As I type this note, I'm watching Fed Chairman Ben Bernanke testify before Congress. "I do not support too big to fail," says Bernanke – the great maestro of last year's bailouts, the very man who enabled "too big to fail." Only in Washington.
Watching these guys is like watching a puppy chasing his tail. He thinks he's going to catch it. And he has no idea why you're laughing at him.
The problem, of course, isn't the regulations of the system – it's the system itself. You can't make paper money sound. You can't create a fractional banking system that won't collapse. Says Bernanke, "Booms and busts have long been a problem in capitalism." That's not true. Booms and busts have long been a problem associated with paper money and unsound banking.
The problem, of course, is all the politicians and all the bankers want the power granted to them by paper money and fractional banking. So... they have to create a moral story, wherein the problem lies with "greed," not with the system itself. And right now, it looks like Ken Lewis will be this go-round's scapegoat. At least it's not me this time...
But you've got to hand it to Wall Street... Those boys are great at inventing new ways to make money. Michael Milken did it with junk bonds. Lewis Ranieri did it with securitized mortgages (bundling together pools of mortgages, selling them to investors, and collecting fees along every step of the transaction). We all know how that worked out.
Now, banks are trying to take all the crappy real estate securities on their books and repackage them to get a higher rating... and consequently hold less cash against those assets. The deals are known as "re-remic," which stands for resecuritization of real-estate mortgage investment conduits. The result is the same – banks are holding the same assets as before, just with higher ratings – but bankers, lawyers, and ratings agencies earn fees throughout the process. And we've learned you can't trust a triple-A rating from Moody's or Standard & Poor's in the first place, making re-remicing even more ridiculous...
Last week, the president and chief operating officer of a little-known technology company increased his holdings of company stock by 550%. The reason? Shares of his company are about to explode. This small company (less than $240 million market cap) focuses on one of the fastest-growing businesses in the world today – digital video. And it already has two of the best customers in the world: Comcast and Verizon. Its business is only just getting ready to boom...
Inside Strategist editor Braden Copeland expects these shares to double in a year, and says they could "easily" return 300% from here. To sign up for Inside Strategist, and access Braden's latest pick, click here...
Jim Rogers told CNBC inflation is already much worse than the government is reporting... "There's no question the U.S. is vulnerable to hyperinflation down the road or certainly the inflation we saw in the 1970s. I would expect that to come back in the foreseeable future, certainly in the next few years," he said.
"The true inflation rate in America? It's certainly at least 6% or 7%. The U.S. government lies about it, as you know. Everybody who shops knows that prices are up, everybody except the U.S. government, and I wish we knew where they shopped so we can shop there too and get good prices."
Rogers said the Fed's money printing is destroying the dollar and he is "extremely worried" about the long-term prospects of the currency. He recommends buying Asia, but said he isn't currently buying anything due to the recent rally.
Yesterday, I flew from Munich to Miami, after five of the best days of my entire life. The inaugural Atlas 400 trip went off without a hitch. Included in the trip were two days spent racing cars at private tracks – at BMW's training center in Munich and at the Porsche test track in Leipzig. I took a few short videos (just from my little handheld camera) to show folks what we did: Steve Sjuggerud racing a 911 4s at speeds in excess of 150 kph, Matt Smith "drifting" around a corner on BMW's test track, and my friend, M.A., enjoying one of the beer tents.
I took these videos because I honestly didn't think anyone would believe the things we did or the fun we had doing it. Like Sjug says in the video at the end of his race lap, "I can't believe they let you do this..."
These videos show you a little bit of what the trip was like... but nothing could replicate the actual experience. You see, it wasn't being inside a beer tent with 10,000 other people having a great time, or even racing the new Panamera Porsche – a car that's not available in the States yet... The real benefit of the trip was building relationships with some of the most successful people I've ever met. Traveling with us was the world's foremost expert in rare coins, the world's leading offshore asset-protection attorney, the former head of securities trading for Bank of America, an expert in Central American real estate, one of the most successful Internet entrepreneurs, the world's most widely read investment expert, several authors, etc.
