I’ve been holding CCJ basically since that reactor went critical in Japan. In fact, the only reason I bothered to purchase CCJ was BECAUSE of the reactor.

As an observation, in the face of natural disasters, people are horrible at honestly judging a situation. They ALWAYS skew to the pessimistic, end-of-the-world viewpoint. And especially with radiation, where the radiation level does not even determine health risks so much as radiation-time, people get goofy.

Case in point: I say to you, “you’ve been exposed to ‘high’ levels of radiation for a few hours.” Let’s suppose that “high” is around the range where death becomes 50/50 according to statistical observation. Rank the following outcomes in terms of likelihood: Death, cancer, sickness – no cancer, and no impact.

Most people, upon freaking out at this statement, would immediately order these outcomes in terms of the fear they have to them – death is most likely, followed by them developing a cancer, followed by them only getting sick, and finally leading off with them scraping by unscathed.

In reality, this is completely wrong.

When exposed to high levels of radiation, the most likely outcome is cell death; since we’ve already specified 50/50 chance of mortality, this is the highest outcome (as all others must fit inside 100% probability), followed by sickness without cancer (survivable cell death), and finally followed by no impact occurring.

The likelihood of developing cancer from 1 hour of exposure at any magnitude of radiation remains effectively the same – zero (this is not to be confused with the implications of absorbing radiating materials into your body, which is why unprotected exposure to radioactive materials is frequently associated with cancers).

This is a good example of panic creating opportunities. The fact that none of the Japanese workers have died from radiation is indication that they will be alright and a reminder that nuclear energy, while complex and potentially dangerous, can be managed safely.

Other examples include the Macondo well in the Gulf of Mexico, the threat of an Iranian blockade of the Hormuz Straight, the impact of peak oil on net global oil supplies, the relevance of the Y2K bug to global finance, etcetera.

Now, I will demonstrate first hand again the kinds of profits that can be made by keeping a level head when “freaking out” is the cool thing to do.

You see, CCJ’s price has been lackluster of late, to say the least. Yet, I continue to hold it after purchasing logarithmic intervals from the entire spread of $29 all the way down to $17. It comprises an enormous portion of my allocations (just under 20%).

But that is about to change.

In a matter of months, Russian recycled nuclear warheads will stop entering the marketplace as fuel. At such point, current uranium production is insufficient to maintain current fuel demands of all global reactors.

And the number of those reactors is increasing – not decreasing.

Germany’s promise to switch from nuclear fuel to alternative energy sources is weak. They have no chance of accomplishing this…nadda, zilch, zero. The technology does not even exist is terms that could make this possible, at this time.

And Japan will not be decommissioning any of their own reactors, despite public mood on the subject.

The reason they cannot do this is China.

Japan is an island nation with few natural resources. The majority of their consumption comes from abroad. The whole reason they went nuclear to begin with was to create a quasi-self-sufficient power grid for the country. The major catalyst for that choice was fear of China’s naval capacity.

Your standard nuclear plant can run for upwards of 500 full power days before needing to reshuffle the fuel rods. That’s a year and a half of power, without fear of supply disruption.

If Japan were to start converting away from nuclear, it would expose itself to two risks it currently doesn’t have: the first is daily fluctuations in the price of fuel (all of which it must import), and second, the risk that China tries to blockade their supply routes.

If Japan made the switch, and China ever decided to interfere with them, then they would have literally a few months to respond before watching their entire grid fault out. Nuclear gives them options to respond to military provocations – as the Chinese have so kindly reminded them of.

Uranium is set to soar, and CCJ is the biggest beneficiary. By this time next year, I will be insufferably gloating.

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Hahahahhaha BAS shorts are in the incinerator now. The company is one of the highest moving stocks on volume, on the announcement that Bernanke is hell bent on higher commodity prices. BAS is going to $18+…go ahead and quote me on that.

My position is in around $12, 10% of my portfolio at the time.

