Today’s Investment Vehicle: INVESTORS PRUDENCE

By: Shan Saeed

GLOBAL INVESTMENT HISTORY

How investors can analyse the market with their investment funds. After every decade, a new financial craze sweeps the markets. In the 1980s, junk bonds captured high yields at a time of rapidly-falling interest rates. In the 1990s, investors moved into high-fee mutual funds, which offered a one-stop-shop for diversification.

Over the past decade, two new investment products came to the forefront. The first, collateralized debt obligations (CDOs) blew up spectacularly in 2008. These assets, mortgages in the “it never goes down!” housing market, became increasingly backed by pools of mortgages funded without stringent underwriting standards.

The second product, the exchange traded fund (ETF) has continued to surge with popularity among investors. That’s because ETFs offer the same type of diversification as mutual funds, but often at a fraction of the fees. But all is not well with these products—and investors should be wary.

RESULTS ABOUT EXCHANGE TRADED FUNDS


The biggest problem facing ETF investors today is having too many choices. In the past decade, ETF issuance has greatly surged from 113 ETFs in 2002 to 1,440 in 2012. This 10-fold level of growth isn’t sustainable. Today, investors can find an ETF with a laser-like focus on a specific sector. They can find ETFs that leverage up that sector’s performance by 2 or 3 times—either on the long side, or the short side. 

More importantly, ETFs have already become the most popular investment vehicle today. If ETF growth doesn’t significantly slow over the next few years, it may signal that it’s time to invest elsewhere until the excesses are weeded out. Investors should always beware of new financial products until they’ve had a chance to be proven during a period of market stress. For traditional ETFs, that moment came with the financial crisis. Unleveraged funds performed in line with the overall markets.

But the returns of leveraged ETFs have in many cases failed to perform as they should have. For instance, a double-leveraged ETF that should surge 10% when its tracking index falls 5% won’t necessarily see that kind of return.

Why? For starters, it’s because leveraged ETFs use options. Options impose both an intrinsic value and a time premium on the buyer. As the option moves closer to expiration, the time premium evaporates. As leveraged ETFs “roll” the options by selling soon-to-expire options for ones further out, they have to pay out time premium.  This unfortunate drag means that leveraged ETFs are a poor long-term investment vehicle. Over the short-term, they may perform better than expected, but timing is everything. Unleveraged, broad-index ETFs should provide investors the opportunity for diversification without the problems associated with their leveraged counterparts. 

Investors must nevertheless remain vigilant for any substantial market changes and be willing to act accordingly. Don’t rely on increased leverage to “make up” for lost investment power. Only use leveraged funds when the markets are at extreme points. Its not there yet.


Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry a RISK. 

Gold and Silver are hedge against financial / economic repression ------By Shan Saeed

Strategic analysis of the Global Economy

I had shared this insight 3-year back in a TV channel that Gold and Silver were hedge against uncertainty and chaos. Gone are the days when Gold/Silver were hedge against INFLATION. Now, I am sharing a new punch line i.e. Gold and Silver are hedge against FINANCIAL & ECONOMIC REPRESSION. We are living in historic times where financial market chaos and uncertainty is giving rise to a new structure and landscape to the global markets.

In order to know what is really going on in the world, investors need to first shut off the parade of mainstream media clowns and start tuning into alternative media. One commentator recently pointed out what should seem obvious to anyone who actually has a brain and uses it.

MAIN STORIES FOR THE LAST 2-MONTHS

1.   What is the real story behind the incredible lack of reporting regarding the European crisis — especially in the countries of Greece, Spain, and Italy right now? Spain will leave Euro or Greece or Germany

2.   Why has Citigroup been put in charge of issuing "digital-identity badges" to individuals that work for Defense Department contractors?

3.   What will happen to JP Morgan in the next 2-years? Will it collapse like Lehman Brothers?

4.   Saudi Arabia is pumping more oil to get Obama elected to secure shale gas deals in the long run.

5.   Why does the United Nations want to govern the Internet? Why aren't more people getting upset about their attempted power grab?

