For precious metal investors at the time, it seemed like the stocks picked themselves. Gold and silver were breaking price records monthly — much as they are today — and the entire global investment community was seduced by the companies discovering them. You could almost randomly buy any precious metal stock getting attention and sell it a week or two later for a 20% gain or more.

And with gold prices now at $1,100 an ounce, precious metal investors like Greg McCoach and I are on a shopping spree for mining stocks. In the article below, Greg tells investors about a few precious metal stocks that have recently paid gains up to 2,357% and recommends ways for you to protect yourself financially from coming economic and monetary plights.

Today's issue of Wealth Daily also includes a short feature from Christian DeHaemer. Chris will be traveling to Mongolia on Monday to get a first-hand look at the country's booming commodities industry. His trip includes a visit to a brand-new gold/copper mine that's expected to more than double Mongolia's GDP.

Enjoy,

Luke Burgess
Editor, Wealth Daily
Investment Director, Hard Money Millionaire

Precious metal stocks continue to build momentum on the recent strength of gold and silver prices. But this tidal wave is just building momentum. . .

The wave of interest in precious metal stocks is rushing back. And investors are starting to make some money again.

In fact, 100% of the precious metal stocks in my Mining Speculator portfolio have made money in the past eight weeks.

Shares of precious metal companies like Victoria Gold (TSX-V: VIT) and Vast Exploration (TSX-V: VST), among several others, have more than doubled in the past few weeks. Other stocks have performed even better.

Share prices of junior precious metal company Mexivada Minerals (TSX-V: MNV) shot up 511% in less than a week in September after making a new gold discovery in Nevada. Take a look. . .

One of the best performing recent precious metal stocks has been Canadian-based Decade Resources (TSX-V: DEC). After the company reported impressive drill results from their Red Cliff project in northwestern British Columbia, share prices increased a whopping 2,357%. Early investors turned $5K into $122,850 in one month. Check it out:

Precious metal prices continue to look very strong. I would not be surprised to see gold as high as $1,250/ounce within the next few weeks, given all that is happening with the U.S. dollar and further derivative problems looming over the global financial system.

The mainstream financial media has been on an aggressive smear campaign against gold. Don't buy it. It's likely that precious metals will take a breather at some point and pull back a bit — maybe even below $1,000 an ounce.

But the long-term trend remains intact and precious metals will continue to power higher for many years. Take a look at a 10-year chart of gold prices. . .

In order for gold to reach a true inflation-adjusted new high from the 1980 high of $850 an ounce, gold would have to be $6,500 an ounce. That means precious metals are nowhere near their highs as so many analysts want you to believe. These are the same people that have been banging their "gold is dead" drum for the past 10 years, as the yellow metal keeps breaking price records.

They don't get it! Forget about them.

I maintain that the best way to protect yourself financially from coming economic and monetary problems is to own physical gold and silver bullion and precious metal stocks.

Keep in mind, of all the precious metal stocks we evaluate, less than 5% are worth a second look. But those few companies can represent incredible opportunities to profit like Silver Standard Resources (NASDAQ: SSRI), which paid investors 852% per year for nine straight years. Click here to learn how investors are getting ready for a similar pay day. 

Good Investing,

Greg McCoach
Editor, Wealth Daily
Investment Director, Mining Speculator and Insider Alert

Mongolia Deals Are Lining Up
— Christian DeHaemer

I'm boarding a plane for the 26-hour flight to Mongolia on Monday. The goal of this trip is to find out which companies will benefit the most from the current gold and mineral boom going on there.

You see, last month Mongolia's government signed a $4 billion deal with Rio Tinto (NYSE: RTP) to that will produce the world's largest gold/copper mine, called Oyu Tolgoi. 

This deal opened the floodgates. . . and now everyone wants a piece of the action.

Earlier this week, the Chinese Sovereign Wealth Fund invested $700 million in a coal project. And today, U.S.-based coal company Peabody Energy (NYSE: BTU) said it was "very interested" in Mongolia's Tavan Tolgoi coking coal project.

"Without an investment agreement on Oyu Tolgoi, nothing on Tavan Tolgoi was going to happen. We're very interested in Tavan Tolgoi. It's early (in the process) and we'd look to do it with a partner," said Peabody CEO Greg Boyce.

The change has been dramatic and fast. There is now a political stability that allows multinational corporations to invest great sums of money — over the long-term — in this remote, landlocked country.

And there's more good news: One of the wealthiest men in Mongolia, cashmere tycoon Sukhbaataryn Batbold, was elected as the new prime minister. Mr. Batbold is leaving his position as the current foreign minister of Mongolia. 

In his speeches, Batbold talks about lowering the unemployment rate by encouraging foreign companies to develop mines. He is a capitalist democrat and is very popular.

Mongolia's near-virgin status as a resource center, its propinquity to China, its new pro-western, pro-business government and the multi-billion dollar deals being signed all point to a massive economic boom that will be most identified by a flood of foreign dollars into Ulaanbaatar.

Not only will the Western and Chinese companies benefit, as they start building mines. . . but the companies in Mongolia will experience exceptional growth as they build the infrastructure to accommodate this boom.

That's why I'm going to put boots on the ground.

This could be the last great opportunity of our generation.

Sincerely,

Christian DeHaemer

Editor, Wealth Daily
(Founder, soon-to-be-launched Crisis & Opportunity)

I'll be the first to admit that this story isn't exactly news.

But with all of the negative press Goldman Sachs has received lately I suspect it is a story that most people are probably unaware of.

You see, from its permanent place in the catbird's seat, Goldman actually cleaned up as the housing market crashed.

So I have included a snippet of the story here, but if you're interested in how the vampire squid always manages to come out on top you should probably read the whole thing.

From McClathy by Greg Gordon entitled: How Goldman secretly bet on the U.S. housing crash

"In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting.

Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation's premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies.

Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk.

Now, pension funds, insurance companies, labor unions and foreign financial institutions that bought those dicey mortgage securities are facing large losses, and a five-month McClatchy investigation has found that Goldman's failure to disclose that it made secret, exotic bets on an imminent housing crash may have violated securities laws.

"The Securities and Exchange Commission should be very interested in any financial company that secretly decides a financial product is a loser and then goes out and actively markets that product or very similar products to unsuspecting customers without disclosing its true opinion," said Laurence Kotlikoff, a Boston University economics professor who's proposed a massive overhaul of the nation's banks. "This is fraud and should be prosecuted."

McClatchy's inquiry found that Goldman Sachs:

• Bought and converted into high-yield bonds tens of thousands of mortgages from subprime lenders that became the subjects of FBI investigations into whether they'd misled borrowers or exaggerated applicants' incomes to justify making hefty loans.
• Used offshore tax havens to shuffle its mortgage-backed securities to institutions worldwide, including European and Asian banks, often in secret deals run through the Cayman Islands, a British territory in the Caribbean that companies use to bypass U.S. disclosure requirements.
• Has dispatched lawyers across the country to repossess homes from bankrupt or financially struggling individuals, many of whom lacked sufficient credit or income but got subprime mortgages anyway because Wall Street made it easy for them to qualify.
• Was buoyed last fall by key federal bailout decisions, at least two of which involved then-Treasury Secretary Henry Paulson, a former Goldman chief executive whose staff at Treasury included several other Goldman alumni."

The game is rigged and we are the stooges.

Related Articles:

Ratigan on Goldman Sachs: "Legalized Theft"

Goldman Sachs is in the Catbird Seat

The Goldman Sachs Oligarchy

To learn more about Wealth Daily click here

Today's issue also features Wealth Daily Editor Christian DeHaemer's piece on India and Mongolia gold. Chris is planning a trip soon to Asia to report on gold from this part of the world. Stay tuned for more news from his travels.

— Steve

———————————————————————————

Aside from a few failed characters in the auto industry and banking, it goes without saying that the average CEO is a pretty sharp business person.

Like most entrepreneurs, these overachievers see and do things that most people simply cannot fathom. They take risks, they work hard, and they drive their visions down roads that, in many cases, have not yet been paved — without sure answers.

Where it all ends, they can never be sure; but win or lose, they are ready to find out. That is why they make the big bucks.

The average biotech CEO is something of an even bigger outlier. Armed with a Ph.D. and advanced degrees from institutions like MIT, these guys are geniuses on top of being sharp-witted executives.

As a result, they're not just concerned with new business models, but with advancing medicine and curing disease — like cancer and AIDS.

Unfortunately, for all of their brain power, delivering a life-saving drug to the public is one of the toughest tasks out there. . . as is finding the market's top biotech stocks.

Uncovering Top Biotech Stocks

In fact, it's just as one of these super-smart guys told me two weeks ago, as he patiently explained a promising new therapy to me over lunch. . .

