Underground investor Christian DeHaemer says junior gold stocks are the ones to watch. In fact, he says this asset class will be “the number one asset class over the next two years.” This means that junior miners could make you more money than any other asset class in the near future. According to DeHaemer, there are several factors contributing to this play (most of which will be familiar to Notes readers).

For one thing, the US is creating more money than at any time in history in an effort to inflate the next bubble, save the banks, and extend the hand of government. Bloomberg has put the total bailout bill at $12.8 trillion, which is roughly this year’s annual GDP. The profligate spending by current and past administrations is well documented and ultimately must lead to inflation. What we are seeing now is the de facto definition of an inflation-generating machine. […]We have seen from the 1970s that hard assets perform better in a high inflation environment. Add to this a falling dollar, which is the other side of the same coin, and a flight away from paper currencies into gold, and you get a powerful long-term trend in real assets like oil and gold.

*** Christian says junior miners are a great way to play this scenario because they offer low risk and high reward…

Junior gold stocks didn’t fully participate in the rally that drove gold from $250 to $1,000 per ounce over the last seven years. But they absolutely got hammered in the commodity/credit bust of 2008. Many fell by 75% or more. And these are the top-tier, small companies with little or no debt and plenty of proven reserves. These are companies that were trading at market caps from $500 million to $1 billion a few years ago, that you can now buy in the $100 million range… in December I was able to pick up some of these small-cap gold companies for little more than the cash they had in the bank.

This kind of trade is for gutsy investors only. But here at Notes we reckon this could pay off big time.

P.S: James Davidson’s Crisis Strategy Alert portfolio continues to soar to new heights, without the risks of conventional investments. James has a nose for what he calls “investment outliers” — assets mispriced by crisis conditions. One “income outlier” he recently discovered allows ordinary citizens to pick up “tax rebate” (up to $781.33 a month). These monthly payouts are easy to set up. But you must act fast. The next check could arrive as soon as 4.00 EDT, Friday, June 12.

The Guara exploration well struck oil in the BM-S-9 concession area – the same block as September’s Carioca discovery, which could contain as many as 33 billion barrels of oil.

“There are those who will tell you that oil is a cyclical business and a global fungible commodity,” says Christian DeHaemer in Taipan Daily.

It rises and falls with the business phase. If you look at a hundred-year chart, it is as obvious as a sidewinder on a sand dune. A sine wave through time — up and down in seven-year cycles.

But there are others who believe in the “Peak Oil” argument, the ultimate end-game, like a Suburban crushing a Subaru at the end of a long hill. Peak Oil enthusiasts will point to long lists of numbers, detailed maps of known reserves, past prognosticators of genius, and declare with tinfoil-hat fervor that “we are running out of oil.”

I’ve read these books and listened to the speeches. The idea that there is a finite amount of oil on the planet, and we are near the point where we will extract less in the next hundred years than we did in the past. Makes sense to me, as does the business cycle. I don’t know if the hundred-year history of the oil cycle is over. There is always a “this time it’s different” ideology at the peak. But then again, sometimes, it is different.

What we do know — what isn’t in dispute — is that oil is expensive, and that by all accounts the easy oil has already been found and is being extracted at a furious pace.

And this has led the industrial countries on a desperate search for this ever-scarcer commodity.

Russia, China, India, Brazil, Canada, Europe and the U.S. are fighting an anxious and diminishing struggle for the last of the world’s hydrocarbons. Russia is sending submarines to plant national flags at the bottom of the Arctic Ocean. China has moved aggressively to acquire oil holdings from Kazakhstan to Somalia. India has gotten in bed with the genocidal regime of the Sudan to the tune a $45 billion natural gas pipeline. The U.S. is spending trillions in treasury and thousands in lives to make sure the oil flows from the Middle East.

The Guardian of UK fame recently reported that “money is no object as the big players grab what is left of a diminishing resource.” (This was after China’s Sinopec paid $1 billion for the right to explore for oil in deep water off Angola.) Just a few years ago, such a deal would have sold for a mere $35 million. But competition is fierce over the last remaining frontiers where vast quantities of oil might be found.

Martin Spring in Money Morning UK reports on another Brazilian energy find:

The newly-discovered Sugar Loaf field under the Atlantic off Brazil, claimed to be one of the world’s biggest, is primarily a natural gas resource. The Shtokman development in the Barents Sea off Russia’s Arctic coast, and several projects off the coast of north-west Australia, focus on production of gas, not oil.

There is also increasing interest in exploiting hard-rock resources that have been neglected in the past because it’s difficult to tap their gas. On the western slopes of the US Rockies, Exxon Mobil is starting to employ an explosive fracturing technique three times more effective than conventional technology to unlock the riches of the Piceance Basin.

But if the prospects turn out to hold $6 trillion of petroleum, they’ll kick the emerging market into the premier league, making it one of the world’s ten largest oil producers.

“There are those who will tell you that oil is a cyclical business and a global fungible commodity,” says Christian DeHaemer in Taipan Daily.