6.   Rare earth and Water will become the new source of war in the revised world order?

7.   Will Chin’s economy and growth trajectory cool off?

I am sure many of you could add more questions about other truly serious issues facing the world on an individual, national, or on the global basis. I bring these items to your attention because if you are trying to be a wise investor, it is mighty difficult to have success when you don't know the truth about things.

We are living in a time of unprecedented events. Throughout world history, there have always been good times, bad times, wars, rumors of wars, and problems that may have seemed insurmountable at the moment.

ADVENT OF THE DOOMS DAY. WHAT DID THE DOCTOR ORDER?

I read an article that clearly illustrates the necessity for alternative media to help us wrap the arms around this situation.

Raoul Pal was a Goldman employee who co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe. After Goldman, he was the founder of Global Macro Investor, co-manager of GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world. This is not some doomsday sprouting windbag arbitrarily pasting together disparate charts to create 200 page slideshows.

With Pal's resume, this is someone who is well-connected financially and knows things most others don't.

His latest writings—specifically his latest presentation — are what I want my readers/ investors /people to pay attention to, as it portrays the most disturbing and scary forecast related to these derivatives for the global economy:

• We don't know exactly what is to come, but we can all join the very few dots from where we are now, to the collapse of the first major bank...
• With very limited room for government bailouts, we can very easily join the next dots from the first bank closure to the collapse of the whole European banking system, and then to the bankruptcy of the governments themselves.
• There are almost no brakes in the system to stop this, and almost no one realizes the seriousness of the situation.
• The problem is not Government debt per se. The real problem is that the $70 trillion in G10 debt is the collateral for $700 trillion in derivatives...
• Yes, that equates to 1200% of Global GDP and it rests on very, very weak foundations...
• From an EU crisis, we only have to join one dot for a UK crisis of equal magnitude.
• And then do you think Japan and China would not be next?
• And then do you think the U.S. would survive unscathed?
• That is the end of the fractional reserve banking system and of fiat money.
• It is the big RESET.

Pal continues:

• Bonds will be stuck at 1% in the U.S., Germany, UK, and Japan (for this phase).
• The whole bond market will be dead.
• Short selling on bonds — banned.
• Short selling stocks — banned.
• CDS — banned.
• Short futures — banned.
• Put options — banned.
• All that is left is the Dollar and Gold.

It only gets better (we use the term loosely)...

• We have around six months left of trading in Western markets to protect ourselves or make enough money to offset future losses.
• Spend your time looking at the risks of custody, safekeeping, counterparty etc. Assume that no one and nothing is safe.
• After that... we put on our tin helmets and hide until the new system emerges.

How did we allow this to happen?

Do you want to know where we stand and what is going to happen to the U.S. economy and global economies?

Stop listening to the mainstream media and start getting acquainted with what is going on with this terrible derivative situation.

No wonder Ben 'the Liar' Bernanke has to tell so many lies... He told the American public after QE1 there would be no need for QE2 and yet QE2 came in.  As of today, he is telling us there is no need to do QE3 — but plans are already under way for exactly that.

If you listen to what Ben says in the mainstream media, you are almost certain to lose your shirt in the investment world in the coming months and years ahead.

SILVER- Extinct just 8 yrs from now!!!!

That's how long it will take for the supply of silver to be completely wiped off the face of the earth, according to the U.S. Geological Survey. That's why you need to be buying silver right now — only not in the way that you think...90% Silver has been mined. Silver is a poor’s man Gold.

A global economic disaster and resulting paradigm shift had to happen at some point, and it appears that time has come. I think, we are now coming to a point where there is no more "kicking of the can" down the road.

History clearly shows that governments and central banks can hide their mistakes for many years, but they all eventually go bust. What we are witnessing in Europe, in my opinion, is just a precursor for what will eventually come to London, the United States, Japan, and China.

People ask me if the bull market in precious metals is over. Most of these individuals are the very ones who are still listening to the mainstream media, who have a constant propaganda machine to bash the precious metals.

