Month: January 2014

By HY Markets Forex Blog

Gold declined for a second day from the highest level in a month on Wednesday as investors speculate that the Federal Reserve will reduce its bond purchases further, adding pressure on the bullion.

The Yellow metal’s contract for February dropped 0.36% lower to $1,240.50 an ounce on New York’s Comex at the time of writing. While silver futures dropped for the second straight session, trading 0.75% lower at $20.135 an ounce.

Assets in the world’s biggest bullion-backed exchanged-traded fund came in 789.56 tones on Tuesday, dropping to a five-year low.

Gold – US Dollar, US Stocks

The US dollar index edged 0.24% higher to 80.858 points at the time of writing.

Stocks in New York advanced on Tuesday, boosted by the US macro data. The market was driven by the upbeat US retail sales report for December, rising 0.2% higher and beating analysts’ forecasts.

Meanwhile, the US businesses’ inventories also reported positive figures, showing a rise of 0.4% higher in November.

Gold – Fed Tapering

In December, the Federal Reserve announced they will cut its monthly bond purchases to $75 billion from $85 billion.

Philadelphia’s Federal Reserve (Fed) President Charles Plosser said he recommend the central bank should end its quantitative easing before late 2014. Plosser also said he forecast the unemployment rate would reach 6.2% by the end of the year.

Charles Plosser supports the Fed’s decision to scale-back its stimulus and commented on the labour marking performing better than expected.

Dallas Fed President Richard Fisher also supported the Fed’s December decision to begin to taper the quantitative easing program and said he would prefer the program scaled-back further by $20 billion.

Members of the Federal Open Market Committee (FOMC) will gather for their next meeting on January 28-29.

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Article By RoboForex.com

Analysis for January 15^th, 2014

GBP/USD

GBPUSD, Time Frame H4. Tenkan-Sen and Kijun-Sen intersected and formed “Dead Cross” (1). Ichimoku Cloud is going down (2), and the price is on Tenkan-Sen. Short‑term forecast: we can expect resistance from Tenkan-Sen – Kijun-Sen, and decline of the price towards D Senkou Span A.

GBPUSD, Time Frame H1. Tenkan-Sen and Kijun-Sen are influenced by “Dead Cross” (1); all lines are directed downwards. Ichimoku Cloud is closed (2), Chinkou Lagging Span is on the chart, and the price is on Tenkan-Sen, inside Kumo Cloud. Short‑term forecast: we can expect resistance from Kijun-Sen and decline of the price.

GOLD

XAUUSD, Time Frame H4. Tenkan-Sen and Kijun-Sen are influenced by “Golden Cross” (1). Ichimoku Cloud is going up (2), Chinkou Lagging Span is above the chart, and the price is inside Tenkan-Sen – Kijun‑Sen channel. Short-term forecast: we can expect attempts of the price to enter Kumo and stay inside it.

XAUUSD, Time Frame H1. Tenkan-Sen and Kijun-Sen intersected and formed “Dead Cross” (1). Ichimoku Cloud is going up (2), Chinkou Lagging Span is below the chart, and the price is on Tenkan-Sen. Short‑term forecast: we can expect decline of the price.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Article By RoboForex.com

Analysis for January 15^th, 2014

EUR/USD

H4 chart of EUR/USD shows sideways correction between support and resistance levels. Three Line Break chart and Heiken Ashi candlesticks indicate descending movement.

H1 chart of EUR/USD shows bearish tendency, which is indicated by Harami and Tweezers patterns. Three Line Break chart confirms descending tendency; Heiken Ashi candlesticks indicate ascending movement.

USD/JPY

H4 chart of USD/JPY shows bullish tendency. Closest Window is resistance level. Three Line Break chart and Heiken Ashi candlesticks confirm ascending movement.

H1 chart of USD/JPY shows bullish tendency, which is indicated by Three Methods pattern. Three Line Break chart confirms ascending movement; Heiken Ashi candlesticks indicate bearish pullback.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

By MoneyMorning.com.au

We bet you didn’t realise this about the Aussie market.

Apparently investors have been asleep since the start of the year.

That was until yesterday.

According to the Sydney Morning Herald, that was when there was a ‘Wake-up call for investors as shares plunge’.

The Aussie S&P/ASX 200 fell 1.5%. It was the biggest drop for the year so far. Get ready for the hollerin’. You’ll start to hear the same stories as last year about tapering and falling markets.

The same stories that caused many investors to miss out on the big stock rally.

If that sort of talk stopped you from making the most of the stock rally last year, you’ve got a decision to make. Will you let the same talk stop you from investing now? And importantly, if you do, will it be the right thing to do…?

It was the same old story from the Sydney Morning Herald yesterday:

‘The Australian sharemarket has shed $24 billion in value in its worst trading day since September, as investor worries ahead of the US earnings season reverberated across global stocks.‘

Every time the stock market tumbles the mainstream press wails about the billions wiped off stocks. Rarely do you see the story on the other side of the ledger when stocks rise 1.5%.

It’s no wonder so many investors become ‘paralysed’, too scared to invest at a time when there are so many exciting opportunities around.

