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Issue for ...
February 15, 2009
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Dear Friend,
As the housing market continues to sink, corporate earnings weaken and
unemployment rises, I fully expect the stock market to capitulate entirely,
dropping as much as another 50% from here, making a bottom target of
3,000-4,000 a reasonable projection for the Dow Jones Industrial Average, a
collapse about equivalent to that of Japan's Nikkei in the early 1990's. Of
course, just as an expiring cardiac patient will appear to leap off the
table when the 'stimulus' paddles are applied, we will almost certainly
experience 20%-25% rallies along the way, each an opportunity to dive in
short once again.
I also expect the Dow and the gold price to meet somewhere along the way,
probably in the vicinity of 3,000-5,000. Now there's the trade of a
generation: short the stock market and buy gold. Two years ago I wrote that
we were entering Kondratiev Winter, when the 'tax and spend' credit excesses
that began with 'conservative' Ronald Reagan would be purged. Basically, the
tanking of the economy is the end of a long 'money from thin air' credit
expansion trade with about a 30-year trailing stop. We are just now getting
stopped out as things reverse and go short. Of course, all of life is a
trade.
With the smoke still billowing from Putin's explosive speech at Davos, it
won't be too much longer before the rest of the world agrees that the dollar
as the sole international reserve currency is not a good idea, and one
nation after another starts dumping greenbacks. To combat this, Helicopter
Ben Bernanke will pull out all the stops on the monetary Wurlitzer and jack
up interest rates in a failed effort to stanch the outflow of foreign money
and attract international capital once again, while simultaneously gunning
the printing presses to the red line. That's when inflation will go 'Warp
10' and everything you buy will cost a great deal more than it does today.
Which is why you should go out and buy it now.
Speaking of which, here is an interesting link for those of you inclined to
avoid being the last person in the preparedness line. Hopefully, it won't
ever be necessary. But, then again, the folks in Iceland didn't think it
would be, either.
http://www.thepowerhour.com/news/items_disappearfirst.htm
A few weeks ago I mentioned that I thought the time had come for everyone to
raise their precious metals hedge reserve to 15%. I think 20% is now the
wiser figure. Here is an excerpt from a memo I wrote to our Executive
Members just last week
"... if you have not already done so, I would suggest raising physical
holdings of precious metals to 20% as a hedge against economic uncertainty,
and holding it in highly graded numismatic coins ONLY.
Think of it this way. We'll start with a hypothetical portfolio of $100,000
to make the math easy. If 20% of your money ($20,000 in numismatic coins)
goes up three fold (to $60,000, with gold at about $3,000 an ounce), and the
other 80% ($80,000) still in paper/electronic holdings goes down by as much
as 50% (to $40,000, with the dollar index collapsing), you still have
$60,000 + $40,000 = the same $100,000 in net buying power.
You are neither poorer nor wealthier for the exercise. You maintain the same
buying power as before, while your neighbors are 50% poorer. And you did it
with only 20% of your stash. And you removed some of your liquid net worth
from the electronic markets where it is available to you in tangible,
physical form."
Again, be sure your holdings are in highly graded numismatic form as I
haven't the slightest doubt that in the end stages of an economic collapse
the government will nationalize precious metals, from ETFs to gold mining
stocks to the coins in your safe deposit box (to which Homeland Security
already has access), and that only numismatics will be spared.
Additionally, I do not believe for a moment, and have not for some time now,
that there is anywhere near enough actual gold being held by ETFs, possibly
none at all. It is very likely all derivatives. Think Enron. If the
following article is accurate, and given current affairs it would fit in
perfectly with schemes already underway, it is all the more imperative to
hold physical gold. If and when these allegations were proven true, gold
would go ballistic overnight.
http://jsmineset.com/index.php/2009/02/12/where-do-all-the-gold-etfs-get-their-bullion-from/
Moving right along with more good news, America’s 500 largest companies may
soon face the choice between paying their employees or funding their pension
plans. My best guess is that they will cut back benefits by 50% or more. At
some point the government will have to cut back on its 'pension' plan, too.
When Social Security, Medicare and Medicaid benefits get slashed, that's
when real civil unrest could begin.
As I have written in the past, a pet will not wander far from its food bowl,
nor will taxpayers from their benefits. Take away the bowl for long enough
and little Fluffy will turn nasty and bite you. Take away (or drastically
slash) Social Security and even blue-haired little old ladies will join up
with La Raza and demand reparations.
As the stock market continues to collapse, we will see a tsunami of
bankruptcies, an increase in violence in the major cities, and homelessness
such as has never been witnessed before, just as state governments go
bankrupt and cannot afford to fund welfare programs for the homeless. All of
this is chronicled at http://financialrealitynews.blogspot.com . Tell your
neighbors who are still getting their 'news' from CIABCNNBCBS to pick a day,
any day, stop by that blog and read the previous 20 posts. That should do
the trick.
