Selling Fear in Crude Oil

We last wrote about the crude oil market in early November. At that time, we stated that the market internals did not justify the relatively high prices we were trading at and further added that we believed the $100 per barrel resistance would hold and provide a ceiling to any attempted rally. The market declined nearly 10% by the middle of December and now, here we are again back up to $100 per barrel.

As we mentioned previously, there's a distinct fear bias in the crude oil futures market that always pumps a premium into prices. This fear bias has recently been fueled by several events in Iran. First of all Iranian students stormed the British embassy in Tehran as retaliation for new economic sanctions imposed upon them by Britain. The U.S. and Canada also followed Britain's lead. Secondly, the European Union imposed economic sanctions on an additional 180 companies and individuals, prohibiting them from conducting commerce with European Union members. Finally, Iran has threatened to close the shipping lanes of the Straits of Hormuz if economic sanctions are placed on their crude oil exports.

Political games aside, the fundamental issues in the crude oil market can be seen in slackening demand as well as the weakening internal market structure. Global gross domestic product is sure to slow in 2012. The U.S. is just beginning to gain some traction and many economists feel that the best case U.S. outlook will see job growth keep up with population growth. This will leave us at historically high levels of unemployment as stabilizing the workforce will not lead to wage inflation.

The problems in Europe have yet to be dealt with. Recent, credible comments point to a European Union, "minus one small country." The European Central Bank continues to fight battles rather than implementing a strategy to win the war. The most recent example was their action on December 21st in which they lent more than $600 billion to 523 banks at an interest rate of 1%. The protection of private and corporate bank bad debt at the expense of settling sovereign debt issues is penny wise and pound foolish. Their inaction will lead to a European recession in 2012 and dampen their crude oil demand going forward.

The weakness in the EU has already begun to manifest itself in the BRIC markets. Brazil, Russia, India, and China are all slowing at a rapid pace. Their domestic stock markets have declined by an average of nearly 20% for 2011. The International Monetary Fund expects that these countries will grow by 6.1% on average in 2012. While this is more than enough to be jealous of, it still represents a decline of more than 35% from their recent high growth rates. The projected economic slowdown in BRIC countries can also be seen in other metrics including, valuations, mutual fund outflows and the implementation of easing policies as they attempt to engineer a soft landing for their slowing economies.

Reselling Gold For Profit: Buy Low, Sell High

Over one hundred and fifty years after it hit its peak, it seems the Gold Rush is alive and well. Millions of people are turning to the lucrative and exciting practice of selling gold, silver and platinum for profit as a way to supplement their income. With some training that will provide you an understanding of the industry of precious metals and how to maximize earnings, a gold reselling business can actually become a full-time revenue-earning source.

Benefits of Owning a Gold Reselling Business

Every business has its attractive features and this goes especially for a gold reselling business. This type of business is entirely different from most other business opportunities, and with this uniqueness comes many benefits.

You can have a gold reselling business completely on your own. Though you can use the assistance of other employees if you wish, you are more than capable of pursuing success in gold reselling by yourself.

This type of business helps others as well as providing you income. When sellers come to you to sell their scrap or unwanted gold, you not only take the pieces off their hands but provide them with some extra money.

A gold reselling business does not require an inventory, supplies or drawing in customers with products. This promotes low overhead costs and simplicity of operation.

You can absolutely customize your business to fit your schedule and motivation. With gold reselling you can work the hours you want, with the intensity that you want. You can even choose from a variety of gold buying and selling techniques to maximize profits and speak to your particular talents.

Gold reselling can be a very exciting business opportunity. Using some methods is like going on treasure hunts, and you never know what will be brought to you during an event. Every day is different so boredom is not a problem with this business.

Start-up Costs

Most businesses require some form of start-up costs. Gold reselling is slightly different in this area.

The majority of your work in a gold reselling business is done from home or other businesses. Some gold resellers like to rent out conference rooms or other locations for very large events, but this is mostly for well-established, experienced sellers and can be considered later.

If you intend to pay your gold sellers cash for their offerings, you will need a lump sum of available capital at your first event. Many resellers get around this by paying with checks. If you use this method you must immediately go to your local recycling center in order to collect your profits and put the money in your account so it will be available when your sellers cash your check.

There are many gold reseller resource programs available online that can provide insider tips and tools that can help you get going and see success quickly. These range in price, with the average being around $60. This is not a necessary expense, but might appeal to people who appreciate a wealth of information about any endeavor they begin.

Advertising your events can bring in far more sellers than just word of mouth. Options for appealing to eager potential sellers include Craigslist (which is free), newspaper advertisements and flyers.

Earning Potential

A successful gold reselling business can be very lucrative if you learn the basic methods and go about buying and selling the gold intelligently and cautiously. You have several options for buying and selling gold and other precious metals for profit.

One way to find gold to resell to refiners is by frequenting garage sales, flea markets and estate sales. These sources can bring surprises and amazing bargains that will give you a boost in profits quickly, and eliminate having to determine how much to offer a seller at a private event.

The way many gold resellers actually begin their businesses is to go through their own jewelry stashes to find pieces that they no longer want or need and selling those to refiners. This not only gives them immediate income, but teaches them how the process works so they can be prepared for working with sellers.