Fewer Stocks to Take Bigger Risks

That’s what kept so many people out of stocks last year. Maybe you were one of those investors to miss out. That was a shame. The S&P/ASX 200 index gained 15.1% last year.

While that was below the performance of many overseas markets, it was certainly a better option than many other investments – gold, property, and of course, cash.

So, is now the time to switch to cash or something else other than stocks? Remember the old saying, ‘past performance isn’t always a reliable indicator of future performance’. In other words, just because Aussie stocks went up last year, it doesn’t mean they’ll go up this year.

The simple answer: for most investors, now is not the right time to get out of stocks.

As you should know by now, we advocate a relatively conservative approach to asset allocation. But we do that for a reason. The more conservative your asset allocation strategy, the more risks you can take.

That probably sounds like gobbledygook, and counterintuitive.

After all, in order to take more risks, don’t you need to have a high-risk asset allocation strategy? Not necessarily. Not if you follow our approach.

It all comes down to how you invest and where. For instance, we recommend a maximum stock allocation of 50%. That should consist of at least 30% in dividend stocks and the rest in a mixture of large-cap and small-cap growth stocks.

The other 50% should be in a combination of cash and gold.

Exactly how much you allocate to each of these investment classes is up to you. It’s not that hard to work out; you’ll soon get the feel of it. But what about the idea of increasing your risk by becoming a more conservative investor?

Speculating With Small Stakes

The reason we can recommend such a high cash balance is because of the type of stocks we recommend investors hold in their share portfolio.

Most financial advisors recommend big blue chip stocks and nothing else. Many financial advisors have no choice. A condition of their affiliation with a financial planning group may stop them from recommending stocks outside the 200 biggest ones.

That’s terrible. It means the financial planner can’t recommend 90% of the stocks listed on the ASX.

We recommend something most financial advisors wouldn’t dare recommend. That is, we recommend investors get into some of the riskiest stocks on the market. There’s a simple reason for that. These stocks are so risky that if you back the right one, it can return many times your original investment.

That means you only need to invest a relatively small amount in each stock. Of course, there’s a flipside to investing in these risky stocks. There’s the risk you could lose some or all of your investment.

Using this approach is a great way to get into the market if you’re unsure of whether to buy stocks or not. And it’s a great way to get access to potentially big returns without risking a lot of money. Let’s say you have $100,000 of investible cash. You could choose to keep $95,000 in the bank to earn interest.

With the remaining $5,000 you could invest in a small handful of speculative small-cap stocks. The worst case is you lose the $5,000 you speculated (and that’s unlikely if you split the money between three or four well-researched stocks). On the positive side, the interest you earn on the cash should make that back.

Do you see what we mean? Just because you’re a conservative investor with a conservative asset allocation strategy, doesn’t mean you can’t make speculative investments. We’ve shown you an extreme example. The same principle for speculating applies for investors prepared to invest more in stocks – blue-chip and small-cap growth.

The only question remaining is where should you invest your speculative portfolio? There are a number of choices with a lot of potential. We’ll give you a couple of ideas on that tomorrow.

Cheers,
Kris+

Special Report:  574 Years in the Making

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By MoneyMorning.com.au

By MoneyMorning.com.au

If you’ve been a longtime reader, you know how 3D printing is a revolution poised to change how things are made across the globe.

But do you know about 4D printing?

4D printing is 3D printing with ‘smart’ ink…that evolves over one more dimension: time.
‘Smart ink’ is basically different materials combined together that adapt to their environment. They could change shape or appearance in response to heat, light, air, fluid or pressure. How it happens depends on their smaller parts and how they’re programmed. In other words, 4D printing is not about the technology that manipulates materials, but rather, the materials that manipulate themselves.

Like a seed following the instructions of its DNA, we can 3D print materials that self-assemble into the fourth dimension. They can camouflage themselves with ‘skins’ that ‘heal’ or coatings that self-repair. Submarines could cloak themselves based on the water they passed through. Airplane wings could change like metal origami based on where they fly and what they carry.

Right now, 4D printing is in its experimental phase, but some companies have already shown interest. The US Army Research Office awarded $855,000 in 2013 to three universities to make advances in 4D printing. The most well-known project, however, is going on at MIT.

‘The idea behind 4-D printing,‘ says director of MIT’s Self-Assembly Lab Skylar Tibbits, ‘is that you take multimaterial 3-D printing…and you add a new capability, which is transformation. Part of my work had been writing code to digitally design things. If we can write code to operate a machine, why can’t we also use code to get things to assemble themselves?‘

Tibbits believes materials could contain the ‘software’ needed for self-assembly, saving time and money. The materials would mimic the movements of machine-assembled devices driven by actuators, motors and sensors. In an interview with Scientific American, he uses the example of a thermostat, one that’s not digital:

If you pull off the cover of that thermostat, there’s a coil with a bimetallic strip. You have two metals sandwiched together with different expansion rates. When subtle temperature changes happen, it turns the coil to the left or right. That turns a dial to either increase or reduce heat. There’s no motor or traditional sensor. It’s just a material that’s expanding and contracting and turning a dial.

