Help! America Needs Financial Advice!

Question from Reader:

>"Do not trust the socialists in power. Get out of the dollar. Buy commodities (GLD, HUI, DBA, the Euro via Everbank or UDN)."

>Dear Mitchell,

I have been hearing about collapse for over a year now. I am VERY worried. Next year when the commercial "adjustable" mortgages start re-adjusting, many claim we will spiral out of control, and at that point, nothing may be able to stop it......

>I have a bit of money from my Mom.....Lord KNOWS how hard she and Dad worked for all ten of us to have the best they could provide. I have the money in two savings accounts. Should I convert all of it to gold or euros do you think? I do not want to lose what little is left. Our retirement funds were decimated.......and I am STILL out of work with no prospects in sight. I am hoping to start a small community based business with a neighbor....but this has not been the greatest year for me....and things health wise are NOT looking any better.

>I have debated "buying down" our mortgage so that payments on the house would be much lower. We were VERY lucky to get a fixed rate mortgage some years ago at 5.5%. But the payments with taxes are high, and I don't know when I will have an income again......

>I am really worried about the dollar's collapse. I appreciate any advice you may have......GOD Bless you,

Dear Reader: Do not panic. I would advise you not to pay off your house but rather, if necessary, get on the sub-prime bandwagon and borrow up to your eyeballs. In inflation debtors win. People with cash lose, so get rid of it. Get rid of your bank accounts.

I'm sorry that you lost in the market. All investments are risky. I would advise you to purchase a range of the things in the list you clipped: GLD, HUI, DBA, UDN. I would not put all my eggs in one basket.

Some commentators are afraid of bankruptcy of commercial banks. Hence, buying Euros through a CD has that risk. But otherwise, diversifying out of the dollar and possibly shorting the stock market is a good idea.

GLD is a gold ETF and it is taxed as a collectible, at 28% rather than at the lower capital gains rate. Gold stocks, are volatile and risky. They can go up alot more than gold, but they can also be affected by a stock market collapse. I lost money in 08 because of that very problem. The gold stocks can easily go down 70%. Gold is volatile but less so than the stocks.

If you put your money in gold, you need to be able to live with a 40% decline without panicking. IF you put your money into gold stocks, the variability is larger.

There is a stock, SH, which is the short-sale equivalent of the S&P 500. It goes in direct opposite to the S&P 500. You and I wish we had bought that in summer 08. You might consider this:

30% GLD
10% UDN
10% HUI
10% DBA
10% SH
20% SPY
10% SLV

These are:

GLD= gold exchange traded fund;
UDN = dollar short exchange traded fund;
HUI=gold stock index exchange traded fund;
DBA = agricultural commodities excahnge traded fund;
SH = S&P 500 short fund;
SPY = S&P 500 exchange traded fund;
SLV = silver exchange traded fund.

Alternatively, you could try this:

Cash: 50%
GLD: 50%

or

Cash 30%
UDN 20%
Gld 50%

or

GLD 100%

or

SH 90%
GLD 10%

Shorting the market now is of course risky. It could continue to go up because of the monetary infusion last year. But it has had a good run; Americans are heavily in debt; the Chinese are ticked; and the national socialists are in power. I would not be optimistic.

You might also look at international stocks but I would wait. If there is a stock market decline in the near future it will infect the international stocks too.

I am not a prophet and cannot foretell with any certainty what the markets will do. I do think gold is going up and if you put 100% in GLD you would not be crazy in my opinion. If you are bullish and put your money in the S&P 500 you could do well from hereon in, but there is a risk of stock market collapse. I would not be an unrepentant bull at this point.

The reason for a possible market collapse is this. The stock market is going up because of a large infusion of money last year. That can continue for a while. However, it is also inflationary. As inflation starts (dollar declines) the Federal Reserve Bank is subjected to pressure to withdraw some of the dollars. This will cause interest rates to rise. When interest rates rise, the stock market falls.

But let's say the Fed doesn't withdraw the dollars. Then, inflation escalates. Interest rates then will rise because bond investors want higher returns. It seems like there's a good chance for a market decline at some point either way.