It rises and falls with the business phase. If you look at a hundred-year chart, it is as obvious as a sidewinder on a sand dune. A sine wave through time — up and down in seven-year cycles.

But there are others who believe in the “Peak Oil” argument, the ultimate end-game, like a Suburban crushing a Subaru at the end of a long hill. Peak Oil enthusiasts will point to long lists of numbers, detailed maps of known reserves, past prognosticators of genius, and declare with tinfoil-hat fervor that “we are running out of oil.”

I’ve read these books and listened to the speeches. The idea that there is a finite amount of oil on the planet, and we are near the point where we will extract less in the next hundred years than we did in the past. Makes sense to me, as does the business cycle. I don’t know if the hundred-year history of the oil cycle is over. There is always a “this time it’s different” ideology at the peak. But then again, sometimes, it is different.

What we do know — what isn’t in dispute — is that oil is expensive, and that by all accounts the easy oil has already been found and is being extracted at a furious pace.

And this has led the industrial countries on a desperate search for this ever-scarcer commodity.

Russia, China, India, Brazil, Canada, Europe and the U.S. are fighting an anxious and diminishing struggle for the last of the world’s hydrocarbons. Russia is sending submarines to plant national flags at the bottom of the Arctic Ocean. China has moved aggressively to acquire oil holdings from Kazakhstan to Somalia. India has gotten in bed with the genocidal regime of the Sudan to the tune a $45 billion natural gas pipeline. The U.S. is spending trillions in treasury and thousands in lives to make sure the oil flows from the Middle East.

The Guardian of UK fame recently reported that “money is no object as the big players grab what is left of a diminishing resource.” (This was after China’s Sinopec paid $1 billion for the right to explore for oil in deep water off Angola.) Just a few years ago, such a deal would have sold for a mere $35 million. But competition is fierce over the last remaining frontiers where vast quantities of oil might be found.

Martin Spring in Money Morning UK reports on another Brazilian energy find:

The newly-discovered Sugar Loaf field under the Atlantic off Brazil, claimed to be one of the world’s biggest, is primarily a natural gas resource. The Shtokman development in the Barents Sea off Russia’s Arctic coast, and several projects off the coast of north-west Australia, focus on production of gas, not oil.

There is also increasing interest in exploiting hard-rock resources that have been neglected in the past because it’s difficult to tap their gas. On the western slopes of the US Rockies, Exxon Mobil is starting to employ an explosive fracturing technique three times more effective than conventional technology to unlock the riches of the Piceance Basin.

In fact, Kuwait is prepared to spend tens of millions of dollars updating its refining industry. At last total, upgrades were going to cost $18.75 million. And that’s the low end of the scale for what’s happening in the Fertile Crescent. Some estimates put the number of construction projects at nearly 3,000, worth approximately $1.3 trillion… and that’s just the ones currently in the works!

The thing is, cement demand will rise by 40% over the next three years, and the top cement maker in the area, Orascom, won’t be able to handle it all. (Orascom was acquired by French cement maker Lafarge [LG: Paris] late last year.)

So the Gulf Cooperation Council is pooling $2 billion to build 75 new cement plants and create a brand-new company: Cemena.

The new company’s plants will begin its operations sometime in 2010, and Cemena will account for about 10% of the region’s demand.

Know what that means? Lafarge’s Orascom will still have to work overtime to help meet that 40% rise in demand. And that translates to profits. Lafarge just released its earnings report. Net income rose 49%, and earnings per share jumped 36%.

That’s good news for my buddy, Christian DeHaemer, editor of Material Profits. It’s also good news for Adam and me over here at Taipan Trader. The Middle East is one area we’re trying to break into for some juicy international companies.

With this type of growth in the face of all the unrest, it might be worth a risk or two.

Sara Nunnally

Editor, Taipan Trader

9 out of 10 Winners for 1,043%! 

This cutting-edge service just nailed 9 winning picks out of 10 tries… for total gains of 1,043%. And if you don’t mind profiting at other investors’ expense, you could get in on gains like this, and you could even pocket a quick 424% in the next 12 weeks.  Follow this link for all the details…

This equates to US$500 billion by the end of 2012. As you can see by the chart for Tata Steel, which is up 663% over the past five years, there are select companies that benefit from this type of government largesse.

But there is another company, a pure play, that will benefit directly from India’s rising GDP and its continued quest for a modern road, rail and power network. And due to a recent change in banking laws in conjunction with an acquisition, it has the catalyst needed for dramatic share price appreciation this summer. But you’d better act fast. Read my free report today.

Christian DeHaemer

Editor, Material Profits

This super-safe $15 stock is the “sleeping giant of India”. Most investors think they can’t own it, but they’re wrong!

While plenty of Americans know that China is a fast-growing economy, a small group of investors are making seven times more money investing in India.

And right now, you have a rare opportunity to slip through a “secret backdoor” and own shares of this $15 Indian company that I guarantee will post a triple-digit gain in the next 12 months… or your money back. Over the next five years, you could see 10 times that amount… maybe more!

Keep reading to learn more…