We were stunned when the top hedge-fund managers in the world echoed our worries about the U.S. government's loose fiscal policy leading the world into ruin. We were even more surprised when they started buying gold (a trade we recommended in 2002 around $300 an ounce). After all, we're lowly newsletter publishers known for our bold predictions and a general disdain for government. These were guys like John Paulson, George Soros, and David Einhorn... the largest and smartest investors in the world... leaders of the global economy.
We can get away with slamming the government because we're publishers. It's freedom of speech. The Securities and Exchange Commission (SEC) and the Federal Reserve don't regulate us. But they regulate hedge funds. And they can make things difficult for dissenters. Nonetheless, we were thrilled when the world's best investors supported our investment thesis...
All our readers are already invested in gold, so the added boost is great. But more important, the world needs to understand the deterioration of fiat currency and the merit of gold and silver. While we have a loyal subscriber base with whom we share ideas, guys like Soros and Paulson can send a message to a much larger audience.
And the idea caught on... Over the past three years, mainstream financial institutions have been piling into gold (via bullion, ETFs, and mining stocks). Imagine if, five years ago, David Einhorn, manager of Greenlight Capital, would have told his investors the dollar would fail and he was using their money to buy gold bars, stored under the Fed in New York. They would have laughed in his face... then withdrawn their funds. Now, he's lauded as a genius. And more and more big investors are buying gold and silver... Dan Loeb of Third Point Capital, David Tepper of Appaloosa, Eric Mindich of Eton Park.
It's been a great trade...
The only downside to this antigovernment, pro-gold talk is it's more difficult for us to find our next big prediction. Just look at Steve Schwarzman, head of private equity behemoth Blackstone. He's a multibillionaire... probably the leading private-equity executive of our time. And he's leaving the U.S. for Paris. Here's why...
"The United States is going through a difficult time politically, and having other types of issues that everybody in this group knows about," Schwarzman said at a recent Goldman Sachs conference. "The political calculus of the last two years hasn't resulted in a winning calculus."
He also apologized that Blackstone's president, Hamilton James, couldn't make it... "He's in Brazil," Schwarzman said, "which should tell you a little bit about the way the world is headed."
When Wall Street executives start leaving the U.S., you know it's time to worry. For years, Porter has been researching the collapse of the U.S. currency and pointing out the most egregious problems along the way (General Motors, Fannie Mae, Freddie Mac, etc.). And he's gathered all that information into a new presentation called The End of America.
We truly believe the economy is collapsing. We simply can't sustain the huge debts our government has and – thanks to quantitative easing – is still creating. Protecting your wealth from this looming disaster will likely be the most important investment decision you ever make. We can't stress strongly enough how serious this situation is. To view Porter's The End of America, and learn how to save yourself from the collapse of the U.S. dollar, click here...
Finally, I hope you won't mind a brief personal note...
Porter lied to us.
A group of us got together last night to celebrate a wonderful year of business. Whenever we attend a group dinner, we play the "wine game." We ask the waiters to decant three bottles of wine – one inexpensive, one in the middle, and one expensive – and serve them to us blind. Then, we try to guess the varietal and price of each. Last night, we were stumped. The wines were delicious. They were bold and fruity... Definitely new world. Eifrig and I thought we were drinking a flight of California cabernets.
Porter disagreed. He asserted we were drinking French merlots from Saint-Emilion. Then, he pegged the vintages as 2003, 2001, and 1999. If you're not a wine drinker, note that guessing the type of grape and region is difficult. Adding the correct vintage on top of that is almost impossible.
Then, Porter bet me $1,000 he was right. I tried to take the bet, but he backed out. Thankfully...
We asked the waitress to unveil our grapes... The first bottle was a 2003 Pavie... a French merlot from Saint-Emilion. Doc and I were floored. Then, she unveiled the next two – a 2001 Chateau Peby Faugeref and a 1999 La Mondotte... Again, both merlots from Saint-Emilion.
Doc and I couldn't believe it. We applauded Porter for his feat. Then, he told us the truth... He bumped into Tony Foreman, the owner of the restaurant (and the gentleman who happened to choose our wines) in the bathroom. Tony let a few details slip.
