Greg's Note: With Earth Day creating a lot of buzz about green energy and technology, people are desperately looking for a cheap and effective way to produce green energy. Byron King has a theory that the more expensive dirty energy resources get, the cheaper green energy will look by comparison. Check out Byron's case. Enjoy, and send your comments to the managing editor here: greg@whiskeyandgunpowder.com Whiskey & Gunpowder
I live in Pittsburgh, and grew up here as well. Both figuratively and literally, Pittsburgh is built on coal. Coal is the remains of ancient plant life, buried within the rock record. For example, one of the most extensive and valuable mineral resources in the U.S. is called the Pittsburgh Coal Seam. The Pittsburgh Coal Seam shows up in outcrops all over town, if you know where to look and what you are seeing. But there is a lot more to this hunk of rock. The Pittsburgh Seam extends underground all over western Pennsylvania. The Pittsburgh Seam is high-grade coal and can be as much as 6-8 feet thick. That's a lot of energy stored up in one place. ~~~~~~~~~~~~~Special~~~~~~~~~~~~~ A Behind-the-Scenes "Guest Pass" to Profit in the World's Most Secretive "Millionaire's Market" Beginning tomorrow at 7:10 A.M. EST, you can use your guest pass to go behind the scenes in the financial community's best-kept secret: the "Millionaire's Market." Once inside, you'll begin to legally "withdraw" $810 or more per week — and you'll be able to deposit the money directly into your retirement account! ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ A century or more ago, coal from the Pittsburgh Seam was abundant and cheap. People heated their houses with coal, cooked with coal, powered simple engines with coal. And all over western Pennsylvania, people like Henry Frick and Andrew Carnegie pulled a heck of a lot of money out of that Pittsburgh Seam. They built mines, powered mills and created immense industries based on burning coal. More fundamentally — if not philosophically — they profited from harnessing and releasing the stored-up energy from ancient sunshine. Energy and Capital Let's think about that for a moment. It was not that capital was cheap back in the last century. Gold was gold. Money was money. When they borrowed funds, Frick and Carnegie paid the same interest rates as anyone else anywhere else. But they succeeded, and did so in great fashion. What was their advantage? Well, it gets back to that Pittsburgh Coal Seam. In the last century, western Pennsylvania had rich seams of coal located near the surface. Pittsburgh had proximity to some of the best energy reserves in North America. So coal became the foundation of industry. Energy powered industry, and industry created wealth. The rivers of western Pennsylvania made it easy to transport that coal. That is, using barges to float things down the rivers required relatively less energy per ton-mile to move the coal to Pittsburgh's mills. And using the rivers meant that it required less energy per ton-mile to move the value-added products out to the interior of the country, and to the world. (For example, the steel locks on the Panama Canal were built at Pittsburgh and floated down the Ohio and Mississippi rivers, across the Gulf of Mexico and to Panama.) Yes, it took capital to gain access to the energy sources. But the energy sources also leveraged the capital. In its own way, energy is a form of capital, isn't it? And it is a major competitive advantage to control a source of low-cost energy. In fact, control over reliable sources of low-cost energy may be even better than access to cheap capital, especially in years to come. There are so many dollars in this world that almost any darn fool can borrow them, or how else to explain what has been happening on Wall Street lately? But ample and low-cost energy can certainly multiply the effectiveness of capital. Ask Frick or Carnegie. The Price and Consequences of Using Coal Have you seen the price of coal lately? In 2008, thermal coal prices are set to double, from about $55 to $125 per ton. That's based on a recent agreement between Japan's Chubu Electric Power and the giant mining firm Xstrata, and it should become the benchmark for 2000-09 contract prices worldwide. ~~~~~~~~~~~~~Special~~~~~~~~~~~~~ Brace Yourself, It's Coming We asked all the market experts we know, and they all agreed on one thing: a coming stock market apocalypse. The writing is on the wall, and the catastrophe we've been hearing about could be here sooner than later. If you haven't started planning for these disastrous events, you're already behind the pack. Start your survival plan now. Click here for details… ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Spot prices for thermal coal have tripled in the past 12 months. And spot prices for coking coal (used to make steel) have quadrupled in the last 12 months. Just in the last two months, those prices have doubled. Do you notice any patterns? Let's boil it down to a few key points. The cost of the world's "traditional" energy source — coal — is skyrocketing. And about 40 percent of the world's electricity is currently generated using coal. Many other industries use even more coal, from steel makers to cement kilns. So if coal prices are going up, what will that mean for electricity prices, or steel, or cement or whatever? They are headed up, as well. I would say grab your oxygen mask. But that's a bad joke, because of the carbon dioxide (CO2 ) issues that people blame on coal. The Time for Geothermal Arrived So where can we in North America get significant amounts of "clean" electricity with minimal CO2 emissions? Not from coal. How about windmills? Yes, when the wind blows. How about solar? Yes, when the sun shines. And how about geothermal? Yes, all the time. 24/7/365. Really, the stars of economics and politics are aligning on this one. The time for geothermal has arrived. Welcome aboard. Until we meet again… P.S.: As long as we're talking about energy, did you happen to see oil prices yesterday? Somehow oil almost touched $120 and things are still looking grim. As OPEC continues to squabble and Peak Oil reaches the front pages, could $150 or even $200 oil be that far off? Click here to decide for yourself… |
Whiskey & Gunpowder Special Reports $1,000 Gold and Rising... 5 Entirely New Ways To Play the Gold Trend The 10 Shocking Reasons for China's Pollution Problem Geothermal Energy: Investment in the Future Here's One Coal Stock That's Set to Skyrocket Investing in Exchange Traded Funds The Real Story Behind the True Gold Bull Market If someone forwarded you this copy, please look here to start your own subscription. Wanna let us know what you thought of today's issue? Now you can... click on this link. Whiskey & Gunpowder is a free e-mail service brought to you by a team of rebellious brigands. If you have not already done so, please click here to confirm your subscription. This will help us ensure you get every Whiskey & Gunpowder without interruption. Are you having trouble receiving your Whiskey & Gunpowder? You can ensure its arrival in your mailbox here. Please note: we sent this e-mail to lemmetry@gmail.com because you subscribed to this service. To end your Whiskey & Gunpowder e-mail subscription, click here. Nothing in this e-mail should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice.We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. © 2008 Agora Financial, LLC. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This newsletter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the World Wide Web), in whole or in part, is strictly prohibited without the express written permission of Agora Financial, LLC. 808 Saint Paul Street, Baltimore MD 21202. |