"Steve," he said, "if all of these new drugs worked the same way in people that they do in mice, we would all be rich."

The reality is it takes an average of 12 years and over $350 million to get a new drug from the laboratory onto the pharmacy shelf. And of, say, 5,000 cures discovered in the pre-clinical stage, only about five will make it through the entire FDA approval process.

Therefore, companies have to cover not only the cost of successful development of a single drug, but of many drugs that never even make it to market.

Even still, the research-based portion of the industry currently invests some $12.6 billion a year in new drug development. That is a figure that historically doubles every five years, since developing blockbuster drugs is a risk/reward game.

The Biotech Roadmap

The gatekeeper in this case is the U.S. Food and Drug Administration (FDA), charged with making sure that drugs and biologics are safe and effective before they become available to consumers.

The process begins with the pre-clinical phase in which researchers identify and refine compounds that can be tested in animals and living tissue. Roughly three and a half years later, qualified candidates emerge and are granted Investigational New Drug (IND) status.

Once the FDA gives the green light, the "investigative" drug will then enter three phases of clinical trials:

• Phase 1 uses 20-80 healthy volunteers to establish a drug's safety and profile. (timeframe: about 1 year)
• Phase 2 employs 100-300 patient volunteers to assess the drug's effectiveness. (about 2 years)
• Phase 3 involves 1000-3000 patients in clinics and hospitals who are monitored carefully to determine effectiveness and identify adverse reactions. (about 3 years)

The company then submits an application (usually about 100,000 pages), to the FDA for approval — a process that can take up to two and a half years. Once approved, the drug becomes available for physicians to prescribe.

Before hitting the shelves, each and every drug must clear every single hurdle, which makes investing in biotech stocks highly speculative in every sense of the word. . . no matter how promising a company may look on paper.

After all, as my friend the biotech CEO told me, curing a mouse is one thing. . . curing a human being is something else entirely. As a result, the share price of these companies moves accordingly, making these stocks highly volatile.

Even still, since 80% of growth for the 10 biggest drug makers came from the blockbuster drugs that debuted in 1990s, the "next great cure" is always on the top of the list for big pharmaceutical companies.

As a result, investors in the right companies stand to make the biggest gains.

That's because all of these big companies know that it will likely take three or four $300 million - $500 million drugs to replace the revenues they will lose when their blockbuster drugs go generic. What's more, many of them simply don't have the R&D capacity anymore to keep their pipelines full.

That's why tiny biotech research companies can be bought out in an instant these days, since they currently contribute 67% of all drugs currently in clinical trials.

Of the 320 currently publicly-traded biotech companies, a full 41% have market caps below $100 million. For investors, that means there are serious gains to be had when one of these super-smart CEOs delivers on his or her promises. . .

And despite the lengthy, involved, and expensive process behind pharmaceutical companies' making drugs available to those who need them most. . . they continue their research and work. In fact, we've just published a report about the company that might finally hand us a cure for cancer.

Biotech guys aren't your average CEOs — and neither are their companies, or the dreams they are chasing.

Your bargain-hunting analyst,

Steve Christ, Investment Director
The Wealth Advisory

The price of gold hit an all-time high yesterday with the announcement that India has recently bought 6.7 billion dollars worth of the heavy metal from the International Monetary Fund (IMF). As I write this, gold is a few dollars short of $1,100 an ounce.

Now, $6.7 billion is equal to a month's worth of U.S. military operations in Iraq, and doesn't even come close to any of the bailout packages awarded to U.S. financial institutions. . . but it was enough to purchase half of the total amount the IMF is selling this year. And $6.7bil is more than pocket change for India. . .

According to Yahoo Finance:

The sale to India was nearly half the 403.3 tonnes of gold that the IMF has targeted for sale over the coming years. . . The Washington-based IMF, which currently holds 3,217 tonnes of gold, is the third-largest official holder of the precious metal after the United States and Germany. India is the world's biggest consumer of gold, importing between 700 and 800 tonnes of the metal every year or 20 percent of global demand.

India's Initiative: A Bellwether for Government Gold Buying?

The amount of money that India's central bank spent on gold is not as significant as the fact that they bought gold at all.

For the past fifteen years, major governments like France, Russia, and Germany have been selling gold on the open market. This has obviously had a bearish effect on the price of gold.

This year, not only are none of the major holders of gold selling the metal, but up-and-coming countries like India and China are buying it. China recently reported that it was doubling its gold reserves to 1,054 tonnes.

Both of these countries are selling U.S. Dollars and buying hard assets. They simply believe that the dollar will continue to fall. The fact that the Fed announced today that they would hold the Fed Rate to 0.25% for the foreseeable future backs their argument.

Last week, I told you about a "double top" in the Russell 2000 and that you should buy puts on the corresponding iShare (NYSE: IWM). Those puts surged 59% the next day.

Today I'd like to take a look at the ten-year gold chart. . .

Pent-up Energy in Gold

I've circled patterns on the ten-year gold chart above. These patterns are called "coiled springs." The thinking is this: markets tend to go from trading for long periods of time in tight ranges. This is interrupted by massive breakouts. Sideways markets build energy like a weight on a coiled spring; when the weight is removed, the spring leaps forward.

The chart shows that after each sideways period (lasting roughly two years), the price of gold jumped an amount equal to that which it went sideways. This would suggest that this rally is going to push gold to $1,450 to $1500 an ounce.

And that's just for starters. . . I personally believe that the next liquidity-fueled bubble market will be in gold and other hard assets.

One of the most obvious ways to play this surge in gold prices is to buy junior gold miners — and I've been recommending those all year, to my readers' good fortune.

Go Down Stream

Another way to play the new gold boom is to buy companies that help miners mine the yellow metal.

You may not be aware of it, but there is a new gold mine in Mongolia. In fact, it is the world's largest — a mine bigger than the state of Ohio!

The spending on this mine will double the GDP of Mongolia. That's right — double. . . which means Mongolia will become to Central Asian minerals what Dubai is to Middle Eastern oil.

This boom all stems from a recent government corporate tax cut from a draconian 68% to a more modest 30% of profits.
And this is just the first deal. Mongolia is rich in mineral wealth. The floodgates have been thrown open.

This coming gold rush in Mongolia will flood the country with cash. Early investors will literally make their fortunes.

That's why I'm getting on a 26-hour flight this coming Monday — and braving the cold (the high on Sunday was 13°F), to find out the best way to play it. I've arranged to meet with the largest broker in Ulaanbaator and some well-connected ministers and politicians.

Believe me. . . my date book is stuffed with tours and meetings. I will be doing my due diligence with my boots on the ground. Look for my report in your inbox on January 1, 2010.

Stay tuned for more next week,

Christian DeHaemer
Editor, Wealth Daily
(and soon-to-be-launched Crisis and Opportunity)

It's a small chunk of land, about one-third the size of Rhode Island, located in a part of the world most people know nothing about.

But they're not the only ones watching. Venture capitalists, hedge fund managers, and resource companies from all over the globe are also watching and waiting. . . ready to pour billions into Greenland once they get the green light.

Why?

This coming January, when the Kingdom of Denmark relinquishes sovereign control over Greenland's natural resources, the world's biggest deposit of Rare Earth Metals (or REEs), will fall into private hands. . . for the first time ever.

This single site boasts deposits valued at an estimated $1.3 trillion. . . and yet, REEs are worth more than just money.

Which is why the world's leading manufacturers of hybrid cars, wind turbines, batteries, and yes — even the guidance systems to our most sophisticated air and ground defense missiles systems, are watching the events in Greenland unfold with baited breath.

The elements that fall into the category of Rare Earths include:

• Lanthanum - essential in the production of electric car batteries;
• Terbium - without this element, high-strength magnets would not exist;
• Erbium - makes possible a wide range of light-weight, high-strength metal alloys;
• Thulium - makes high-frequency lasers a reality.

And once Greenland takes control of its mineral wealth, this land — totaling barely 500 square miles — is projected to supply 25% of the world's entire REE market. . . for half a century.

To companies like Toyota and Honda, that have virtually staked their futures on the rapidly expanding hybrid/plug-in car market, and to our own defense industry, which cannot perform even the simplest task without highly-involved electronic assistance, this news could not have come at a better time.

Because for the last decade and a half, our greatest and most populous modern rival has been hard at work to corner the market on these vital elements.

And on April 17 of this year, with the signing of a single contract, the Chinese reached a record 96.7% global market share.

China's "Dragon Metals"

That's why we've dubbed these commodities "Dragon Metals," because China literally owns that market.

This is the kind of monopoly that has caused emergency Congressional meetings in the past. . .

Meetings that have ended in government-mandated intervention.

But there is nothing Congress can do to stop the Chinese government from closing its global stranglehold on materials without which the modern world cannot function.