All was well in the end. We followed up the blind taste with the best bottle of wine I've ever tasted... A 2001 Petrus. Tom Dyson, who's not an appreciator of wine, wasn't allowed to have any.
And we ended the dinner with a delicious chocolate dessert and a bottle of 1997 Fontodi Vin Santo (my favorite desert wine in the world). What a way to end the year...
New highs: Altius Minerals (ALS.TO), Denison Mines (DNN), First Trust Dow Jones Select MicroCap (FDM), Imperial Metals (III.TO), PowerShares Dynamic Biotech (PBE), CARBO Ceramics (CRR), HMS Holdings (HMSY), BLADEX (BLX), ConocoPhillips (COP), Vanguard Natural Resources (VNR), McDonald's (MCD), Alexander & Baldwin (ALEX).
The mailbag is still full of comments on the state of medicine... Lob your vitriol at feedback@stansberryresearch.com.
"If you don't want to visit an MD take a ride to the airport and let the TSA check you out. Don't forget to ask for a diagnosis. It free. Just don't try to board a aircraft." – Paid-up subscriber Bruce M.
"I hate the arrogant incompetence of doctors, especially now when self medicating and curing yourself over the net are so popular. But, Im not going to set a compound fracture I get snowboarding, nor remove that swollen and bursting appendix. Besides that, Im not co ordinated enough to cut my own hair, let alone do my own dental work.
"Yes doctors suck, Mostly because they have no incentive to do a good job. If they kill you, they get paid as much as if you live. And with the socialist health mandate coming down on us, the incentive to rush threw to get that t time is going to be a great boon for funeral home business." – Anonymous
"My wife went to the doctor to have her IUD removed and replaced. The doctor couldn't remove it as he claimed the string was cut too short. The recommended hospital visit to perform the removal procedure was quoted at $5,000. I'm not kidding!
"I tried, to no avail, to get an itemization of the proposed charges. This included an anesthesiologist, a surgeon, and a nurse assistant, among other things. We decided to check out a 'Family Plannng (abortion) Clinic'. They did the removal for $100. And they just so happened to have a new IUD at hand that they inserted for $75. The whole thing cost $175! (My wife's original IUD – a $15 device – cost us about $600 the first time it was inserted – with the string cut too short).
"The medical profession has really evolved into something quite criminal. It has little to do with health and healing – it's nothing more than big business – and a corrupt one at that." – Paid-up subscriber S.M.
"Having read Porter's doctor bashing comments on his treatment for shingles, I must reply to him. If possible please forward this email to him. I have been an Emergency Physician for 25 years. Shingles is common, easily diagnosed, and usually treated at home with antivirals.
"They probably admitted you because of your lymph node swelling. They were probably concerned that you had a secondary bacterial infection that had spread to the nodes. You hate doctors and you think they are arrogant. I equally despise patients like you who have a little bit of knowledge and think they know more than I do. You are an arrogant prick. The next time you get sick, stay home and take some herbs." – Paid-up subscriber Michael McAuliffe, M.D.
Porter comment: Michael... you said, "I despise patients like you who have a little bit of knowledge and think they know more than I do. You are an arrogant prick." That attitude is clear whenever I see any doctor, for any reason. The last two times I've gone to any doctor I've been:
1. Misdiagnosed as having a collapsed lung. Had I not spoken up, these guys would have jabbed a hollow tube through my ribs, causing me serious pain and complications for absolutely no reason other than to earn the fees. I had a bad cold. And I felt better within the week – by doing nothing excepting letting my body heal itself.
2. Misdiagnosed as having a flesh-eating bacteria – despite the fact that all my symptoms were classic shingles, so classic in fact that hundreds of doctors emailing me from around the world have said the performance of the ER doc in question was shameful. Again, I felt better in two weeks by doing nothing other than treating the pain. I didn't take the antivirals because I had no idea what side effects they might cause and I don't trust doctors... because they think patients who can think for themselves are arrogant pricks.
All I can say about your medicine and attitude is 'good luck.' Sooner or later, your partner, the government, is going to be wiped out. Bankrupt. Finished. And you and doctors like you are going to get flushed down the toilet with it – because you'd never make a dime in the free market.
Regards,
Sean Goldsmith and Porter Stansberry
Baltimore, Maryland
December 8, 2010