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On or around August 28, a series of BLATANT hit pieces on BAS surfaced, portending that a sudden rise in demand for put options revealed a huge reversal imminent. These pieces, mostly disseminated by Yahoo Finance (the market manipulator’s preferred financial news source) and then hyper-linked on Twitter, led to massive losses in the name, cratering the stock by over 15%.

I am here to say, I outlasted you and your villainy. Another 2% and I will be back to even. All this redeeming occurred in a matter of just 3 short days.

What this tells me is that there was no real reason for BAS to have ever traded down in the first place. Demand for BAS shares is strong, and this was nothing shy of a coordinated attack orchestrated by unseen persons.

I can only hope that those of you behind this baleful comportment met your untimely demise, trapped in your own wickedness. However, I know better.

Market manipulators are wonted cowards, spineless from birth and devoid of any of the compulsions necessary for greatness.

Bereft of these qualities, they are forced to lurk in closets, casting aspersions on passerby’s. Rumors, gossip, lies, and all other physiognomies of wretched prevaricators are their haunts, and they lurk slyly out of sight, misleading the ignorant and gullible to their dooms.

The pests who caused this selloff were long gone before now, taking the easy profits, probably within the first 10% of downside, before scampering off back to their rat nests.

So instead I must hope that any who believed this racket learned their lesson – through fire.

This is what you deserve if you’re senseless enough to believe that a sudden demand for put options of all things is a guide to where stocks should be trading.

Funny enough, but in either case of a put or call option, the exact same relationship is being established; whereby one party receives cash with an obligation to transact stocks. The ONLY difference is on which party – long or short – gets to elect whether or not to exercise the terms of the contract.

A sudden demand for put options could be as much a desire to have temporary insurance as any direct evidence that prices of a security should go lower.

Someone played you for a sucker, BAS shorts, getting you to take a position against a company that ALREADY had 20% of their average float tied outstanding.

Now you get what you have coming to you.

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Get your rally hats on, boys.

My long standing prediction was that the EU would require €3 trillion in funding in order to get them to 2014. You may refresh yourself on this postulate, here.

We got the first trillion in LTRO’s 1 and 2 as direct funding to Europe’s banks.

Today, the seeds for the next two trillion – minus whatever pittance is sitting in the EFSF\ESM joke-of-a-failure – have been planted by Mario Draghi.

We will run higher on this news, as men and women with intellectual deficiencies run with the false assumption “printing = higher prices”. However, although it is flawed, do not doubt the ability of this false premise to ramp us another 10% higher.

In the real world, this news will crush the euro, sending the EURUSD below 1.2. At the same time, America’s exports will be taken for a short trip down river – never to be seen again.

Meanwhile, this monetary easing will not do anything for Europe’s economy, in a seeming-contradiction that will make the ECB’s amateur statistician’s heads explode.

The reason is because all of this money is slated to be consumed by the entitlement machine that is “European stagnation”. It was already promised to the people, and its effect is passively witnessed on the EU civilizations every single day. Giving someone what they already expect to receive does not change behavior.

Europe will continue to contract, as demand will not be stimulated and prices throughout the EU will ramp higher – strangling the people.

Here in the US, dollar strength is slowly setting the stage for the next bleed out. China is in a similar boat.

These purchases by the ECB will in time be shown to have actually made things worse for Europe. They are giving themselves 3 years’ worth of funding, conveniently getting them to 2015. However, the activity itself undermines confidence in the euro and any reason for long term investors to step in (not that they were going to anyway).

Thus this is a bastardized tradeoff: 3 years of short term funding in exchange for 30 years of long term funding. Imagine it like a wave…a tsunami…rolling through the short term paper, pulling the tide out on the long end, and crashing through anything that comes in its path – all budgets will be swallowed whole by this destructive force.

I will conclude by saying, prepare for a ferocious rally that will last through the holidays…probably. But have lots of spare cash on hand. Because as soon as the first round effects of this pump are exhausted, we will have to face that the state of affairs have been worsened from Draghi’s intervention.

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