Already, he’s tested 4D printing on a fairly large scale, printing a 50-foot strand material and then placing it in a pool. The angles and orientation of the black, rigid plastic changed over time as it was submerged. Attached to this strand was a white plastic that expanded 150%, causing it to fold.

But despite all of the excitement, Tibbits admits that 4D printing is still in the early states, and that he’s just one research lab: ‘Our job is to push knowledge and discover new things. We don’t develop new products; we rely on industry for that. The development of new 4-D printing applications depends on strong collaboration with businesses interested in pursuing this technology.‘

Those at his Self-Assembly Lab believe the tech is powerful enough to disrupt ‘biology, material science, software, robotics, manufacturing, transportation, infrastructure, construction, the arts and even space exploration.‘ He believes two segments hold the most promise in the near term: extreme environments and large-scale infrastructure. Space, where oxygen lacks and temperatures freeze, is one example. Underground is one more.

Harsh environments like outer space would, indeed, be made more accommodating. And with that, let’s check out my personal favourite space where a more immediate, more practical application is: underground.

One Potential Application: A Solution to a $350 Billion Problem

It’s time to rescue the most vital resource on the planet: water.

We take water for granted all the time. About 60% of your body is made up of it.

You can survive three weeks without food.

But without water? Try three days. We don’t recommend it…

Throughout history, the great civilisations understood its value: Egypt, with its pyramids by the Nile, and Rome, with its monumental aqueducts. But here in the US, our modern-day empire is in serious trouble. Many of the big water systems were built not long after the Second World War. In fact, 30% of water pipes are 40-80 years old. 10% are older.

That’s why if you listen closely, dear reader, you may be able to hear it…

Water mains breaking around the country every two minutes – 700 a day, on average.

A few months ago around our Baltimore office, the city’s main street was flowing like a river. Still, that was nothing compared with what happened on the Potomac. A pipe erupted so fiercely helicopters had to be called in to rescue people before they drowned.

Click to enlarge

It’s the same everywhere else. In Philadelphia, cars and homes have been flooded. On the West Coast, Los Angeles’ famous Ventura Boulevard has been swamped.

When something like that happens, you tend to be asked by local officials to stop watering your lawn and washing your car. Cut back on using toilets, they recommend. Same with dishwashers and washing machines. The fire departments need all they can get in case chaos breaks out. But it becomes more than an inconvenience when it gets really bad. Even worse than property loss, bacteria and viruses can enter the greater water supply through broken pipes. The 2008 salmonella outbreak that sickened over 250 people in Alamosa, Colo., is a small example.

In fact, the nation’s drinking water system is so troubled the American Society of Civil Engineers gave it a grade of D-plus in its 2013 Report Card for America’s Infrastructure.

‘You can’t have jobs, you can’t have businesses, homes, you can’t have hotels, homes, if this infrastructure isn’t in place,‘ says Eric Goldstein of the Natural Resources Defense Council.

And guess where action needs to be taken most? I’ll give you a clue: It also has among the highest crime rates – official and unofficial.

Washington, DC’s, average pipe is 77 years old. In the wake of the Great Recession, funds dried up to fix the water problem. Some $10 billion were allocated from the stimulus package. But according to CNN, the funds needed over the next 20 years are $334.8 billion. The more we wait, the worse it gets. So much for the government taking care of the public’s single most basic service: drinking water…

Click to enlarge

Fortunately, our friend at MIT, Mr. Tibbits, has shown the potential of 4D printing as a solution. Tibbits is working more than a tad bit with a Boston company called Geosyntec to develop a new paradigm in water infrastructure. Rather than use fixed-capacity water pipes, they’re experimenting with nanoscale adaptive materials built from the environment. The best 4D printing tech is based on the work nature has already spent billions of years producing. 4D printing with adaptive pipes to correct our water piping reminds me a lot of how human veins expand and contract to accommodate blood flow. The 4-D printing solution is similar.

‘Imagine if water pipes could expand or contract to change capacity or change flow rate,‘ Tibbits said in a recent TED talk. ‘Or maybe [they] undulate like peristaltics to move the water themselves,‘ he said. ‘This isn’t expensive pumps or valves,‘ he continues. ‘This is a completely programmable and adaptive pipe on its own.‘ This is, of course, only the beginning. ‘Manufacturing could be more like growing,‘ he said in a BBC interview in July, 2013. ‘Maybe the construction sites in the future, we play Beethoven and structures build themselves.‘

Regards,

Josh Grasmick,
Contributing Editor, Money Morning

Ed Note: The above is an edited version of an article originally published in The Daily Reckoning America.

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By MoneyMorning.com.au

Source: Brian Sylvester of The Mining Report  (1/14/14)

http://www.theaureport.com/pub/na/no-title-15798

China’s recent halting of flake graphite production in Pingdu, Shandong, made headlines, and has many investors wondering how supply may shift. Simon Moores, manager of Industrial Minerals Data, tells The Mining Report that he sees an interesting dynamic unfolding in the graphite space over the next five years. As buyers for steel and battery markets compete for limited graphite supplies, the winners will be companies that can deliver the best, tailor-made products. In the meantime, offtake agreements are signaling a new confidence in the sector.

