Many Hemispheres readers are already heavily invested in gold and silver.  They are looking for diversification but would like to stay in hard assets and even more specifically, metals.    Fortunately, there is a new, valuable asset class that you can physically own in your own name, (trust or LLC) touch and see, take delivery of, or store off-shore in allocated, segregated fashion, reselling directly into the industrial market when you liquidate or when the stockpile is sold in its entirety at full mature value.

These are the rare and strategic metals that are now used in 80% of all products today.

“The secret ingredient of almost everything!”

The world is fast becoming more dependent rather than less on these rare, strategic, tech metals, so much so that they continued to go up in value even during the recent worldwide economic unpleasantness.  Now, of course past performance is not necessarily a guide to the future but a series of events are unfolding that bode very well for the future for anyone participating in a stockpile of rare and strategic metals.

Furthermore this relatively new, hard asset class has some other advantages:

There is currently no clear reporting obligation. Unlike precious metals that are sensitive and are subject to various tax, treasury and anti-money-laundering controls, rare and strategic tech metals are much less sensitive. These are not financial assets that sit in an account. They are physical things that you own. You can even own them anonymously if you wish as the companies acquiring and storing them are private. You can even own pure silver & gold this way in industrial granulate form, that doesn’t class as bullion or precious metals.

Americans can hold these physical metals in an offshore Nevis LLC nestled inside a self-directed IRA in a completely IRS compliant structure. The same also applies to self-directed retirement plans in other countries.

It’s a currency diversification in that you can easily pay in one currency and cash out in another. Sales proceeds can be sent to almost any bank account, anywhere in the world.

What metals are we talking about?  They are not household names but they are in almost everything in and around the house.  This ranges from kitchen appliances and cutlery, TVs, flat screens, and I Pads, cell and smart phones, automobiles and even the new efficient solar panels, medicines, ointments, creams, water purification and jet engines and commercial aviation, to name just a very few of their myriad applications.  The world of today cannot live without the metals of tomorrow.  In fact, National Geographic in a recent 2011 article referred to them as “The Secret Ingredient of Almost Everything”.

They include such rare critical technical metals as rhenium, indium, gallium, hafnium, tantalum, tellurium and bismuth. Other strategic industrial metals include molybdenum, chromium, tungsten, cobalt and zirconium.  These metals are all limited in supply or vulnerable to supply interruption, and under increasing demand.

Above all, though, we like this opportunity (rare and strategic tech metals) because it´s about owning something physical that you can touch and feel, and take possession of if you want, rather than owning questionably backed paper or following numbers on a screen.  In the event of a medium or even drastic negative economic event, physical investments like this will be the only ones worth having!

Current events around the issue of rare and strategic tech metal supply and demand

In 2012 there have been two more significant events that show the importance of these metals to the world and also the trend towards a continuing problem of supply meeting demand in this sector, further driving up the values of these metals in the years to come.

Early in the year the USA, Japan and the EU issued a formal World Trade Organization (WTO) complaint against China regarding the Chinese reductions in exports of rare, strategic, industrial and tech metals like the ones we mentioned previously.

These countries need these metals to initiate and complete their strategic economic plans over the next few years.  Over the past two years, China has reduced exports of these metals around 40%.

These countries and their manufacturing sectors, and military have small or no stockpiles of these crucial materials to meet their strategic needs over the next 3 to 5 years, let alone over the next 10 to 20 years.

Most tech metal experts who have studied this WTO complaint feel that China will not comply because they will argue that these governments need the materials for their high tech military applications, and that a WTO complaint cannot be filed around materials used for the military.

They further believe that if the WTO orders China to increase exports of these raw materials so that these countries can meet their strategic economic goals, China will simply refuse, as they really need most of these materials to fuel their own economic strategic plans.

Unfortunately for these countries, the WTO has no teeth, and the only enforcement of their decisions is a series of ping pong ball embargos, back and forth to try and get China to comply.  I think we all know how this will turn out.

The second significant event that occurred in September of 2012 came out of Beijing in an AP, and CNN news report that China was consolidating the metals market inside China by closing all of the independent, smaller mines and refineries and smelters. They are doing this so that the Central Committee takes over complete control of this sector, can control pricing, and to eliminate a black market that has existed up until now. This will cause another, immediate 20% reduction in exports.

