Investors who’ve been undertaking their business for many years know that gold, silver, and platinum make for an excellent investment. These metals remain steady whatever forms of issues the whole world encounters, or whenever the economic system is down. When these kinds of metals are used correctly in a diverse investment portfolio, your total investment plan is highly to be effective. If this will be your first time to invest, this article will offer you beneficial details which will help you in your precious metal investing passion.

Of all the precious metals, gold is the most popular one that’s being invested on. This makes gold probably the most unpredictable in terms of selling price. Know that the more a kind of item is being exchanged, the more the future development of this particular item is also unstable. Gold is subcategorized into 2: bullions or bars and numismatics. Gold bullion/bar is gold that’s genuine or nearly pure in content. Numismatics, on the contrary, are minted coins which have been oftentimes made to mark special events. You can purchase gold in either of its two subcategories.

If you plan on buying gold, or any of the other important metals, just be sure you already have a good or a safety deposit box waiting for it where this specific precious metal can immediately be kept hidden and secured safely. Never boast or talk about your gold in just about everywhere or to anybody to make sure that you will not be tempting anybody from robbing these items. It is because, this kind of precious metal is very tricky to trace if not impossible once it’s robbed.

Platinum is not as popular as gold, but this is really more precious compared to gold and is also many times the worth of gold. You can find platinum in electrical contacts, in dental care, to coat rocket nose cones, as clinical devices, and also as jewelry pieces.

Before you start investing your hard earned money, it is important that you have even just a bit of know-how on the five major forms of investing in gold and other kinds of precious metals. These types include tangible bars and coins, precious metal shared funds, certificates, stocks from mining agencies, as well as commodities of gold and metal. If your main desire is security and diversity, prefer to buy gold bars and coins.

Search for precious metal merchants from the internet and from brick-and-mortar stores. Then, make sure you ask the length of time that the supplier has been in this business, if this individual focuses on a certain area of the market, and who the usual consumers are.

Ensure that you shop around, also. Even though the market provides a price for these kinds of precious metals, private dealers may also have included their individual mark up rates.

You must learn concerning the market on coins and bullions and how to take a look at them. The structure, condition, including flaws on the coins or bullions can affect their price just as much as their content, so affecting their selling or buying amount in your investment.

If you would prefer not to keep anything, then pick certificates. Certificates speak for title of specific amount of objects and the particular kinds of object.

You might also want to consider investing on stocks and funds as well as coins and bars. Precious metal funds are probably the most stable forms of precious metal investing since they are varied and managed. Stocks may provide you bigger roi however they are less steady simply because you’re only buying into only one enterprise.

In case you are really after high earnings, you may go for precious metal futures. Nevertheless, this is only if you’re confident about your self in being able to anticipate the growth and fall of gold and silver in the future. In futures, you make an agreement to purchase and sell gold and silver at certain costs at particular points in time. Doing well in futures solely depends upon the value of the precious metals during the term of the contract.

Precious metal price can vary in so great amounts. Therefore, they should not be the only things you’ve in your investment portfolio. Only allow 10 percent of your entire investments on gold and silver coins.

Welcome to the exciting and fast paced world of Forex. You may have realized that this is a large market with many different facets. Trading currency is extremely competitive, and it may be overwhelming to think about finding the right strategy. Use the following tips to help you get started.

Don’t forget to read the 4 hour charts and daily charts available in the Forex world. With instantaneous electronic communication and pervasive technology, you should be able to track foreign exchange trends in quarter-hour intervals. These short term charts can vary so much that it is hard to see any trends. It’s better to follow long term cycles to protect your emotions against short-term ups-and-downs.

It is important to take periodic breaks from forex trading. The market is such a busy place, so it is important to take a step back from time to time.

If you want to use a forex trading robot, always test it on a demo account first before going live with it. This will prevent any unnecessary loss of money due to wrong settings.

Many think that there are visible stop loss markers in the market. This is not true, and it is inadvisable to trade without stop loss markers.

Use margin carefully so that you avoid losses. Margins also have the potential to dramatically increase your profits. Carelessly using margin can lose you more than what your profits would have been. Margin should be used when your accounts are secure and there is overall little risk of a shortfall.