The Mining Report: Simon, China is putting mining on the back burner while it cleans up damage done to the environment by mining and other industrial work. Graphite processing facilities, including those in Shandong Province, have halted flake graphite production. Will that affect prices?

Simon Moores: For sure. We expect the immediate price impact will be minimal. Typically, graphite mining stops during the winter in China, so most international buying already happened in the autumn.

Inside China, we’ve heard that some producers are raising their list prices, taking advantage of the story. The key will be whether those prices stick when buying begins again after the Chinese spring festival in late January/early February. At that point, I anticipate a price reaction.

TMR: It’s estimated that China controls 70% of the world’s graphite production. Is its grasp on the graphite business loosening?

SM: China’s macro policies, certainly on environmental responsibility (including the use of natural resources and improving air quality), are leading to a crackdown on the mining industry. Halting graphite mining, as we’ve seen in Pingdu, is a perfect example of that.

As a result, we could easily see some shift of supply. The temporary closures in Pingdu could be enough to scare buyers into looking elsewhere. That’s already happening. Major graphite buyers are looking all over the world for new sources. If the Pingdu restrictions extend into Heilongjiang Province, buyers could move—not just look—to sources outside of China for the first time since the 1980s.

TMR: In your May 2013 interview, you suggested that prices for flake graphite had bottomed. What happened to the price for standard-grade graphite over the latter half of 2013?

SM: Prices remained flat. We saw slight decreases, but ultimately the trend was flat. We expect to see price improvement in Q1/14 or Q2/14 because of the supply-demand situation. If that’s the case, we’ll know that the second half of H2/12 was the bottom, but there’s been no upturn yet to confirm that.

TMR: What’s your price outlook for 2014 and into 2015 for flake graphite, plus-80 mesh, 94–97% carbon?

SM: This year we expect some improvement, maybe to $1,400-1,500/ton. Should that momentum carry into 2015, prices could improve further, to $1,600-1,800/ton. We don’t expect to see the huge increases we saw back in 2010-2011. That was a unique situation.

TMR: What’s the biggest wildcard facing the graphite space this year?

SM: On the supply side, it’s still China. On the demand side, the wild card is demand from a new sector and that’s batteries.

TMR: What should get investors excited and involved in graphite in 2014?

SM: The fundamentals haven’t changed since the price spike and exploration boom of 2010-2011. The key elements are China’s dominance, China’s mining regulation plans and the emergence of new markets.

I would look at refractories versus batteries. Manufacturers of refractories are trying to get higher quality graphite. Battery manufactures are competing for the same grade—large flake, higher purity graphite. Most of the mines around the world can’t supply sufficient volumes. That presents a great opportunity for anyone trying to build a new mine.

TMR: Readers of The Mining Report are mostly familiar with small-cap graphite explorers and developers. In that sector, what makes a good graphite project?

SM: It’s a balancing act. It comes down to the product the project can produce, who would want to buy it and how economical the resource is. Grade is important. Typically, higher purity in the ground translates directly into a more economical resource. Flake size is also key, because buyers are demanding larger flake (plus-80 mesh and higher) and higher purity (95%, 96%, 97% and 98% C).

The size of the resource is somewhat less important from end user and industry perspectives. After all, industry consumes a maximum of 450,000 tons per year, in a good year. But I can understand that an investor would want to see large, confirmed resources for long-term business plans.

TMR: The first offtake deal has been signed with a junior graphite developer in Canada, Focus Graphite Inc. (FMS:TSX.V). Does that deal legitimize graphite juniors by giving them a role in the bigger picture?

SM: It legitimizes some of them. The deal was a vote of confidence in the exploration sector. It showed the world that the exploration and development sector have some very good projects and can create a product the market wants and needs.

The Focus Graphite deal covered nearly 100% of the company’s planned production, including fines. Fines are usually a very difficult product to ship because they’re always in excess supply and are of lower quality carbon. There’s less of a market for fines and it has more product competition.

What stood out for me in the Focus Graphite deal is that it came from China. It shows the big buyers in China are looking elsewhere for new supplies. I thought that was the big takeaway, not just for Focus Graphite, but for the whole exploration sector. Focus showed its willingness to work with China as a customer, not necessarily as a competitor.

I think if the exploration industry starts to see China as a market—an opportunity, rather than a threat—more progress would be made.

TMR: How much of an advantage does the offtake deal give Focus over other players in similar positions?

SM: It’s an advantage now, because Focus was the first to announce and it shows a serious, large-scale partner in China. Only one other company has had an offtake since, and that’s Kibaran Resources Ltd. (KNL:ASX) with a Europe-based trader.

TMR: Do you think we will see other, similar deals?

SM: We could, yes. A lot of buyers want to get long-term supply. A lot of players are waiting to get the best deal, whether that means buying a project outright or signing offtake agreements.

TMR: Across the mining space, but particularly in the graphite space, a number of companies are running low on cash. Do you expect any mergers of survival?