I learned something valuable from every single person on the trip – including a new way to participate in PIPE financing that could make me 13% per month on my investment. I also learned the trick to moving U.S.-based cash from UBS to other Swiss banks that aren't currently under the U.S. microscope. These two secrets alone are worth millions to some people...
For me, though, the most valuable part of the trip was riding back to our hotel from the Munich airport, after racing in Leipzig. I was sitting in the back of an S500 Mercedes. We were flying, driving over 200 kph. I was talking to the most successful young entrepreneur I've ever met – a guy who once sold $18 million worth of products over the Internet in one day. We agreed in principle to start a new business together, as partners. I'm pretty sure this new business will make both of us at least $1 million next year.
What could make the trips – and the Club – more valuable? You.
We're looking for more people to join us. Charter memberships are still available. (It costs $25,000 to join the Club. But once we reach 100 members, the price goes up to $30,000 and then up from there.) Besides the trips, the Club offers other important benefits – like a private Facebook-like application to keep in touch with the friends you make on the trips, the world's best global concierge, and a private monthly Club newsletter, which will feature details of what the Club's members are doing from around the world – the best travel and investment tips – directly from our members.
Why join such a club? Because almost everything good that's happened in my life – from starting my own newsletter to meeting my wife – happened because of someone I knew, a relationship I'd made. And since I began my career 15 years ago, I've met more people and developed more relationships from traveling than any other way. Here's what I've learned from those experiences: You can build a better relationship faster when you're doing something that's incredibly fun and when there aren't any other distractions. I also know on trips like these, if you're in the room, then you're in the deal. That's just how it works...
I've organized about two-dozen of my best contacts, and we're reaching out to our large subscriber base to find people who want to meet new friends from around the world. I'm reaching out to you directly to let you know that it's working. We have our first 20 or so paying members. We've pulled off our first trip. And I know the momentum for this group is going to surge... So if you want to be involved or you know someone who might, please get in touch (feedback@stansberryresearch.com).
New highs: Managers Fremont Bond Fund (MBDFX), Vanguard Inflation Protected Securities (VIPSX), Sprott Resources (SCP.TO), Korea Electric Power (KEP), European Goldfields (EGFDF.PK), Curagen (CRGN).
In the mailbag... One of our subscribers has a wonderful problem: a cash windfall. Have you been through something like this? If so, let us here from you. What mistakes did you make? What would you do different next time? Send your replies to: feedback@stansberryresearch.com.
"In about 4 months I will wake up and find a whole lot more cash than I ever dreamed of in our bank account... money left to us that we never imagined could or would or should happen. It is truly overwhelming, so I need your help as right now I am not capable of thinking... What publication(s) do you have that would be an income producing... We want the money to grow so would something like the Advanced Income or the Income Alliance be appropriate... I've read what is on your website and here is the question my husband asked me, 'Is this something that I could do, do they give the buy and the sell, etc.?' He would need to have recommendations to follow as we have our own business and he isn't ready to give up that, yet, as it does quite well for us." – Paid-up subscriber Margaret
Porter comment: The first thing you ought to do is meet with an experienced financial planner – someone who can help you figure out a plan to make sure the money you receive will last for your entire life. What we do here at Stansberry Research is mainly equity research, but we also feature bond research (True Income), trading ideas, and lots of macroeconomic analysis. What we don't do is any individual counseling. And if you're new to managing money, that's what you really need – someone who can show you how to build a basic portfolio.
Once you've done that, our newsletters can help you find good investments in the asset classes you're holding. Keep one thing in mind, the four ways you're most likely to lose your money are taxes, inflation, lack of investment discipline (position sizes, trailing stop losses), and divorce. If you can mitigate the risks of these four things, you'll probably be OK.