Persistence is often the deciding factor for Forex traders. Losing is part of forex trading, and every trader will experience a run of losses periodically. Maintaining a level of persistence is often what distinguishes success from failure in trading. It may seem horrible to go on, but you should stick with it.

Risk management should take priority in the trades you make. Know what your personal level of acceptable losses is. Place any stops and limits in smart positions and keep them there. If you ignore loss prevention, you may clean out your account with little effort. You must recognize losing positions in order to get ahead.

Treat your stop point as if it is written in stone. You should always come up with stop point that you will never move. Remember why you use a stop point in the first place. You’ll only lose if you try this.

There are advantages to trading on the Forex market. It is always open, so trade is possible 24 hours per day. Only a modest capital investment is needed with forex. You can literally use Forex any time, day or night.

Begin Forex trading through the use of a mini account. This can give you the experience you need without breaking the bank. Although it may not seem as exciting as an account allowing for larger trades, it can truly make a difference once you sit down and analyze your profit margins and losses.

Be on the lookout for underhanded tricks when trading on forex. Many people who do Forex trading have past histories of day trading. They have developed tricks over the years to help themselves. You might find yourself confronting problems such as slippage, slow order filling, stop-hunting, and trading against clients.

Listen to other’s advice, but don’t blindly follow it. An approach that gets great results for one person may prove a disaster for you. Take all advice with a grain of salt and use hard facts and intuition for the majority of your trades.

You should not invest more than a certain amount of what you have in your account. This gives you “error-room.” You will be able to recover from any bad trade and come back to prosper. The more you watch the market, the more you will want to trade heavy. Keep in mind that being conservative is the best way to trade.

You will not gain all of your skill and information at once, but rather slowly over time. Be patient because otherwise, you are going to lose your trading account equity in a few hours.

Reward yourself for your efforts in the Forex market. Retrieve some of your profits by sending your broker an order of withdrawal. If you are making money with Forex, you deserve to enjoy it!

The account package you select should reflect your level of knowledge and expectations. Knowing your strengths and weaknesses will assist you in taking a rational approach. You should not expect to become a trading whiz overnight. Most believe that lower leverage is the way to go for your account. For starters, a practice account can be used since there is no risk involved in using it. Starting trading with small amounts of money until you learn effective strategies.

It is common to want to jump the gun, and go all in when you are first starting out. Start out with just one currency pair. After you have a bit of experience and knowledge under your belt, there will be plenty of time to try out trades with various currencies. For now, stick to one currency pair or you might quickly find that you’re playing a losing game.

Always concoct an idea for trading on the foreign exchange market. Do not rely on short cuts to generate instant profits for you in the market. Making good gains in the market is the result of lots of dedication, time and research.

Many traders think that the value of any one currency can fall below some visibly telling stop loss marker before it rises again. This isn’t true. It is generally inadvisable to trade without this marker.

You should now be more prepared for forex trading. By simply reading this article, you have improved your chances of becoming a successful currency trader. These tips should help you have a successful trading experience.

There are differences between business opportunities, such as their size. When you trade on the Forex market, you trade on the largest market in the world. Look at these tips so that you can find and take advantage of the various opportunities Forex has to offer.

For simple and easy trading, it is best to pick the extensive forex platform. Look for platforms that do more than simple alerts; the more advanced ones will enable you to actually make trades and explore data reports. This will increase the time of your reaction and offer greater flexibility. Don’t lose out on a great trade because you can’t access the internet.

Forex marketing holds many advantages over other investment and money making schemes. The Forex market never closes, and you can trade at any time you wish. A person only needs a little bit of money to do forex trading. You can literally use Forex any time, day or night.

With advances in technology, many currency trading robots are appearing in the marketplace. Although many of these robot creators claim that their robots have helped many people retire from their day job, their effectiveness is still questionable.

After choosing a currency pair, do all of the research you can about it. By trying to research all the different types of pairings you will be stuck learning instead of trading. Pick your pair, read about them, understand their volatility vs. news and forecasting and keep it simple. Follow the news about the countries that use these currencies.