It's part of a plan that Deng Xioping claimed almost two decades ago would: "Do for China what oil did for Saudi Arabia."

Evidently, the People's Republic is wasting no time in putting this advantage to strategic use.

Plans to limit exports and systematically inflate prices have already trickled down from the party leaders, and progressive decline in production has been standard operating procedure for the past several years.

According to Wired Magazine, "China's Ministry of Industry is weighing a total ban on exports of terbium, dysprosium, yttrium, thulium, and lutetium — and may restrict foreign sales of other rare earth metals."

This news is a potential death knell for hybrid manufacturers that have forecast 500% growth in the next 6 years alone. . . alongside a wide spectrum of other cleantech companies whose products depend on magnets, motors, and batteries to create and store energy.

Not to mention a political and economic nightmare for our Department of Defense. . .

However, as Greenland prepares to open its resources to the open market, this Chinese monopoly has finally met a foe it cannot easily topple.

Come January, a single company will control this massive deposit, turning it into the world's second biggest single producer of REEs.

With a stock price just under 60 cents today, this company has already gained close to 30% since the start of September. . .

But the big spike is still just around the corner, with a vast majority of the gains still in the future.

In the next few weeks, we'll be publishing specific approaches to squeezing the most mileage out of this historic stock, as well as more information on an approaching commodities boom that may be the biggest we've seen in decades.

Profitably yours,

Brian

P.S. Rare Earth Metals and other commodities vital to the developing electric car and battery markets and Uncle Sam's own defense industry should be on every investor's radar. And as current energy prices continue to rise, we find ourselves in the early stages of the greatest commodities bull market in history. . .

Wealth Daily's Ian Cooper has closed 93 winning trades with his resource and energy stock picks this year alone! Since November 2007, readers of his Pure Asset Trader service have enjoyed gains of 3,124%. You won't want to miss out on these kinds of profits. Click here to read more.

According to the National Association of Realtors (NAR), pending home sales rose again, marking eight consecutive monthly gain - the longest streak since measurement began in 2001.

That led NAR chief economist, Lawrence Yun, to confidently predict his fifth or sixth bottom in housing—but who's counting... besides me.

"Home values will stabilize sooner rather than over-correcting," Yun said, "That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery."

Of course, how solid that bottom may be depends largely on the mess the housing bubble left behind.  Because for many of those that bought at its peaks, the dream of home ownership has ended in the road to ruin.

So much so that it makes more sense to turn in the keys these days , than it does to keep making the payments.

From  USA Today by Stephanie Armour entitled: More walk away from homes, mortgages

"When Sharon Sakson was laid off recently from her job as a television writer and producer, she burned through her savings to pay the $2,400 monthly mortgage on her home. But she soon decided it didn't make sense: Her home was worth thousands less than the mortgage she carried on it.

The home had been appraised at $390,000 when she refinanced in 2006, but she estimates it's not worth the $320,000 it initially cost in 2004. So Sakson did what a growing number of homeowners are doing today: She stopped paying and decided to let the bank take her home.

"I'm walking away from my house," says Sakson, 57, who stopped making payments about six months ago on her home in Pennington, N.J. "The bank can have it."

What Sakson did is called a strategic default, or a voluntary foreclosure, and it's fast becoming a major challenge to the government's $75 billion effort to keep distressed borrowers in their homes. Walking away from a mortgage is serious business - it can knock 100 points off your credit score and make you ineligible for a new mortgage for seven years. Yet, about 588,000 borrowers walked away from homes last year, double the number in 2007, according to a recent study by credit-scoring firm Experian and management consultants Oliver Wyman. While home prices are rising, the increases pale compared with overall drops in home prices since 2005 that threaten to push millions more homeowners into Sakson's predicament, owing more than their homes are worth and seeing little chance of rebuilding equity soon.

More will walk away, which will hamper the housing recovery, reinforce lenders' tight credit policies and drag on the economy's recovery, economists say.

‘It's increasingly a more important factor driving the foreclosure crisis,' says Mark Zandi, of Moody's Economy.com. ‘As we move forward, the job market will stabilize, and the big thing will be strategic defaults. People are going to determine it doesn't make financial sense to hold on to their homes. That's going to be a significant problem. Strategic defaults mean foreclosures could be high for a long time.'"

By the way, according to Ivy Zelman, CEO of Zelman & Associates, the foreclosure wave could reach as high as 3 to 4 million distressed homes this year, since 3.7 million homes are either already in the foreclosure process or are at least 90 days past due.

That's an important distinction, since a recent analysis of foreclosure rates by the Amherst Group showed cure rates for these loans are practically non-existent. The Amherst data noted a near 0% cure rate of all loans in foreclosure, while loans 90 plus days past due were cured only 0.8% of the time.

As for loan modifications, you can practically forget them - 70% of all loans re-default within 12 months. You can add them to the total pushing the number even higher.

As for walk-aways, it's a business decision plain and simple.

Related Articles:

Moody's: No Housing Bottom Until Q3 2010

Sorry Charlie, But Housing has Further to Fall

House of Cards Part Two

The 800 lb. Gorilla

To learn more about Wealth Daily click here

One second, all is well. . . buyers line up to chase the recovery. The next, buyers are swimming for the exits in a sea of red ink.

Not exactly the kind of "confidence" you'd expect in a recovery, is it?

But while negativity is abundant, a bull market is never far away. . . and you can easily find it by using the three technical indicators I've written about before.

Or, by using themes.

I'm going to give you some examples. . .

Resolution Profits

It's a seasonal phenomenon that many of us are all-too familiar with.

This year is likely to be no different, as millions head into the winter holiday season rummaging through our kids' Halloween candy, anticipating the traditional Thanksgiving gravy and stuffing, and marking our calendars for December holidays and office parties. . .

The end of the year marks the time when we assess the pounds we've packed on from pumpkin pie and eggnog and start worrying about added "baggage" — and promise ourselves that next year will be different.

How do you profit from this predicable trend? You find the stocks, namely ones like eDiets.com (DIET), that have historically risen at the tail end of the year on New Year's resolutions. The trick to playing this stock is to buy during mid to late November.

The stock should then rise as people begin promising themselves that next year will be the year for weight loss, and sign up for diet and exercise programs.

We haven't noticed the same run in stocks like Weight Watchers or NutriSystem that we have with eDiets.com (DIET), though:

• From around mid December 2003 to the start of 2004, DIET ran from about $3.50 to about $6.50.

• DIET ran from $3.25 to $5.35 from mid December 2004 to the start of 2005.

• It ran from $4.50 to about $8 between mid December 2005 and January 2006.

• From mid December 2006 to the start of 2007, DIET sold off after an early November 2006 run.

• And from the end of November 2007 to the start of 2008, DIET ran from about $4.60 to $6.

DIET is a seasonal — and very predictable — thematic mover, as you can see by most of the posted gains. Buy and hold.

Another way to trade themes is to watch the press. Take H1N1, for example. . .

H1N1: How to Live High on the Hog

It's all about swine flu these days. Millions of kids have been out of school. Parents are calling out of work sick. People—unfortunately—have died. And multi-billion dollar industries are suffering.

Six months ago, fears that H1N1 might have originated at a Smithfield Foods (SFD) facility in Northern Mexico put the company in crisis mode. And the stock plunged until Mexico said there was no connection to Smithfield's farms.

There is news that a pig at the Minnesota State Fair tested positive for H1N1 in preliminary tests. But while confirmation is still needed, the "easy money" trade may be to play the downside of stocks, like Smithfield (SFD), Tyson (TSN), and even Hormel (HRL), as this could easily cause panic in the pork industry.

It took only a few cases of mad cow disease to create a wave of panic in the beef industry years ago. Countries — including Japan — banned American beef imports and prices plummeted. And from what we're seeing now, the damage is far from over. . .

Suffering like they haven't suffered in years. . .

Things are so bad for pork producers that congressional leaders are drafting a letter to the U.S. Secretary of Agriculture, asking that he buy $100 million in pork for various federal food programs and take more emergency action to help the troubled industry.

Take a look at Smithfield again: The company had record sales of $12.5 billion last year. But thanks in part to H1N1 and high supplies of pigs, they lose an average of $23 on every pig sent to slaughter.

This loss has resulted in a $190 million loss for the year ending May 2009. Other companies are losing an average of $20 to $25 per pig.

Even hog-related commodities have come under pressure, based on fears that pork consumption can cause swine flu. Frozen pork belly futures fell close to 7% in recent months, thanks to swine flu.

So how do you profit from the swine flu theme? You play off the nation's fears, and short pork-related companies like Smithfield (SFD).

Just imagine what could happen to the $15 billion pork industry bottom lines going into end-of-year holidays, in which pork is normally consumed in high volumes.