Let's look at this thing from an objective standpoint for the past 12 years to help you understand if you haven't already figured it out...Each and every year for the past 14 years, I have been bullish on owning gold and silver. Now, realize I am not talking about the fraudulent paper representations of gold and silver like pooled accounts, certificate programs, or ETFs...

You will never see the full benefit of those investments as the precious metals soar to levels the average investor can't even understand at this point. The reason: They are not backed with real metal as is fraudulently advertised.

I also want to mention the fact that for eleven years in a row, gold and silver have hit a new high each and every year since 2001.

When gold was at $350, I remember the mainstream media coming out in droves saying how gold would never cross $400 and was most likely headed to $150. Each and every year for the past eleven years, these manipulative morons have said the same thing as gold kept tracking higher and higher. They were wrong, and people like me have been right and got the appreciation for my strategic insight.

Who are you going to listen to? Why would the secular bull market in precious metals be over at this point? Has anything changed for the better?

Of course not. They are getting much worse very quickly... and governments and their central banks don't know what to do about it other than create money out of thin air and pump it into the system.

It's not working. Look at what Merkel and the Euro jackals told us just three months ago that all has been solved with debts in the European Union and not to worry. Now we find out there is plenty to worry about, and QE3 will be happening in a big way despite what the banksters say.

The fact is that after reaching each and every new high the past eleven years, the precious metals markets have always corrected back 10% to 25% from the latest high before trekking to the next new high.

The Reason to own Gold and Silver have never been stronger than right now. They will become even more so in the coming months and years ahead as the calamity of governments and politicians is fully exposed for the entire world to see. Wall Street has been losing "clients" ever since they had to be bailed out by the government...JP Morgan's recent $2 billion trading loss is just the latest example.

And people are going to become irate as they lose their savings, pensions, etc., etc. As Richard Maybury recently said in his Early Warning Report, the evidence is quite clear:

“Socialism doesn't work. The leviathan state in Washington needn't be overthrown because it is committing economic suicide. Like the Kremlin in the Union of Soviet Socialist Republics two decades ago, the whole statist structure is collapsing of its own weight, because it is rotten to the core. The trouble we have been seeing all over the world during the past several years is the beginning of this spontaneous disintegration everywhere.”

Get ready for gold and silver to make a run to the next new highs before the year is out as the problems with debts, fiat currencies, and derivatives all come to a head at once. It's not going to be pretty for those who are unprepared, so do what you can to get your house in order before it's too late...

Secure your future by taking position in Gold and Silver. Ownership of physical gold and silver that is in your possession will be paramount to your financial success in the coming months and years ahead. Eventually, the right mining stocks could offer insane leverage to drastically higher precious metals prices.

And if you want to know who the last man standing will be in the coming debacle, you need only heed this quote by George Bernard Shaw:

You have a choice between the natural stability of gold and the honesty and intelligence of the members of government. And with all due respect for those gentlemen, I advise you, as long as the capitalist system lasts, vote for gold.

Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry a RISK. 

TIME BOMB: DERIVATIVES ---THIS ANIMAL CAN CREATE HAVOC FOR THE FINANCIAL MARKETS--By Shan Saeed

I am not sharing earth shivering news but its a hard fact. But in the so-called modern-day age of high-tech wonders and medical miracles, we now have a titanic problem the world has never seen before: derivative liability on a scale that boggles the mind.

What is even more puzzling is the fact that 90% of the people have absolutely no understanding or the slightest clue how this is now going to affect us.

And the punch line: From a timing perspective, I think 2012 and 2013 will usher the most challenging times for the financial markets globally. 

After hearing this, I have started to wonder about the recent revelations regarding J.P. Morgan Chase and their $2 billion derivative loss (or was that $4 billion?). The latest news seems to indicate $20 billion loss, but suddenly it's starting to sound like just the tip of the iceberg, similar to how the 2008 derivative meltdown started.