SM: I expect the biggest and the best projects will survive. The top companies, the ones you read about, have the best projects. The smaller ones will have to look at merging or folding if they can’t get funding.

As I’ve said before, some in the industry—both producers and buyers—are waiting for a good time to buy a project. It doesn’t have to be a leading project, which could be quite expensive. It could be a smaller project. They’re just waiting for a good deal. So I expect to see some activity in 2014.

TMR: Does Industrial Minerals Data keep track of companies’ cash on hand and the burn rates?

SM: No, we focus on collecting prices and supply-and-demand figures. We track the industry, not individual companies.

TMR: What was the funding scene for the industry in 2013?

SM: Clearly, it was a difficult year for funding. One financing that stood out was Syrah Resources Ltd.’s (ASX: SYR) raising AU$35 million (AU$35M) for its project in Mozambique. I know how difficult it was for all the other projects in the industry, so that was an achievement. It was a big step toward actually building a mine.

TMR: Were there other events that got your attention? I’m thinking of the Sri Lankan government opening up to graphite mining, for example.

SM: Sri Lanka did open up exploration throughout the year by loosening legislation to welcome foreign investment. Many more companies are active there now and they tend to be Australian. The nature of Sri Lanka’s graphite means, in volume terms, it will remain a niche.

TMR: What about the efforts of a research team trying to develop condoms made of latex graphene? Is that possible?

SM: Only theoretically. You can be the first to try it. I won’t.

TMR: So, batteries and steel will remain the primary demand drivers for graphite?

SM: Yes, definitely. Steel refractories will remain the staple for a long time, but the potential for explosive growth will come from batteries. If you have a big market from steel plus big growth percentages coming from batteries—and everyone is competing for the same raw material—it could create an interesting dynamic over the next five years.

TMR: In terms of company news, does any company stand out for doing something different from its competitors?

SM: It was a quiet year in terms of stories. Juniors battled it out on a few fronts, especially the carbon purity stakes of the end product.

The battlegrounds now are over resource size, purity and upgrading the size of reserves.

For example, Canada Carbon Inc. (CCB:TSX.V) has a vein graphite deposit in North America and it has one of the more original approaches. It’s one of the smaller companies, but the company’s niche approach is refreshing and more suited to the graphite industry outside of China.

TMR: Do you prefer a vein deposit to other types of deposits?

SM: Not really; it depends on the market you’re going for.

Canada Carbon is going for a niche, not to take on the whole market. The company is thinking sensibly about alternatives. It doesn’t plan to produce more than 10,000 tons a year.

TMR: Northern Graphite Corporation (NGC:TSX.V; NGPHF:OTCQX) was once the darling of the sector. Its share price had a good run, but has since come off quite a bit. Why?

SM: Northern Graphite did a great job of getting out ahead in the race, publishing a lot of information first. It led the industry in that perspective. Obviously, as more projects come on-stream, there is more competition. If you stick your neck out, some people will have a go at you and other people will respect that. That’s just the hazard of leading the pack, as Northern Graphite did.

Investors should be considering all the serious graphite companies, and that includes Northern Graphite.

TMR: What’s next for graphite investors?

SM: You never quite know in this space, but I think the worst is over. I think we’ll see improvement in 2014 for everyone in the graphite industry. The fundamentals haven’t changed since the boom of 2011: China still dominates. New supply is needed for high-tech markets, which are competing with the traditional steel refractories. No new mines have been built since the 1980s.

Add on to that the diminishing supply, given the new situation in Pingdu, China. Supply, especially for large-flake, high-purity grades, is tighter. Premium products—large-flake, plus-80 and bigger, at purity levels of 95–99% carbon—will be in demand.

We should see some price improvement as well. Usually, when prices improve, that sentiment translates to the rest of the industry. That gets reflected in the investment arena. If that happens, it should encourage more people to return to graphite investing, because the fundamentals are pretty clear.

TMR: In addition to the high-purity producers, what about companies that can provide a value-added product?

SM: This is important. The industry needs value-added products that are hot and fresh out of the kitchen.

But for the pure mining companies, that will be difficult to achieve. Producing spherical graphite, for example, is effectively a second business requiring more capital.

From the raw material perspective, it’s not just about purity. It’s really about the large flake and the purity together. If you look at the plus-45 mesh or higher—the next step down from plus-80—in conjunction with purity in the 95-99% ranges—that product will be in demand. We’ve actually seen a shortage of some of these higher grades in a market where not many people are buying.

TMR: Have management teams in the graphite space adjusted their business models to be more accommodating to the market?

SM: Beginning last year, they started listening more to industry. The responsible companies were asking people what they actually wanted. It’s nearly all about processing technology to get the true value. Companies that follow that route aren’t just making flake graphite; they’re making spherical graphite for batteries. That is a big investment, and also a significant step forward.

TMR: I have to ask about the graphene-graphite debate. Has this industry made progress in developing graphene made from mined graphite?

SM: To be honest, not much. The exploration sector has done most of the legwork on this and has made some inroads, but it’s still a young industry. It’s still risky to say you can make all graphene from flake graphite because there are so many different production routes. It remains a theoretical product without a market.