It could be bad. . . real bad.

But you can profit from it, even in this schizophrenic market.

Stay Ahead of the Curve,

Ian L. Cooper
Wealth Daily

P.S. Wealth Daily has been pointing out market trends and opportunity for profit to our readers for years now. . . and our team of researchers realizes just how precious time is when it comes to gathering information, spotting trends, buying, holding, and selling. We take the legwork out of this time-consuming process for readers. Options Trading Pit, for example, delivers market commentary, urgent updates, and market picks that are up 1,794% since January of this year. Click here to become one of these profit-taking readers.

A mere few weeks after Burlington Northern reported a 30 percent drop in third-quarter revenue, Warren Buffett decided that was a sign to jump in.

This morning the famed investor decided to buy the shares he didn't already own for $34 billion.  If approved, it would be the biggest bet ever for Buffett's Berkshire Hathaway.

From the AP by Samantha Bomkamp entitled:  Buffett's Berkshire buying Burlington Northern RR

"Warren Buffett's Berkshire Hathaway Inc. on Tuesday agreed to buy Burlington Northern Santa Fe Corp., making a $34 billion bet on the future of the U.S. economy.

Burlington Northern, the nation's second-largest railroad, is the biggest hauler of food products like corn and coal for electricity, making it an indicator of the country's economic health. The railroad also ships a large amount of goods — including everyday items such as refrigerators, clothing and TVs— from Western ports like Los Angeles, Long Beach, Calif. and Seattle.

Analysts say Buffett is planting both feet in an industry that is poised to grow as the economy gets back on solid ground. If approved, it would be the biggest acquisition ever for Berkshire Hathaway Inc.

Berkshire Hathaway already owns about 22 percent of Burlington Northern, and said it will pay $100 a share in cash and stock for the rest of the company, a 31.5 percent premium on Burlington Northern's Monday closing price. Shareholders have the option to convert their stock for a cash payment of $100 per share or receive Berkshire Class A or Class B common stock. Up to 60 percent of the deal is cash and 40 percent is in stock.

"Berkshire's $34 billion investment in BNSF is a huge bet on that company, CEO Matt Rose and his team, and the railroad industry," Buffett said in a statement.

"Most important of all, however, it's an all-in wager on the economic future of the United States. I love these bets," he said"

Love him or hate him, you would have to admit the guy is pretty sharp.

That being said, a 30% premium seems pretty high on this one. Since when does a railroad merit a 20 P/E?

Related Articles:

The Warren Buffett Investment Principles

Warren Buffett on the Economy: "It's fallen off a cliff'"

Jim Rogers vs. Warren Buffett

Warren Buffett Meets His Match

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Ross sees a "huge crash in commercial real estate coming" and Soros spoke of a "bloodletting yet to come." Makes you wonder how these guys became so filthy rich when they can't see what's happening.

"In commercial real estate and leveraged buyouts, the bloodletting is yet to come," Soros said. "These factors will continue to weigh on the American economy, and the American consumer will no longer be able to serve as the motor for the world economy."

That's interesting, Soros... because the bloodletting started a long time ago.

There have been bankruptcies, bank failures, foreclosures, destroyed property values, and so on and so forth. And there's more pain to come for commercial real estate and the greater economy. I don't care what Geithner would have you believe about the economy's ability to handle any CRE hits it takes.

But I digress...

Here's what we reiterated in early September, months after the collapse already began:

Without a doubt, this problem has emerged as the biggest threat to our economic rebound and banks (especially regional banks, which hold more than $1 trillion of mortgages backed by CRE that is quickly losing value).

The sector will suffer from two things, one of which is bad underwriting. CMBS owners were lent money on the assumption that occupancy and rents would keep rising. But that never happened. The opposite did. "The result is that a growing number of properties aren't generating enough cash to make principal and interest payments."

And with values sinking, vacancies soaring, and a recession making it unlikely for us to see demand pick up, banks aren't exactly jumping up to refinance deals.

Even Steve Christ will tell you that all of this is a recipe for disaster. . . and that industry leaders have estimated that 200,000 businesses and 10 percent of the nation's shopping malls will close their doors over the next year.

That means that we're maybe only in the second inning here as this crisis unfolds.

So, with roughly $530 billion in commercial mortgages coming due for refinancing in 2009-2011, and some estimates showing that as many as 68% of loans maturing during that time will fail to qualify for refinancing, you have to wonder how it will all get done, says Steve.

The brutal answer: it won't.

"Federal Reserve and Treasury officials are scrambling to prevent the commercial real estate sector from delivering a roundhouse punch to the U.S. economy just as it struggles to get up off the mat," said a recent Wall Street Journal article. But "their efforts could be undermined by a surge in foreclosures of commercial property carrying mortgages that were packaged and sold by Wall Street as bonds."

And, according to Deutsche Bank AG, "as property value declines and scarce credit continue to drive commercial property developers and investors into default, total lifetime losses on banks' $1 trillion "core" commercial-mortgage holdings, or those backed by income-producing properties, would reach between 11.6% and 15.3%, or $115 billion and $150 billion."

"So far, banks in general have been reluctant to take losses on their commercial books," says the Wall Street Journal. "This "delay and pray" strategy is preventing most banks from issuing new loans as they prepare their balance sheets for potential future losses..."

It's bad... real bad. But there are ways to profit from the coming disaster... which you can check out in Options Trading Pit.

Regards,

Sam Hopkins
International Editor

—————————————————————

Big Potential in "Little Platinum"

Palladium is an underdog among precious metals.

It has some unique attributes that set it apart from the "big three" — gold, silver, and platinum. So if your goal is to have a diversified portfolio of precious metals, investing in palladium can be a good choice.

Before you go out and buy palladium bullion/coins, it's important to realize that prices for this metal are quite volatile, and fluctuations are more dependent on industrial demand than metals like gold, where industrial use is considered a secondary market mover by many investors.

In 2001, the price of palladium peaked at over $1,100 per ounce. It currently trades around $320. A drop like that will pique the interest of contrarian investors, and cause heartburn in more conservative ones. . .

Rightly so, on both counts.

Palladium is a more speculative play, and therefore research and risk tolerance are prerequisites to investing.

For now, let's take a look at what palladium is, how its price moves, and how you could benefit from palladium in your portfolio.

Palladium is a member of the platinum metals group and it has many industrial uses (more below). I would classify it among the riskier metals as an investment class, but the potential upside is great. As the world continues to print money in an attempt to stimulate economies, palladium could benefit from both increased industrial demand and inflation.

I don't like this inflation-driven "recovery" scenario, but am positioning myself for the possibility.

What is Palladium Used For?

The primary industrial use of palladium is in the manufacture of catalytic converters (devices that clean automotive exhaust). This unique metal converts harmful gases, like carbon monoxide, into more benign ones like carbon dioxide. The decline in car sales is partially to blame for the fall in palladium prices. But with governments artificially stimulating auto-sales around the globe, palladium prices have rebounded with demand.

Growing Popularity in Jewelry

Palladium is also widely used in the jewelry market. It's an essential ingredient of white gold and is a cheaper alternative to platinum. Palladium is very similar to platinum, with the main difference being that palladium is a bit less dense. It is used in fine jewelry and is starting to replace its more expensive cousin as the base metal in engagement rings and other products. It's easy to see why jewelry makers and consumers like palladium: It sells for around $320/ounce, compared to platinum at $1335/ounce.

Palladium is also widely used in the fields of electronics, dentistry, and medicine.

According to Stillwater Mining:

Palladium-containing components are used in virtually every type of electronic device, from basic consumer products to complex military hardware. Although each component contains only a fraction of a gram of metal, the sheer volume of units produced results in significant consumption of palladium. The largest area of palladium use in the electronics sector is in multi-layer ceramic (chip) capacitors (MLCC). Smaller amounts of palladium are used in conductive tracks in hybrid integrated circuits (HIC) and for plating connectors and lead frames.

Investing in Palladium

Coins or bars are the most common ways to invest in this metal. The Royal Canadian Mint makes beautiful .9995% pure palladium coins that are legal Canadian tender. But they're pretty hard to find these days. A more accessible (and cheaper) option is palladium bars from reputable mints, like Pamp Suisse. I recently bought some of these 1-ounce bars from American Precious Metals Exchange (www.apmex.com), an online metals dealer I've had good experience with. (We have no business relationship.) APMEX has the best prices I've been able to find for small-to-mid level buyers like me.

From what I've seen, they ship what is promised and on time.

Palladium Stocks?

There are few pure plays in the palladium mining world, so investing via common stock is more difficult than gold or silver. The biggest player in the U.S. is Stillwater Mining (NYSE: SWC). They operate a large mine in Montana, which is one of only three large-scale production sites in the world. North American Palladium (AMEX: PAL) is another relatively pure play, though they are much smaller and more speculative than Stillwater.

