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Finding Shelter From The Storm

Monday, April 4, 2011, 10:05 AM
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Finding Shelter From The Storm

Monday, April 4, 2011

Executive Summary

  • GDP growth requires energy, and the Fukushima disaster has just set back nuclear's expected contribution by years (decades, likely)
  • Trading strategies for an end to QE, by asset class (stocks, bonds, currencies, commodities, precious metals, real estate)
  • Fukushima's likely impact on the energy market
  • Why the priority now for investors should be on wealth preservation
  • The odds QE will resume later in the year

Part I: A Global Tsunami, Courtesy of the Fed

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II: Finding Shelter From the Storm

A Global Energy Shortage

The aftershocks from Fukushima will extend across the globe and well into the future, as energy plans that had formerly relied on nuclear will slow to a crawl. We will possibly even see a reversal in that energy source for a while as older plants are scrapped faster than new, safer designs can be brought on line.

Growth in net energy from oil is no longer possible. The cheap oil is gone, flow rates of conventional oil struggle to recover to 2005 levels, and the new stuff is hideously more expensive in terms of dollars and energy to extract.

Alternative fuels are not-yet-ready-for-primetime and have enormous scale issues to overcome. Coal will fill in some of the gap, but we had big plans for nuclear to plug much of the rest.

No longer.

 

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