Subscribe to this blog's feedU, that is. Uranium. According to this article, hedge funds have been buying up uranium.
Cue, of course, jokes from the Wall Street Journal about "a new nuclear arms race". But the story here isn't that, twelve months down the line, Citadel is going to be ending its press releases with the ominous sentence "Our words are backed by NUCLEAR WEAPONS!"
Instead, it's a way of getting in on a market that has been climbing dramatically over the last year or so.
Prices have gone up from under $20 a pound in 2004 to over $110 this month. The reasons are beyond this post - look out for more on the subject in a Risk article next month! - but the basic story is the rapid growth in demand from an expansion in nuclear power generation, set against a more or less flat supply.
Uranium's far from a perfect market, however - it's seriously oligopolistic, with no real futures market yet (though see here).
So how else might you get your share of the (yellow) cake? Molybdenum (vital to the construction of nuclear reactors) might be a decent proxy.
Fortunately, most of the world's uranium is in Canada and Australia - both unlikely to suffer geopolitical upset.
Unfortunately, in the "unaccounted externalities" column, the big swing towards nuclear power may not be such a great idea - this report points out that uranium isn't as clean as you might think, global-warming-wise - mining uranium is a dirty and inefficient business - and while it might be rather better than coal a) it won't be as good as wind or solar and b) at least you can't use coal to make weapons capable of incinerating entire cities.