It’s not necessarily the best company in scientific terms that wins in these things. It’s whoever makes the market inroads now. The graphite-to-graphene companies out there now—Grafoid Inc. (private) would be a good example—are doing the work and creating the market. If those companies are linked to flake graphite projects, that’s a plus for this side of the industry.

TMR: In that case, is Focus providing a model for others to follow?

SM: I think Focus is concentrating on the processing and the technical aspects of it. In the end, it doesn’t matter too much where you get your raw material; it’s about the processing technology that you develop.

I said a few years back that those that hold the technology cards will lead the pack and I still believe that.

TMR: In effect, if you could provide a steady consistent supply of graphene, there will be markets for it. Without the steady supply, there are no markets for graphene. It’s a chicken-and-the-egg situation.

SM: Definitely. That’s why the graphene supply side is pushing to create a market. Some companies are working with paint manufacturers, plastics manufacturers. The first step is discussion between graphene companies and end users about how to use it. You can create a graphene powder, but how do you get it into the end product? How will it improve that product? By how much? What will it cost? Will their customers buy it? Someone will get there eventually, but these things take time.

TMR: And we’ll be here to talk about it. Simon, thanks for your time and your insights.

Simon Moores is manager of Industrial Minerals Data, a business that sets prices for natural graphite and fluorspar industries from offices in London and Shanghai. He has been reporting on, researching and analyzing the non-metallic minerals sector since 2006, when he joined London-based publishing and research house Industrial Minerals. He has specialist knowledge in critical and strategic minerals including graphite, lithium, rare earths and titanium. He led the research and publication of the market study, “The Natural Graphite Report 2012: Data, Analysis and Forecast for the Next Five Years.” He has chaired conferences and given keynote presentations around the world. He has also been interviewed by international press including the London Times regarding Chinese control on world graphite production, and The New York Times with regard to rare earths after breaking the story that China blocked exports to Japan in 2009.

Want to read more Mining Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

DISCLOSURE:
1) Brian Sylvester conducted this interview for The Mining Report and provides services to The Mining Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Mining Report: Northern Graphite Corporation and Focus Graphite Inc. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.
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By CentralBankNews.info
    Mozambique’s central bank held its benchmark rate on the standing facility steady at 8.25 percent, maintaining what it described as “a scenario the requires caution and prudence.”
    The Bank of Mozambique, which cut its rate by 125 basis points in 2013, also said it would ensure that the monetary base during January does not exceed 45.892 billion meticais, down from the December target of 47.493 billion.
    Mozambique’s inflation rate eased to 3.54 percent in December from November’s 4.04 percent.
    The bank said the government’s inflation target for 2014 was 6.0 percent, along with real growth in Gross Domestic Product of 8 percent and international reserves that can cover four months of imports.
    “The MPC considered that the achievement of these objectives will allow the country to remain in the forefront of the fastest growing countries with macroeconomic stability in sub-Saharan Africa,” the bank said.
    Mozambique’s GDP expanded by an annual 8.1 percent in the third quarter, in line with the bank’s revised projections. Economic activity was helped by an 8.8 percent rise in the tertiary sector, while the primary sector grew 7.0 percent, driven by mining.

    Net international reserves rose by US$ 81 million to $3.009 billion in December, in line with the target, while gross reserves were enough to cover 5.1 months of imports.
    Mozambique’s medical ended the year at 29.95 to the U.S. dollar, representing a monthly depreciation of 0.07 percent and an annual drop of 1.49 percent, after a 0.2 percent decline in November.
   
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By OilPrice.com

The U.S. Environmental Protection Agency published a rule on January 9, 2014 requiring oil and gas companies using hydraulic fracturing off the coast of California to disclose the chemicals they discharge into the ocean. Oil and gas companies have been fracking offshore California for perhaps as long as two decades, but they largely flew under the radar until recently.

An Associated Press story in August 2013 revealed that oil and gas companies had engaged in hydraulic fracturing at least a dozen times in the Santa Barbara Channel – the site of the nation’s first offshore drilling site as well as the first major oil spill. The 1969 well blowout in the Santa Barbara Channel became the impetus for a series of environmental laws such as the National Environmental Policy Act and the Clean Water Act.

Documents published through a Freedom of Information Act request showed that federal regulators have allowed drillers to dump chemicals into the ocean without an environmental impact statement assessing the effects of doing so. This was largely unknown to California regulators and the general public. The Bureau of Safety and Environmental Enforcement – the federal regulator responsible for regulating offshore oil drilling – has issued “categorical exclusions” for fracking offshore California, essentially giving frack jobs a pass on environmental assessments. The logic is that offshore fracking has largely occurred in existing wells, locations for which companies already jumped through all the environmental hoops long ago.

Offshore fracking could be much more widespread than even federal regulators are aware. According to the Environmental Defense Center, BSEE only began to learn about the extent to which fracking was occurring offshore when pressed to respond to FOIA requests.

The industry maintains that hydraulic fracturing is safe, and BSEE officials point to the fact that fracking offshore requires only a fraction of the water needed to do the job onshore.

