reckoning

 

P.S. My co-editor at Outstanding Investments, Justice Litle, is looking at

many of these uranium companies. After all, there's no use in building a

reactor if you don't have the fuel to make it work.

 

Justice is in charge of the Outstanding Investments portfolio, and he is

doing a fantastic job. He has already recommended great uranium stocks

that he's had his eagle eye on, and I think there are more to come. For a

sneak peek at these stocks, see our new special report:

 

The Four Horsemen of the Petrocalypse

http://www1.youreletters.com/t/339970/8422802/784173/0/

 

Editor's Note: With 15 years of experience, Kevin Kerr is a true

veteran of the commodities markets. A licensed commodities trader

since 1989, he's worked the trading pits in Chicago and New York with

legends like Paul Tudor Jones, and he's even traded commodity

derivatives in London. Over

Kevin Kerr's career he's dealt with everything from cotton to currencies

to oil and natural gas.

 

If you take a look at Kevin's track record with his commodities trading

service, Resource Trader Alert, you'll see for yourself that he is no

stranger to the natural resource markets:

Get Rich Trading Real Resources

http://www1.youreletters.com/t/339970/8422802/784117/0/

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