Russian Stockpiles of Palladium — Potential Problem?

Some of the most productive palladium mines in the world are located in Russia. And their government has not been very forthcoming about levels of production or stock. Some people think Russia's stockpile of the metal is more sizable than the market has priced in, and that it may continue dumping metal on the market to generate cash during a lull in oil prices.

However, it is in Russia's best interest not to release too much metal at once into the market, to ensure prices stay at profitable levels. And Russia doesn't have a monopoly on palladium by any means — there are large mines operating in North America and South Africa, as well. But Russia's dominant status is a factor to consider when investing.

Time to Buy?

Palladium's had a nice run over the last year, and we think it has more room to run. However, it may be prudent to wait for a pullback to the $280-$300 level. If the dollar's rally continues for a few more weeks, that should provide a great opportunity to scoop some up. Price fluctuations can work in your portfolio's favor if you're patient. And we'll keep you up to date.

Good investing,

Adam Sharp
Analyst, Wealth Daily

Editor's Note:  From the obvious to arcane in the investment world, Ian Cooper's Pure Asset Trader service tells readers just how to capitalize. It may be an oil company you hadn't heard of, or an investment opportunity like palladium that the financial media is just now getting wind of. . . Pure Asset Trader readers are always out in front and reaping the benefits of Ian's 94% success rate! To prove PAT to you, Ian is offering five months of timed recommendations — free! Click here to learn more.

Fresh off a decent GDP number, the bulls have had tough time gaining traction in the markets lately.

It may just be because the markets realize that the +3.5% gain in the third quarter was achieved primarily with assistance of smoke and mirrors.

After all, without a healthy push from Uncle Sam, the gains practically would have been non existent.

So while some cheerleaders have used the numbers to make the case that the recession is over, a closer look at the figures leaves them riddled with doubt.

That's the opinion of Joseph Stiglitz who recently said that we have much farther to go before we can claim victory over the downturn,

Here are the details...

From Bloomberg by Bob Willis entitled: Stiglitz Says U.S. Recession ‘Nowhere Near' End After GDP Jump

"Nobel Prize-winning economist Joseph E. Stiglitz said the U.S. recession is "nowhere near" an end and the economy's third-quarter growth rate of 3.5 percent, the first expansion in more than a year, won't carry into 2010.

While this week's figures on gross domestic product are "very good," the numbers would be "miserable" without stimulus measures enacted by the Obama administration, Stiglitz said today at a forum in Shanghai. He urged the U.S. and other countries not to pull back on efforts to shore up economies.

"When we look at if workers can get jobs, if they can work full time, if businesses are able to sell goods they produce, in those terms, we are nowhere near the end of recession" in the U.S., said Stiglitz, 66, the former chief economist at the World Bank. The U.S. job market is still "in very bad shape."

The U.S. unemployment rate reached a 26-year high of 9.8 percent in September and economists project it will exceed 10 percent by early 2010.

"The unemployment rate is likely to go up," Stiglitz told reporters two days earlier in Beijing. "Growth won't be fast enough to bring down the unemployment rate."

Stiglitz, a professor of economics at Columbia University in New York, said the growth rate of 3 percent to 3.5 percent needed to create enough jobs for new U.S. labor market entrants was unlikely to be sustained into next year.

It is too early for the U.S. and other countries to begin easing stimulus measures put in place a year ago to avert a financial market meltdown, Stiglitz said.

"For the world as a whole, it's premature to think about exiting stimulus," he said today in Shanghai. Stiglitz became a Nobel laureate in 2001, sharing the prize with George A. Akerlof and A. Michael Spence, both of the U.S., for their analysis of how markets function when buyers and sellers have different information about a product or service."

It will be interesting to see how the market reacts this week if we do get a 10% unemployment figure from the BLS on Friday.

By the way, while everyone was busy yucking it up at happy hour on Friday the FDIC was busy seizing banks. In all, nine failed banks were shut down potentially costing the FDIC some $2.5 billion in the process.

The failure of the nine banks brings the nation's total number this year to 115.

The bad news is there are about 500 more banks on the troubled list.

Related Articles:

 Third Quarter GDP Surprises To The Upside

Stiglitz Says Problems Have "Become Even Bigger"

Dollar Vs. Euro: An Eye on the Euro and the Hottest Indicator on Wall Street

Warren Buffett on Investing in Gold

To learn more about Wealth Daily click here

In the Fall of 2007, my partners and I had a series of tense meetings on the state of the economy. We were convinced that the whole thing was about to come unglued.

In fact, things looked so bad to us that we spent a good deal of time talking, in detail, of what to do in the event of a complete economic and societal breakdown.

Yet in a sense we were also hesitant.

Hesitant because, although our alarms were ringing loud and clear, there was hardly a whiff of concern coming from DC, from the FED, or from the mainstream media. After all, the stock market was sitting near record highs.

In fact, all of these institutions were actively engaged in a chorus of cheerleading on just how healthy the economy was.

Our research led us to the exact opposite conclusion.

Clearly, someone was very wrong.

Fed chairman Ben Bernanke was consistently touting the strength of the economy, and even went so far as to say the housing market was a minor issue, at the very moment the foundation of the housing market was crumbling.

This man either lied outright, or was simply too dim to understand what was happening. I don't have to tell you, neither option is acceptable from a man of his responsibilities.

Worse still, no one I'm aware of in the mainstream media ever questioned any of this. Instead, we were treated to constant party-line, bull market rhetoric. Look, passing on unchecked data and flat-out rumor as fact doesn't count as useful information.

Luckily for our readers, we don't rely on any of these institutions for hard analysis.

Right on cue, our own Ian Cooper went short, calling for the market to drop to 6,500... over two months before it happened.

While most market participants watched in horror, Ian and his Options Trading Pit readers made a killing in only 60 days' time, including one 338% gain, closed in 2 days.

Sadly, the vast, unwashed majority aren't so lucky. They drove into the teeth of the worst recession in 50+ years without even a hint of apprehension. And they'll be paying for it, literally, for quite a while.

In the 16 years I've been in this business, I can't think of a time when there's been more distrust, more graft, and more uncertainty surrounding the world of finance and politics.

I also can't recall a time more perfectly suited for robust investment gains, provided you've got your ears on.

The reality is that those two worlds—finance and politics—have essentially merged. And it's no secret there's a revolving door between DC and New York.

Worse still, the media has been actively collaborating, perpetuating the myth that we can spend our way to prosperity, that if we just buy and hold we'll get wealthy some day, and a thousand other idiotic ideas that now rival the hollowness of the phrase "Change we can believe in."

It's incredible to me how many of these talking heads remained on air, despite the fact that they couldn't have been more consistently wrong if they'd known in advance how things were going to turn out.

No matter which way you look, you get the sense that you're being gamed. And you're right.

The plain fact is, no one in politics, in the media, or in mainstream finance cares about you, aside from your value as a "useful idiot."

Think I'm kidding?

The public's assessment of the accuracy of news stories is now at its lowest level in more than two decades of Pew Research surveys, and Americans' views of media bias and independence now match previous lows.

Just 29% of Americans say that news organizations generally get the facts straight, while 63% say that news stories are often inaccurate. In the initial survey in this series about the news media's performance in 1985, 55% said news stories were accurate while 34% said they were inaccurate. That percentage had fallen sharply by the late 1990s and has remained low over the last decade.

There's a vague sensation taking hold, a feeling that American capitalism is rigged. And as that feeling of angst manifests itself, a wealth of money-making opportunities will be suddenly on the table.

Yet most will be too blind with rage, or simply too slow, to act on them.

Here at Angel Publishing, we've become known for being years ahead of major trends. And as a result, our readers profit from being in early.

Whether it's the Green Revolution, Peak Oil, precious metals, options... you name it, we cover it. And that means we profit from it. Again and again.

I want you to be there with us.

Think about it... Obama's been president for about 8 months now. Yet today it's even more apparent that powerful lobbyists and the wealthiest few still run America.

Somewhere along the line, the deal was broken. You may feel betrayed. But what you shouldn't feel is helpless.

When I think about the out-of-control $23.7 trillion in new Treasury and Fed debt dumped on the backs of my children and grandchildren, frankly, I get a little pissed off.

But I realize that the best way for me to protect myself, and them, is to become as wealthy as possible.

Consider that our mission statement.

Our business model runs contrary to an independent newsletter industry that's quickly becoming a corporate, revolving-door newsletter selling system.

Our philosophy is... If our readers make money from our research, our business thrives. 

Truth is, we've consistently shown the way to profits before, during, and after the economic meltdown. But we're just getting started.

