Workers heave great hunks of iron and steel up vast construction cables… great machine-age pulleys send building parts up storey after storey… ever closer to the sweltering sun.

Passers by gawp at the great feats of engineering that tower above… the men high up in the giant structural shafts look down from up high see them as tiny blips… one of thousands of dots in the ever expanding City.

From the edge of Brooklyn to shore of Wall Street the trend is repeated for hundreds of miles… as far as the eye can see.

But the focus is on Manhattan…

The new financial centre of the world is riding high with the race to build the earth’s tallest building.

On one side is Walter P. Chrysler, founder of the eponymous motor company and his architect, William Van Alen. On the other is Alen’s old partner, H. Craig Severance, hard at work on the 70 storey Bank of Manhattan Trust Building on Wall Street…

Construction of the Chrysler Building began on September 19 and the contest between Alen and Severance is intensely fierce.

For over a year the two buildings are neck-and-neck.

Then at the last stretch – a mere two feet in it – Severance pips Alen to the finish line to claim the title.

But Alen has an ace up his sleeve…

Unbeknownst to anyone, he secretly constructs a 185 foot long spire inside the frame of the building.

On October 23rd, 1929, to the pride of the workmen… the gasps of the awe-struck on-lookers, businessmen and journalists… the spire is hoisted onto the top of the Chrysler Building’s dome and lowered into the 66th floor of the building.

The battle is won.

Fast forward to today: The stark reality of the 21st Century

The Chrysler Building was the first man-made structure to rise above 1,000 feet.

Its grand opening epitomised America’s financial might.

Of course, in boom-time New York, that title didn’t last for very long. It was trumped by the Empire State Building the next year.

Now I’ve always found the Chrysler Building the far sexier of the two – a genuine masterpiece of Art Deco architecture.

But yesterday, something happened that brings home a stark reality of the 21st Century… a century where America is no longer the financial King of all nations.

The New York Post broke the news that this American icon – one the great symbols of the West’s financial might – is likely to be sold to cash-rich Gulf investors…

The Arabs move in

The Abu Dhabi Investment Council – the Gulf Emirate’s smaller Sovereign Wealth Fund – is ready to pay $800 million for a 90% stake in the landmark building.

It’s a tiny amount for such a striking building. But it’s what this news represents that is huge.

The Arabs are moving in.

Only two weeks ago the Kuwait Investment Authority and the Qatar Investment Authority plunked-down $3.95 billion on four prize properties in New York – including the old GM Building.

Record oil prices gut America

Chrysler moved out of their iconic building years ago.

The company itself is an absolute mess…

The gas-guzzlers it specialised in fell out of favour in the mid-70s as oil prices skyrocketed… America’s motor industry declined.

And the Japanese with their smaller, fuel-efficient cars seized the initiative. By 1979, the Chrysler Corporation had to petition the United States government for $1.5 billion in loan guarantees to avoid bankruptcy…

Chrysler sold itself to the German auto giant Daimler in 1998 – officially a “merger of equals”.

Grafting Chrysler’s sub-prime onto their high-end brand was probably the dumbest move the Germans ever made. In 2007 they off-loaded it onto US private equity firm, Cerberus Capital Management, for $7.4 billion.

Good luck to them. Personally, I think the Arab’s purchase of the Chrysler Building is going to prove a far smarter investment than Chrysler itself.

I see surging oil prices wreaking havoc on what’s left of America’s manufacturing economy, just as they did in the 1970’s.

The latest figures from the US Commerce Department show the America’s trade deficit continues to soar. That’s almost entirely down to imports of crude oil and petroleum products. In April, crude-oil imports rose by $4.2 billion to $29.3 billion – a new record.

There’s plenty more to come. Because even those scary figures are only the result of oil at an average price of $96.81 a barrel.

That’s a long, long way below the close to $140 levels we’ve seen this month.

One way to get your cut of this phenomenal shift of wealth

All of this brings home an important point we at Profit Hunter use as our fundamental strategy towards our investments…

The balance of financial power is inexorably shifting eastwards… to the oil-exporters… and to Asian manufacturers.

America is being bled dry by higher oil prices. And the masters of this new petrodollar-dominated financial universe are picking the choicest bits of its carcass.

But we don’t lament this fact. Instead, we line up to get our cut.

Our Gulf merchant bank investment has a long track record of snapping-up undervalued U.S. icons. And right now they’re as undervalued as ever!

In the 1980’s it bought luxury retailers like Tiffany and Saks Fifth Avenue. It continues to build a top-drawer portfolio of American properties.

It bought the high-end 280 Park Avenue office complex last November, just a short walk away from the Chrysler Building itself.

You can bet that as America’s economy reels under the credit crunch and falling property prices; continues to haemorrhage dollars into the Gulf to pay for the oil it desperately needs… this one company is going to find plenty of new opportunities to add to its holdings.

If you’d like to review our higher tier “special situations” investing service, go here for more details, and I’ll send you details of our entire open positions immediately.

Regards,

Manraaj Singh
Editor
Profit Hunter

Source: Cash Rich Arabs Takeover New York

World leaders have gathered in Rome this week to try and sort out the global food crisis amid claims of an imminent Malthusian catastrophe. But is this just another old chestnut or are these claims right this time?