Politics being the religion that it is, legions of Obama believers still
cling to the hope that their messiah will somehow 'change' things.
Everything is changing, all right. We are witnessing the dystopian
devolution of America, a process that will eventually lead to
disintegration. The Constitution -- fatally wounded with the passage of the
Income Tax Act of 1913 and the creation of taxation's evil twin, the Federal
Reserve, in that same year (both a necessary prelude to the formal
institutionalization of socialism twenty years later with the passage of the
Social Security Act) -- was shredded as the passage of the USA PATRIOT Act
decimated the Bill of Rights. Everything else is just the political autopsy,
performed in advance.
People don't like it when you say these since emotions run deep. And
patriotism is just an emotion. If it weren't, mothers wouldn't let their
children volunteer to get their limbs blown off saving the world for Big
Oil. No doubt the same words spoken to a Roman citizen of 2,000 years ago
under the reign of Caligula would have generated similar feelings. People
are inclined to suffer oppression and tyranny right up to the moment when it
arrives at their front door. Mel Gibson depicted this well in his movie 'The
Patriot.'
As we discussed this past Wednesday night in reviewing the book
'Extraordinary Popular Delusions And The Madness of Crowds,' people as a
crowd will react to the destruction of their financial world -- a lifelong
trade coming apart -- as will the individual trading alone and watching a
Forex trade (especially an overleveraged one) go against him: fear turns to
panic and judgement flies out the window.
Which is why I believe Gerald Celente of Trends Research was correct in
predicting major social unrest in years to come. His forecast was by the
year 2012, although I think we'll see signs of it sooner than that. Celente
also recently forecast the emergence of South American-style kidnapping here
in the United States as desperation leads to the worst types of violent
crime. This is another reason for everyone to take self-defense seriously.
As has been reported widely on the Internet, the U.S. military is currently
training for crowd control and, where necessary, to put down internal
resistance, as unused military bases are converted into FEMA camps to house
and feed destitute Americans. Think post-Katrina SuperDome on a nationwide
scale. Things could get interesting in this department.
To wit, the day after the plutocratic injection of Barry Soetoro (Google it)
into the White House, alarmed citizens literally emptied America's gun
stores of everything sporting a trigger and a front sight. Wal*Mart reported
that ammunition sales rose 400% within a single week (that should keep the
Chinese busy.) The Pentagon is well aware that there are thousands of
middle-age 'gunnies' trained in 'Nam who can still put the red dot on a
house fly at 100 yards; who don't particularly like Mr. Obama (to put it
mildly) and will not take kindly to being bussed to a 'the government is
here to help you' detention center. Think: little Waco's and Ruby Ridges
springing up everywhere
The elites who inserted B. Hussein Obama into office in spite of his not
being a natural born citizen as required by the Constitution -- as well
understood by the Supreme Court which refuses to act in spite of over twenty
lawsuits already having been filed and summarily denied without explanation --
will see to it that our new Mr. Lincoln carefully supervises the lowering of the
American economy to a level that will allow America to be comfortably merged
into a supranational, one-world jurisdiction with a single, irresistible
government (the Borg, realized.)
Not only will Barry, Nancy and the gang not solve the current economic
crisis (which can only be 'solved' through the natural cleansing process),
every single economic initiative passed by Congress will prolong the crisis.
This is, of course, to be expected since, once a government has stepped
outside of the law, it's only natural function is to interfere, exacerbate,
confound and control.
BREAKING NEWS: The $787 billion stimulus bill passed last night was not read
by a single Congressman, as per the following short clip:
http://www.youtube.com/watch?v=CvnwOjDjnH4
It's interesting to contemplate the state of affairs whereunder your elected
representatives can enact statutes that can compel your performance under
threat of fines and incarceration, yet don't even read the laws they pass.
Of course, this was also true with the USA PATRIOT ACT, as Dr. Ron Paul
pointed out. No Congressman had time to read that one, either. Essentially,
we no longer have representative government. Then what do we call it?
Over the past several months, Merkel of Germany, Brown of the UK,
internationalist-san-pareil Henry Kissinger (indicted by the World Court in
the Hague for war crimes) and other globalists have taken the velvet gloves
off, come out of the closet and called, openly and loudly, for a one world
government.
Paul Warburg, front man for Rothschild banking interests, was the kingpin
who saw to it that central banking was hatched at the 1901 Jekyll Island
conference that led to the creation of the Federal Reserve. His brother,
James Warburg, a member of the Council on Foreign Relations, stated in
testimony before The Senate Foreign Relations Committee on February 17th,
l950, "We shall have world government whether or not you like it, by
conquest or consent." That was 59 years ago. Apparently, things have
progressed too slowly for the likes of octogenarian NWO godfathers like
Bush, Sr. and Hank Kissinger. So now the gloves are coming off.
So what to do? After all, life must go on, and there are many reasons to be
thankful for being alive, in particular, family and loved ones.