For example, our newest analyst, Christian DeHaemer, just went on record... recommending his readers buy put options on the Russell 2000.

He's up 59% in 2 days.

(Christian brings with him 14 years in the financial publishing industry, along with an incredibly accurate track record. He'll launch his new advisory, Crisis & Opportunity, in January. Stay tuned.)

And there's this, which just came over the newswire: "President Obama Pledges $3.4 billion toward a 'smart' power grid.

Jeff Siegel has been covering the Green Energy sector — and talking about this very development — years before it became as trendy as wearing the "Free Tibet" t-shirt.

And his readers have been crushing it.

He's even got a short list of companies poised to reap these government contracts. Take a look for yourself here.

Members of Nick Hodge's Alternative Energy Speculator have racked up over 45 winning trades in 2009. And they're on course to close another 20 before the year is up. 

And it doesn't end there.

Ian Cooper's Pure Asset Trader — one of the best commodities and resources trading services in business today — has its readers enjoying a 94% win rate in 2009. (37 winning trades in 39 tries.)  

Precious metals expert Luke Burgess has been right on 95% of the trades in his Hard Money Millionaire advisory.

The $20 Trillion Report has closed 20 winning trades in 22 tries this year, capitalizing on a number of unconventional oil and natural gas plays. And with oil moving north again, the gains in energy are just getting started. 

And I haven't even mentioned the gains delivered by the likes of analysts Steve Christ, Sam Hopkins, Greg McCoach and Keith Kohl.

So here's a quick look at Angel Publishing's family of investment advisories, and their latest research.

I hope you'll join us.

To your wealth,

Brian Hicks
Publisher, Angel Publishing Investment Research

Renewable Energy:

Green Chip Stocks

Green Chip International

Alternative Energy Speculator

Alternative Energy Trader

Precious Metals:

Mining Speculator

Hard Money Millionaire

Greg McCoach's Insider Alert

Energy - Commodities:

The $20 Trillion Report

Pure Asset Trader

Wealth Building & Options Trading:

The Wealth Trust

Despite the obvious problems associated with the homebuyer tax credit, the Federal government will apparently do anything to keep the housing ponzi scheme from collapsing any further.

That's why the program is set to be extended soon to cover the spring selling season. What's more, their proposal would also be expanded to allow higher-income Americans and some who already own homes to qualify for the tax break. Yippee more "free" money!!!

That's true even though the existing program has turned out to be exactly what you would expect from Uncle Sam: All smoke and dubious results.

 In fact, according to estimates by Ted Gayer at the Brookings Institution, each additional home sale generated by the $8,000 first-time homebuyers' tax credit actually costs the government $43,000 for each additional sale.

It's madness I tell you.

Besides, according to Moody's this is one collapse that can't be stopped....

From Bloomberg by Jody Shenn entitled: Moody's May Downgrade Mortgage Bonds With New Outlook

"Moody's Investors Service said it's planning a review of U.S. home-loan securities that will likely lead to another round of rating changes based on a new view that property prices won't bottom until next year's third quarter.

The firm will boost its loss projections by "significant" amounts for prime-jumbo, Alt-A, option adjustable-rate and subprime mortgages backing bonds issued between 2005 and 2008, also after seeing higher losses per foreclosure than expected, Moody's said today in a statement. Recent data showing rising home prices doesn't prove the slump is over, the company said.

"The overhang of impending foreclosures and the continued rise in unemployment rates will impact home prices negatively in the coming months," New York-based Moody's said. Since the first quarter, the company has assumed in its mortgage-bond ratings that housing prices would bottom at the end of this year.

Ratings reductions typically boost the capital needs of bondholders such as banks and insurers and force some investors to sell debt. Moody's and Standard & Poor's, criticized by lawmakers for assigning top grades to mortgage debt proven too high by later defaults, have already cut ratings on hundreds of billions of dollars of notes in the $1.7 trillion market for so- called non-agency mortgage bonds, which lack government backing, lowering many securities multiple times."

Here's a bet home prices fall another 10%—-no matter how hard they try to prop them up.

Related Articles:

Sen. Isakson Goes Off the Deep End

The Madness of Extending the Home Buyer Tax Credit

Home Buyer Tax Credit Gives Way to Fraud

To learn more about Wealth Daily click here

And it's unlikely you'll read about it on any blogs or hear about it by word of mouth. Even the most extreme government watchdog groups seemed to have missed this story. . .

1. Most of the world is quickly diversifying from the U.S. dollar to hedge against the multitude of American macroeconomic problems.

2. Now, even the U.S. government is trading in its own dollars for another currency — the same currency that China, Russia, oil-bearing Gulf countries, the UN, the IMF, the World Bank, and many others have already suggested to replace the greenback as the world's main reserve currency.

3. Over the past few weeks, the U.S. Treasury has liquidated billions of U.S. dollars to more than quintuple the national foreign reserves of this very currency. This is a clear sign. . .

The U.S. Government Doubts the Dollar

But this is more than just an outright signal that the U.S. dollar is in serious trouble. We already know that much.

The U.S. government's move to further diversify from its own currency is a beacon for investors to seriously prepare for another sharp increase in commodity prices. And in just one minute, I'm going to share with you several ways to profit. But before we get into that, it's important to understand how and why commodity prices will rise, as the. . .

U.S. Dumps Dollars for Special Drawing Rights (SDR)

The Special Drawing Right (SDR) was created by the International Monetary Fund in 1969 to support the Bretton Woods fixed exchange rate system.

The value of the SDR was initially coupled to one U.S. dollar, which was still pegged to gold ($35/oz) at the time. But after the collapse of the Bretton Woods system in 1973, the value of the SDR was adjusted to reflect a basket of 16 world currencies.

Today, the SDR is currently pegged to four currencies: the U.S. dollar (44%), euro (34%), Japanese yen (11%), and the British pound (11%).

The SDR is unlike any currency you're familiar with. SDRs are not backed by assets, nor do they represent a claim on the IMF. Rather, each member agrees to back its SDRs with the full faith and credit of its own government and to accept them in exchange for convertible currencies.

In reality, the SDR is less of a currency and more of an accounting entry. However, the SDR has similar characteristics as money, such as an interest-bearing asset, store of value, and means of settling debt. The SDR is a private currency of sorts — useable and accepted exclusively by IMF member states.

There are no SDRs in physical circulation like the dollars or euros in your pocket; they have an electronic unit of value.

So the SDR can be simply created, instantly, at the will of the IMF board — which is not bound by regulations. Therefore, there is still the threat of inflation as with any regular fiat currency.

This lack of regulation — combined with liquidity issues and the fact that the SDR makes a claim on nothing — creates potential pitfalls of using the SDR as a reserve currency.

But that hasn't stopped many world governments and other international finance organizations from making a push to use the SDR as the world's main reserve currency, laying the groundwork for. . .

A Post-U.S. Dollar World

The possibility of the U.S. dollar losing its main reserve currency status has sent government officials into a frenzy. Over the past few months, U.S. administrators have been extremely vocal in supporting the dollar as the world's main reserve currency.

Of course, U.S. Treasury Secretary Tim Geithner's voice has resonated loudly from Washington. Here are just a few things Geithner had to say about the dollar in recent months:

"I think the dollar remains the world's dominant reserve currency . . . that's likely to continue for a long period of time.” – At a meeting with the Council on Foreign Relations, as reported by The New York Times on March 26, 2009. “The dollar will remain the principal reserve currency.” – During a visit to Abu Dhabi, as reported by Reuters on July 15, 2009. “We have a special responsibility here in the United States to make sure we are doing the things in this country to preserve confidence in the U.S. financial system – confidence that’s very important to sustain the dollar’s role as the principle reserve currency in the international financial system. . . We expect, as I think countries expect around the world, the dollar to retain that position for a very long time.” – At the G-20 summit in Pittsburg, PA, as reported by Bloomberg on September 25, 2009.

Despite Geithner's public confidence in the U.S. dollar, the Treasury increased its holdings of SDRs in one week by 453% — worth $27.5 billion — in late August. Just take a look at the U.S. Treasury's International Reserve Position statements between August 21 and August 28:

Since that time, the U.S. Treasury has increased its SDR holdings by another 11%, and currently owns almost $40 billion worth of SDR. Current SDR holdings account for nearly 30% of the U.S. total foreign currency reserves.

This is a clear sign to the world that the U.S. government is making moves to hedge against its own falling dollar. . . and this may be the catalyst that leads the entire world to sharply diversify from the dollar.

An actual changeover in reserve currency dominance would send the value of the U.S. dollar plummeting, quite likely to all-time lows. Fortunately, there's still some time before the dollar completely collapses. And investors can prepare themselves with. . .