Having the right attitude toward trading and risk is as important as forex market analysis when it comes to making a successful trading plan. By taking the time to become educated about the techniques and fundamentals of the market, you will have the ability to develop a plan that will help you succeed in analyzing the market.

Beginners should never go against the trend. Going against the market when choosing highs and lows is also risky. If you ride the trend, you’ll be more relaxed when the market changes. Attempting to trade in a fashion opposite to the trends in the market will stress you out unnecessarily.

As a beginner Forex trader, you need to plan out how you’ll use your time. The shorter one hour and 15 minute charts are a good way to quickly move trades when you want to exit a position in just a few hours. Extremely short charts such as 5 or 10 minutes are commonly used by scalpers.

If you move your stop losses prior to them being triggered, you could lose much more than if they just stayed where they were. Following an established plan consistently is necessary for long-term success.

A mini account is a good way to start. This will be an account that you can play around with and use to learn about the market. A mini account is a great way to get started in training, and to discover your personal style of trading for increased profits.

If you want to know what it takes to be a successful Forex trader, it is one word – persistent. No trader can have good luck forever. Maintaining a level of persistence is often what distinguishes success from failure in trading. Even if there does not seem to be light at the end of the tunnel, keep walking and you will see it eventually.

There is no need to buy an automated software when practicing Forex using a demo account. All you need to do is find the main forex page, and sign up for an account.

With time and experience, your skills will improve dramatically. Using demos to learn is a great way to understand the market. The internet is full of tutorials to get you started. Before you start trading with real money, you want to be as prepared as possible with background knowledge.

After you have lost a lot do not make any more trades. Remove yourself from the intensity by coming back a few days later with a fresh approach.

Become skilled at analyzing market fundamentals and trends, and use this information to make your own decisions. Only this way can you make a good profit in Forex.

You can find reputable brokers and dishonest brokers by doing a simple internet search. Find a good internet forum that focuses on Forex trading for expert tips and information. This information should help you select a reputable broker that will be your partner in the marketplace.

Do not allow greed or excitement to play a role in the decisions you make as a trader. Some fall victim to this and loss money unnecessarily. You can lose money if you are full of fear and afraid to take chances. Work hard to maintain control of your emotions and only act once you have all of the facts – never act based on your feelings.

Now, you need to understand that trading with Forex is going to require a lot of effort on your part. Just because you’re not selling something per se doesn’t mean you get an easy ride. Just remember to focus on the tips you’ve learned above, and apply them wherever necessary in order to succeed.

Milk

Got milk? The answer increasingly is no.

Americans drink 30% less of the white stuff than they did in 1975, the Wall Street Journal reported last month — a shift that makes it clear how quickly tastes can change from one generation to the next. Children, traditionally a big market for dairy, account for a smaller percentage of the population than they used to. Plus, milk has become increasingly expensive.

Juices

High prices, concerns about sugar content and a migration from real fruit juices to cheaper reconstituted fruit drinks have all played a role in the decline in juice consumption, according to market researcher Mintel. Even orange juice, long a breakfast staple for many Americans, has been dropping in popularity. Many time-strapped commuters would rather buy a coffee on-the-go than take the time to grab a glass of OJ from the refrigerator before they leave for work, researchers say.

Soft drinks

Soda dominated the latter half of the 20th century as the beverage of choice in restaurants, fast food joints, vending machines and refrigerators. But with consumers increasingly focused on health, Coke and Pepsi often get blamed for obesity, diabetes and other health woes. New York City’s Board of Health has even approved a proposed ban on sales of 16-ounce sodas. “While diet sodas have increased in popularity, soft drinks now tend to be most popular among teenagers and 20-somethings,” says Thomas Mullarkey, analyst with Morningstar.

Bottled water

The declines in juice and soda seem to be a boon for the bottled-water business. Although bottled water is regarded by some as a luxury (since the stuff comes free out of the tap), it has one big factor in its favor: Water is healthy. In 2011, total U.S. bottled water consumption increased 4% to 9.1 billion gallons, according to the International Bottled Water Association. In fact, every person in America now drinks enough bottled water a year to fill up two gas tanks, it says.

