One of the greatest e-mails we've ever received...

 Yesterday, we received one of the most impressive feedback e-mails in Stansberry Research history...

In yesterday's Digest, we discussed pharmaceutical giant Merck's recent acquisition of biopharmaceutical firm Cubist. We explained how Stansberry's Investment Advisory research analyst Dave Lashmet predicted the takeover in September... and how that was the second antibiotic stock since August that Dave wrote about that went on to be acquired.

 We also noted yesterday that Dave is now the editor of our Stansberry Venture publication. This is our service that gives subscribers access to venture capital-type deals in the stock market.

Dave is an expert in biotech. He's responsible for one of the 10 most profitable positions in Stansberry Research history, which we list at the bottom of every Digest mailing. He has served as a business development officer and engineer. He's an inventor who holds multiple patents. And in Stansberry Venture, he is searching for the smallest and most promising firms out there... ones you'd likely never hear about (that is, until they get acquired). The goal is for subscribers to make five or 10 times their money on these speculations.

 Some readers are skeptical of the claims we make about the potentially huge returns with our recommendations. But in the case of Cubist, Stansberry's Investment Advisory subscribers are up nearly 50% in three months. And one subscriber – at least, the only one who wrote in to tell us – made a fortune...

Dear Stansberry: Just wanted to say thank you for a great job on Cubist. I bought 3,000 shares about a month ago as the result of the Stansberry's Investment Advisory recommendation. Then when Stansberry Alpha recommended I opened 20 contracts (synthetic ownership = 2,000 shares). With the acquisition by Merck announced over the weekend, today I closed all 5,000 shares. My profit = just over $120,000 in about 1 month's time. You hit this WAY out of the park! – Paid-up subscriber Rob M.

Rob... even though we suspect you flagrantly ignored our advice on proper position sizing, congratulations on the big win nevertheless.

 In other news, the U.S. dollar is showing tremendous strength against other currencies around the world. Since June, the dollar has beaten nearly every major currency. Today, it sits at its highest level since 2010.

Part of that strength is due to the Federal Reserve recently ending quantitative easing... and the possibility that it will raise interest rates in the near future.

Plus, the U.S. economy is starting to look a little healthier, too. The recent November jobs report showed that non-farm payrolls increased to 321,000 jobs – well beyond expectations of 230,000 jobs.

 The U.S. dollar index compares the dollar with a basket of other major currencies. As you can see in the chart below, the U.S. dollar index is surging higher while other currencies – like the yen and the euro – are in freefall mode...

 These currencies are being devalued as central banks around the world are engaged in their own versions of the Bernanke Asset Bubble. They're printing money and keeping interest rates near 0% for the purpose of stimulating their economies.

 Japan – the world's third-largest economy – is officially in recession. According to Bloomberg, Japan's economy shrank "an annualized 1.9% in the July to September period from the previous quarter." That's on top of an annualized 1.6% decline in the second quarter.

Business spending declined 0.4%, while private consumption rose a meager 0.4% from the second quarter to the third quarter. It seems that consumers are feeling the pinch from a devaluing yen and an increase in sales tax from 5% to 8% back in April.

Over in Europe, things aren't looking much better...

 Ratings agency Standard & Poor's just downgraded Italy's credit rating to one level above junk. In October, German industrial production was much lower than anticipated. And European Central Bank (ECB) policymaker Ewald Nowotny recently warned of a "massive weakening" of the European currency union.

Nowotny recommended that the ECB purchase bonds from ECB member countries in an effort to stimulate the economy. France and Italy are on board with that plan. But Germany would prefer for these countries to show more fiscal responsibility... and pressure is starting to mount. French Finance Minister Michel Sapin told the Financial Times that he was concerned with "certain extreme comments in Germany."

 The ECB's measures – designed to stimulate the European economy – have proven to be ineffective. It's difficult to entice investors into buying Spanish 10-year bonds at all-time lows of 1.82% or Italian 10-year bonds at 1.97%... considering neither government is exactly ideal.

So far, the ECB has only purchased around 18 billion euros' worth of bonds. Its goal is 1 trillion euros' worth. At this rate, it will take the ECB more than five years to complete its purchases. If the ECB wants to stimulate Europe's economy, it will likely be forced to buy sovereign bonds and continue easing.

That's what ECB President Mario Draghi has been pushing for... But again, Germany is against the idea.

Jens Weidman, chief of German central bank Bundesbank, said that low interest rates don't work for Germany... and "easy money" policies reduce the incentive for governments to reform.

As a result, the ECB will wait until the first quarter of 2015 to decide whether to begin easing.

