Porter Stansberry vision of America

[platoonDaddy]

After olives and time to reflect, here are my thoughts:

Most of what he is discussing is already well known. Ultimately he is correct in that we are heading for a massive fiscal and currency crisis. Everyone should be invested in Gold and commodities and foreign stock. A lot of people got the 2008 real estate crash correct. They all seem to speak with one voice that there will be even a greater crisis and crash. I do not think this guy is correct that it is going to happen this year. It will happen sometime this decade by 2020. I know the stuff about China Russia Japan and France. I did not know they were conspiring to dump the dollar now. They just know that the train wreck is going to happen and they are taking some actions now. China and Russia trade oil in their own currency as a result of the meeting. I have heard about this basket of currency proposal. It is bullshit and will not work. All fiat currencies have the same problem. They will need a currency based on Gold or a basket of commodities. As soon as China stopped buying US notes, they bought Japan’s. Then Japan’s currency appreciated too much and they took action to devalue their own currency. Yes the dollar is going to collapse, but so are the Euro and all other currencies. When it hits the fan in the US it will be a global crisis not just a US crisis. That is why I don’t agree with moving money outside US. When banks collapse in US they will also collapse in foreign countries. So try and get money out of a foreign bank that is collapsing. If they give up on the dollar and all banks have no need for them it will be dumping about $ 14 trillion at once. We will be in Zimbabwe heaven.



Here is what I am concerned about this year. You have political risk with the debt ceiling next month. Will the republican put up a fight? They will put on a show but not a fight. If debt ceiling is not raised, we will immediately be bankrupt. We need to raise it so we can get new money from some other suckers so we can pay off the maturing debt. That is why we have been wining an dining India. They will probably take up some of the slack this year. Right now no one is really buying. The fed is buying our new debt with printed money. It is not printed these days, just an electronic debit. This is the crazy nonsense going on. The government is buying its own debt with printed money. The other thing that just happened is the fed changed its accounting rules in the past two weeks. It owns more treasuries than either china or Japan individual. It also owns mortgage back securities. Everyone applauded how the banks paid back TARP. Where did they get the money? The fed bought their junk mortgage back securities at the value the banks said it was worth. Now the fed is suffering loses. So they changed the accounting rule that the losses will go on the US Treasury books not the fed’s book. Some US news outlets did not report it. Reuters did.



Next concern is the states. Yes it will be about 160 billion hitting soon. I think the fed will probably do its trick and buy some municipal bonds on its books as well. Again more printing.



The next risk is June when QE2 expires. Will the fed do QE3? If it does we may have the currency crisis hit then. Or it may be India comes to the rescue. If the fed does not, interest rates will have to sky rocket to get countries to buy our debt. Because we mostly have short term debt, we could end up with a trillion hit to the budget just to pay interest. Bond market will also bust. Also, Gold will tank. Once interest rates exceed the real rate of inflation, gold will tank at least in the short run.



Gold and silver are still the place to be, there just may be a good buying opportunity or dip this year. I think the guy is right it will get to 5k an ounce. Just remember, whenever we have a crisis Gold and the dow reach parity. It has happened twice. So Gold $1,300 and dow $12,000 will Gold go to 12,000? Or will it increase and down collapse to around $5,000. Don’t know. I do think there will be dangerous fluctuations in gold this year, because of political risk and possible ending of QE along with interest rate increases. But the trend is there. It is the only way to secure your wealth. Since the end of last year I have lightened up on the gold ETFs and spreading more into oil, fertilizer companies and gold and silver miner stock. I still keep a good amount in gold ETF and physical gold. If you want a good cash and carry place to buy gold or silver bullion check out the Gaithersburg Coin Exchange.



Bottom line gold may have some dips this year, but it will be buying opportunity for you. A lot of countries are buying gold and we may end up going back to currencies back by gold after the dollar is dumped. The good news is the US has the largest stockpile of gold. Other countries that have bought it are China, Russia, India, Iran, and some of the Arab states. The leader of Tunisia that just got thrown out stole 1.5 tons of his country’s 6 tons before he left. He knew how to protect his wealth.



One key factor to watch is the oil factor. If oil gets to $140 a barrel before June, it will be time to get out of stocks including commodity stocks. Whenever it does year over year doubling, the stock market crashes by at least 30% within the next twelve months following the doubling. It is too much of a shock to the world economies. But the stocks will crash for everything including commodities. Just stick with the metals, gold/silver to ride it out.


I am not reviewing my grammar.

[mr_smiles]

watch out they might pitch you some viagra to go with those penny stocks.

I love the fact that he's doom & gloom and wants you to invest in gold & silver - but don't forget those penny stocks.

[platoonDaddy]

watch out they might pitch you some viagra to go with those penny stocks.

I love the fact that he's doom & gloom and wants you to invest in gold & silver - but don't forget those penny stocks.

Let me tell you a thing or two about buying penny stocks: Traders only would look at the mid and large cap companies, whether it be for long term trades or even day trades. But with the emergence of traders penny stock trading, the stock market has changed. Investors would have to have a big time bank account in order to bring in a high income. Mostly because you needed at least a few thousand dollars in order to buy just 100 shares of some mid cap stock. With trading penny stock though, the doors have opened for the working class people.

Penny stocks gives you an advantage that you can’t find in most trading instruments: leverage. With the kind of leverage that penny stocks give a trader, it means that the average Joe (you & I) on the street can play the market. Also, many of them have grown to be extremely successful traders, and it all started with trading these dirt cheap stocks.

People that brush off penny stocks as disposable, forget the fact that many gigantic companies have started off on the bargain bins. Imagine if you were able to buy shares in those companies when they were 15 cents a share? It’s the kind of thing that would not only make you rich, but it also gives you some bragging rights. That’s what buying penny stocks can do.

Now for my watch of the year: Australian rare earth miner. LYSCF (pink sheets). It fluctuates a lot. If it dips down to $1.30 it is a strong buy. I bought it at 90cents and $1.20. China has 98% of the market. When China had the naval incident with Japan last summer they cut off the shipment to Japan in rare earths which are used in electronics and defense equipment. The Japs will probably buy out that Australian company. The US also got concerned and it re-opened up Molycorp MCP. That company is California based. It could not be mined because of environment concerns. The defense department said it will handle the environmental concern. So the US government is insuring it will have a supply for the defense department. Rare earths are not rare materials. It is just their mining causes a lot of environmental pollution.

There is also a rare earth ETF REMX

[Caeser25]

Is there a financial crisis? Yep. Is it/was it bad? Yep. Is it the end? No. The economy is correcting itself and, once the dust settles, those who are hard workers and wise with their money will once again rise to the top.

The thing is, we are not in control . The Fed is.

[platoonDaddy]

Sounds like another nutt trying to make a buck.

One of his points about the Dollar and presto looked what just popped-up:


By Ben Rooney, staff reporterFebruary 10, 2011: 4:37 PM ET

NEW YORK (CNNMoney) -- The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world's reserve currency.

http://money.cnn.com/2011/02/10/mark...llar/index.htm