When it comes right down to it, in the natural resources game exploration is exploration. Sometimes an explorer hits it big, other times he tastes dust. From an investor’s point of view, when to make an investment in a natural resources company is the key.

When investing in China, one only needs to understand a few key elements to succeed. The primary element is business fundamentals; the next is the use of political party power. Put the two together and an investor will soon understand that the entire concept of the Chinese transformation to a semi-capitalistic system rests in the retention of power.

In the last several decades, the world has been introduced to several basic technology advances. These advances were the very minimum advances needed to spawn entirely new markets. They were also based on fairly simple premises; premises that had been locked away waiting to be found, understood and utilized.

As the big dominos of $125 oil, $4 copper, $6 corn, and $1,000 gold fall onto the market, raw-material producers enjoy record cash flows. The next domino is all the cash finding its way to companies that supply equipment, services, and infrastructure to those producers.

Commodities across the board- hard, soft, and tender- have all been obliterated in just a day and a half as rumors go around that hedge funds who were leveraged up trading commodities have to unwind that leverage, causing a run on commodity profits like a run on Bear Stearns last week. Others are pointing to the strong (i.e.

Copper finally breaking out of this 2 year consolidation range that I noted in my last post. Today copper finally broke through that $3.75-$3.80 top it’s been hitting and tapping $3.86 as I write. Folks are saying the commodities run, thus copper included I presume, is a bet on the dollar falling further on the next Fed rate cut.