Coffee

Coffee snobbery seems to be growing faster than coffee drinking. In fact, despite the rise in gourmet beans and cafes, per capita coffee consumption remains relatively stable. The high price of premiums brands like Starbucks and the explosion in the energy drinks market hasn’t helped, analysts say. Last year, Starbucks raised the prices of many drinks by around 1% in much of the Northeast and Sunbelt and, in 2011, hiked the price of packaged coffee by 17%.

Tea

While coffee consumption has been flat, tea drinking is growing. In 2011, Americans consumed over 65 billion servings of tea, according to the Tea Council of the USA. About 85% of that was black tea and iced tea, while 14% was green tea and the remainder was full-bodied oolong and the more delicately flavored white tea. The Tea Council sees specialty teas driving further growth.

Powdered drinks

Powdered protein shakes, Instant Breakfast, chocolate mixes for children and powdered ice teas are losig their fizz, says Adam Rogers, senior researcher at the Beverage Information Group, a trade organization in Norwalk, Conn. “I believe they are out of fashion because of the increase in ready-to-drink and/or single-serve options,” he says.

Wine

California has become the nation’s chief source of entertainment — and not just because of Hollywood. Napa Valley, Sonoma County and other regions have helped place wine on more and more dinner tables. It doesn’t hurt that wine from the U.S. has a reputation for being a better value than imports, according to the Beverage Information Group. As wine lovers discover new regions and varieties of wine, including sweet reds and higher-end blends, wine consumption is expected to continue to increase over the next five years, Rogers says.

Spirits

Wine is fine, but as the poet Ogden Nash put it, “liquor is quicker.” A new wave of advertising followed the end of the industry’s self-imposed television-advertising ban in 1996, analyst say. Americans have developed a taste for a wider variety of spirits, rather than just the mainstream bottles. And shows like HBO’s “Sex and the City” helped rekindle the cocktail culture.

Beer

Increased competition from other alcoholic beverages, like fine wines, vodka, cocktails and whiskey, have nipped at beer’s popularity. High unemployment rates among core beer drinkers and a weak U.S. economy overall have also contributed to the decline in beer drinking over the past decade, Rogers says. While light beers are among the hardest hit, craft and imported beers appear to be bucking that trend, he says. Americans “increasingly opt for craft beers, rather than mainstream beers over the last decade,” says Mullarkey.

‘Tis the season for market predictions for the year ahead, and while most analysts keep their crystal-balling within tight ranges, Saxo Bank has compiled 10 surprises that could rattle financial markets. How about a surprise selloff in gold to drive the yellow metal to $1,200 an ounce, for example? Or an unusually sharp oil-production rise to slam crude-oil prices back to $50 a barrel?

“These ten predictions are not Saxo Bank’s official forecasts for 2013. They could, however, prove far more relevant for investors because of the huge impact if any one of them sees the light of day in the New Year,” said Steen Jakobsen, chief economist at Saxo Bank.

“Before trading or investing, investors must know the worst case scenario — capital preservation is a must and portfolios need to be able to weather a perfect storm, or for that matter any storm,” he said.

Here are the 10 outrageous predictions for 2013:

