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Breakingviews: Deflating strategic reserves

Monday, Sep 30, 2013 - 03:25

Sept. 30 - Reynolds Holding and Robert Cyran discuss the U.S. government's botched sale of helium stockpiles and why socking away valuable resources rarely makes sense.

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Today we have a very uplifting story feeling. The US government started stockpiling the stuff back in 1925. Minnesota. To fill up fleet of zeppelin it's now that -- really work out so now what's trying to get rid of the stuff and wreaking Havoc in the markets and everything else -- -- What's going on here first of all why do we care. About healing healing -- Easton he -- children's balloons but also very important for scientific research like any -- you want it cool something -- well -- you need to use helium select. All the cellphones and -- -- we're -- -- heat liquid it and those MRI districts are totally out of it yet it's incredibly valuable. On the promise that it if the byproduct natural gas and run and if you send me 25 despite the stock pilots and they and they just. Accumulated to. Huge amount of and they decide 1986 get rid of it yet probably as they did it's really stupidly trying to contest. Is that say no don't do anything else that and so that is they got rid of -- are really low price and now they all the feeling that they're getting rid of the stockpiles is about. It's it's roughly a third -- local consumption consumption right. And so that means is -- when you got someone dumping that much -- on the market and generally low price you know no one else wants to produce anymore helium okay I'm in demand is rising so what this means is that. These young shortages you're getting you're starting demand is rising again because there's so much scientific Greece has generally retailers all around the world and in Armenia and in China wants -- England that are yeah itself and for Pittsburgh and the problem was the governments and okay well. The way they dismantle the firms not only get get rid of the stuff at below market prices but Dallas that once you get rid of -- to pay off the debt. We'll stop getting rid of the stuff and so because the prices so low it it. Discouraged anyone from. Building. New alien plants right what that means that he would have had gone in it would have been like this week of October and -- basically yeah you would have shut down all of this government third of the lies lies and affairs -- it disappeared there have been no other replied so so so what are they doing adamantly at a fixed now everything I actually -- we can't do that because that would be big. But -- it's I don't know -- it -- -- that and keep on going in the end. More importantly they're gonna start I'm making is that the price of the healing in the days. Put on the market to more market yet now we hear about stockpiles usually in terms of book. Oil reserves of such what does this say about the bigger picture whether it's a Smart they needed to stockpiled outlets stockpiles is the they've they've got lots of problems. It's we saw that in the we had the -- Maples here heights in Canada recently writer Tom and that was last year yes exit tens of millions of -- here with stolen. Announcing any -- valuable stuff and when there it's there so it's hard to secure there's the other problem is you know when you actually put stuff -- the stockpile for the oil for example -- last President Bush sounds -- I'm putting oil and those -- even though Arnold when I was I suppose it really really high president. Now and so that is best you know so it's not necessarily -- ID even to sort of safer rainy day. -- sort of keep things on the market keep the market priced its line of hand going into pro network as it is really appealing intellectually -- -- ultimate in in practice an intimate court out. Okay we're gonna leave that there that's of interest thing and the big complex story in the meantime stay tuned for all more breaking news tomorrow.

Breakingviews: Deflating strategic reserves

Monday, Sep 30, 2013 - 03:25

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