For those not familiar with the current derivative liability hanging over the head of the financial system, here are the facts: There is nearly $1 quadrillion (that's 1,000 trillion) of unsecured derivative liability in the world.

This number is absolutely insane! A million seconds is roughly 12 and half days. A billion seconds is 32 years. A trillion in terms of seconds represents 32,000 years. A quadrillion is 1,000 times 32,000 years in terms of seconds.  It's hard to get one's head wrapped around such a number.

The Top 5 U.S. banks make up $230 trillion ($230,000,000,000,000) of this quadrillion dollar liability.

Here is the breakdown of this number as accurately described by noted retired writer Paul Roberts who was famous with the Washington Post...Paul Roberts enlightens us about another $230 trillion:

However, the $230,000,000,000,000 in derivative bets by U.S. banks might bring its own surprises. JPMorgan Chase has had to admit that its recently announced derivative loss of $2 billion is more than that. How much more remains to be seen. According to the comptroller of the currency, the five largest banks hold 95.7% of all derivatives held by banks. The five banks holding $226 trillion in derivative bets are highly leveraged gamblers.

For example, JPMorgan Chase has total assets of $1.8 trillion but holds $70 trillion in derivative bets, a ratio of $39 in derivative bets for every dollar of assets. Such a bank doesn't have to lose very many bets before it is busted.

Assets, of course, are not risk-based capital. According to the Comptroller of the Currency report, as of December 31, 2011, JPMorgan Chase held $70.2 trillion in derivatives and only $136 billion in risk-based capital. In other words, the bank's derivative bets are 516 times larger than the capital that covers the bets.

It is difficult to imagine a more reckless and unstable position for a bank to place itself in, but Goldman Sachs takes the cake. That bank's $44 trillion in derivative bets is covered by only $19 billion in risk-based capital, resulting in bets 2,295 times larger than the capital that covers them.

Bets on interest rates comprise 81% of all derivatives. These are the derivatives that support high U.S. Treasury bond prices despite massive increases in U.S. debt and its monetization.

U.S. banks' derivative bets of $230 trillion, concentrated in five banks, are 15.3 times larger than the USA GDP size 15.1 trillion. A failed political system that allows unregulated banks to place uncovered bets 15 times larger than the U.S. economy is a system that is headed for catastrophic failure. As the word spreads of the fantastic lack of judgement in the American political and financial systems, the catastrophe in waiting will become a reality.

Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry  a RISK

Smart Money continues to stay in precious metals By Shan Saeed

Gold and Silver will continues to outshine and outsmart other asset classes going forward. Gold and Silver are hedge against financial and economic repression. 
In long-term bull markets, there are often lulls. For example, if you look at the Nasdaq bull market of 1982 to 2000, you will see that at its 1990 low, it had gone nowhere since its 1983 high. That is seven years of near-flat movement despite being in a long-term bull market. Right now, we have seen a near year long consolidation in gold and a near two-year consolidation in the stocks.

However, I still think the long-term trend is to head higher. If you analyse at economic slowdowns in India and China, the eurozone crisis and the looming debt crisis in the United States, there is little else for these countries to do but to cut interested rates and print money. 

Smart money is doing this: Soros Fund Management LLC, founded by the 81-year-old billionaire, more than tripled its investment in the SPDR Gold Trust in the first quarter to 319,550 shares, now valued at $50.2 million, an SEC filing May 15 showed. It held as few as 42,800 shares last year and as many as 6.2 million at the end of 2009.  John Paulson has helped his GLD position in the first quarter. I could imagine that both these big investors are waiting for the long bull run in precious metals. 

Therefore, both are ignoring short-term weakness and getting ready for a huge round of money printing to come. ..Gold stocks are a special opportunity because by certain valuation metrics, they are cheaper than their 2008 lows and are as cheap as they have ever been. Big and valued investment still long gold and gold stocks cheap — this brings a unique opportunity in the gold sector. 

