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Heavy Metal: Putin's War

Palladium Will Run

Written by Christian DeHaemer
Posted March 25, 2014

As new information comes out about Ukraine, it is becoming clear that the U.S. created a coup to remove the duly elected president Viktor Yanukovych.

But things got out of hand.

Now, the administration/CIA is having buyer's remorse, as Putin reacted with boldness and speed to reclaim historically Russian territory.

Don't forget that Crimea voted to split with Ukraine and rejoin Russia. This is because 60% of the Crimean population thinks they are Russian.

And it's no wonder. Crimea has been part of Russia since Catherine the Great. Russia first officially annexed Crimea in 1783.

Furthermore, despite what the MSM says, there was no Russian invasion. They had troops in place from treaties and agreements.

Crimea is now Russia. It's a done deal. And backing the neo-Nazis now in power in Ukraine will end badly, just as getting involved in Libya, Egypt, Syria, Iraq, Afghanistan, Nicaragua, Chile, Iran, Vietnam, Laos, and a long list of other third-world hellholes ended badly.

The only questions now are what the blowback will be and how we can profit from the coming sanctions. And there will be sanctions — along with the cliché of patriotic chest thumping and Obama's wagging finger.

Metal Sanctions

As I write this, a series of meetings with members of the G-7 group of nations is ongoing in Europe. The G-7 includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. The Ukraine will be a focus.

So far, there has been some tit-for-tat stuff on the sanctions front, but no real pressure.

The Russian Foreign Ministry recently banned 13 Canadians from entering Russia, including the head of the Ukrainian Canadian Congress. Last week, Obama froze some Russian bank accounts.

This is just the beginning; more sanctions are coming.

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One way to play it is to buy palladium. Here's why:

  1. Most palladium is mined in South Africa and Russia.

  2. The price is starting to move on increasing volume despite a commodity bust.

  3. Palladium hit a 2½-year high late last week.

  4. Two new palladium ETFs will suck up supply. The Standard Bank said it would launch a physically backed palladium exchange-traded fund in South Africa on Monday, and Absa Bank said its planned South African palladium ETF would begin trading on Thursday.

  5. There are ongoing mining strikes in South Africa.

  6. Russia's Norilsk is a large producer of palladium, and the threat that sanctions might shut off exports will force users to stock up.

  7. Palladium is used in hydrogen fuel cells, and the industry is having a growth surge.

These catalysts are set up in a way that could launch the price of palladium next month. If the mining strikes aren't rectified and Russia gets hit with sanctions, we could see a massive spike as producers seek to fill their needs in April.

One way to play it is to buy the ETFS Physical Palladium Shares ETF (NYSE: PALL). It just hit a 52-week high of $77.53.

All the best,

Christian DeHaemer Signature

Christian DeHaemer

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Since 1995, Christian DeHaemer has specialized in frontier market opportunities. He has traveled extensively and invested in places as varied as Cuba, Mongolia, and Kenya. Chris believes the best way to make money is to get there first with the most. Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor's page.

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