Silver and Copper to Benefit from Global Electrification Push / Commodities / Electricity
Precious metals markets are making modest advances inthis final trading week of May. U.S. markets will be closed on Monday inobservance of Memorial Day.
During the extended weekend, millions more Americanscompared to last year are expected to hit the roads for travel. They will beconfronted with pain at the pump as gasoline prices have risen to over $3.00per gallon in most parts of the country.
Other signs of a serious inflation problem are buildingfollowing the massive cash injections into the economy by the Federal Reserveand the Joe Biden administration.
Former President Donald Trump weighed in on America’scurrent inflation and energy predicament in a recent interview with Newsmax.
Donald Trump: And the lumber's gonethrough the roof. The lumber, I guess as much as anything, but everything.Steel. You look at what's going on with pricing. And obviously, you're going tohave inflation. Gasoline is going to stop at $6, $7, I think, based on what I'mseeing. We were energy independent when I left. And right now, I would have tosay, we are no longer energy independent. We're putting windmills all over theplace, which cost a fortune. Which by the way, if you're a believer in thecarbon footprint and all of the other things, when they make these windmills,which are all made in China and Germany, by the way. They're all made in China,Germany, we don't do them here. They put them together. We put them togetherhere. We don't make them here. What goes into the air when they make them ismore than anything that can ever be saved.
Whether Trump’s gas price forecast comes true remains tobe seen, but he has a point about so-called green energy. The amounts of metalsand other materials that go into things like wind turbines and solar panels isenormous. Not to mention the vast amount of land they take up or the mountainsof waste they generate when they have to be torn down and replaced every 25years or so.
The power source with the greatest efficiency andsmallest environmental footprint is one that few people are enthusiastic aboutthese days. But economic realities may soon force the U.S. and otherindustrialized countries to re-embrace nuclear power.
If environmentalists want their dream of replacing coal,oil, and gas to come true, their best chance may be to champion nuclear. Modernreactors emit nothing into the air other than water vapor and can generatesteady, reliable power for several decades before having to be de-commissioned.
Opponents say it’s not worth risking another Chernobyl orFukushima type disaster. But the long-term safety record of nuclear remainsstellar compared to, say, coal. Even green energy sources – with all themining, manufacturing, and transportation activity that goes into them – claimmore lives every year than nuclear plants.
The fuel for a nuclear reactor is uranium. And uraniumprices could go skyward if a nuclear renaissance commences.
In the meantime, the electrification agenda is rapidlyproceeding. The Biden administration and major car companies are settingambitious goals for transitioning to electric vehicles over the next few years.
That means more demand for conductive metals including copperand silver.While there are potential alternatives to uranium and other energy input fuels,there is really no practical alternative to copper when it comes to carryingelectricity or silver when it comes to high-tech electronic components. Silveris also essential in solar panels.
The mining industry has little ability to ramp up silverproduction to meet rising demand. After years of high grading andunder-investment in acquiring new reserves, gold and silver mining isn’t going to be a growth industry anytime soon. Althoughhigher spot prices could certainly translate into healthy profit growth forminers and bullion investors alike.
Metals markets have been advancing over the past fewweeks as inflation fears continue to rise. Trillions in newly created dollarsby the Federal Reserve at the behest of the Biden administration are causingprice spikes in various sectors of the economy.
The Fed insists the inflation surge is just transitory,but central bankers are giving no indication that their inflationary policieswill let up anytime soon. The deficit spending that politicians in Washingtonare offloading to the Fed certainly isn’t transitory.
President Joe Biden just released his budget proposal fornext year. It calls for a whopping $6 trillion in spending and projects adeficit of $1.8 trillion.
Despite assuming controversial new tax hikes oncorporations and investors are enacted by Congress to raise revenues, theadministration’s plan is still charting an endless river of multi-trillion-dollardeficits ahead – on top of a record $3.1 trillion budget gap this year alone.
It adds up to a dreadful outlook for the Federal ReserveNote dollar and more monetary fuel for higher precious metals prices.
By Mike Gleason
Mike Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.
© 2021 Mike Gleason - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.