Regards,
Porter Stansberry and Sean Goldsmith
Miami, Florida, and Munich, Germany
October 1, 2009 As I type this note, I'm watching Fed Chairman Ben Bernanke testify before Congress. "I do not support too big to fail," says Bernanke – the great maestro of last year's bailouts, the very man who enabled "too big to fail." Only in Washington.
Watching these guys is like watching a puppy chasing his tail. He thinks he's going to catch it. And he has no idea why you're laughing at him.
The problem, of course, isn't the regulations of the system – it's the system itself. You can't make paper money sound. You can't create a fractional banking system that won't collapse. Says Bernanke, "Booms and busts have long been a problem in capitalism." That's not true. Booms and busts have long been a problem associated with paper money and unsound banking.
The problem, of course, is all the politicians and all the bankers want the power granted to them by paper money and fractional banking. So... they have to create a moral story, wherein the problem lies with "greed," not with the system itself. And right now, it looks like Ken Lewis will be this go-round's scapegoat. At least it's not me this time...
But you've got to hand it to Wall Street... Those boys are great at inventing new ways to make money. Michael Milken did it with junk bonds. Lewis Ranieri did it with securitized mortgages (bundling together pools of mortgages, selling them to investors, and collecting fees along every step of the transaction). We all know how that worked out.
Now, banks are trying to take all the crappy real estate securities on their books and repackage them to get a higher rating... and consequently hold less cash against those assets. The deals are known as "re-remic," which stands for resecuritization of real-estate mortgage investment conduits. The result is the same – banks are holding the same assets as before, just with higher ratings – but bankers, lawyers, and ratings agencies earn fees throughout the process. And we've learned you can't trust a triple-A rating from Moody's or Standard & Poor's in the first place, making re-remicing even more ridiculous...
Last week, the president and chief operating officer of a little-known technology company increased his holdings of company stock by 550%. The reason? Shares of his company are about to explode. This small company (less than $240 million market cap) focuses on one of the fastest-growing businesses in the world today – digital video. And it already has two of the best customers in the world: Comcast and Verizon. Its business is only just getting ready to boom...
Inside Strategist editor Braden Copeland expects these shares to double in a year, and says they could "easily" return 300% from here. To sign up for Inside Strategist, and access Braden's latest pick, click here...
Jim Rogers told CNBC inflation is already much worse than the government is reporting... "There's no question the U.S. is vulnerable to hyperinflation down the road or certainly the inflation we saw in the 1970s. I would expect that to come back in the foreseeable future, certainly in the next few years," he said.
"The true inflation rate in America? It's certainly at least 6% or 7%. The U.S. government lies about it, as you know. Everybody who shops knows that prices are up, everybody except the U.S. government, and I wish we knew where they shopped so we can shop there too and get good prices."
Rogers said the Fed's money printing is destroying the dollar and he is "extremely worried" about the long-term prospects of the currency. He recommends buying Asia, but said he isn't currently buying anything due to the recent rally.
Yesterday, I flew from Munich to Miami, after five of the best days of my entire life. The inaugural Atlas 400 trip went off without a hitch. Included in the trip were two days spent racing cars at private tracks – at BMW's training center in Munich and at the Porsche test track in Leipzig. I took a few short videos (just from my little handheld camera) to show folks what we did: Steve Sjuggerud racing a 911 4s at speeds in excess of 150 kph, Matt Smith "drifting" around a corner on BMW's test track, and my friend, M.A., enjoying one of the beer tents.
I took these videos because I honestly didn't think anyone would believe the things we did or the fun we had doing it. Like Sjug says in the video at the end of his race lap, "I can't believe they let you do this..."
These videos show you a little bit of what the trip was like... but nothing could replicate the actual experience. You see, it wasn't being inside a beer tent with 10,000 other people having a great time, or even racing the new Panamera Porsche – a car that's not available in the States yet... The real benefit of the trip was building relationships with some of the most successful people I've ever met. Traveling with us was the world's foremost expert in rare coins, the world's leading offshore asset-protection attorney, the former head of securities trading for Bank of America, an expert in Central American real estate, one of the most successful Internet entrepreneurs, the world's most widely read investment expert, several authors, etc.
