Geothermal the Next Uranium, US House Prices Go Bust

“Is the uranium bull market over?” Byron King repeated the question asked by a member of the audience. “Well…no. The world’s fleet of nuclear plants is growing. Those plants will need fuel. Where’s it going to come from? Mine production isn’t catching up. In America, we’ve been salvaging the warheads from the old missiles of the Soviet Union and repurposing them for peaceful purposes. That supply is about up.”

“A few years ago I pounded the table telling anyone who would listen to buy uranium,” said Rick Rule. “There may still be money in it…but today…I’m telling you, pounding the table, that geothermal is absolutely going to take off. It’s carbon free. It’s abundant. It’s doable. And the greenies love it.”

More on that subject in the July issue of Australian Small Cap Investigator.

America’s great national gamble on house prices looks like going bust. We’ve traded the wild west streets of Las Vegas for the high foothills at the base of the Rocky Mountains, where another hedge fund has fallen victim to the spreading subprime fungus.

Today’s Denver Post reports that “Braddock Financial Corp.’s $300 million Galena Street Fund, the most recent victim of the collapse of sub prime mortgage bonds, notified investors earlier in the week that it will be closing its doors.”

A few years ago one of my colleagues called the conditions in the housing market “the Denver Flu”. The greater Denver area has seen a huge housing boom, much of it financed with subprime loans. “The Denver-based Galena Street fund appears to have fallen prey to the investor panic surrounding default-ridden subprime bonds. Shocked and scarred investors – prompted by the collapse of two Bear Stearns hedge funds – have been yanking assets from the hedge funds that invest in these bonds.”

The Post continues, “In turn, the hedge funds have been flooding the market with subprime mortgage bonds in order to raise cash needed to return to investors. That has driven down prices across the board, depressing fund performance and making the bonds less attractive as collateral for loans.”

The housing bubble was first and foremost a mortgage-lending bubble. That’s how it became nationalised, through the financial markets and their appetite for high-yielding debt. Let’s hope Australia doesn’t – or hasn’t already – made the same mistake.

Dan Denning
Markets and Money

Dan Denning
Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.

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Christina Macpherson

Bubbles – bubbles – the housing mortgage bubble could indeed be next. Maybe there will be a geothermal bubble later on.

But my interest is in the uranium bubble. It is surely such a speculative investement area. For one thing there need be only one notable nuclear mishap (and that is statistically inevitable – over time). And the other thing – there is a world-wide growing wave of popular opinion against the nuclear industry.

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