Happy 4th of July!
I'm going to start off by asking you – if you have a chance, and want to know a little bit more about the July 4th Holiday, the meaning of the Start Spangled Banner and how it came to be – please feel free to watch a 10 minute video that will change the way you think about our national anthem forever - at:
On the day that we broke from Britain – a very famous European banker named Rothschild said: "I care not who runs the country, if I control the money". In so many Instances men like Ben Franklin, George Washington, and Hamilton made comments about how they had to keep the viper bankers out of Government or they'd ruin America – yet despite their best laid plans, alas it was ultimately the bankers that did take over. In 1913, the Federal Reserve was born in the US. No longer would the Treasury print the money and keep an eye on the supply. No longer would Americans run their own Treasury. No, from then on it was a cabal of private bankers that would do that for us. Then, in the 30's when they confiscated everyone's gold, it was a done deal - the bankers had absolute and complete control over our money. Today: taxes are killing us, the money supply is so corrupt that inflation is rampant, and the Bankers have become (once again) “too big to fail” and they run the Country. Did you know that at the signing of the Declaration of Independence the taxes levied on the public ran around 3 - 5%?
Recently I’ve gotten a ton of e-mail surrounding Gold being at 1485 and Silver at 34 – and, do I consider that a buying opportunity. Well, never in recorded history has a Country or Government solved it's debt problems by issuing more debt. In this modern era, every country on earth is issuing bogus dollars in order to combat the ills of borrowing too much in the past. This will not stop. Here are some interesting tidbits:
- The Bank of Moscow joins the bank bailout train, getting a $10.6B no-interest loan from Russia's central bank. The Bank of Moscow’s capital is missing and may have been wiped out from fraud. At least we know that fraud isn’t unique to the U.S.
- A famous hedge fund manager John Paulson – recently advised Bank of America to ‘shaft’ and ‘settle’ with mortgage investors. Bank of America settled on Wednesday on an $8.5B toxic mortgage debt – and John Paulson reportedly sold a majority of his $124M share in Bank of America – about 2 months ago! This is a guy who knew most mortgage backed securities were garbage, so he shorted the sector – back in the day. And now pushes bank executives to fight back against investors claiming that the bank was selling them toxic waste – so that he could sell his stock before the bank crashes. Wow!
- Also, sovereign countries have recently declared that they will no longer consider assets that have been rated by Ficht, or Moody's, because they are "fake" ratings.
- Finally the government is going to change how it reports inflation. We told you that this would happen. The government is going to ‘re-arrange’ how the CPI (consumer price index – our consumer measure of inflation) is measured – especially concerning fuel prices – and this is almost criminal. Since people tend to change their driving habits when gasoline goes higher – the U.S. wants to capitalize on that by changing it's reporting. If you drive LESS when gasoline is expensive, they will report that as a FALLING consumer price index. So, if gasoline goes to $5 a gallon and that forces 25% of the people to quit driving completely, the CPI will FALL despite the actual price rising 40%!
I’m firmly convinced that hyperinflation is here – it’s growing – and it’s going to get out of control.
The "true" read on inflation right now is about 10%. You can be sure that within a year it will be 15 - 18 and rising. Based upon numbers like 10 to 18% - that leaves alternative measures of money – such as gold and silver – a very ‘sane’ investment. But in what other areas can you look:
- Real Estate: In some areas of Florida and Las Vegas, houses that were 150K before the bubble, then 500K during the bubble can be had for 129K now.
- Agriculture: Food will continue to be an important part of any world. The amount of people continues to rise, and food is expensive. Unfortunately, food is one of the things people will indeed kill and die for. Anything that helps food grow such as fertilizer, to the seeds and tractors that reap it, has a stable future.
- Energy: The demand for electricity will continue to increase. Producing it, from coal, oil, shale/natural gas, nuclear, is going to continue. Yes alternatives will continue to come on board, but my bet is that 20 years from now we'll still be using coal, oil, natural gas and nuclear to run the grid. Good companies in exploration, drilling, electric production and distribution via the grid rebuild will continue to reward you.
- Finally consider the Hong Kong dollar. Hong Kong isn't the US. It isn't Greece, Spain or Portugal. It's an economically conservative country with surpluses and NO debt. No matter what gets hammered out as the final currency solution to a fiat world, Hong Kong dollars will always hold intrinsic value. I'm not against it at all.
So, gold and silver top the list for me. Then Energy and Agri are next in line. An incredible in Real estate is next, followed by a few good choices in currency.
In the meantime enjoy your July 4th Holiday, and reflect back on what it really means.
Our long term holds still look like: SLV, NG, AAU, DNN, AVL, SLW, SQM and USSIF.
In fact – with Gold being pushed down to the $1,500 level on Friday - the GLD and SLV are long-term buying opportunities.
We did some very short term buying this week:
- We liked CLF at 91.98 and sold at 93.95.
- We like AMSC for being an oversold, beaten down, and noticed "insider buying" speculation. We bought in at 8, and it crosses 9 this week.
- We also CRZO, and off the radar energy play. We were in at 40, and it's 41.75 now.
We take those profits and buy more gold, silver and energy.
Please be safe out there!
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Until next week – be safe.