Easy Ways to Profit from Commodities

One of the best ways to hedge against a falling U.S. dollar is, of course, by investing in silver and gold. Precious metals have a 6,000-year history of preserving value against fiat currencies like the greenback. The most direct way of investing in gold and silver is to hold the physical metals. However, many investors prefer the ease of investing in gold and silver ETFs.

Other commodities — such as energies, grains, softs, and meats — also do well during times of a falling U.S. dollar. There are plenty of easy ways to invest in these commodities, including investing in ETFs, stocks, futures, and options.

Exposure to other foreign currencies, such as the euro and Japanese yen, will also provide a good hedge against a devaluing dollar. A simple option for investing in foreign currencies is currency ETFs. You can buy and sell them as easily as stock — without special transaction fees.

As the value of the U.S. dollar continues to decline, commodities will broadly rise. I strongly urge all investors to have at least some exposure to commodities.

Good Investing,

According to the Bureau of Economic Analysis (BEA), the U.S. economy expanded at a 3.5% pace during the third quarter, delivering some faint hope to the idea the recession may be ending.

However, within the report we also learned that without the cash for clunkers program and the homebuyer tax credit, real GDP growth for the quarter likely would have been something closer to 1.9%.

That's less than the estimated 2% growth rate that is necessary to otherwise be left standing still.

Even still, it's hard to argue with the fact that +3.5% is much better than -6.4%.

Also from the BEA release:

• Real gross domestic purchases - those made by U.S. residents of goods and services produced anywhere - increased 4 percent in the third quarter, compared with a 2.3 percent decrease in the second quarter.

• Current-dollar personal income decreased $15.5 billion, or 0.5 percent, in the third quarter, compared with an increase of $19.1 billion, or 0.6 percent, in the second quarter.

• Personal current taxes increased $4.8 billion in the third quarter, compared with a decrease of $119.1 billion in the second quarter.

• Disposable personal income decreased $20.4 billion, or 0.7 percent, in the third quarter, compared with an increase of $138.2 billion, or 5.2 percent, in the second quarter.

• Personal outlays increased $148.2 billion, or 5.8 percent, in the third quarter, compared with an increase of $8.2 billion, or 0.3 percent, in the second quarter.

• Personal saving - disposable personal income less personal outlays - was $364.6 billion in the third quarter, compared with $533.1 billion in the second.

• Current-dollar GDP - the market value of the nation's output of goods and services - increased 4.3 percent, or $150.3 billion, in the third quarter to $14.3 trillion. In the second quarter, current-dollar GDP decreased 0.8 percent, or $26.8 billion.

You do have to wonder though how the economy will respond once all of these government programs come to an end.

After all, beneath today's numbers, the underlying problems still remain.

As for the much hyped Cash for Clunkers program, here's a post mortem on that fiasco.

From CNNMoney by Peter Valdes-Dapena entitled: Clunkers: Taxpayers paid $24,000 per car

A total of 690,000 new vehicles were sold under the Cash for Clunkers program last summer, but only 125,000 of those were vehicles that would not have been sold anyway, according to an analysis released Wednesday by the automotive Web site Edmunds.com.

The Cash for Clunkers program gave car buyers rebates of up to $4,500 if they traded in less fuel-efficient vehicles for new vehicles that met certain fuel economy requirements. A total of $3 billion was allotted for those rebates.

The average rebate was $4,000. But the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009, according to Edmunds.com. That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales. (emphasis mine)

In order to determine whether these sales would have happened anyway, Edmunds.com analysts looked at sales of luxury cars and other vehicles not included under the Clunkers program.

Using traditional relationships between sales volumes of those vehicles and the types of vehicles sold under Cash for Clunkers, Edmunds.com projected what sales would normally have been during the Cash for Clunkers period and in the weeks after.

Edmunds.com's estimate of the ultimate sales increase generally matches what industry experts had thought, said George Pipas, a sales analyst with Ford Motor Co."

By the way, according to the forecasts, the economy will likely grow at a 2.4 percent annual rate from October through December. GDP will also grow 2.4 percent next year and 2.8 percent in 2011, the surveys have showed, compared with an average of 3.4 percent growth over the past six decades.

The difference is significant.

Related Articles:

The Madness of Extending the Home Buyer Tax Credit

The Cash-for-Clunkers Hangover

"Shadow Inventory" Looms Large in Housing

Home Buyer Tax Credit Gives Way to Fraud -

To learn more about Wealth Daily click here

Or, as the oft-quoted Barron Von Rothchild said, "Buy when blood is running in the streets, and sell when the horns are blowing victory."

I've been long and strong since last December, when I was buying up junior gold plays on the cheap. In the spring, I was buying oil and riding the 3G telecom wave in emerging markets. It turned out I was correct — and had my best overall year since 2003.

The truth is I've had a very good crisis.

But I'm not here to gloat. I'm here to tell you how to profit from what's going to happen next. . .

Where has the fear gone?

If you remember, during the spring of 2009, you couldn't get a higher rate of bearish market psychology. The fear was so palatable you could smell it. People were literally jumping out of windows with their trading account records stuffed in their coat pockets.

Obviously, that was the time to buy.

But now, there is no fear. Every stock chart you look at is up 200% or more. Investors who've held through the bad times are thinking, "A few more up months and I'll be able to retire again."

But they aren't going to get it — not this year, anyway.

I'm not just blowing Dixie. This isn't just a hypothesis. I know the bears are dead because the volatility index (VIX), a great measure of market psychology, is back to historic lows.

VIX is Down

Think of the VIX as the opposite of the stock market. A year ago, it took off to record highs as the major indexes fell 50%. When the market started to calm down and the bulls took over, the VIX went back to its historical trend line at 20.

Two Year VIX

This tells me that all of the bears are wrung out of the market. And let's face it: they've been getting creamed for eight months.

The good news is put options are cheap again.

But it's not just the lack of fear that had me bearish. . . it's the Dow Jones Transportation Average, a leading indicator.

Be Bearish

The Dow Jones Transportation Average has a double top, which is a major reversal chart pattern. It means that the bulls have tried to break a certain level. . . fallen back. . . tried again. . . and failed again.

Double Top in Transports

Dow Theory states that if the Transports break their trend line — and this is confirmed by the Dow Industrial Average — then we are in a bear market. This theory has been right 10 out of 11 times. The Industrials haven't confirmed. . . yet.

But the small caps also have a double top.

Russell 2000 — Double Top and Broken Trend

There is also a double top in the Russell 2000 — the index of the small capitalization stocks.

If you go back through market history, the small caps tend to lead the market both up and down. The idea is that they are more nimble and less defensive. Therefore, they are the first to be affected by events.

The Little Guys are Running Scared

You will also notice that the MACD had a crossover and turned negative. And the volatility has flattened out to the point that it has broken its downtrend.

I'm starting to see these bearish chart patterns all over the place. The NASDAQ has broken its uptrend as well, and looks like it is rolling over. . .

The dollar is bouncing higher — a sure sign the smart money is getting out of equities.

I recommend picking up some iShares Russell 2000 Index (IWM) put options.

I suggest the December 53 (symbol: IWMXA), which last traded at $1.40 with 23,650 contracts out. Or you may just consider switching some of your investments into cash.

Happy Investing,

Christian DeHaemer
Angel Publishing

Editor's Note: Wealth Daily has been pointing out market trends and opportunity for profit to our readers for years now. . . and our team of researchers realizes just how precious time is when it comes to gathering information, spotting trends, buying, holding, and selling. . .

My colleague, WD's own Ian Cooper, takes the legwork out of this time-consuming process for his readers. His Options Trading Pit delivers market commentary, urgent updates, and market picks that are up 1794% since January of this year. Click here to become one of these profit-taking readers.

Dollar up.....Dow down. It's not much more complicated that that these days.

In fact, here's a look at the recent correlation between stocks and the greenback using the PowerShares DB US Dollar Index Bullish (NYSE:UUP) as a proxy for the dollar

First, in the long term....

....then over the last 5 days.

 Any questions?

Related Articles:

Roubini Predicts a Dollar Reversal

Dollar Vs. Euro: An Eye on the Euro and the Hottest Indicator on Wall Street

Warren Buffett on Investing in Gold

To learn more about Wealth Daily click here

According to a UK Times report from March 2009, "[It] has triggered what government sources in Tokyo told The Times was an invisible tsunami of panic in Japanese industry."

Oddly enough, the same event happened five months earlier — in November 2007 — with the same result. . .

What had the Japanese in such a state of panic?

Its old foe — China — had just served some revenge.

In a stunning turnaround, the Chinese Communist Party announced further export restrictions of a vital group of commodities. Without access to these commodities, the Japanese automobile industry would come to a screeching halt.

Why?

Toyota's hottest selling car — and quite frankly, its future — is the hybrid Prius.

