I couldn't invent a better investment scenario than the one I am about to share with you.
A monumental shift is about to take place... and it could mean big profits for smart investors. It all has to do with a little-known treaty signed decades ago.
And while Barack Obama's White House wants to renew this treaty, Vladimir Putin and his cronies have stated that it's not going to happen.
Sure, not great for diplomacy... but as an investor, your focus should be on making money.
At the end of the year, a treaty signed back in 1991 between the United States and Russia will expire.
Few investors realize it, but -- thanks to this treaty -- uranium from old Russian nuclear warheads has been used to generate about 10% of our nation's total electricity -- more than solar, wind and hydroelectric combined.
About 31 million Americans rely on electricity generated by this Russian uranium, which fuels U.S. nuclear plants.
What does this mean for investors today? Simply put, before this uranium supply is disrupted, the price of uranium mining stocks could rise sharply.
Many of you may think uranium and nuclear energy are on the way out, especially after the catastrophic tsunami in Japan in 2011, which led to the ongoing Fukushima disaster. But I am here to tell you, nuclear power is still a growth industry.
Since the earthquake and tsunami in Japan, it's true that country has lost its appetite for nuclear power. But many other nations don't have that option. Nuclear power is still the best bet for cash-strapped emerging economies around the globe, which means the obituary that was written for nuclear power is premature.
In fact, only 10 of the world's 445 reactors stopped operating after the accident. Meanwhile, more than 60 new ones are under construction in 13 different countries... and 370 more are in the planning stage.
China, for example, has plans to build dozens of reactors in coming years, which is why that country is now lining up long-term uranium supply agreements.
It's not just China, either. India has tripled electricity generation since 1990, but that's not enough to meet booming demand. Moreover, oil imports are leading to chronic trade imbalances, a trend that will only worsen as oil prices rise. So India's leaders have committed to giving nuclear energy 25% of the nation's power generating capacity, up from 2.5% today.
To get there, India's uranium appetite is forecast to spike tenfold over the next decade.
Problem is there's not enough to go around... The world's 435 active reactors burned through about 180 million pounds of uranium last year. But miners could only produce around 140 million pounds.
And that's where the 1991 treaty with Russia comes in to play.
That 40 million-pound shortfall has been made up by salvaging uranium from other sources -- like recycled Russian warheads. When that extra supply dries up, we could see uranium prices soar.
That's why you need to be focused on uranium right now. From exchange-traded funds (ETFs) like Global X Uranium ETF (NSYE: URA) to a range of small international uranium mining firms... there are myriad ways to profit from the looming supply/demand imbalance.
But why not go with the best?
Cameco (NYSE: CCJ), the world's second-largest uranium producer, is your best bet to profit.
The company owns a high-grade mother lode that boasts the richest uranium ore body on the planet -- with concentrations 100 times stronger than average. Extraction costs are so low it could turn a profit even if prices drop by half.
This firm produced almost 20% of the world's uranium mined last year. What's more, it's sitting on 65% of the world's known uranium supply.
In truth, it's the only uranium miner in the world that has a chance of ramping up production fast enough to satisfy the coming wave of demand.
But despite the bright long-term picture, this is a stock that has simply slipped off of most investors' radars.
Shares stood above $40 in early 2011 but now trade for half as much. The key catalyst to get this stock moving back northward: firming uranium prices. As the Russian supply agreement winds down, and as China and India cement their nuclear power plans, look for the commodity -- and this stock -- to pivot right back on to investors' radars.