This is bad news for the USA, Japan, Korea, Taiwan, the EU, Sony, LG, Toshiba, Panasonic, Samsung, BMW, the US Military Industrial Complex, and all other manufacturing sectors that need these metals now.  The metals that China does release to them will cost more, and they may have to locate their production facility in China, to get access to the metals.

China is not asking anything outrageous. They simply want to receive the true market value for these metals now that there are so many new applications for them in the past 10 years.

This is good news if you are a participant in a stockpile of these metals outside of China as you will reap the benefits of these increased values in the metals in the coming years.

Furthermore, demand will continue to rise for the products which use these metals as over 1 billion souls are emerging from poverty in places like China, and India and South America, and entering lower and middle class, and they will have all those products that we in the West take for granted.

In true price-inelastic form, the products that contain these metals will not go up significantly in price, stunting demand, because such trace amounts of these metals are used in each product, that manufacturers will simply absorb the increased costs of rare and strategic tech metals, in their already sizeable profit margins.

Also, if you buy a cheap Chinese knock off phone, or a real IPhone, a luxury car like Mercedes Benz or a bargain priced Korean or Chinese car, get your medicine from a private doctor or public clinic, it does not matter, as expensive and inexpensive products use relatively all the same rare metals in the same amounts.

To illustrate in numbers the expected increase in demand for some of the aforementioned metals, a February 2012 Metal Report from Deutsche Rohstoffagentur shows that production levels for indium are already not meeting demand, and will increase from 580 metric tons in 2010 to over 1,800 metric tons by 2030.  Gallium production will need to increase from 180 metric tons to 600 metric tons to meet increased demand.  Tantalum production will need to increase from 600 metric tons to 1400 metric tons to meet demand.

Realistically, production will not be able to increase to the necessary levels to meet this expected demand, so solutions like increased recycling and more efficient use of the metals will need to be initiated.  These solutions, and especially recycling, will only further increase the values of the metals.

A ¨turnkey¨ provider of rare and strategic tech metals

Swiss Metal Assets S.A. (SMA) based in Germany, Switzerland, Italy and Panama is currently the only ¨turnkey¨ provider of rare and strategic tech metals in world.  Physical ownership within allocated, segregated accounts stored at private duty free vaults in Zurich, Switzerland and Panama City, Panama.

Haines and Maassen (HM ) our metal trading partners, who have been operating in this sector since 1948, selected metals for this new program to be gathered in what they metaphorically referred to as ¨baskets¨ that had the best chance of increasing in value now, and in the future, with the idea being, this would be a new asset class that German citizens could exchange their devaluing paper currency in for, to hedge against inflation, and worldwide economic malaise.

The program was and is an overwhelming success, with clients now coming from countries all around the world, including an ever increasing amount from the USA to participate in the Key Industry, Tech Metal, Construction and Engineering, and Military rare and strategic metal stockpiles.  Since the program began in 2009 the metals have averaged 17% increases in value overall, with the largest increase in the baskets at that time, reaching a 47% increase in 2010 alone.

The media file around the original German Company is quite extensive, consisting of television and print, whereas the approach to promoting this program in the United States, for example, is done through sponsored investment conferences and symposiums primarily in the US, Canada, and Central and South America, and through newsletters like the one you are reading now.

SMA and its trading partners in Germany and Switzerland Schweizeische Metalhandel AG and HM, have over the last 5 years, developed a proven, safe and secure method to discretely preserve wealth utilizing fully allocated, segregated and securely stored offshore, rare technology-based strategic metals and precious metals.

The baskets are steadily increasing their value in the face of some very volatile financial markets and widespread economic instability.  As you know, the last few months (and years actually) have been very rough times for the financial markets.  As SMA regularly tells their website visitors and clients alike, SMA´s wealth preservation strategy is firstly, a safe secure and private defensive mechanism for rough times with the baskets holding and/or increasing their value very well in that regard.  Once your assets are safe, it is enjoyable to also consider the significant potential for profit as well.

If you find this to be as intriguing an opportunity as we do, and believe that it is worth a closer look, then please go to the link below to get more details about how the Swiss Metal Assets programs can work for you and or your family.