1. First and foremost, get out of debt. I can't tell you to run up your
credit cards, stocking up on food and toilet paper, then tell your credit
card companies to go jump in a lake, since that would be enticement to
commit fraud. So I'll be sure not to mention that. I do know that many
Americans who are about to lose their jobs, and knowing that it will soon be
impossible to pay off their remaining mortgages, have already decided not to
waste another payment and are sending the bank the house keys now and
thanking them for the ride. Insiders call this 'jingle mail.'
2. Start networking with like-minded families in your area. Type 'gulching'
into Google and learn about the power of real networking.
3. Move in with one or more other families and be thankful you don't live in
Gaza.
4. When you get there, plant a garden. If you don't have room for one, learn
hydroponic and 'aeroponic' gardening (Google it.)
5. Sell everything that isn't nailed down, that exists only to be dusted, or
that you haven't touched or worn in a year and buy numismatic gold and
silver while there's any left.
6. And, above all, start a journal of your experiences. They may prove
invaluable to your descendants in generations to come (assuming of course,
that they can read) in learning how not to take their eye off the ball and
place blind trust in men with power and guns. Of course, history being what
it is, it will almost certainly need to be repeated.
7. Finally, if you have not yet acquired and refined the skills of trading
and investing, now would be a good time to get started. The Institute is
offering an installment plan on our Forex currency trading course to help as
many people as possible lean how to trade their way out of the Depression.
You can learn about the course at http://www.iohe.org/forex. Plus, I will
shortly be adding Tuesday and Thursday night support calls just for Forex
students. Write to me with your questions.
If you haven't attended a recent Wealth Wednesday, we're having fun
discussing ways to empower and enrich ourselves from the destruction of the
economy. Remember, there are always two sides to every trade. If you'd like
to join us (it's FREE), just write and ask to be added to the notification
list. Be well.
And May The Pip Be With You,
Gordon Philips for
THE INSTITUTE OF HIGHER EARNING
gordon@higherearning.com
.· ´¨¨)) -:¦:-¸.·´ .·´¨¨))
((¸¸.·´ ..·´ When you wish -:¦:- -:¦:-
-:¦:- ((¸¸.·´* upon a pip... -:¦:- -:¦:-
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PUBLISHED BY:
The Institute Of Higher Earning
P.O. Box 113
Milford, NH 03055 USA
800-504-2340
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WHAT IS THE HIGHER EARNING REPORT?
* A highly prestigious Internet newsletter.
* A deeply cathartic literary experience.
* A financial air bag for your portfolio.
* A total waste of innocent electrons.
* A compass for your retirement ark.
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WHY THE INSTITUTE? MAYBE BECAUSE YOU...
* Still work at a J.O.B.? (Just Over Broke.)
* Got drunk and hired a financial planner?
* Aren't getting enough pips? (what's a pip?)
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* Got so much debt you're thinking of selling it on Ebay?
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* Need some solid education and support from some very nice people?
························································
YOUR EDITOR
Gordon Philips, Senior Researcher, Head Trader, Custodian, Home School
Principal, Sibling Rivalry Negotiator, and Complaint Department Manager for
the Institute
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OUR SLOGANS
'Conquering Debt, Mastering Money.'
'So Many Trades, So Little Time.'
'Build Your Own Ark. Quick!'
'What Goes Up...'
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FAVORITE SONGS ABOUT MONEY:
--- Bull Market Music ---
'Million Dollar Girl' -- Eddie Money
'For The Love Of Money' -- The O'Jays
'This Golden Ring' -- Gary Lewis and the Playboys
--- Bear Market Music ---
'Ain't Too Proud To Beg' -- The Temptations
'Been Down For So Long It's Looking Like Up To Me Now' -- Junior Johnson
'Brother, Can You Spare A Dime?' -- Various Artists
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JOIN US THIS 'WEALTH WEDNESDAY'... IT'S FREE!
Join Gordon this Wednesday night at 8:00PM U.S. Eastern time (5:00PM on the
left coast) and get answers to your questions about Forex trading, debt
elimination, saving and investing, fiat money, market sentiment, precious
metals and how to protect your family in the event of a cataclysmic meltdown
of Obamanation.
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DISCLAIMER
Information from The Institute Of Higher Earning is provided for educational
and informational purposes only. No one on our utterly terrific staff is
licensed to utter personalized financial advice. Before trading or investing
we suggest that you seek the counsel of a registered financial advisor who
is thoroughly versed in the equities and currency markets and can
demonstrate long term, consistent success in both. Warning: this may be a
protracted search. Our work is based on what we've learned as financial
journalists and graduates Minima Cum Laude from The School Of Hard Knocks.
It may contain errors and you shouldn't make any investment decision based
solely on what you read here (watch MSNBC first ;-.) There is risk inherent
in all forms of trading and investing, from baseball cards to church bingo,
so don't trade or invest with money that you cannot afford to watch go up in
smoke and still sleep well. If in doubt, consult spouse.
Thank you. |
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