Gold and Energy Advisor: Gold, Oil & Energy Markets Investment Research
James DiGeorgia, Mr. Macro
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Gold and Energy Advisor's Real Wealth

Real Wealth #102  05/15/2007

Occam's Razor


Dear Subscribers,

It's time for us to accept what has become all too obvious. The United Sates is going to either withdraw its troops from Iraq either completely or redeploy its troops to the Kurdish and Sunni regions of the country at some point in the next several months.

Last Wednesday, 11 moderate Republicans met with President Bush at a private White House meeting to bluntly warn him that the situation in Iraq needed to improve markedly by fall or scores of Republicans would desert him on the war.

The White House session demonstrates the grave unease many Republicans are feeling about the war, even as they continue to stand with the President against Democratic efforts to force a withdrawal of forces through a spending measure that has been a flash point for weeks.

The fact is public support for the war was crumbling and as many as 30 Republicans in swing districts could be unseated in the next election. Representative Tom Davis told Mr. Bush that the President's approval rating was at 5 percent in one section of his Northern Virginia district.

Meanwhile, recent poll numbers are showing historic low approval numbers for the President. His numbers are now as low as President Carter's at the height of the Iranian Hostage Crisis in 1979.

Making matters worse, Tony Blair's resignation after 10 years as the English Prime Minister may well foreshadow a British withdrawal from Iraq as well. The war is as unpopular in England as it is growing to be here in the states.

The vacuum will bring a violent and bloody civil war in Iraq.

Vice President Cheney's warnings that are being echoed by the leading Republican Presidential candidates of a violent bloody civil war erupting in Iraq if we withdraw our troups are likely accurate, but the public opinion of the majority at this point has become as one person told me this week... "Let's just get out of Iraq now and to hell with all those bastards...I could care less if they kill each other." More and more Americans are adopting that mentality. It's one of the reasons Robert Novak of the Evens Novak Newsletter (included in predicts gloom and doom for the Republicans in '08. 

The Bush Administration sees the withdrawal as writing on the wall and is so desperate to stave off a civil war it's actually holding talks with Terhan. (US and Iran Iraq Talks)

Talking with Iran is fine, believing anything they say or relying on their promises would be the biggest U.S. foriegn policy blunder since invading Iraq. Sunday's announcement by Al Qaida to have missing U.S. Troops may drive the Bush Administration to actually try to make a deal with Iran. The argument being Al Qaida is a common enemy. Work a deal with Iran. Iran has one goal and that's to establish a Persian Theocracy from Pakistan throughout Africa in our lifetime. The destruction of Israel and the end of the moderate Sunni and Christian governments throughout the middle-east are the means to an end. 

A U.S. withdrawal comes at the price of one hundred thousand lives. The Iranians have been backing all sides in Iraq on the principal that chaos will drive the United States out. Once we're out, the Iranians will back their agenda and the slaughter to secure their interests will begin. The Saudis are walking into the trap. Their at War with Al Qaida and refuse to really see the threat Iran presents.

An all out civil war in Iraq will have a very negative impact on the world economy because it's going to push the price of oil back over $75 a barrel... and perhaps as high as $100 a barrel in a series of frenzied spikes.

With the Dow Jones bursting through the historic 13,000 level, it's awfully hard for an investor to focus on the obvious dangers immediately ahead. If you're smart, that's exactly what you're going to do -- right now.

The economic euphoria we're seeing, thanks to the rapidly growing world economy, could be disrupted very soon by an oil shock that's actually ignited by the withdrawal of U.S. and British forces from Iraq. The irony being, of course, is we're being assured that a withdrawal will lead to less violence.

The Bush Administration is cornered. It's being dragged out of Iraq, not by the Democrats, but by the GOP, which is fearful it could loose another 30 seats in the House and as many as 7 additional Senate seats in '08 if things continue the way they are going. The White House meeting between those 11 GOP moderates clearly shows the anti-Iraq war sentiment in the United States is approaching the point of becoming a political Tsunami.

