How to Protect Yourself from the End of America

The latest Daily Wealth newletter is all doom and gloom.  Here's a quote from Porter Stansberry that summs up their worries:

This is how America ends – with the lie that we all can live at the expense of our neighbor and borrow endlessly. Rather than simply face a downturn in the economy, we plan to borrow trillions of dollars our children and grandchildren will be forced to repay. Rather than let all those people and institutions that took on too much debt (like GM) be liquidated and restructured, we plan to risk a hyperinflation. Rather than insist homeowners who can't afford their mortgages lose their homes, we would jeopardize the credit rating of the country.

It is all madness. None of the government's bailout plans will solve any of the problems. The government can only shift the burden of the failures. Instead of bondholders and shareholders being wiped out, taxpayers are put on the hook. These actions will temporarily resuscitate the economy – but cause a permanent decline in the value of the dollar.

I'm sure I've posted about this theory before.  Anyway, he does have a few idea's of hour to prepare. Unfortunatly many of us, such as myself, don't even have the money to take up his suggestions.  Oh well, it'll be alright, 'cause I have theory.

It may very well be that the United States of America as we know it will come to an end.  However, I think it'll be alright.  There is still war out there, but I really think the human family has evolved so very much, that by the time the U.S. starts to crumble, it won't matter.  

Don't get me wrong, I love my country dearly, and I would ber very sad to see it's end.  However, more and more people are sayign "world peace," more and more are saying "live for the sake of others."  I think that while President Obama's stratagy of saving our economy now will distroy it in the future - he helping to push for a culture of service in this country will make it alright.  Nobody will have any money, but everyone will be helping eahcother out for free anyway!  I don't mean to say we'll have communism nessiserily.  Instead, we'll have Libertarian socialism - that is, everyone living for the sake of the whole, and soing so in free will, without any forceful government persuasion.

We will have the same capitalist society that we love, accept that the culture of service will compensate for the fast that nobody has anything.  In the past, if nobody has any money, either everyone starves because everyone is looking out for themselves, a totalitarian regime comes about and forces change, or both.  However, and the global culture continues to be pushed towards a "let's all hold hands" kind of world, people won't suffer as much as they did in past depressions, nor will we cry of for some Hitlar, Stalin, or Kim-Il-Sung.

From bergen, Hordaland, Norge,

Christopher D. Osborn

Why Gold Could Fall 50% from its Highs

Below is a messege fro Dr. Steve Sjuggerud from DailyWealth.  It has an alarming title, especially considering how much he and his team have been recomending gold lately.  However, this isn't a worry for long-term investors. He says at the end of the article that DailyWealth is still in a long-run bull market.  They're just warning people not to expect short-term gains and thereby recomends against investing in gold for the short term.

This really isn't anything new for them, actually, which makes me feel really good about them.  DailyWealth has Always generaly recomended against short-term investing, and for long-temr investing.  They also always recomend a varied investment portfolio.  Don't just invest in gold, invest in other things like options on the Japanies Yen Trust (FXY), they say.

Anyway, have a good read.

From Bergen, Hordaland, Norge,

Christopher D. Osborn 

Why Gold Could Fall 50% from 
its Highs
By Dr. Steve Sjuggerud
January 13, 2008

Who's bearish on gold?

I dare you... Name one analyst who thinks gold could crash now.

What, you don't know any? That's what scares me... Everyone I know is bullish on gold... Everyone but my friend Jack Crooks.

I've mentioned Jack once or twice in DailyWealth as a true, successful contrarian. Over the summer, Jack was the only man I knew who was bullish on the U.S. dollar. He essentially said everything keeps getting worse, but the dollar has stopped going down, so it's bottomed. He nailed it. The Dollar Index soared from 72 when he wrote that to a peak around 88 a few months later.

He's at it again, this time on gold... with similar reasoning. Yesterday, he pointed out several circumstances that should cause gold to go up... but haven't lately:

How much more stimulus is possible to pump out and cheapen paper currency the world over? How much closer can we get to all out war in the Middle East? How much more dangerous can the Pakistan-India on-going quagmire become?

This is nasty stuff...Yet the supposed supreme safe haven – gold – continues to fade [fall] on all this stuff.

Jack says gold investors have gotten the exact circumstances they want for higher gold prices... and yet gold keeps falling. This is not a good sign.

Here's another ominous sign: Gold is breaking down.

In worse news for gold prices, gold broke below its key long-term moving averages. Jack points out that the recent highs have been lower and lower – another bad sign.

You may not put much faith in technical indicators like these. But some actually work...

I ran the numbers today. I use a 45-week moving average as a signal of general uptrends or downtrends (above the moving-average line is a bull market, below is a bear market).

Since late 1970, gold has risen at about 6% a year, compounded. But amazingly, when the price of gold is above its moving average, it compounds at a double-digit annualized rate. And when it is below the moving average, you lose money. That is a huge difference.

We at DailyWealth do believe gold is in a long-run bull market. But the near term could be difficult...