I didn't think it would see as good as buying opportunity in gold stocks as it was seen in 2000 and 2008. However, we have one yet again.  If investors have missed out on the gold bull market, I would use the recent weakness to take advantage and get into the bull wagon. 



NEXT STOP FOR Gold: $1800 or $1900


As long as gold can maintain its support at $1,525 an ounce, 
further gains should be forthcoming. 
What’s the best strategy now? You buy gold. 

The precious metal’s 15 percent correction from last 
September’s 6, 2011 high of $1,923 creates a great opportunity 
to purchase it at a “discount.  Investors stay long above $1,525. 
Every time I hear that to get to that level, I can see big buyers
 — perhaps central banks — adding to their coffers of physical gold.
 That's giving the nice base. To be sure, if gold drops below $1,500, abandon ship. 
But I dont anticipate that. I see a very good chance that 
the Federal Reserve will implement another round of 
quantitative easing [QE-3]. “If the gold stays above $1,600, 
I am definitely see a clear shot to $1,700.

Other financial investors/players are calling the shots as well. 

1. Goldman Sachs predicts a price of $1,940 in 12 months. 

2. Barclays sees an average of $1,790 in the fourth quarter 

3. Morgan Stanley expects $2,000 then. 

4. HSBC eyes $1800 by Dec-2012

4. Shan Saeed expects Gold touching $1900/ounce by Q-4. 2012

Disclaimer: This is just a research paper and not an investment advice. All financial transactions carry a RISK. 

Austerity or growth stimulus. Comparison between USA and UK.  

By Shan Saeed

 I agree with Mr Krugman –Nobel Laureate from Princeton University that USA need more econ0mic growth. It is highly imperative that to create more jobs in the US, the UK and the rest of the EU. In the end, bottom line is to raise living standards. Like Mr Krugman I am no fan of austerity.

I also see Mr Krugman agrees that the Euro was a badly designed currency. He and I agree that there have been major imbalances between various states in Euroland, with no easy way of correcting the large balance of payments and banking imbalances that have built up thr0ugh the foolish design of the system. He has pointed out that Florida, after a housing bubble, received 4% of its GDP in the form of enhanced federal transfers. This is aid on a scale unknown within the Eurozone, where the richer areas are reluctant to subsidise the poorer areas. I have always argued you need a banking, budgetary and payments union to make a success of a single currency. Alternatively they need to get on and break it up quickly and cleanly.

 Where I find Mr Krugman less convincing is in his belief that a country deeply in debt can simply borrow more or print more to create sufficient extra public sector demand to get back to rapid growth. He believes that most of the UK deficit is cyclical – that it will vanish once UK will have fuller employment. He further believes UK can get to full employment by printing and spending more in  the public sector, without triggering an inflation which could  damage the private sector . Such an inflation could more  than  offset  or swamp the beneficial effect of more public spending on demand. Any analysis of past UK recoveries would lead people to doubt this idea.

 Mr Krugman does not agree with those in the UK who say that President Obama has got it right by administering a big public sector spending boost which has led to faster growth. He is very criticial of the US for cutting too far too fast. He points out that since the middle of 2011 US real government spending per head has been falling. Despite or because of this the US economy has grown reasonably for the last three quarters. Meanwhile the UK, where real public spending has been rising, has experienced two quarters of decline in output. Not all of the differences in spending levels are the result of cyclical effects.

If I critically analyze at the UK’s recovery from the 1981 and the 1991-2 recessions, I will see that in each case the government cut the growth rate of public spending and the economy started to grow more quickly. On each occasion commentators and the Opposition united to say that public spending was being cut savagely and too far.  In each case the move to decent growth came from a good increase in private sector consumption and investment.

 In 1981 output fell 2.5% whilst public spending was constant. In 1983 compared to 1982 real public spending rose by just 0.5% whilst investment and consumption expanded to give an overall growth rate of 2%.. In 1991 output fell 2.5% whilst public spending rose by 3.25% in real terms. In 1992 real public spending came down  by 0.25%, and rose by the same amount in 1993. By 1993 the economy was growing at 1.25%, and by 3% in 1994.

