President Bush Launches New Ethanol Boom

JUPITER, FL (PRWeb) March 7, 2007 -- "In just three days, Air Force One will touch down at Brasilia's Juscelino Kubitschek airport, President Bush will sign a land-breaking ethanol deal with President Lula, and the ethanol profit explosion will be off the launch pad," says Martin Weiss, Ph.D.

The advantages of ethanol are overwhelming. Unlike crude oil, the supply of ethanol is renewable and is not depleted. And unlike gasoline, the refining and consumption of the fuel can be relatively clean. Long term, ethanol is a partial answer to global warming and could be a very substantial answer to America's over-reliance on supply chains from the Middle East and Persian Gulf. Shorter term, the U.S.-Brazil ethanol alliance can even help reduce the growing influence of Hugo Chavez, the president of oil-rich Venezuela.

At the turn of the new millennium, two things happened: The U.S. government and industry began to push ethanol more forcefully. And Brazil, still the world's leading producer despite the earlier decline, took off. Result: Worldwide ethanol production has nearly doubled in five years; the surge in volume has triggered the development of new, more efficient technologies; and a new mega-industry has been born.

Right now, the only country with cars running on pure ethanol is Brazil. But a mix of ethanol and gasoline is used in the U.S., the European Union, Mexico, India, Argentina, Columbia and, now, Japan.

Investors are starting to pile in. Overall, investments in Brazil's ethanol industry are surging. In 2005, they were about $6 billion, including new plants, acquisitions and expansions. In 2006, they've surged to nearly $10 billion. And by 2010, even if there's a recession in the U.S., they should hit at least $15 billion.

The main attraction: Ethanol is transforming Brazil's economy and, propelled by the upcoming deal between the U.S. and Brazil, Brazil's ethanol technology is about to transform the world.

Until recently, Japan was the world's largest sleeping giant with respect to biofuels. Prime Minister Shinzo Abe plans to increase consumption of biofuel for transportation to 3.15 million barrels by the end of 2010. He will boost the ethanol content of regular gasoline to as much as 10 percent. And as a result, Japan's purchases of ethanol will rise to as much as 44 million barrels per year. Nippon Oil and other Japanese refiners have set their goals even higher. They want to replace 20 percent of Japan's gasoline and diesel consumption with biofuels.

Brazil's ethanol opportunity is just one of many. Today Brazil's inflation monster has been tamed. Twelve years ago, Brazil stopped rampant inflation in its tracks by introducing a new currency, the real. Ten years ago, it passed a law preventing federal and local governments from spending beyond their means. And starting four years ago, Brazil's president has transformed the country from one of the world's most fiscally shaky nations into a model for fiscal responsibility.


"Brazil is best known for its production of agricultural commodities -- first coffee, then sugar, then soybeans, and, now, ethanol. But Brazil is also among the leading exporters of aircraft, mineral ores, metals and steel. And Brazil makes more automobiles than the U.K., Italy, Mexico or India and it is the world's largest maker of cars with flex engines (that can run on either gasoline or ethanol). No investment is without risks, and Brazil certainly comes with its fair share. But after a normal correction, consider some of Brazil's leading companies traded on U.S. exchanges: Embraer (ERJ), Petrobras (PBR), Petrobras (PBR) and Brazil's banks," advises Dr. Weiss.

For more information and to read the full article, visit this link:
http://www.moneyandmarkets.com/press.asp?rls_id=711&cat_id=6&

About DR. MARTIN WEISS & MONEY AND MARKETS
Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.

###