It doesn't matter whether you support President Bush as an investor, you cannot take sides with your savings -- your retirement. You have to invest according to the times.

Watershed moment in the Iraq War took place this last week

The visit by the 11 moderate GOP members was a watershed moment in the Iraq War. It can be compared to Senator Baker's visit with President Nixon just before he resigned. The Republican Party is abandoning the President. The scandals and this increasingly unpopular war have rendered the President a lame duck and political albatross.

The last time the hand writing on the wall was so clear was a year before President Bush called for the Iraqi invasion, I warned millions of people via email and direct mail that...

"Bush Means Business: An invasion of Iraq is inevitable"

The prediction was not well received; I was mocked, scolded and dismissed as just a guy trying to sell an investment newsletter, yet the wheels started turning and in little more than a year, the U.S. invasion was launched.

Meanwhile, my investment recommendations and market predictions in the Gold & Energy Advisor have also proven to be absolutely outstanding...

*        Gold in 2006 has actually exceeded the average per ounce price in 1980. The pull back taking place now is a gift. We could see $650 again but $1,000 an ounce lays ahead in the not too distant future.

*        Our model portfolio has racked up a 116% gain in 36 months.

Today the world is even more dangerous than it was before the invasion of Iraq.

It going to get much worse

A civil war in Iraq is just one of the nightmares we'll be facing in the financial markets. In fact, there are two major crises brewing. I want you to keep in mind what lay immediately ahead...

#1: The Syrians and Iranians are going to fund and support Hezbollah in an effort to overthrow the pro-western government in Lebanon.

#2: AL-QAEDA leaders in Iraq are planning the first "large-scale" terrorist attacks on Britain and other western targets with the help of supporters in Iran. Spy chiefs recently warned the British government, according to the London Times, that one operative had said he was planning an attack on "a par with Hiroshima and Nagasaki" in an attempt to "shake the Roman throne", a reference to the West.

The report, produced earlier this month and seen in The Sunday Times, appears to provide evidence that Al-Qaeda is active in Iran and has ambitions far beyond the improvised attacks it has been waging against British and American soldiers in Iraq.

This report follows revelations last year that up to 150 Britons had traveled to Iraq to fight as part of Al-Qaeda's "foreign legion". A number are thought to have returned to the UK, after receiving terrorist training, to form sleeper cells.

The recent foiled attempt by 172 Al-Qaeda Terrorists to attack oil instillations in Saudi Arabia and here in the United States, the intercepted attempt by terrorists to attack Fort Dix is a clear indication that the war is heating up across the globe.

Ironically, the strife and chaos heading our way is going to be financed not only by Iran and Radical Islamists, but also by the world's hunger for oil.

The higher the price of oil, the more bombs and weapons the Iranians and radical Sunni Islamists will have to wage war. The Iranians believe oil should be over $100 a barrel. The closer to that target price, the greater the danger.

It's going to be an absolute mess. Throw in the possibility of the biological attack I described in the most recent special issue of Gold & Energy Advisor as a third major threat and even a hostile Hurricane season ahead to boot -- and we're going to see a tremendous amount of profit opportunities emerge starting in the second half of this year.

Your mantra for the next few years should be: I'm going to invest heavily in oil, energy, commodities, precious and numismatic investments to protect and profit from the chaos. 

Yes, you can make money in stocks.

Yes, you can make money trading index options.

Yes, you will even be able to generate profits in Real Estate.

But you'll make the biggest and most consistent profits the next few years investing in oil, energy, commodities, precious and numismatic investments.

Your investment nest egg will be at tremendous risk. If you're smart and keep a clear head, the Iraqi civil war and second Middle-East War in a year (Syria, Hezbollah, Iran, Israel and Lebanon) can be leveraged to build the kind of wealth that will allow you to provide safety and security to your family.

