Gold and Energy Advisor: Gold, Oil & Energy Markets Investment Research
James DiGeorgia, Mr. Macro
- Chief Editor -
Mr. Macro
Geoff Garbacz, Mr. Micro
- Chief Strategist -
Mr. Micro
Dan Hassey, Mr. Retirement
- Senior Stock Analyst -
Mr. Retirement

Gold and Energy Advisor's Real Wealth

Real Wealth #294  06/13/2011

The Political and Economic Realities: The Next Financial Crisis is Brewing!

Dear Subscribers,

Tonight's the first Republican Presidential debate for 2012. Or as a call it... "The Lying Season" begins.

Not a  single Republican candidate is telling the truth about the U.S. Economy, Jobs or the risk of a complete financial collapse. Pawlenty is promising dramatic cuts in taxes ( This would double our national debt in 5 years).

Herman Cain is promising legislation that is no longer than three pages, Romney has refuted every good thing he accomplished as Massachusetts Governor, my old friend
Newt Gingrich sold his sole with all sorts of phony internet scams that no longer has any credibility with me and anyone in the know. Micheal Bachman is plain too stupid to be President and along with Rick Santorum would deliver a devastating defeat for the Republican party since 1964.

For those of you who believe Texas Gov Rick Perry is the solution - please listen to me. Perry has serious issues that would destroy him in a general election even if he won the nomination quickly. There's so much there below the surface - it would take several issues of the Gold and Energy Advisor to fill you in on everything.

This leaves former governor Sarah Palin. Apologies to those who find her compelling. She is simply an uneducated opportunist that is incapable of being President. I find it very disturbing that when she gets caught showing her lack of education. Here her eyes always go vacant and she rambles on getting every fact wrong with a big smile and all the charm she can muster. If she had flubbed a few questions on the campaign trail it would be no big deal - but she's done it over and over again. 

Who would I support?

Jeb Bush my first choice is the smartest Republican I have every met. He's honest enough that he might well be able to both get elected and secondly make the kinds of painful reforms the American public could digest. Yet, the Bush name is still poison and it would be some challenge to battle against the economic policies put in place by his brother. That leaves for me, Former Governor George Pataki of New York. Yes, he way too liberal for the national Republican party that he has virtually disappeared from national politics.

Not having a serious Republican candidate capable of battling both the hard-liners in his party and being able to pressure the Democrats in  Washington to make the needed compromises...

I remain extremely bearish on the U.S. and World Economy.

The vacuum of honest problem solving political leadership in the Republican party leaves me believing...

... a devastating worldwide monetary crisis is on the horizon.

The bottom line reason for this belief can be summed up in just one sentence:

The vast majority of politicians in Washington have been corrupted by large money special interest groups. As long as the Oil companies, Multi-National Banks, Pharmaceuticals and Financial Institutions, Unions, Trial Lawyers etc... etc... control Washington's lawmakers and regulators the future of our country will remain in danger.

This isn't a Democratic or Republican problem, a large number of politicians of both political parties are guilty of voting on the side of their biggest contributors best interests and not the best interests of their constituents.

As many of you know, I consider myself a Conservative Republican, but I think the positions being held by the Republican leadership in Washington are every bit as radical as many of the positions held by Democrats because of the billions of dollars pouring in every election cycle.

The truth is I believe both political parties (like the Roman Emperor Nero) are fiddling while our Government,  and Economy burn to the ground.

Our personal, corporate and import Tax codes are a disaster...

When people and mega-companies with tens, even hundreds of millions of dollars, much less billions in yearly income are paying virtually no income taxes, there's something very wrong.

When we provide subsidizes and tax breaks to multi-billion dollar oil companies when oil is trading over $75 a barrel, there's something wrong.

The tax code must be reformed. Special interest tax breaks and subsidies must be eliminated. People making over $250,000 (single), $400,000 (married) must pay 40% in taxes after legal deductions. The tax code should graduate from 40% to 49% for people making up to to $1 billion and 49% FLAT with only basic deductions for incomes over $1 billion.

How radical is this? These rates would still be lower than those under President Reagan.

The fact is supply side economics, huge tax cuts designed to spur investment and jobs has been proven to disastrous.