 On top of the recent economic struggles in Japan and Europe, neither area is even close to hitting its 2% inflation goals. The Japanese Consumer Price Index (CPI) shrunk 0.9% in October. And inflation in the European currency union was a meager 0.3% in November. As we said in the December 2 Digest...

Deflation is a temporary phenomenon. Eventually, central banks – which have the power (and will) to print unlimited amounts of money – will win. You can't bet against the printing press... The argument of deflation versus inflation is one of the most important issues in the world today. And if you want to prosper in the coming years, you must have a good grasp of the problem.

 As a result of quantitative easing in Japan and Europe, both currencies remain under pressure. The dollar-to-euro ratio sits at 0.80, its highest level in more than a year. And the dollar-to-yen ratio has skyrocketed to 121.5 – its highest level since 2007.

Before the stimulus, Japan was already the most heavily indebted nation in the world, with nearly $14 trillion in debt – or more than 230% of its gross domestic product. Now, Japan's central bank – the Bank of Japan – will purchase an additional $271 billion in Japanese government bonds... for a total of $723 billion in Japanese government bond purchases a year.

And if Prime Minister Shinzo Abe's Liberal Democratic Party wins parliamentary elections next week (as is currently projected), the yen is likely to weaken further.

 So, what will protect you from this global currency experiment? Gold, for one. As we explained in the November 26 Digest, it's a good time to purchase some of the precious metal.

We know that deflation is temporary, and that one day, central banks will win out. The ongoing debate of inflation versus deflation is critical today. As we've explained recently, the best way you can possibly position yourself for whatever is coming down the line is to understand the issues.

Our friend and currency expert Jim Rickards wrote the best book we've read that details the big picture today. It's called The Death of Money. In it, he argues that precious metals like gold will soar higher in both inflationary and deflationary environments.

He also agreed to do us a favor... and wrote a "bonus" chapter exclusively for our subscribers. You can't get this chapter by buying it off Amazon (where it retails for nearly $20). But we believe this book is so important, we're giving it to you for free. All we ask is that you cover the minimal shipping and handling costs (less than $5). Click here to get your free copy today.

 New 52-week highs (as of 12/8/14): American Financial Group (AFG), Amgen (AMGN), Deutsche X-trackers Harvest China A-Shares Fund (ASHR), Axis Capital (AXS), ProShares Ultra Nasdaq Biotechnology Fund (BIB), Bristol-Myers Squibb (BMY), Berkshire Hathaway (BRK), Chubb (CB), Cubist Pharmaceuticals (CBST), CME Group (CME), Dollar General (DG), Express Scripts (ESRX), iShares Dow Jones U.S. Insurance Fund (IAK), Invesco Value Municipal Income Trust Fund (IIM), Eli Lilly (LLY), ProShares Ultra Health Care Fund (RXL), Travelers (TRV), ProShares Ultra 20+ Year Treasury Fund (UBT), W.R. Berkley (WRB) and Alleghany (Y).

 Many subscribers wrote in to us to share their big gains in Cubist. Send your stories to feedback@stansberryresearch.com.

 "Closed Alpha option trade today for about $5700 profit in 4 days. Still holding CBST shares for 30 dollar per share gain. Great job guys!!!! Thanks a lot." – Paid-up subscriber Noel Gregory

 "CBST: I have one pair of Jan 2016 options, got filled last Thursday it took a week to get it on a GTC order. Nice surprise Monday morning!! This is not the first one I also have TGT, MSFT, WRB, and LO. There are more, these are the off the top of my head. I only wish I had a service like this 30 years ago. Thanks Porter, Dave and the whole staff – keep up the great work. Happy holidays to everyone." – Paid-up subscriber Lorne Faust

 "Great call on Cubist! I bought shares for my own account and for a trust I manage for the kids. I also followed your alpha trade recommendation for the trust. Until today, my wife (and CFO) has been giving me a hard time about the recent Alliance membership expense. After showing her the news and reviewing Cubist (and other) positions, she's fully on-board. Looking forward to your subsequent thoughts on how to proceed from here. Thank you and best regards." – Paid-up subscriber Bill

 "Two excellent and timely picks. I closed my position on CBST with a 42% gain in 46 days. Guess you could say I got lucky on DRTX. Because it shot up so quickly, I only bought a 1/2 position on my initial buy, then bought the remainder after it had pulled back about $1.50 per share. This move prevented me from getting stopped out, just barely. Shortly thereafter I closed my position with a 65% gain in 60 days. Keep 'em coming." – Paid-up subscriber Billy Neeley

Regards,

Bill McGilton

Baltimore, Maryland

December 9, 2014