1. Germany’s DAX plunges 33% to 5,000 –- China’s economic slowdown will continue and add pressure on Germany’s industrial expansion. Such a scenario will stoke low consumer confidence and large price declines in industrial stocks, which make up a large part of the German benchmark index.
2. Nationalization of major Japanese electronics companies –- Japan’s electronics industry suffers after strong competition from South Korea, causing annual losses of $30 billion for Sharp Corp., Panasonic Corp. and Sony Corp. alone. Credit worthiness will deteriorate and the Japanese government feels obliged to nationalize key industry players – similar to the U.S. government’s bailout of the auto industry.
3. Soybeans rise by 50% — After a year of extremely poor harvests due to bad weather, new crop soybeans will be just as exposed to new weather disruptions in the U.S., South America and China. Increased demand for biofuel will also push prices higher and food security will become a buzz word.
4. Gold drops to $1,200 an ounce — The strong U.S. economic recovery surprises the market and especially gold investors, which flee the traditional safe haven investment. Additionally, lack of pick up in physical demand from China and India trigger a round of gold liquidation, and the metal falls to $1,200 an ounce before central banks eventually start taking advantage of lower prices.
5. Crude oil slumps to $50 a barrel –- U.S. crude-oil production continues to rise through advanced production techniques and with domestic inventory levels already at 30-year highs combined with limited exports options, oil prices come under renewed selling pressure.
6. The dollar/yen  falls to 60.00 – Japan’s new leader Shinzo Abe has vowed to use aggressive easing measures to boost the economy, which has punished the yen. Not all measures are introduced, however, and the market becomes over-positioned to for yen weakness and risk appetite retrenches, prompting the dollar to drop 60.00 yen, as the Japanese currency emerges as the world’s strongest currency.
7. Euro/Swiss francs  relationship breaks peg, touches 0.9500 – As European Union tail risks are aggravated –- maybe by the Italian election or a Greek exit of the euro zone – capital flows surge into Switzerland once again, inspiring the Swiss National Bank and Swiss government do abandon the franc’s peg to the euro rather than push reserves past 100% of Switzerland’s gross domestic product. As a consequence, the euro/Swiss franc touches a new low.
8. Hong Kong unpegs the Hong Kong dollar from the U.S. dollar and re-pegs to the Chinese renminbi – The renminbi’s volatility increases and Hong Kong becomes a major world currency centre.
9. Spain steps closer to default as interest rates rise to 10% — With social tensions in the country, the public sector cannot cut costs further and Spain’s sovereign credit rating will be downgraded to junk. Yields rapidly rise as an inevitable default is priced in.
10. 30-year U.S. sovereign yield  doubles in 2013 – The Federal Reserve’s low-interest-rate policy forces investors to leave fixed income and substitute bonds with stocks. As the bond market is far larger than the equity market a 10% reallocation to stocks should amplify equity fund inflows by around 30%. This leaves to higher yields in the U.S. and marks the beginning of a decade-long outperformance by stocks over bonds.

By Anthony Grisanti/Founder and president at GRZ Energy

In an eerie twist of fate, the East Coast is once again facing a Halloween hurricane.

Sandy, as it is named, should not be taken lightly. At this point, all hurricane track models have it making landfall somewhere between Maryland and Boston on Monday into Tuesday.

It is good, if you have something like this generator at your home:

DuroStar DS4000S 4,000 Watt 7.0 HP OHV 4-Cycle Gas Powered Portable Generator

This storm could potentially be more destructive than Irene, which hit the East Coast last summer. What makes this storm different is that, according to NOAA, it could combine with another system and develop into a super storm that could impact the area for days.

The area that could be affected represents about 8 percent of refining capacity for the U.S., which translates to 1.1 million barrels a day. These refiners make everything from jet fuel to gasoline and heating oil. The area has seen a steady decline in the number of refineries operating, with 13 in 2007, and eight in 2012.

So what will it all mean for gasoline and heating oil prices?

This week on “Futures Now” I have been discussing how we are already running a deficit of 8 million barrels year-over-year in gasoline supplies and 30 million barrels in heating oil/distillate. Take that figure, combine it with the fact that pipelines and barge routes could be affected too, and remember that rates have already been bid up because lack of space.

What we have is a recipe for a serious price spike in gasoline and heating oil. Although I believe any spike would be relatively short-lived, lasting only one or two weeks, it may turn a bad supply situation into a worse condition as we head into the winter and then the spring gasoline season.

Gasoline futures have already spiked, and heating oil has risen too, although not at the rate of gasoline. The potential impact to heating oil prices could be as great as to gas, if not greater, because of the deficit in supply and the fact we are coming into winter.

Let’s hope this storm turns and goes out to sea, but I believe in being prepared for all scenarios. Be safe and be aware.

By CNBC’s Jane Wells

Eight dollar corn appears to be the new normal, and even though much of that corn hasn’t made its way into the food chain yet to feed cattle, pigs and chickens, retail food prices are already rising.

