Looming War Will See this Resource Skyrocket

I’m the most bearish resources analyst you’ll read.

But don’t get me wrong. I don’t enjoy being bearish.

For starters, being bearish doesn’t advantage my newsletter — Resource Speculator. Punters usually like to read stuff that reinforces their own views. For example, if they’re bullish on gold and own gold stocks, they will look for information that confirms they’re correct.

It’s called confirmation bias. Punters do this because nobody likes to sell baffled.

So when I say that gold may head to US$931 per ounce the coming year, I’m shutting out lots of potential subscribers. Many investors don’t want to believe I’m appropriate, because that means admitting they will lose money. Instead, they listen to other, more positive forecasts, and dismiss my views because wrong.

But they’re ignoring a simple fact: gold has rejected for four straight years. Something must be wrong. Yet rather than admitting they’re wrong, they’ll keep holding their own gold stocks. That is, before the gold price drops to levels that they can’t warrant anymore. Then they’ll sell the lot.

Be smart, not naive

I’ve made this mistake myself during the monetary meltdown of 2008/09.

You may have also.

It’s an expensive lesson. But a vital lesson for becoming a better investor.

The simple fact is, if you truly want to make big money within the stock market, you must remove all of your emotions from the game. This means thinking outside the box and also trying to prove that you’re wrong.

Looking at the hard facts is why I’m bearish on resources. Even though there have been multiple bear market rallies in all sectors seeing a short term bounce in prices, commodity prices continue to head reduce. This is a trend that’s established to continue in the months ahead.

But that’s about to change. Many, though not all, resources may return to a bull marketplace next year.

The reason why is as simple as it’s disturbing. Across the world we’re dealing with rising geopolitical conflict.

You can see it everywhere you look.

NATO putting soldiers on the border of Ukraine. Washington sailing war ships round the South China Seas. Obama’s bombing campaign to dethrone Syrian President Bashar Hafez al-Assad.

And tensions will keep rising as worldwide economic conditions move from bad to worse.

And instead of reducing taxes and burdensome regulations and restructuring fixing their bankrupt budgets, politicians all over the place are trying lay the blame on someone else for their mistakes.

For the majority of the last two years, the majority of this particular blame has landed on the shoulders of Russian Leader Vladimir Putin. And Western leaders are actually pointing their fingers in the Chinese.

Unfortunately for the Washington (and the West), Putin and the Chinese are no push overs. According to The Guardian, ‘A Chinese state-run newspaper with links to the Communist party said “we’re not afraid to fight the war?with the U.Utes. in the [South Chinese Seas] region.”‘

When war arrives, commodities historically outperform

History shows that once the economy declines (as it is right now), politicians often send their people off to war.

In my view, another war is coming soon. Now war is obviously not something that I want. But it is not in my power to quit it. And if major turmoil is coming, it’s best to prepare yourself right now.

As legendary investor Jim Roger’s states,

‘War is not good for anything, anything more, except commodities…if there’s going to be a war, it usually means commodity prices go higher.‘

Jim is spot on. Just check out this chart beneath. It shows commodity costs rising into every battle over the past 200-years.

Source: marketoracle.co.uk

And the next time war breaks out, one commodity in particular will skyrocket. I’m talking about crude oil.

Today there isn’t 1 hotspot but three: Ukraine, the South China Sea and Syria. And any of these three hot-spots could erupt into a full size war. In my free statement, I talk about the ongoing conflict in the Middle East, and why that’s where we’re most likely to see things spiral out of control. For more details, you are able to click here.

The world is viewing who will make the first move. Although it will take some time before we see a full on confrontation, the stage is being set for the next World War.

While I don’t want this any more than you do, Jim Rogers puts it this way:

‘Wars start when bureaucrats make mistakes and then additional bureaucrats react to those mistakes and the next thing you know, you have eight or ten bureaucrats sending Eighteen year old kids to kill each other, and it’s very worrisome what’s happening.

‘Having said that, war is not good for anything, anything at all, except commodities. I’m not going to state buy commodities because you don’t want to start a war, but if there is going to be a war, it usually means commodity prices go higher.’

I’ve been watching this unfold along with growing concern for some time right now. On 3 December 2014, whenever crude was trading at US$63 per barrel, I authored to readers of?Resource Speculator:

‘Crude essential oil prices won’t stay low forever. In fact, expect to see crude oil prices rocket into 2016/17.

‘As economies keep falling apart, geopolitical risk will pick up into 2016/17. You’ll see turmoil and social unrest rise around the world at an alarming rate.’

It’s time to start preparing your resources portfolio

But please note: before the oil price will take off, crude is likely to fall further — hitting my forecast associated with US$34 per barrel by earlier 2016.

I’ve been preparing Resource Speculator readers about this last crash for some time now. You will see a smarter time to buy. That period hasn’t come yet.

No shots happen to be fired. The US, Russia and China are not yet from war. But when this does occur, you will want to have exposure to crude oil stocks. And to make the most out of your investments, you’ll want exposure to the best of those stocks.

Which stocks am I talking about? You can learn more here.

Regards,

Jason