It is easy to know what will happen, difficult to know when. The rising SPY could continue for another year. The stock market could double before the collapse. No one could know this. Unless you had inside information about the banking world last year, it would have been difficult to predict that the collapse of their balance sheets would have occurred.

So I don't know what to tell you. In an inflation, borrowers benefit. The St. Louis Fed tracks money statistics, and they are scary. I cannot say for certainty that the gold market will go up.

If you want to take a risk, buy gold stocks. Check out the Kitco site each week. No one knows for sure what will happen, least of all me.

Where I am heading right now, but I'm taking my time, changing a little each week:

SPY 10%
GLD 50%
HUI 10%
SH 5%
SLV 5%
Euros CD 20%

Mensa Expert Calls Global Warming "Junk Science"; Dr. Tim Ball Exposes Academic Fraud in the Global Warming Community

The leading advocate of global warming and unquestionably the next recipient of the Nobel Peace Prize, Mad Magazine's Alfred E. Neuman has better scientific credentials than university advocates of global warming.

In January of this year I blogged about climate change. It seemed evident that those arguing for climate change were not functioning as scientists because they had not established criteria for the rejection or falsification of their claims.

Now it turns out that Al Gore received the Nobel Peace Prize for repeating the claims of frauds. This should put the credibility of the Norwegians and their preposterous "Peace Prize" to bed. Giving it to Barak Obama added concrete shoes to the dead victim of the Swedes' and Norwegians' politicized institution. Mad Magazine's Alfred E. Neuman will probabaly get it next year. His scientific credentials are better than those of Benjamin Santer, Jonathan Overpeck, Ken Briffa, Tom Wigley, Kevin Trenberth, Michael Mann, and Phil Jones.

First:

>A speaker for Mensa, the high-IQ-society, has called "global warming" "junk science" (h/t Jim Crum):

Sam’s Summary on the issue posted May 4th 2007

"However weak the argument for global warming, it does not diminish the need for intelligent protection of the environment. There are many things we can do to improve the environment without resorting to junk science. In the end I think the global warming hoax will hurt legitimate environmental causes."


Second

Jim also forwarded this article by Timothy Ball, adding that global warming is not a hoax, but a fraud. I added the bold.

>Hacked files of the Climatic Research Unit, Global Warming a deliberate fraud
The Death Blow to Climate Science
By Dr. Tim Ball

>Saturday, November 21, 2009

>Global Warming is often called a hoax. I disagree because a hoax has a humorous intent to puncture pomposity. In science, such as with the Piltdown Man hoax, it was done to expose those with fervent but blind belief. The argument that global warming is due to humans, known as the anthropogenic global warming theory (AGW) is a deliberate fraud. I can now make that statement without fear of contradiction because of a remarkable hacking of files that provided not just a smoking gun, but an entire battery of machine guns.

>Someone hacked in to the files of the Climatic Research Unit (CRU) based at the University of East Anglia. A very large file (61 mb) was downloaded and posted to the web. Phil Jones Director of the CRU has acknowledged the files are theirs. They contain papers, documents letters and emails. The latter are the most damaging and contain blunt information about the degree of manipulation of climate science in general and the Intergovernmental Panel on Climate Change in particular.

>Climate science hijacked and corrupted by this small group of scientists

>Dominant names involved are ones I have followed throughout my career including, Phil Jones, Benjamin Santer, Michael Mann, Kevin Trenberth, Jonathan Overpeck, Ken Briffa and Tom Wigley. I have watched climate science hijacked and corrupted by this small group of scientists. This small, elite, community was named by Professor Wegman in his report to the National Academy of Science (NAS).

>I had the pleasure of meeting the founder of CRU Professor Hubert Lamb, considered the Father of Modern Climatology, on a couple of occasions. He also peer reviewed one of my early publications. I know he would be mortified with what was disclosed in the last couple of days.

>Jones claims the files were obtained illegally as if that absolves the content. It doesn’t and it is enough to destroy all their careers. Jones gave a foretaste of his behavior in 2005. Warwick Hughes asked for the data and method he used for his claim of a 0.6°C temperature rise since the end of the nineteenth century. Jones responded, “We have 25 years or so invested in the work. Why should I make the data available to you when your aim is to try and find something wrong with it?” He has stonewalled ever since. The main reason was because it was used as a key argument in the Intergovernmental Panel on Climate Change (IPCC) Reports to convince the world humans caused rapid warming in the 20th century. The emails obtained are a frightening record of arrogance, and deception far beyond his 2005 effort.