But offshore fracking differs from the onshore practice in at least one important way. After an onshore well is fracked, the waste water is often re-injected into the ground for storage. However, offshore drillers often simply dump the waste water into the ocean – although the industry claims the water is treated before entering the marine environment.

The latest EPA rule would merely require companies to report the chemicals that they are discharging into the ocean. The rule is a weak one because relies upon companies to self-report their activities.

EPA’s announcement is a new wrinkle in the story of fracking in California, which has been much more raucously debated onshore. Last year, the state passed a controversial law that introduced the first regulations on fracking. It requires companies to disclose the chemicals used in the drilling process, obtain permits, and monitor air and water quality. Environmentalists rejected the law and are calling for a full moratorium.

Governor Jerry Brown does not support a ban on fracking and insists the new law is rigorous. Despite the complex geology that could prevent California from ever living up to its oil and gas potential, the industry and many policymakers remain in favor of trying to exploit the vast oil and gas reserves in California – both on and offshore.

Source: http://oilprice.com/Energy/Energy-General/EPA-Issues-New-Rule-to-Require-Chemical-Disclosures-for-Offshore-Fracking.html

By. Nick Cunningham of Oilprice.com

By Dennis Miller – How to Profit During High Inflation

Anyone with a technical degree will admit that college programmed them to consider “sell” a dirty word—to think salespeople use trickery to lure consumers into buying things they don’t need. It makes no difference whether it’s an investment product or a Pet Rock; anyone involved with selling or its evil twin marketing is guilty until proven innocent.

I spent the majority of my first career in sales and marketing, where I focused on negotiations and pricing. My clients included 40 of the top 500 US corporations. Now I work alongside some of the best economists and analysts in the world, and well, let’s just say I bring a different perspective and experience base to our meetings.

That difference became apparent during a recent discussion on how our subscribers can protect themselves and even profit from inflation. We were all in agreement on several key points:

• The government cannot continue to print money as it is without high inflation resulting.
• Traditional investments like precious metals will soar when the world finally discovers the US dollar is worthless. Own them, be patient, and when it hits, what a ride it will be.
• Billions of dollars will flow out of the stock market as interest rates begin to rise.

Certain companies and industries fare better than others in an inflationary environment. Success means investing in those companies whose stock prices and dividend appreciation will grow ahead of the rate of inflation, giving investors true gains.

Investors should look for:

• Companies with a worldwide presence to hedge against the US dollar;
• Companies with a history of regular dividend increases ahead of the inflation rate; and
• Companies that can quickly pass through their cost increases to the market.

Take oil companies and airlines, for example. When oil companies notice some saber-rattling in the Middle East, the price at the pump can go up a nickel or more the next day. Contrast that with the airline industry, which does a very poor job in this regard.

Why do air travel and gasoline—both considered commodities—perform so differently when their costs are rising? The major oil companies understand market dynamics as well as any industry I’ve served. If an event is going to cause their costs to rise for whatever reason, it only takes one company to raise its prices, and the competition immediately follows. Market share is generally unaffected, but the entire industry makes money.

Price fixing is illegal, and that’s not what oil companies are doing. Go to the Weather Channel, surf around, and you can find the best gas prices in any given ZIP code. If you’re a dealer, you adjust your prices accordingly. After all, how far is a customer going to drive to save a couple cents per gallon when gas is priced over $3/gallon? It sounds crazy, but gas customers don’t have as much mobility as one might think. They risk spending more in gas driving around than they might save at the pump.

The airlines used to do the same thing when they were a regulated industry. One company would announce a fare increase, and all the competition would follow. Now unregulated, some airlines have significant cost advantages over their competition. A few years ago, Southwest Airlines made a huge bet on the direction of fuel prices and guessed right. It had a terrific advantage over the competition, and it was reflected in its pricing.

Unlike a driver needing gas, an air traveler has time to hop on the Internet and compare airfares quite easily, and price is a major factor when buying a plane ticket. While costs increase in the industry, those who maintain a cost advantage over their competition use that as an opportunity to increase their load factor. Instead of raising prices quickly, they lag behind. Fill just two or three more empty seats on a flight, and that income is straight profit. It is a very difficult industry in which to pass through cost increases quickly. Instead, for years the industry has scrambled to cut costs to remain profitable.

At this point, I shared what I consider to be the best place to look for companies that will beat inflation with the team. I started with two fundamental truths about cost and pricing:

• In business, the cost of producing your product or service should tell you only one thing about how you should set your price: specifically, the price you don’t want to sell it for.
• The selling price should be the value of your goods or services in the mind of the customer, as tempered by competition.

Too many businesses set their selling price as a formula called “cost plus,” which is the wrong way to go about it. Your cost information tells you when you’re losing money on every sale. There are companies that price their goods below cost with the intention of building up enough volume to bring their unit cost down in order to become profitable. Sometimes it works. But the sooner it does so the better, because these companies cannot continue losing money forever.

