Protect Yourself from the Fraud of the Federal Reserve

Protect Yourself from the Fraud of the Federal Reserve
Current mood: awake
Category: Life

FUNNYMONEYREPORT.COM

Exposing the frauds of paper money and educating investors on investing in gold, silver and other tangible assets.


REASONS TO OWN GOLD/SILVER/COMMODITY BASED STOCKS

GLOBAL FIAT CURRENCIES

All major currencies are unbacked by gold, silver or any other commodity. The process of global debasement of currencies will continue with the US Dollar leading the way. This means higher prices for tangibles, especially gold, silver and commodities in general.

DEMAND FROM INVESTORS

Investors are beginning to realize that gold and commodities are an alternative to tech stocks and "safe" investments from the previous bull market in stocks and bonds. Precious metal ETF's continue to add ounces and outperform traditional stock indexes.

GEOPOLITICAL TENSIONS

Risk premiums for oil rise with political tensions. Real or projected shortages raise the prices of key commodities and tend to bolster the safe haven aspect of gold in the longer term.

CHINA THE 800LB GORILLA

As China builds out its infrastructure the need for commodities of all types will continue for many years. Now that gold ownership is legal in China, the demand from such a huge population will change the dynamics of the gold market for years to come.

GOLD AND SILVER AS MONEY

The Liberty Dollar, Goldmoney, Silver Money Legislation proposed in Mexico, the Gold Money Bill proposed in New Hampshire are all signs that the idea of gold and silver as money is gaining credibility. Islamic nations have proposed a return to the Gold Dinar as an official currency alternative to Western Fiat Currencies. Gold or silver as money might soon serve as a future parallel system of payment.

FINANCIAL PROBLEMS IN THE UNITED STATES

The sub-prime mortgage debacle, debt levels of individuals, government debt, and massive deficits will contribute to a weaker dollar as the Fed is unable to raise interest rates to bolster exchange values with foreign currencies.

LIMITED SUPPLY OF KEY COMMODITIES

Due to the long lead times for mine development and regulations, new supply will not reach the market anytime soon. Critical shortages of uranium and nickel are unlikely to be alleviated in the short term. Many new mines are of lower quality ore and will require higher prices to be economically feasible.

DERIVATIVE TIME BOMB

With the exposure of Big Banks to financial derivatives totaling in the trillions of dollars, a meltdown of these "weapons of mass financial destruction" could lead to a loss of confidence in paper money. The response of the Fed would likely include money thrown out of helicopters in an effort to rescue banks, " too big to fail ". This in turn could lead to accelerating inflation and higher prices for gold and other commodities.

INTEREST RATES TOO LOW

M3 money supply (no longer published) is actually growing in excess of 10%, the CPI as it was measured in 1980 is actually closer to 6%, inflation is much higher than the official numbers produced by the government. As a result most investors are suffering from negative real interest rates on bank deposits and money market funds. Gold and commodities tend to move higher in such an environment

CENTRAL BANKS RUNNING LOW ON GOLD

Recent studies of the gold market indicate that more gold is held in private hands than is held by central banks. This is important because central banks will be unable to continue to manage gold prices and the perception of fiat currency values. Private investors now have the upper hand. Further selling by central banks of gold reserves will only weaken their position. This development means higher gold and commodity prices and weaker fiat currencies.

Gold and commodities are in a generational bull market that has many years left to play out. We think that one way to invest is to purchase stocks of companies involved in the extraction of natural resources. Stocks have the potential for leverage and gains that are several orders of magnitude greater than the underlying commodity.

At the Funny Money Report we have a portfolio of stocks that we actually own, and will share with you our purchase date and purchase price. While not all of our positions are profitable, currently more than 80% of our positions are in positive territory with an average gain of 113.55%. (as of 3/31/2007)

We do not actively trade, but will sell as conditions warrant. We sold uranium miner Cameco at the end of 2006 for a gain of 154%. We bought Bema Gold in 2002 and sold it in 2007 for a gain of 354%. The profit on that trade was enough to purchase a brand new Subaru with the original investment left over to search for new opportunities.

EXAMPLES OF WHAT WE CURRENTLY OWN

Stock A up 408%. An iron ore producer with a 5.3% dividend. Our current annual dividend is equal to 27% of our original purchase price.

Stock B up 450%. Originally acquired as part of a silver producer, later spun off when the silver miner was bought out by a larger company. Our cost basis dates from 2004.

Stock C up 73%. With a current market cap of $173 billion, not exactly a microcap, this stock can be purchased by more conservative investors looking to participate in the commodity bull.

Stock D up 180%. We bought this stock two days before Christmas in 2005 as it had been recently listed on the Amex. Several months later we were bought out at significant premium. We continue to hold stock in the new company, a base metal miner that is itself is a potential buyout candidate.

Stock E up 219%. We bought this stock in the fall of 2005 at $1.92 per share. This stock is currently $6.14 per share for a gain of 219%. This uranium miner is being acquired in a reverse takeover. The new company will be a significant producer of uranium. We will continue to hold the combined company.

Our portfolio includes many stocks that will continue to benefit from the ongoing bull market in commodities. We hold a diverse portfolio of large cap, mid cap and microcap stocks including speculative exploration plays and emerging producers. We are commodity bulls. We hope you will join us.

1:40 AM - 2 Comments - 0 Kudos - Add Comment

	ScottA	Hmmmm...? Interesting. I ripped up all my credit cards and am treated like an alien. The government has weakened the dollar simply by continuing to print more and more. It is my thinking, not until we experience a "mild-depression" will that be a correction to how we are financially fit. For me living in the Bay Area, the average 1-bdrm Condos start in the $ 400,000. and 2 bedroom average $500,000 to $550,000. For a CONDOMINIUM! That tells me " The Market is TOO Hot and I am not buying right now. To others they get sucked in to "No-money down" type mortgages. WHat you are about to really see come to bloom should be July-August and get worse. All of these homebuyers who got in on piggy-back loans etc. The hope is that their property " appreciates" . Not planning for the fact they can and will "De-preciate". Now they are upside down on a loan etc. etc...!!! There was a time in the early Nineties, I should have bought that and another time when Gold was around $ 380.00 an ounce. Of course i'm kicking myself! : P We Americans are suckers for the ' Buy it NOW-Instant gratification! Keep it simple Don't live beyond your means, pay yourself first, don't buy what you don't need. Pay CASH for what you do! Or if you choose to go the "global tracking" way of credit cards. Pay them Off Every Month! Posted by ScottA on Monday, May 21, 2007 at 6:46 AM [Reply to this]

Nevada Lights

I really like your entire financial outlook! You couldn't be more right! If you don't need, don't buy it! Pay cash, live a good but normal life and save what you can! You are a smart guy! :0) Too bad you're gay! Posted by Nevada Lights on Monday, May 21, 2007 at 6:56 AM [Reply to this]