When the pessimistic clergyman published “An Essay on the Principle of Population” in 1798, he argued that populations would continue to grow and grow – but land itself was finite. He predicted starvation, death and societal breakdown as the amount of mouths exceed the supply of food.

It turns out he was wrong…

The industrial revolution allowed greater efficiency in food production and a catastrophe was averted. Then in the 1940s and 1950s there was the so-called “green revolution,” where new farming methods significantly boosted food production.

The green revolution allowed food production to keep pace with worldwide population growth… but even this was not enough. As food prices shot up in the 1970s, the work of Thomas Robert Malthus became popular once again.

The worries about overpopulation proved mistaken… history repeated itself. The green revolution continued and agricultural yields improved… but population growth continued and continued. Today we are faced with accelerating food prices yet again. The good Reverend Dr’s name is once again being seen in newspaper leader columns.

Biofuels changed the equation

The main complication this time is the fact that we are burning food for fuel. This implied to me that there is a way back from the brink of starvation – and that involved convincing the Americans to cut their (immoral) subsidies to produce ethanol.

This policy is responsible for taking food off the plates of the poorest people in the world. I do not think a Malthusian catastrophe is imminent in food… but there might be one area where Malthus’ predictions can be applied… and it relates to the most vital commodity of them all.

I have always argued that water is more precious than oil or gold – and this will be proven in the coming decades. Yesterday, Governator Arnold Schwarzenegger declared a drought in California. The Middle East is in real trouble and central Asia is suffering from acute shortages.

Speaking at a Goldman Sachs conference on the top risks facing the world, Lord Stern (author of the Stern Review on the economics of climate change) said that we should be applying the theories of the good Reverend Dr, to water.

The Goldman panel concluded that a catastrophic water shortage could prove an even bigger threat to mankind this century than soaring food prices and the relentless exhaustion of energy reserves. Stern warned that underground aquifers could run dry at the same time as melting glaciers play havoc with fresh supplies of usable water.

“The glaciers on the Himalayas are retreating, and they are the sponge that holds the water back in the rainy season. We’re facing the risk of extreme run-off, with water running straight into the Bay of Bengal and taking a lot of topsoil with it.”

“A few hundred square miles of the Himalayas are the source for all the major rivers of Asia – the Ganges, the Yellow River, the Yangtze – where 3bn people live. That’s almost half the world’s population,” he said.

Goldman’s said it thought the best way to play the sector was to buy a basket of small “potential takeout candidates” such as Badger Meter, Calgon Carbon, Clarcor, Pentair, Pall, Instituform, Hyflux, Tetra Tech, Acqua America and Watts Water.

Population growth fuels commodity demand

The problem is not the growth in population per se, but the fact the population is getting more affluent. As standards of living rise across the Earth and human footprints grow, the number of people the planet can support will diminish.

According to UN research, the world population is expected to increase from around 6.5bn today to 9.1bn in 2050. Almost all of this growth is expected to occur in the less developed regions, whilst the population of the more developed regions will remain mostly unchanged, at 1.2bn.

All of this new demand will have to be supplied with “stuff”. That means food, materials and energy. Demand is soaring for all finite resource and that’s why the commodities supercycle will run for years.

Commodities are sliding at the moment as the rising US dollar takes centre stage. I do not expect that this will continue for long. The long-term argument for investing in commodities is still intact.

As the dollar rises buying opportunities will be created all across the sector… discover what I think the pick of the bunch are right now…

Regards,

Garry White
Editor
Smart Commodities UK

Source: Malthusian Catastrophe Coming Soon

Rising food prices are prompting second thoughts about corn-based ethanol — even from the candidate representing the home state of Archer Daniels Midland:

Democrat Barack Obama said Sunday the federal government might need to rethink its support for corn ethanol because of rising food prices, a stance similar to Republican John McCain’s but at odds with farm states considered important to the November election.

“What I’ve said is my top priority is making sure people are able to get enough to eat. If it turns out we need to make changes in our ethanol policy to help people get something to eat, that has got to be the step we take,”said Obama, D-Ill., on NBC’s “Meet the Press”.

Sen. Hillary Rodham Clinton, D-N.Y., speaking on ABC’s “This Week,” agreed the issue needs closer review.

“What we need to do is accelerate the research into farm waste and into other cellulosic plant materials…”

Kevin Kerr of Resource Trader Alert figures the political tide will turn decisively against corn-based ethanol by next year, with the departed George W. Bush taking the rap for the food fallout.

Still, if the ethanol lobby is destined to lose its sway, the sugar lobby is another matter.
The ethanol giants of southeastern Brazil have transformed how 185 million residents of this South American nation power their cars and trucks. Now, they say they’re ready to start the same ethanol revolution in the rest of the world, if only the world will let them.

That, however, is where Brazil’s ethanol leaders are hitting problems. They already churn out what many consider to be the world’s cheapest and most efficient mass-produced biofuel and say they can export billions of gallons more.

Yet the rest of the world doesn’t seem to want what the Brazilians have. In the United States, a 54 cent-per-gallon tax blocks most Brazilian ethanol from reaching U.S. consumers.

And that’s a function of U.S. sugar growers who also manage to keep much imported sugar from reaching U.S. shores — forcing Americans to pay at least twice as much for sugar as the rest of the world (and wrecking the ecology of the Everglades, to boot).