The USDA reported sharp hikes in retail prices in July compared to a year ago. Steak is up almost 15 percent, whole chickens up 16 percent, ham up 8 percent, and cheddar cheese is up 13 percent. How much of those prices can be directly attributed to the price of corn? How much corn goes into them?chickens up 16 percent, ham up 8 percent, and cheddar cheese is up 13 percent. I asked a cattleman, two dairy farmers, a hog farmer and a couple of egg producers the following: How much corn is needed to feed a single animal over its lifespan, and how much product do you get from that animal?

The result varies from species to species, animal to animal, but the bottom line is the cost of corn accounts for about 10 percent of the average retail price for a high protein morning breakfast of steak, eggs, bacon and milk.

Here’s the math.

STEAK

Your average steer will be fed 20 pounds of corn a day for 160 days after leaving rangeland for the feedlot. That’s 3,200 pounds of corn.

When that steer is slaughtered, it will provide, on average, 600 pounds of beef. That means it takes about 5.3 pounds of corn to produce a single pound of beef.

A bushel consists of 56 pounds of shelled corn, so 5.3 pounds is a little over 9 percent of a bushel. At $8 a bushel, there is $.72 of corn in one pound of beef.

So my massive 16-ounce breakfast steak, which retails on average for $6.90 a pound, contains $.72 of corn, or just over 10 percent of its total price.

EGGS

A hen eats about one-eighth of a pound of corn a day, or 46 pounds a year, which is four-fifths of a bushel, or about $6.51 worth of corn. During that year she will lay, on average, 250 eggs. That works out to about two and a half cents worth of corn per egg, or three percent of the total average retail price for eggs.

BACON

It takes about 448 pounds of corn to raise a hog, and from that hog you’ll get about 210 pounds of pork. That’s a two-to-one ratio corn to pork (a lower ratio than beef, which shows how much more efficiently pigs use feed).

About 1.1 pounds of corn goes into making a half pound of bacon, which is two one-hundredths of a bushel, or about 16 cents worth of corn. With bacon selling for $2.18 a half pound, corn makes up seven percent of that price.

MILK

Finally, the cow. Your average dairy cow will produce 5,814 gallons of milk over her life, and eat a whopping 12,810 pounds of corn. That equates to 2.2 pounds of corn per gallon, which is four-tenths of a bushel, or about 32 cents in a gallon of milk — two cents in one 8 ounce glass. That is about 9 percent of the current retail price for milk.

BOTTOM LINE:

A breakfast made up of a 16 ounce steak, two scrambled eggs, a half pound of bacon, and a glass of milk (that’s some breakfast!) will, according to the USDA, cost about $9.57. There will be $.95 worth of corn in it, or around 10 percent. One-tenth of the entire cost of the meal.

Add to that the cost of transportation, packaging, and other feed, and the cost doesn’t even include the corn needed to feed the mothers of these animals when they’re young, or feeding a cow before she’s old enough to produce milk.

On the other hand, these figures also assume livestock producers are paying the full current cash price for corn. Many contracted at least some corn earlier this year at a lower price. Plus, some supplement their feed with DDGs, the high-protein corn residual after the energy is removed from kernels to make ethanol.

So that means a lot of the more recent high cost of corn has yet to be factored into the price of food. The question will be how much more producers will be pay down the road, when their current contracts end, and $8 corn really is the new normal. Then how much will you have to pay for food?

The seasonal pattern for aluminum is bearish until the late third quarter and if the current downward price trend remains intact, London Metal Exchange aluminum prices could fall as far as $1,800 a metric ton by year’s end, said a metals consultancy on Wednesday.

Aluminum prices have been in a downtrend since the third quarter of 2011 and there is no short-term end in sight to change this trend, said Jorge Vazquez, managing director of Harbor Aluminum Intelligence Unit at his firm’s Aluminum Outlook Summit in Chicago.

Prices are around $1,970, which is below the cash cost of production of about $2,100 a ton, he said. Historically, aluminum producers have enjoyed a 25% cash profit margin since 1970, but they are now suffering a negative 5% return. There’s been only three times that margins were negative – now and in 1982 and 1985, he said.