>Another glimpse into what the files and emails reveal was the report by Professor Deming. He wrote, “ With publication of an article in Science (in 1995) I gained sufficient credibility in the community of scientists working on climate change. They thought I was one of them someone who would pervert science in the service of social and political causes. So one of them let his guard down. A major person working in the area of climate change and global warming sent me an astonishing email that said. "We must get rid of the Medieval Warm Period.” The person in question was Jonathan Overpeck and his even more revealing emails are part of those exposed by the hacker. It is now very clear that Deming’s charge was precise. They have perverted science in the service of social and political causes.

>Professor Wegman showed how this “community of scientists” published together and peer reviewed each other’s work. I was always suspicious about why peer review was such a big deal. Now all my suspicions are confirmed. The emails reveal how they controlled the process, including manipulating some of the major journals like Science and Nature. We know the editor of the Journal of Climate, Andrew Weaver, was one of the “community”. They organized lists of reviewers when required making sure they gave the editor only favorable names. They threatened to isolate and marginalize one editor who they believed was recalcitrant.

>Total Control

>These people controlled the global weather data used by the IPCC...Hadley and CRU and produced the HadCRUT data. They controlled the IPCC, especially crucial chapters and especially preparation of the Summary for PolicyMakers (SPM). Stephen Schneider was a prime mover there from the earliest reports to the most influential in 2001. They also had a left wing conduit to the New York Times. The emails between Andy Revkin and the community are very revealing and must place his journalistic integrity in serious jeopardy. Of course the IPCC Reports and especially the SPM Reports are the basis for Kyoto and the Copenhagen Accord, but now we know they are based on completely falsified and manipulated data and science. It is no longer a suspicion. Surely this is the death knell for the CRU, the IPCC, Kyoto and Copenhagen and the Carbon Credits shell game.

>CO2 never was a problem and all the machinations and deceptions exposed by these files prove that it was the greatest deception in history, but nobody is laughing. It is a very sad day for science and especially my chosen area of climate science. As I expected, now it is all exposed I find there is no pleasure in “I told you so.” ( emphasis added )

NRA Files Brief in McDonald v. City of Chicago

I just received the following e-mail from the National Rifle Association. The NRA "asks the US to apply the Second Amendment to state and local governments". There is a natural right to bear arms. The Second Amendment not only guarantees the right but establishes a responsibility of all Americans to bear arms in order to secure a free state. The Second Amendment says:

"A well regulated militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed."

The people have the right to bear arms, but they also have an obligation to participate in a well regulated militia in order to do the necessary work of keeping the state free. The people can only do this by owning a gun capable of resisting tyranny by the state and federal governments. All Americans ought to own weapons capable of resisting military attack.

I disagree with the NRA that the Constitution ought to be applied to the states. I understand that they are focusing on the right to bear arms, and God bless them. But centralization and the federal government's threat to state sovereignty equals the government's threat to eliminate citizens' freedom and their ability to resist the federal government's authoritarian state violence. Both federalism and the right to bear arms are important.

>On November 16, the NRA filed its brief with the U.S. Supreme Court as Respondent in Support of Petitioner in McDonald v. City of Chicago. The NRA brief asks the U.S. Supreme Court to hold that the Second Amendment applies to state and local governments through the Fourteenth Amendment.

>The McDonald case is one of several that were filed immediately after last year's decision in District of Columbia v. Heller, in which the Court upheld the Second Amendment as an individual right and struck down Washington, D.C.'s ban on handgun possession, as well as the capital city's ban on keeping loaded, operable firearms for self-defense in the home.

>The follow-up cases were filed by NRA and other organizations against Chicago and several of its suburbs. Each of these suits was aimed at the same goal: establishing that the Second Amendment applies to state and local governments as well as the federal government.

Michael Voris: Obama's Anti-Catholic Extremism

H/t Contrairimairi.