Take Amazon.com, for example. It used price as its main competitive advantage for years, delivering few if any profits for the better part of a decade as it grew. There can really be only one strong price leader, and that leader will condemn itself to being a low-margin, low-profit business so long as it competes on price alone.

From a marketing perspective, there are two different types of markets: concept and brand markets. In a concept market, a new idea, technology, philosophy, or methodology is sold. A brand market is an established market where competitors are fighting for market share.

The iPad is an easy example. The iPad was a new concept called a tablet computer. The competition was a different technology—an expensive notebook computer, your home computer, or a smartphone. In a concept market, many times you’re creating a market (tablets) at the expense of another market (portable computers). Personal computers, for their part, completely destroyed the typewriter market.

Apple is a great marketing company, its technology is excellent, and it understood it could price the new gadget below its true competition (computers) and still make terrific margins.

As a new market is created, competition sees the opportunity and jumps in. In the early stages, it validates the concept, and the total market growth accelerates even faster. Competition normally prices its product under the pricing umbrella of the market leader. At the same time, they may drop off a feature or two to keep their costs down. That further reinforces the market leader as the technology leader.

Eventually the market is created, and competition begins fighting for market share. Look at what’s happened to the printer business. Printers have now turned into a commodity—almost a disposable product, really. The market is now a brand market. Capitalism creates competition, which benefits the consumer. Each competitor is trying to convince consumers that their brand is better than the competition’s, and price is an important factor in that contest.

The next thing I look at is who dominates the market. You may be surprised to find the company with the highest quality and highest price is also a low-cost producer because they have the lion’s share of the market. Rather than cut price, Apple continues to upgrade the quality of its products to keep the competition in continual catch-up mode as opposed to leapfrogging their technology.

Because the dominant market leader provides the pricing umbrella for the industry, this creates an interesting Catch-22 in an inflationary environment. As production costs rise, the longer the dominant player hangs on, the more difficult it is for the competition, because they cannot pass on their cost increases to the consumer. If they raise prices, they will lose market share. Once the big boy announces a price increase, the rest of the market generally follows.

The dominant market leader also recognizes there are certain segments where price is a major consideration. There is now a market niche for basic, low-cost tablets. If the leader tries to cut its price to capture that segment, it has to determine how much additional share it would gain to offset the margin loss on the share it currently has. In addition, there are laws concerning predatory pricing, meaning pricing your products with the intention of driving your competition out of business. Concept sellers are generally content to open up a new market, and expect some loss of market share as it matures.

Let’s look at some real numbers:

Apple’s share price rose with the iPad very well, and it’s holding good margins. Now the iPhone5 is out, and the company is hoping for similar results.

There are many examples of concept sales in the technology sector; however, concept sales take place in many markets. One of our holdings in the Money Forever portfolio has developed a new type of noninvasive medical test that gives better results with much less trauma to the patient. Its main competition is not a similar test, but rather the older, less-effective technology. As this new test becomes the standard, various brands will begin fighting over market share. In the meantime, the company is rapidly growing and maintaining excellent profit margins along the way. In turn, its shareholder value is really accelerating.

There are countless TV commercials for products and services like online dating services, reverse mortgages, or hair color for men, all of which are still in the concept stage. The companies are all still selling their idea as opposed to why they are better than the competition. Much of their success will depend on the size of the market they create with their ideas. Direct competitors offering a lower price to garner market share is of little concern.

Companies that create new concepts by finding large markets with needs begging for solutions will prosper. That’s one reason the technology sector is ripe with these success stories. How many products do we use today that were not even invented 20 years ago?

Our research team is constantly on the lookout for concept sellers in all markets throughout the world. Those who recognize the opportunity ahead of the crowd (before we learn about them on television) will see some extraordinary gains. They will thrive in any market, even during high inflation.

Concept sellers range from smaller companies with new ideas or technologies to huge companies like Apple or Sony that develop new products to fill needs they see in the market. When one finds a need and develops a product that’s in high consumer demand, its stock will generally rise, even in a tough market, and its gross margins will be protected because it can more easily pass cost increases to the customers.

You can beat inflation. While the market is a lot tougher than it was a decade ago, those who make the modest time commitment necessary to research and learn can stay ahead of the curve. It is my personal mission to give our subscribers the tools to do just that—efficiently and effectively.

That’s why I put together a short explanation of what it means to retire successfully, and how Money Forever can help you get on track. You do not have to go it alone. I urge you to take a few minutes, sit back, and read all about it. Start your retirement education right now by clicking here.

By CentralBankNews.info
    Tajikistan’s central bank cut its benchmark refinancing rate by 70 basis points to 4.8 percent, reflecting lower inflationary pressures and the impact of external factors.
    The National Bank of Tajikistan, which cut rates by 100 basis points in 2013, said the cut should help lower the average rate of loans in the banking system.
    The central bank said on its website that monthly inflation in December was 0.3 percent for an annual rate of 3.7 percent.
    Tajikistan’s Gross Domestic Product expanded by an annual 7.4 percent in the third quarter, slightly down from the second quarter’s rate of 7.5 percent. The government had forecast 2013 growth of 7.4 percent following growth of 7.5 percent in 2012.

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