If you want to work with people and guarantee at least some gold to resell, you may be interested in hosting gold buying events. Also called "gold buying parties", these events allow people interested in selling their precious metals to come to you. You evaluate their pieces and offer them a purchase amount that you know will allow for some profit when you go to your refiner. They leave with money and you leave with gold to resell for profit.

Don't be afraid to ask friends and family if they have any scrap jewelry they do not need. You can offer them the opportunity to sell the pieces to you, which benefits them but also acts as your first few transactions to get you used to the business.

Gold reselling is a unique business opportunity in that it requires little to no training, experience or starting capital to get going. If you have access to scrap gold, silver or platinum, you can begin selling them to refiners for profit. As your operation grows you will be able to hold larger events and have bigger paydays without the same amount of effort, making this an ideal side business for already busy people just looking for a little boost in income.

The American Consumer Is Throwing in the Towel

The November Unemployment Report showed a decline in the unemployment rate to 8.6% as well as 140,000 jobs added in the private sector, which was partially offset by a decline in government payrolls of 20,000. Sounds good at first blush, private payrolls are adding jobs and the size of the government is declining. While it is encouraging, there are two major problems with accepting this at face value. First, employment is up, but not enough relative to where we should be more than two years into the economic recovery(?). Secondly, consumer spending indicates desperate behavior that is further weakening the underpinnings of this recovery.

We've discussed before that the economy needs to add approximately 125,000 jobs per month just to keep up with population growth. This month's net number of 120,000 still leaves more people unemployed in the long run. The reason the official unemployment rate dropped to 8.6% is primarily due to the 317,000 people who haven't actively looked for a job in the last four weeks and have therefore, fallen off of the unemployment report. Had those people sought employment, the continuing claims number would have been negative by nearly 200,000 and created a significantly different headline picture.

I question the impact of this recovery and have concerns about its ability to continue to gain traction due to the historical perspective of the jobs situation and our population's spending habits. The Federal Reserve Economic Database is accessible by anyone. Looking at their employment graphs we can see that since 2007, the number of people not in the workforce has grown by more than 10 million. Conversely, when we look at the total employment level in the United States it shows that we are at the same level of employment as we were eight years ago. This ties in well with the thesis that American businesses and American workers are more productive than ever. This has led to healthy corporate profits while the domestic demographic spread continues to widen.

The American public on the other hand, is a bit of a concern. CNBC released a survey detailing the economic expectations of the American population versus our expected spending habits this holiday season. Retail sales have surged to all time highs, surpassing even 2007's high, which was fueled by credit. This year, CNBC's survey is expecting holiday spending to be 22% higher at the individual level. This would represent a 4.6% gain in total holiday spending over 2010. This makes no sense when 61% of American's polled believe that the economy is in poor condition with equally dismal expectations for 2012. This is the worst reading in the five-year history of a poll that includes the euphoric '07 highs as well as the desperate '08 lows.

My fear for 2012 is not the Mayan end of the world. My fear is that Americans are dipping into the minimal savings they've built up in the last two years on one last party of a holiday season. According to CNBC, 74% of this year's holiday purchases will be made with cash. This will leave most people skating on thin ice. The idea that we are spending more while expecting less just doesn't jibe with the narrow cushion we stereotypically hold. When we combine this with the fragility of the European Union situation and its ability to quickly throw us back in recession, I'm afraid that this holiday's spending habits may simply be the average American giving up and throwing ourselves a party while we still can.

Investing In Solar Energy - Getting in Early

History is filled with millionaires who made their fortunes through energy, mainly the oil industry. But today, energy investors would be well advised to consider broadening their horizons just a bit. There's a big push towards alternative energy, and the truth is that many options are out there and could provide very exciting opportunities for investors. Investing in solar energy, for example, could be a perfect way to get in on the ground floor of a financial elevator that could climb to great heights. If you're thinking that solar energy may be the best place to put your money, here's a closer look at the option.

While right now solar energy is primarily used in Germany and the Czech Republic, there are many strides that have been made to help bring it forward in America. Several companies have sprung up that are all working towards bringing solar energy to the forefront of the American power grid. While shares in a few of these companies are costly, many are very inexpensive at the moment but climbing steadily. And if the nation does focus more intently on harvesting the power of the sun, investing in solar energy right now could pay off tremendously down the road.

Even right now, investing in solar energy can pay off. More and more people are adding solar panels to their homes to complement their energy usage and numerous municipalities have turned to solar for some basic uses like powering street lights or signs as well as larger uses like powering entire 'green' co-ops. But along with being able to give you some significant financial benefits, investing in solar energy can also provide other benefits beyond just the monetary ones it is obviously capable of delivering - especially to companies that take the time to invest in it.

Investing in solar energy can give a company a positive boost in public perception. Whether your company is already highly regarded or is suffering from a poor image, embracing the green movement can help prove that you're serious about moving the world forward responsibly. As a result, you may even notice an increase in customers based solely on the fact that you've taken these steps. And even private investors will be able to feel good about their contribution to the world's future, knowing that they're helping fund a global change while investing in solar energy and reaping financial rewards as well.