The low price of LME aluminum has caused primary aluminum smelters to cut back production, a trend that is unlikely to end anytime soon as LME prices need to be above $2,550 quickly to avoid further curtailments in the producers outside of China. Chinese smelters need to see Shanghai Futures Exchange prices above $2,650 to avoid widening its current deficit, Vazquez said. The $2,650 level is estimated to be the long-term equilibrium, he added.

Given this data, prices are severely undervalued under cost criteria, long-term equilibrium price estimates, consensus price forecasts, physical market indicators, visible inventory levels and market balance expectations, he said.

Because of the curtailments, Harbor is forecasting this year than China will have a supply deficit of 353,000 tons while the rest of the world will be in a 284,000-ton deficit. In 2013, China’s deficit will grow to 1.2 million tons, while the rest of the world’s deficit will shrink to 236,000 tons. Those figures include only announced cutbacks and are also based on planned expansions occurring.

Judging by that data, this should imply a floor of $2,000 and a ceiling of $3,000, but that doesn’t mean that prices can’t slump further.

Looking toward 2013, Vazquez said Harbor plotted the views of more than 70 aluminum analysts and the consensus price forecast was $2,443, with the highest price being $2,850 and the lowest $2,205. “In the last 10 years, prices did not go under the most bearish analyst’s estimate,” he said, although added that anything is possible.

Prices may fall further, but perhaps by year’s end be in a bottoming pattern. “We should expect much higher prices by the second half of 2013 and all 2014,” he said.

Vazquez added that given industry forecasts and historical patterns, aluminum producers and end users should hedge their 2013 and 2014 metal needs at current price levels. To even risk, he said they should buy in “June 2012, September 2012 and March 2013 at prices no higher than $2,200 per ton for 2013 and $2,300 for 2014.

There’s always a key number on which the market is based. Sometimes it’s an interest rate, as in Europe today. Sometimes it’s another number, like America’s unemployment rate. In the past it’s been housing starts; it’s been inflation; it’s been GDP. For 2012, the key number is the oil price.

It’s the oil price because decoupling growth from oil prices is the key to real prosperity. Throughout the last several years, growth and oil have grown closer together. It’s at the point where now a jump in the Dow Jones industrial average is nearly always matched by a rise in the price of West Texas Intermediate, and vice versa.

Most of what has been happening in the U.S. economy, below the surface, is aimed at this decoupling.

Before you jump on me for another rant against big oil, let me state first that what U.S. oil and gas companies are doing is part of the equation, at least in the near term. Fracking has already decoupled natural gas prices from growth. For the last two years, we’ve had real growth in the economy but falling natural gas prices. Oil can be the same.

Drillers have now had several years to accommodate themselves to spot prices of near $100/barrel. This has given them time to invest enough capital to produce large supplies, profitably, at that price. And once a well goes into production, the nominal cost of producing an additional barrel is usually quite low.

But the more important work is taking place on the demand side. The technologies of efficiency are growing, and have a ready market. Every barrel saved in industrial production, every KwH a commercial building owner can save, every gallon of gas a consumer doesn’t use while remaining productive at work, that’s money in the pocket. It’s an investment that pays for itself, whether you’re replacing bulbs with LEDs in your Christmas lights, buying a higher-mileage car, or insulating a building.

Renewable energy is what will maintain the gains. Yes, it’s small now, in the general mix. But it’s increasing, thanks in part to today’s prices, and in part to advancing technology. Even if solar installation doesn’t grow in 2012 from 2011, the supply of solar energy in the market will grow dramatically, because the base is low. The same is true for wind energy, for chemicals and other feed stocks produced from biomass, and for geothermal energy.

