Whiskey and Silver

  • Renewable energy from inebriating beverages [hic!]
  • The globe’s cheapest source of electricity by 2030…
  • … and a surprisingly shiny way to play it
  • Love it or hate it, Obamacare ruling has investment implications
  • A medical investment play that profits from a captive audience
  • True believers and the Iraqi dinar

  Now this is energy efficiency: Scotland might one day run its power grid using the waste from whisky-making.
The Scottish newspaper The National informs us a firm called Celtic Renewables has just won a grant of 10,000 euros from the European Association for Bioindustries.
“Celtic Renewables,” the paper reports, “produces environmentally and commercially sustainable ‘drop-in’ advanced biofuel (biobutanol) from the 2 billion liters of liquid effluent and 750,000 tonnes of barley residue produced annually by the 4 billion [British pound] malt whisky industry.”
The technology is proven — it just hasn’t been cost-effective till recently, according to Celtic Renewables founder Martin Tangney. “It’s a fermentation known as the ABE fermentation, which was developed in the U.K. mainly to produce acetone for explosives in the First World War, and by the end of the Second World War, it was the second biggest biological process that the world had seen.
“It died out in the 1960s,” Tangney goes on, “because it couldn’t compete with the petrochemical industry as a source of these chemicals. But in 2006, an American inventor by the name of David Ramey drove his 1992 Buick 10,000 miles around America using only butanol in a totally unmodified engine. It showed the world that this chemical could be used as an advanced biofuel.”
We’ll drink to that. Later today, we assure you…
  Mr. Tangney’s project is a droplet in a $12.2 trillion tidal wave of investment.

That’s how much money will be poured into new power generating capacity over the next 25 years, according to Bloomberg New Energy Finance. And two-thirds of that total will go toward renewables like solar and wind. And butanol, to be sure.
The Bloomberg report says the world’s power-generating capacity will double as a result by 2040. And fossil fuels like coal and natural gas will make up only about one-third of that total — down from two-thirds today.
  Solar will become the globe’s cheapest source of electricity by 2030, according to the Bloomberg report.
Specifically, we’re talking about utility-scale solar projects — think giant arrays of panels, not the rooftop variety.
Already since 2009, the cost of a typical solar project has fallen 59%. And as our Byron King reminded us earlier this month, buyers will snap up 50 million solar panels this year — up from 20 million in 2010.
  “At that rate,” Byron teases out the implications today, “solar industry experts predict that the solar industry alone will consume 100 million ounces of silver this year.”
Yep, silver.
“Quality photovoltaic units require significant amounts of silver,” Byron explains. Crystalline silicon PV units, which make up about 85% of the solar panel market, each use about 0.7 ounces of silver. More is ultimately used in the fabrication of silver paste, used in 90% of solar panels.
“But if 0.7 ounces doesn’t sound like much, it’s still about 100 times as much as your cellphones uses. And wait until you see how it adds up.”
  “If the solar industry uses up 100 million ounces of silver this year, that’s about 10% of global silver production,” says Byron.
“As recently as 2008, solar consumed only 19 million ounces a year. That’s 526% growth in seven years. And it’s only just beginning.
“After all, it takes at least 80 TONS (equal to 2.56 MILLION ounces!) of silver to generate a gigawatt of electricity from solar, and industry analysts expect the world to add another 40-50 gigawatts of solar power production in 2015. And solar demand only appears to be increasing each year, not slowing down.
“Meanwhile, supply isn’t holding up. In 2013, the last year we have numbers for, global silver supply fell short of global demand by 133.3 million ounces.
“A major reason for this is that China went from being a net exporter of about 100 million ounces of silver to a net importer of about 100 million ounces over the past few years. And the reason China did that is because every year since 2003, they have doubled their production of solar panels.”
  This morning, silver fetches $15.74 an ounce — almost as low as it’s been anytime in the last five years. Just sayin’…
  Stocks are a mixed bag as the week winds down. The Dow is up nearly half a percent, back within sight of 18,000. But the Nasdaq is down nearly half a percent, back below 5,100.
Treasury yields are approaching their recent highs, the 10-year now 2.46%.
Gold remains mired at $1,172. Crude is off more than 1%, back below $59.
The currencies are showing little movement despite the latest Greek drama going down to the wire. The Greek government still needs to scrape together 1.6 billion euros by Tuesday to keep up with its payments to the International Monetary Fund. Our Jim Rickards remains confident the negotiators will come up with a solution, even if it papers over the problem. He’s long said letting Greece exit the eurozone is not an option for European leaders.
  “So guess which stocks got a major boost from yesterday’s Supreme Court ruling on Obamacare?” muses Greg Guenthner of our trading desk.
“Guess who lobbied their asses off for Obamacare?” he adds. “Bingo, you win the prize — the health care industry.
“Consider the insurance companies. You might be tempted to lobby Congress too if you could get them to pass a law mandating people buy your product. Right?
“Obamacare also has hospitals smiling ear to ear. With millions more covered under Obamacare last year, hospitals faced fewer bills from patients who lacked insurance and couldn’t pay their bills. Hospitals also had fewer emergency room visits, which cost a ton of money — and the hospitals usually end up getting stuck with the tab.
“So we’ll just cover the bills for the people who don’t pay. You’re welcome, hospitals.”
Yes, it’s crony capitalism at its worst. It is also undeniably profitable…