 On both occasions of recovery the government felt it had to set out a path for cutting the level of public borrowing, to prevent high interest rates doing more damage to the larger private sector.   Growth came from a change in the stock cycle, from a pick up in private sector investment, and from increased consumption. Any or all of these could have been hit by a loss of market confidence in the public finances, leading to crisis interest rates.

 This time there are some differences. The first is that the loss of output in the recession was far larger than in 1981 or 1991-2. The second is the level of public spending and borrowing is so much higher relative to the size of the economy, than in the earlier periods. The public sector borrowing requirement was 2.75% of GDP in 1982-3, and 5.75% in 1992-3. The third is the banks are under much stricter regulatory requirements to cut loans and reduce credit to the private sector than in previous periods. The fourth is official interest rates are much lower. Then as now, sensible commentators and Ministers allow some  extra borrowing to accommodate  the impact of lower activity.

 Mr Krugman would doubtless argue that the magnitude of the output loss coupled with the savage deleveraging of banks in the private sector is a good reason to demand even more extraordinary measures to increase spending and borrowing in the public sector further. I would argue that UK  need instead to look at the intensity of the private sector squeeze, and do more to alleviate that. The combination of large tax rises and continuing high inflation for many basics have squeezed the UK private sector badly, and left it so far unable to trigger the bounce back that has characterized previous recoveries. They need work on tax levels and banks, as I have argued here, with continuing pressure to improve productivity in the public sector.

Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry a RISK.

QE-3 is coming for sure. Expect soon guaranteed. By Shan Saeed

The chance the Federal Reserve will stimulate the economy via monetary easing measures stands at 100 percent now. The economy in May-2012 created a net 69,000 jobs, far below expectations for a gain of around 150,000, sparking talk the Fed will stimulate the economy to comply with its dual mandate of maintaining price stability and optimal employment levels.

Since the downturn, the Fed has twice juiced the economy via two rounds of quantitative easing (QE1 and QE2) by buying bonds from banks and pumping the economy with $2.3 trillion in expansionary liquidity in the process. Expect QE3 soon.

The Fed has made it abundantly clear that it has kept QE3 up on the table; [it] would be executed if economic circumstances deteriorated. And people have to admit that Friday's number — no matter how you try to slice it — was deterioration. While May's jobs figures were pitiful, April and March figures were revised downward, making quantitative easing inevitable. The announcement should come around the time of the Fed's June 19-20 monetary policy meeting. 

Quantitative easing tends to fuel debate, as supporters say the measure steers the country away from deflationary decline and encourages investment and hiring. Critics says the move is basically printing money out of thin air and plants the seeds for inflation down the road... Other market observers say all signs put to more easing. I call Quantitative Easing as fantasy money. 

First-quarter gross domestic product growth rates were revised down to 1.9 percent from 2.2 percent, the European crisis is escalating and at the end of 2012 in the U.S., tax cuts are set to expire while automatic spending cuts are set to kick in, a combination known widely as a fiscal cliff that could siphon hundreds of billions out of the economy next year and send the overall economy contracting...US is heading for recession by Q-1, 2013. 

USA have had two months of less than 100,000 job gains back to back, and I believe this is one of the reasons why the Fed may start asking itself, 'What do we do to help the economy?'" 

The April inflation report finds that consumer prices rose at an annual rate of 2.3 percent, which is above the Fed's 2 percent target, although Commerce Department personal spending numbers show that price inflation stemming from personal consumption expenditures grew at an annual 1.8 percent in April, which suggests demand remains sluggish. Even if the Fed does roll out QE3, it might not even work.....QE1 and QE2 failed miserably to stimulate the economy. FED was just trying to manipulate the financial market whether its currency or bond or commodities or equity or housing market. 

Massive liquidity injections stimulate the economy by pushing down long-term interest rates when normal benchmark rate cuts don't work.....Long-term rates are low enough as it is. The potential for the Fed to help much more, much further in terms of lowering long-term rates is quite limited, given that rates are already at record lows. Yields on the 10-year Treasury note slipped below 1.5 percent on Friday as reported by Wall Street Journal. 