Over time it’s this harvest of the abundance all around us that will not only keep oil prices reasonable, but cause them to roll over in time. For 2012 let’s focus on WTI, the spot price for oil in our own country, less in relation to European “Brent” prices than in absolute terms. Keeping that price down as economic growth accelerates, as employment grows, is the key to nearly all other market prices for 2012.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Europe’s never-ending debt saga has investors girding for volatile, unsteady currency markets for years to come.
This debt crisis has also boosted bullish bets on the world’s safe havens—the U.S. dollar and yen — well into the next 24 months in the options market, reflecting fears that problems in the euro zone could linger for years.

“There’s enough uncertainty surrounding Europe and the global economic picture that higher volatility will likely become a feature of this market for some time. And it’s more or less across the board,” said Aroop Chatterjee, senior currency strategist at Barclays Capital in New York.

This is the second time in four years that the options market has signaled such a high level of anxiety. Right after U.S. investment bank Lehman Brothers collapsed in September 2008, currency option prices options spiked as investors paid a high premium for protection against the market’s big moves.

Now the same scenario is playing out. And it’s anyone’s guess as to when it ends.

Implied volatility on one-month euro/dollar options surged to 18.35 percent on Monday—the highest in at least 2 1/2 years. That 18 percent figure is equivalent to expectations for a roughly 5.2 percent move in the euro over the next 30 days, options strategists said.

Implied volatility, or “vol,” is a measure of the options market’s expectations of price movements.

Tuesday’s speculation about plans to boost the euro-zone bailout fund did little to ease fears that the fiscal crisis could drag on, especially after Germany and Spain poured cold water on the idea.

Euro vols did retreat on Tuesday, but have generally traded above the 50-day moving average since early September.

One- to two-year euro/dollar vols were also elevated at nearly 17 percent, generally an indication of stress.

Heightened volatility in the one- to two-year time frame is unusual, analysts said. Normally, investors tend to sell long-term volatility even as short-term volatility spikes.

The fact that volatility is heightened down the road suggests worry that markets will remain unsettled.

“You have basically entered a period where front-end vols have really gone up and the long end has sort of tracked the front end, which is a function of risk aversion,” said Aditya Bagaria, FX options strategist at Credit Suisse in London.

Emerging Markets Also See Worry

In a clear sign that European contagion is spooking investors, option hedges against some of the best-performing emerging market currencies have soared as well.

The rise in volatility there underscores the vulnerability of these assets in times of stress despite their strong economic fundamentals. Already, these markets are experiencing capital outflows, similar to 2008.

Vols on one-month U.S. dollar/Mexican peso pair exploded to 28.4 percent on Friday, a roughly 2 1/2 year high from as low as 8 percent in July.

Traders said one-week Mexican vols had traded as high as 45 percent.

The peso’s one-month vols, though, slipped to 24.8 percent on Tuesday, but the increase in volatility is consistent with the peso’s 8 percent drop against the dollar this year.

Vols in the Brazilian real, the Turkish lira and the South African rand have also surged, just as they did three years ago.

“Investors have realized that, if more than half of the world is to have (stalling) growth, emerging markets will not likely have an easy time,” said Stephen Jen, managing partner at hedge fund SLJ Macro Partners in London.

“I think (emerging market weakness) will continue, even if large interventions slow down the pace of the prospective dollar rally. Too many long-term real money investors are still in these long-EM trades for the dollar rally to be over.”

Risk Reversal Skews
Further signs of stress are evident in risk reversals, a key indicator of risk sentiment in the options market. Risk reversals in major currencies are all showing a strong bias to hold U.S. dollars — still considered a bet on safety.

One-month Australian dollar/U.S. dollar risk reversals, for instance, showed a “put” bias of -7.60 vols on Monday, the most extreme skew since at least 2007, but slipped on Tuesday. In general, put options suggest more investors are betting on a decline in the Aussie than a rise. The higher the number, the more bearish investors are on the currency.

Risk reversal skews favoring the greenback are further supported by positioning among hedge funds, such as Quaesta Capital in Zurich, Switzerland, which has increased long U.S. dollar positions in the last week in its $3 billion currency fund of funds.

Extreme long positioning in the Australian dollar also contributed to the negative bias. Real money accounts, Japanese retail investors and speculators are still clinging to Aussie net longs, though short-term investors are paring positions.

Copyright 2011 Thomson Reuters.

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