Shocked and Persuaded

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Separating Fact From Fiction

The Cherry On Top! (aka Master of the Obvious Part Deux)

There really is no need to say any more as the title says it all.

U.S. Identifies Vast Mineral Riches in Afghanistan

I wonder if Big (What a..) Dick Cheney knew about this one! He couldn’t have otherwise he would have insisted on a more concerted and muscular presence in Afghanistan throughout the War On Terror. Oh well chalk one up to good ol’ fashion Mullah Omar misdirection. Something tells me you will be hearing that Freeport-McMoRan (FCX)out of New Orleans will be getting their grubby nefarious hands involved in this operation given their robust play in the global copper market. Okay you heard it hear folks with FCX’s near monopoly on the global copper market and a large presence in gold we will absolutely see a strong push by them into this nascent opportunity. Just for the record FCX shares are currently trading at $65.26 on the NYSE, traded as high as $87 on January 8th, 11, and April 5th of this year, BUT are far below highs of $114 and 122 on October 10, 2007 and May 19, 2008, respectively. These two dates and the general peak in copper prices happened to coincide with a commercial and residential housing construction boom in China and lead some to believe that we had reached Peak Copper, although the latter has yet to be proven, but it stands to reason we will reach some sort of peak given the finite nature of copper availability, the world’s insatiable appetite for it, and the fact that last I checked creating it out of thin air ain’t an option! I will keep a keen eye on this and I suggest anyone reading this do the same as I demonstrated with an earlier posting on Roche and it’s share skyrocket in the weeks leading up to and after The Great H1N1 scare.

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I would just say to the Pashtuns of Southern Afghanistan caveat emptor with Exhibit A being FCX’s Grasberg copper and gold mine in Indonesia, where the natives are restless and growing more so by the day. FCX is determined to see this mine to it’s complete exploitation given that it accounts for $4 Billion of FCX’s $6.5 Billion operating profit (i.e., Nearly 2/3). Some have even decided that peaceful protest is no longer helpful resorting instead to primitive but effective methods of “Message Delivery”. However, when the Indonesian government equips the mine bosses with a security force of 3,000 troops and police the odds are stacked against the indigenous peoples of Papua and Papua New Guinea (See Map courtesy of The Economist).

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Category: Economics, Energy, Geopolitics

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