I learned something valuable from every single person on the trip – including a new way to participate in PIPE financing that could make me 13% per month on my investment. I also learned the trick to moving U.S.-based cash from UBS to other Swiss banks that aren't currently under the U.S. microscope. These two secrets alone are worth millions to some people...
For me, though, the most valuable part of the trip was riding back to our hotel from the Munich airport, after racing in Leipzig. I was sitting in the back of an S500 Mercedes. We were flying, driving over 200 kph. I was talking to the most successful young entrepreneur I've ever met – a guy who once sold $18 million worth of products over the Internet in one day. We agreed in principle to start a new business together, as partners. I'm pretty sure this new business will make both of us at least $1 million next year.
What could make the trips – and the Club – more valuable? You.
We're looking for more people to join us. Charter memberships are still available. (It costs $25,000 to join the Club. But once we reach 100 members, the price goes up to $30,000 and then up from there.) Besides the trips, the Club offers other important benefits – like a private Facebook-like application to keep in touch with the friends you make on the trips, the world's best global concierge, and a private monthly Club newsletter, which will feature details of what the Club's members are doing from around the world – the best travel and investment tips – directly from our members.
Why join such a club? Because almost everything good that's happened in my life – from starting my own newsletter to meeting my wife – happened because of someone I knew, a relationship I'd made. And since I began my career 15 years ago, I've met more people and developed more relationships from traveling than any other way. Here's what I've learned from those experiences: You can build a better relationship faster when you're doing something that's incredibly fun and when there aren't any other distractions. I also know on trips like these, if you're in the room, then you're in the deal. That's just how it works...
I've organized about two-dozen of my best contacts, and we're reaching out to our large subscriber base to find people who want to meet new friends from around the world. I'm reaching out to you directly to let you know that it's working. We have our first 20 or so paying members. We've pulled off our first trip. And I know the momentum for this group is going to surge... So if you want to be involved or you know someone who might, please get in touch (feedback@stansberryresearch.com).
New highs: Managers Fremont Bond Fund (MBDFX), Vanguard Inflation Protected Securities (VIPSX), Sprott Resources (SCP.TO), Korea Electric Power (KEP), European Goldfields (EGFDF.PK), Curagen (CRGN).
In the mailbag... One of our subscribers has a wonderful problem: a cash windfall. Have you been through something like this? If so, let us here from you. What mistakes did you make? What would you do different next time? Send your replies to: feedback@stansberryresearch.com.
"In about 4 months I will wake up and find a whole lot more cash than I ever dreamed of in our bank account... money left to us that we never imagined could or would or should happen. It is truly overwhelming, so I need your help as right now I am not capable of thinking... What publication(s) do you have that would be an income producing... We want the money to grow so would something like the Advanced Income or the Income Alliance be appropriate... I've read what is on your website and here is the question my husband asked me, 'Is this something that I could do, do they give the buy and the sell, etc.?' He would need to have recommendations to follow as we have our own business and he isn't ready to give up that, yet, as it does quite well for us." – Paid-up subscriber Margaret
Porter comment: The first thing you ought to do is meet with an experienced financial planner – someone who can help you figure out a plan to make sure the money you receive will last for your entire life. What we do here at Stansberry Research is mainly equity research, but we also feature bond research (True Income), trading ideas, and lots of macroeconomic analysis. What we don't do is any individual counseling. And if you're new to managing money, that's what you really need – someone who can show you how to build a basic portfolio.
Once you've done that, our newsletters can help you find good investments in the asset classes you're holding. Keep one thing in mind, the four ways you're most likely to lose your money are taxes, inflation, lack of investment discipline (position sizes, trailing stop losses), and divorce. If you can mitigate the risks of these four things, you'll probably be OK.
Regards,
Porter Stansberry and Sean Goldsmith
Miami, Florida, and Munich, Germany
October 1, 2009