Gold jumped from $35 to $850 from January 1970 to January 1980. That sounds like a rip-roaring bear market. But did you know, from March 1974 to September 1975, the price of gold fell by half? We could see that again. We're already down about 20% from the highs... and nobody is even particularly worried yet.

Look, my friend Jack Crooks is good at what he does. Between Jack and the current downtrend, I wouldn't make big bets buying gold right at this moment.

In short... own gold for the long run. But don't take big risks speculating on it in the short run – it could cost you.

Good investing,

Steve

P.S. I've known Jack since we worked 15 feet away from each other at a firm specializing in international investing. That was more than a decade ago. I can tell you Jack is a smart, uncompromising currency trader who knows his financial history and knows the markets. You can click here to learn more about his work.

Editor's note: Dr. Steve Sjuggerud writes True Wealth, one of the top five financial newsletters in the world. Steve's investment philosophy is simple: Buy assets of great value when no one else wants them, and sell them when others will pay any price. 

Recently, Steve uncovered a "glitch" in his favorite gold investment¦ This anomaly allows investors to make up to 665% after gold prices rise. Click here to learn more.

Gold Still A Good Buy

Here's an article from an investment email list I subscribe to about how Gold may still be a very good investment.

Where to Start When You Want to Buy Gold
By Dr. Steve Sjuggerud

"You think people were surprised when gold hit $1,000 an ounce," a
legendary investor told me this week. "Wait 'til they see $5,000."

As we talked, this investor could hardly hold back his enthusiasm. You
see, he has spent his career finding crises, then buying assets at the height of
panic.

Normally, he does this far away from Wall Street in emerging markets.
And he's done it many times in his career. But now, for the first time, he's
thinking about coming to the States.

Most Americans wonder what will happen next. They have never seen anything
like this before. But my friend has seen it many times. He explained it
simply:

"In crisis, banks want safety," he told me. "So they get rid of
potentially nonperforming assets at any price. They don't care what they get, or
how much they lose on a property, for example... They just want to get it off
their books."

Having seen this many times in emerging markets, my friend is convinced the
Great Inflation is coming to the States in the next few years. The last time we
saw double-digit inflation was in 1981. It could get even worse this time
around. "It's already happening," he says, pointing to the U.S. money supply
figures, which have shot up over the last few months. "It will just take time to
ignite."

My friend is buying gold. One of his holdings is 100-year-old gold
coins. He has many millions of dollars worth of them. He has personally
experienced bank closures and currency revaluations, which have nearly
bankrupted some of his businesses.

So he owns physical gold. This is not like money in the bank. The
government can easily seize your bank account... or devalue your currency... or
confiscate your retirement account (which just happened in Argentina). It's much
more difficult for a government to mess with your physical gold – if it can even
find it.

For years now, I have been recommending 100-year-old gold coins. The
price of gold has more than doubled since I started recommending them. And so
have the prices of these gold coins.
It's not too late to buy. Relative to
their meltdown values, rare coins are cheap. But I don't think that's going to
be true for long...

People are finally catching on to the idea of holding physical gold.
Plain gold bars and "bullion" gold coins (coins that don't have value as a
collector's item), which should sell close to melt value, are in short supply.
You either won't be able to buy them at all... or you'll have to pay an
outrageous price for delivery at some undefined date.

Gold dealer Kitco has stopped selling 18 types of silver and gold bullion
coins and bars. The company's not even sure how long it's going to take to fill
orders that are already in. And bullion gold, which is only worth its melt
value, is now selling at premiums not seen since Y2K caused a market
panic.

So I much prefer the rare gold coins... the 100-year-old ones in near mint
condition. With bullion, you only make money if gold goes up. But with rare
gold, you can make money two ways... if gold goes up and if the "collector's
premium" over melt value goes up.

I've heard from a lot of readers who don't know how to start investing
in gold coins. Professional Coin Grading
Service has a website with lots of information, including a link to www.coinfacts.com, which is a good starting
point. If you want a book, Coin
Collecting for Dummies is actually a good starting place, even if you don't
think of yourself as a collector.

I am comfortable pointing you in the direction of a few honest dealers, who
have taken good care of my subscribers for many years. Van Simmons, in
particular, is a mentor of mine (www.davidhall.com). Dana Samuelson and his
team (www.amergold.com) have done my
readers right for years as well, as have Michael, Glenn, and Rich at Asset
Strategies (www.assetstrategies.com).

The Great Inflation is coming, my friend says. And he knows better than
anyone. He believes gold could hit $5,000. So as a part of his portfolio of
assets, he owns millions of dollars of 100-year-old gold coins.

"People told me I was crazy when I was buying them," he told me. "But
the gold was mine, outside of any bank. And now I've made triple-digit
profits."
My friend believes this is just the beginning for gold. Do you have
some gold, or gold coins, in your portfolio? Maybe you should...

Good investing,

Steve

As for my own recomendations for where to buy Gold, I'm not expet at all, but I like the Liberty Dollar as it can actually be used in some stores across the United States, including one place on Martha's Vineyard in Vineyard Haven, if I remember correctly.

Anyway, as Steve said, good investing.

Christopher D. Osborn
Posted from Bergen, Norge