The chart on Community Health Systems (CYH) is looking strongest right now. “The Supreme Court ruling helped this stock break out of its nearly 10-month consolidation,” says Greg. “While CYH has already popped double-digits, I think this stock can continue to run this summer.”
Greg offers short-term trades like this four days a week. If you’re not getting them in your inbox, you don’t know what you’re missing.
  Another subsector of health care set to thrive — medical real estate. “This growing market is one of the most stable and attractive industries for income investors,” says our income specialist Zach Scheidt.
“Medical real estate companies own hospitals, doctor’s office buildings and other health care facilities, and they rent these locations to public or private practices around the country.
“The great appeal of this business is the strong and growing demand for medical services nationwide, regardless of the regulatory environment. So real estate companies who lease properties to medical providers are sure to see their business thrive and grow — even while medical providers struggle to keep up with the regulatory changes.”
That’s because the tenants are a sort of captive audience.
“Once a hospital is established,” Zach explains, “an entire infrastructure is built around it. Doctor’s offices and physical therapy locations spring up next door. A whole network of services and vendors builds up around it. And once that infrastructure is in place, the real estate company owning the properties can enjoy the benefits of tenants who are extremely motivated to keep their existing locations.”
Zach named his favorite medical real estate player in the most recent issue of Lifetime Income Report.
  “There is no such thing as a 5 Min. read,” a reader asserts.
[Not this again…]
“Almost all your links take at least 30 minutes to read.”
[Oh, the links…]
“Your high-powered selling was a revelation to me. I hardly click on your links anymore. It’s a shame all your wonderful ideas are linked to sales pitches for subscriptions. Obviously, it works for you. Otherwise you would not do it.
“I simply do not have the time to read your daily sales pitches. I have another life.”
The 5: Said by a man who responded to one of our sales pitches somewhere along the line. After all, The 5 goes out only to people who’ve paid for at least one Agora Financial publication.
But that’s OK. We don’t expect everyone to click on every link, just the ones that capture your interest. As long as you find value in The 5 apart from the links and keep coming back, we’re happy.
   “I very much appreciate your article about the Iraqi dinar,” writes a financial pro after our Overtime briefing yesterday.
“I have one client who has invested all of her savings into the dinar, Zimbabwe dollar and Vietnamese dong — expecting each to be revalued and producing millions and millions of dollars. I am frustrated with watching her hopes get squashed week after week with the phone calls stating it hasn’t happened yet, promising soon, only to have the story repeated.
“I so much want to help her get back to reality and to start living today. She has her to-come millions spent in her mind, such as setting up a foundation, buying multiple homes, traveling, etc. And guess what I will be? Her financial adviser. Ha!
“I wondered if there’s anyway someone somewhere could do some investigating and put these people out of business. Every week, my client sends me the weekly phone transcripts, and I’d be happy to share them with anyone there who might find it of interest. I’m just concerned for her and all the other folks that are investing their precious money into a hope that I don’t think will ever be reality.
“If you know of something I can show her that will convince her, or if I can be of help to you, please let me know.”
The 5: Weekly phone transcripts? We had no idea these operations were so sophisticated. God only knows what stories they must concoct each week to keep people expecting revaluation is just around the corner.
It sounds as if you’re doing everything within your power to jolt her back to reality. We’re not sure there’s anything else we could contribute if you’re dealing with a true believer…
  “While many nations in the midst of strong inflation have knocked multiple zeros off of their currency,” writes a reader zooming the lens out, “they ALWAYS issue a new currency along with the revaluation, and the old currency is valued at the old rate.
“Thus, a #10,000 note (where # indicates the local currency) would be equal in value to a #10 note in the new currency if they knocked off three zeros, but the old #10,000 note does NOT go up in value. In fact, such revaluations usually are a preface to further devaluations, and often even more zeros are knocked off in future devaluations.
“The idea that the currency would go up in value by a thousand times is so ludicrous that I am amazed that anyone would be taken in by it, but it just indicates that their greed is stronger than their knowledge of history.”
  “You’re full of it — the Iraqi dinar has great value,” writes one of our regulars. “The value of fiat currency is directly related to its power to acquire hard assets.
“Now, I have a bridge in Brooklyn for sale, CHEAP at only 46 million Iraqi dinars. They even get a formal, handwritten receipt to prove ownership. Talk about a hard asset! They email me with me a ‘request to purchase’ and their bank account information for SWIFT transfers and I will send them the P.O. Box number in Nigeria to which they will mail their Iraqi dinars. Upon receipt, a certified, handwritten receipt leading to title will be sent to them.
“Oh, yeah, I have some Iraqi dinars for sale, $600 per million dinars — same procedure as for buying the bridge. Heh.”
The 5: If you’re shilling a million dinars for $600 and you’re shilling the bridge for 46 million dinars, then you’re valuing the bridge at $27,600.
Really, that’s the best you can do? Piker…
Have a good weekend,
Dave Gonigam
The 5 Min. Forecast
P.S. Take a look at this satellite picture…

govt building
(Click to Enlarge)

In the basement of this Federal building lies a secret document — locked away inside a secure, soundproof room.
American citizens are not allowed to see what’s inside this document.
But once it’s signed into law, it could put your health and the health of your family at risk… all in the name of money and power.
Ambassador Ron Kirk has already warned: “If the American people knew what was in this agreement, it would never become law.”
The government does not want us to see this classified information.
In fact, a member of the Obama administration has even threatened to prosecute elected officials who tell people what exactly is inside this secret deal.
But now details of this shocking story have leaked online.
What are they hiding in the basement of this federal building? Click here to find out.
You’ll never believe what Congress and Obama are up to now.

Dave Gonigam

Dave Gonigam

Dave Gonigam has been managing editor of The 5 Min. Forecast since September 2010. Before joining the research and writing team at Agora Financial in 2007, he worked for 20 years as an Emmy award-winning television news producer.

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