We've done nothing but successfully exported large segments of our nations manufacturing sector over sees worshiping Free Trade that isn't free and allowing our private sector to move millions of jobs overseas, deny our nation jobs and depriving our country of tax revenue.

During the Bush Administration alone we doubled the national debt and saw as many as three million jobs in the United States to move overseas.

Import taxes must be raised from 3% to 15% over the next 10 years. Keep in mind most countries charge 20% to 35% in terms of import taxes.

Any mention of either raising taxes on the rich or eliminating tax breaks or subsidies to Multi-billion dollar companies is a non starter for Republicans. This flies in the face of an intelligent economic policy.

Simply put: The dollar has fallen over 40% in the since 2001 because of the explosion in Federal, State and local debt. The rich and super size corporations in the United States by lobbying for bigger tax breaks and lower taxes have crippled the U.S. dollar. In effect,they have destroyed the value of the dollars they're holding believing lower taxes will make them wealth. It's done the opposite.

Social Security and Medicare must be reformed intelligently...

We're living longer, the age of eligibility for social security must be raised to 67 and 70 for full benefits. People retiring with $10 million in assets must no longer be able to collect social security. This age eligibility can be phased in over the next 10 years incrementally.

Medicare must be reformed also. Again a higher age qualification and a financial means test for eligibility.

In addition a new intelligent protocol for treating people over 80. We can no longer spend $25,000 a day treating people that are 80 years old who have terminal diseases. The emphasis has to be on comfort and pain management.

Medicare and Medicaid must be able to negotiate the prices of medicines in bulk. It blows my mind as a Republican that my party is the against this simple FREE MARKET principal.

It's time to swap reforms in the Tax Code, Tort Law, Medicare, Social Security and yes Immigration....

The Democrats have been fighting against tort reform for three generations.

As a result when I watch TV I see more commercials for Tort attorney's looking to sue nursing homes, physicians, pharmaceutical and insurance companies that any other advertising. We're making lawyers incredibly wealthy and prosperous and at the same time driving health care and insurance costs through the rough. Sanity must be restored.

The Republican party must recognize the separation of Church and State and stop impeding health care and scientific advances.

I'm sorry I know I will upset people by saying. If you really believe in the U.S. Constitution you should leave god out of political discourse.

If you want smaller government, a government that respects your liberty you must be willing to enjoy your personal relationship with god and not force your religious views and rules on others.

Our medical and research community must be focused on curing disease and not just treating disease. It must be reasonably unfettered from scientific research. Our best hope for extending life, eliminating the most serious diseases and maladies is through scientific break-throughs..

If we continue on the current political path in Washington, we will see the WORST ECONOMIC DISRUPTION in human history. The consequences cannot be understated.

NYU Professor Nouriel Roubini, known around the world as Dr. Doom, made headlines this morning, warning that a "perfect storm" of economic disasters may smash the global economy in 2013. (I think it could happen any time in the next 12-36 months).

-The U.S.'s basket-case of an economy and budget deficit
-A potential slowdown in China
-European debt restructuring
-Stagnation in Japan

Trust me; the biggest of the risk is the U.S. Economy, its rapidly growing budget deficits and lack of economic and job growth.

Just stop and consider that unfunded mandates now tower at $61 Trillion. Every dollar of this debt undermines the survival of our nation.

Meanwhile, all of this has lead world famous investor Jimmy Rodgers to come out today and declare the "Dollar is Doomed; own hard assets". Precisely what I believe.

Another wicked stock market, financial market panic is on the horizon. Gold will soar to $2,500 perhaps as high as $5,000 an ounce. Oil will hit $200 a barrel and the American middle class as we know it will be wiped out.

The time to act is now if you're an investor. You must put up to 25% of your money in physical hard assets like gold, silver and platinum coins.  

The next crisis will be much worse than 2008 and 2009. Don't be caught unprepared.

James Di Georgia
Gold and Energy Advisor

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* The Gold and Energy Options Trader is strictly intended as an educational and entertainment service. All Track Record Results are Hypothetical. Subscriber results will differ because of commissions, time of execution, broker efficiencies and potential slippage (price difference between recommended price and execution price). The Publisher and Editor of the Gold and Energy Options Trader James DiGeorgia is not a registered investment advisor. The above performance information is for closed positions only. It does not include performance on open positions.

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