Disclaimer: This is a just a research piece and not an investment advice All financial transactions carry a RISK

STRATEGIC VALUE INVESTMENT IN NATURAL GAS.

By Shan Saeed

Globalization is over. Finished. Kaput. The era of globalization — where the global economic playing field is levelled to create equal opportunity from Argentina to Zambia — is about to fail in a major way.

The global economy is doing its death stagger... like a Hollywood cowboy swaying back on his boot-heels as a barrage of bullets find their mark, utter surprise on his face knowing he's already dead. All that's left is the melodramatic fall to the ground. And you know what? The death of globalization could be a very good news for the U.S. economy. A silver lining is still there.

I have watched American jobs be shipped overseas long enough. I have seen U.S. financial institutions like Morgan Stanley and Jon Corzine's MF Global lose billions and billions with harebrained bets on foreign government debt. Screw China, screw Europe, and screw India — there's only one economy in the world that's where innovative and technology efficiency an turn around the situation provided the government focus is there. Which is lacking at present in and its the U.S. of A.

Won't Go Down without a Fight

You can bet the global powers-that-be won't go down without a fight. You can expect to see Europe adopt Eurozone bonds and bank bailouts to try and gloss over their failed monetary union.

I'm hearing that China has already started to pump money into its grossly imbalanced economy. …And I'm sure US economy is not far from QE3...Gold ramped above $1,622 per ounce yesterday after a dismal employment report virtually guarantees that Bernanke will open the liquidity floodgates again.  Every investor should own some gold. And if you don't own any, now is probably a good time to get some into your portfolio. GOLD AND SILVER ARE YOUR WEALTH INSURANCE.

But right now, I'm also looking ahead to what the ultimate outcome for all this debt and all these failed policies is...

End of Globalization

No matter how I slice and dice it, all I can see is a scenario where U.S. businesses and government alike look inward, as she basically turn her backs on the world. Call it a new isolationism, call it the end of globalization — there simply isn't any profitable reason to remain part of this global economic community.

After all, there's only one country that has real and sustainable consumer demand….There's only one country that has the innovative strength and the products people want….And there's only one country that has the energy resources to support its economy without help from the outside world...

The U.S. has a 90 year supply of natural gas and 110 years of shale gas.

Manufacturers are switching to natural gas to run factories…Utilities are buying natural gas turbines from General Electric (NYSE: GE) to generate electricity.

Truck and bus fleets are using more natural gas vehicles, because nat gas can save as much as $2 a gallon over diesel fuel….And natural gas pumps are cropping up at gas stations in states from Texas and Oklahoma to Florida and Illinois. What's more, the U.S. government may limit natural gas exports to encourage use (and supply) here in America. I foresee a huge bull market for natural gas — and for the U.S. economy as a whole.

I know that's a radical statement. Investors hate stocks right now, especially natural gas stocks. And I'll be the first to admit that Congress and Obama administration is making a bad situation worse...That's why I recommend paying attention to what's going on in Corporate America. ..Companies from Wal-Mart to UPS to Coca-Cola are making the transition to natural gas right now.

As my friends in New York, Chicago and Boston wrote yesterday:

You'll want to keep an eye on companies like Westport Innovations (NASDAQ: WPRT, TSX: WPT). These are the BIG BOYS that make low-emission engines and fuel systems for natural gas-fueled vehicles.

Companies like Cummins (NYSE: CMI) and PACCAR are already seeing big demand for these natural gas vehicles. …But they aren't the only beneficiaries of the coming boom...

I think the end of globalization is coming, and it will spell much pain for American banks as their trading universe gets smaller…Resource stocks — like Gold, Oil, Silver, Copper, Shale Gas and Natural Gas — are the place to be. Good investing

Disclaimer: This is just my research piece and not an investment advice. All financial transactions carry a RISK.