It's just THAT important!


Update on our Dow 13,000

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Now a few news stories I urge you to read and keep on your radar...

Why everyone really wants to control Iraq...

Report: Iraq oil reserves double pre-war estimates

Iraq's oil reserves could be double the pre-war estimates, which, if true, would make the country the second largest producer in the world, according to what's being called "the first and only detailed analysis" since the U.S. invasion. Today's Financial Times with the report by the consulting firm HIS Inc., which estimates oil reserves at up to 116 billion barrels. That would rank the country No. 3 in the world, behind Iran and Saudi Arabia, the top producer. The firm's Iraq Atlas, to be published May 9, also estimates that Iraq's western desert might hold an additional 100 billion barrels of oil, which, if verified, would push it past Iran as No. 2.

If violence subsides and security improves, "Iraq's promising oil fields can be tapped for less than $2 a barrel and could double the nation's output to 4 million barrels per day in five years," the trade publication Iran Oil and Gas writes.

"Iraq's reserves are clearly phenomenal. Once the infrastructure is in place, the oil will come out of the ground quite cheaply," said Ron Mobed, president and chief operating officer of IHS.

G.O.P. Moderates Warn Bush on Iraq

WASHINGTON, May 9 — Moderate republicans gave President Bush a blunt warning on his Iraq policy at a private White House meeting this week, telling the president that conditions needed to improve markedly by fall or more Republicans would desert him on the war.

The Russian Government hates the United States
and we're spiraling towards a new cold war:

50% Good News Is the Bad News in Russian Radio

MOSCOW, April 21 — At their first meeting with journalists since taking over Russia's largest independent radio news network, the managers had startling news of their own: from now on, they said, at least 50 percent of the reports about Russia must be "positive."

In addition, opposition leaders could not be mentioned on the air and the United States was to be portrayed as an enemy, journalists employed by the network, Russian News Service, say they were told by the news managers, who are allies of the Kremlin.

How would they know what constituted positive news?

"When we talk of death, violence or poverty, for example, this is not positive," said one editor at the station who did not want to be identified for fear of retribution. "If the stock market is up, that is positive. The weather can also be positive."


Putin likens U.S. foreign policy to that of Third Reich



MOSCOW Wednesday, May 9, 2007: President Vladimir Putin of Russia obliquely compared the foreign policy of the United States to the Third Reich in a speech Wednesday commemorating the 62nd anniversary of the defeat of Nazi Germany, in an apparent escalation of anti-American rhetoric within the Russian government.


Saudis Arrest 172 in Alleged Terror Plot

RIYADH, Saudi Arabia Apr 27, 5:30 PM (AP) - Saudi Arabia announced Friday that an anti-terrorism sweep netted 172 Islamic extremists and stopped plans to mount air attacks on the kingdom's oil refineries, break militants out of jail and send suicide attackers to kill government officials.

Al-Qaeda seeks to expand its operations

By Stephen Fidler and Roula Khalaf in London

Published: April 20 2007 22:02 | Last updated: April 20 2007 22:02

Al-Qaeda is reaching out from its base in Pakistan to turn militant Islamist groups in the Middle East and Africa into franchises charged with intensifying attacks on western targets, according to European officials and terrorism specialists.

The development could see radical groups use al-Qaeda expertise to switch their attention from local targets to western interests in their countries and abroad. "For al-Qaeda, this is a force multiplier," said a British official who follows terrorism.

One of the first signs of the development was an announcement on September 11 last year by Ayman al-Zawahiri, al-Qaeda's number two, of a "merger" between al-Qaeda in the Maghreb and Algeria's Salafist Group for Call and Combat, known by its French initials, GSPC.

Western officials expect to see a similar merger be­tween al-Qaeda and the Libyan Islamic Fighting Group, a mainly exiled organization devoted until now to the overthrow of Muammer Gadaffi, the Libyan leader.

Please see risk disclosure link below.