Inside the Prius are roughly 40 to 60 pounds of a unique commodity group known as rare earth metals.

But we're calling them "Dragon Metals" (DM) because the Chinese account for 97% of global production. They literally own the market.

Take a look:

Source: New York Times

According to MarketWatch, "China is the Saudi Arabia of [Dragon Metals]. And like oil, [Dragon Metals] will flow to the highest bidder."

In fact, Deng Xiaoping said that these metals "will be for China what oil was for Saudi Arabia."

Japan's tech economy depends on these metals. They have identified 31 Dragon Metals, including lithium, that are vital to the future of the tech economy.

Dragon Metals are a group of elements in the periodic table: namely scandium, yttrium, and the fifteen lanthanoids. The use of Dragon Metals in modern technology has spiked significantly over the past years.

For example, dysprosium has gained significant importance for its use in the construction of hybrid car motors. Terbium and dysprosium are also used in small amounts.

Since Toyota plans to double the Prius's fuel economy, each car will require MORE rare earth metals than it does now. And Toyota plans on selling 1 million Priuses yearly by 2012. . . and 2 million to 3 million by 2014.

Other hybrid/electric cars made by other manufacturers use rare earths in differing amounts — vehicles including the popular Ford Escape Hybrid and Honda Insight.

It all adds up to tremendous demand. And unfortunately, this new demand has squeezed supply. . . and there is mounting concern that the world may soon face a shortage of the materials.

No wonder the Chinese are trying to corner the market!

This is where the investment opportunity unfolds. . .

Dragon Metals are essential to new technologies such as iPhones and flat screen televisions; green energy technology such as wind, solar, and geothermal; and critical to the future of hybrid and electric cars.

Recently, China has been limiting exports of DMs, which could lead to declining worldwide supply and skyrocketing prices. This has Western governments worried, as DMs are also key to high-tech military applications.

An article from The Telegraph reports on plans in China to restrict exports of rare earths:

Beijing is drawing up plans to prohibit or restrict exports of rare earth metals that are produced only in China and play a vital role in cutting edge technology, from hybrid cars and catalytic converters, to superconductors, and precision-guided weapons. A draft report by China's Ministry of Industry and Information Technology has called for a total ban on foreign shipments of terbium, dysprosium, yttrium, thulium, and lutetium. Other metals such as neodymium, europium, cerium, and lanthanum will be restricted to a combined export quota of 35,000 tonnes a year, far below global needs.

This explains why the Japanese are panicking. . .

The Toyota Prius uses 2.2 lbs. of neodymium in the hybrid's electric motor and 22-33 lbs. of lanthanum in the car's battery pack.

Without these Dragon Metals, the Prius would cease to exist. And the thriving hybrid industry in Japan would come to a screeching halt — bringing Toyota and Honda to their knees.

But with every crisis comes an opportunity.

And as an investor, this is where you can make a legendary fortune.

In fact, on August 26, I told you how to play the lithium market by buying Western Lithium for $1 a share. Today, Western Lithium trades for $1.25. . . and has gotten as high as $1.50 since I first told you about this opportunity.

But there are other ways to play the rare earth market.

And I've pinpointed two ways to play this situation:

1) To invest directly into China's electric car market; and
2) To invest in Dragon Metal exploration outside of China.

You see, I can almost guarantee the world isn't going to sit by and become dependent on a vital resource like it did with oil and OPEC.

As you read this, mining companies are scouring the earth, looking for new supplies of Dragon Metals.

And one of the most promising places is Greenland.

In fact, recent estimates show that Greenland could supply 25% of global demand of Dragon Metals.

In the weeks ahead, we will show you specific ways to invest in this opportunity.

In addition to that, we will also bring you a unique way to play the Chinese Dragon metals market as it relates to electric cars.

Stay tuned,

Brian Hicks

P.S. Dragon Metals and other commodities vital to the electric car market should be on every investor's radar — the companies that supply these commodities to auto giants like Toyota and Honda could mean some serious gains for investors. Not to mention, as current skyrocketing energy prices are proving — we're in the early stages of the greatest commodities bull market in history. . .

My colleague, Ian Cooper, has closed 93 winning trades with his resource and energy stock picks this year alone! Since November 2007, readers of his Pure Asset Trader service have enjoyed gains of 3,124%. Click here to read more about how you, too, could start enjoying this kind of profit-taking.

Any one would think the markets were suffering from the onset of schizophrenia the way they've been acting this week. One second, all is well. Buyers line up to chase the recovery. The next - buyers are swimming for the exits in a sea of red ink.

It didn't help that consumer confidence fell unexpectedly to 47.7 in October from 53.4 in September thanks to worsening unemployment numbers... or that new home sales plunged 3.6%, as the effects of the temporary tax credits begin to die off.

Not exactly the kind of "confidence" you'd expect in a recovery, is it?

But don't tell that to those buying anything that confirms the delusion of a "jobless" or "consumer-less" recovery...

Even corporate insiders know better than to chase this rally higher.

Insider selling just about tripled last week to $846 million, as insider buying came in at a pathetic $14.7 million from $32 million. That's a clear message. Even insiders believe their company share prices are overvalued... and they're cashing in before the next leg down that we have been calling for.

Because today is the day the Department of Energy announced $3.4 billion worth of federal funding to "speed deployment of advanced technology designed to cut energy use and make the electric-power grid more robust."

In laymen's terms: the Federal government is paying for about 18 million new smart meters to be installed in homes and offices around the country.

The grants are part of the stimulus. . . and will be paid out to 100 utilities across the country in spurts ranging from $400,000 to $200 million.

Like Putting Cash in Your Pocket

For investors and consumers alike, this is the equivalent of receiving free money.

As a consumer. . . you could be the recipient of one of these free smart meters. That would enable you to save hundreds of dollars on your utility bills through better energy understanding and management.

I know I'll be getting one, since my local utility, Baltimore Gas & Electric, has been awarded $200 million.

But it gets even better for investors. . .

You see, the government — by giving money to utilities — is about to purchase billions of dollars' worth of new equipment for the electric grid.

And, thanks to new transparency requirements associated with the stimulus, I've been able to find out exactly which companies will be the beneficiaries.

Now, I shouldn't have to tell you what happens to the stock of companies that receive free government cheese. Be it for lucrative defense contracts or biotech research grants. . . when government funding is announced, stocks fly.

This time, it just happens to be energy's turn. And over the past few months, I've compiled a list of companies certain to receive stimulus payouts.

The investment potential here is massive. Just imagine having a list of companies guaranteed to get government funding. . . along with the exact date on which they'll receive it.

It's the kind of information that can lead to early retirement. So, it goes without saying that I've been keeping it closely guarded.

But now that the Department of Energy has made a formal announcement, I'm giving away the list to all who want to read it.

Simply click here.

Call it like you see it,

Nick

But companies like Nokia can't assume their market leadership will last 'til kingdom come. . .

And it's certainly not good news that Nokia just reported its first quarterly loss ever. Since 1996, the company has been growing and growing, but the iPhone suit against Apple strikes many as a sour-grapes effort to climb back into a smartphone scene to which Nokia paid too little attention.

Apple and Nokia are now part of a flame war that will probably end out of court, but not before millions in legal fees are generated and Nokia potentially diverts important resources from the task at hand: getting back to profitability.

I watched Advanced Micro Devices (NYSE: AMD) doggedly pursue Intel (NASDAQ: INTC) in a similar way from late 2005 on, and AMD shareholders have nothing to show now but a share price that is down 64% over the past five years. Intel shares dipped into the red by 4% in the same time period, but we know who still holds the upper hand.

Nokia may be best off showing that Finland's tech economy (near Sweden, Denmark and Estonia, which gave us the highly successful internet phone software Skype and file-sharing service Kazaa), can be a template for a major worldwide expansion of broadband access. Nokia can take the helm of a global high-speed wireless web campaign through its existing consumer base — and the fact that its country is now a policy Petri dish for 21st century telecoms.

Nokia dropped by 16% in the month to October 22, while Apple gained nearly 10% — largely on the back of iPhone sales.

Frankly, Finland could be first in a long line of countries that will make broadband internet a civil right. Each nation that recognizes the importance of high-speed internet to economic growth will generate new momentum for profit growth at smartphone makers.

Whether on the desktop or laptop or in the pocket, you want to tap international broadband expansion in your own portfolio.

Regards,

Sam Hopkins


P.S. Smartphone patent disputes are one thing, but smart grid electricity development is leaving plenty of room for multiple companies to profit. . . from metering solutions to massive load monitoring systems that can shift a whole city's power balance and avoid blackouts. In rich and poor countries alike, progress means investment in new energy technology, and we're tracking a world's worth of spending in Green Chip International. To learn more, click here.