 | |||||
5% Inflation: The Secret Tipping Point for You and the Economy
This great convergence of so many crises is leading to one terrifying (but inevitable) economic reality: An inflationary era, the likes of which America has never before seen. It will be like the _70s on steroids. Problem is, most of the players who lived through that arduous era are no longer around. Few recall that it was a time that included the worst 15-year period for stocks ever--even worse than the Great Depression! Few recall that once inflation hit levels of 5% it began to feed off itself. Higher energy and commodity costs forced businesses to charge more for goods, which in turn forced workers to demand higher wages, which further added to the cost of goods. And so it went. And once inflation hit levels of 5%, an inflationary psychology gripped the markets. Businesses raised prices just because of the mere expectation of higher inflation in the future. Markets became irrational. P/E ratios plummeted. Investors punished even the greatest growth stocks of the time--like Procter and Gamble, 3M and Polaroid. These great power players watched their stock prices crash 50- 90%--even as their fundamentals remained strong and growth powered forward. Few remember how irrational and unforgiving investors can be in inflationary times. Traditional investment havens like CDs, bonds and money-market funds turned into financial death traps--as the modest rates of interest could not keep up with the soaring rate of inflation. Retirees on fixed incomes watched their standard of livings shrink. And then once investors realized that they could get a much better deal from hard assets--everyone began flocking to oil, rare metals, gold, silver, real estate and other commodity investments, putting even further upward pressure on commodity prices--resulting in a deathly inflationary spiral--that almost ruptured the fabric of American society. And this is the tragic reality of an inflationary market that few on Wall Street (let alone those in the broader market) understand today. But there's one financial figure that does understand the curious nature of an inflationary market. He lived through the oil shocks and the Great Inflation of the '70s. Not only did he live through it, he helped his clients come out of it richer than before. His name is Dr. Stephen Leeb. Stephen Leeb has been calling major trends accurately in the market for decades now. In 1984, at the end of America's Great Inflation he began writing a book called Getting in on the Ground Floor, which predicted an era of falling inflation and how to profit off it. At the time the DOW was a little above 1,000. Leeb predicted that it would climb to above 4,000. People thought he was nuts. In 1999 he had another best-selling investment book published called Defying the Market. This book predicted the coming oil crisis and the dotcom collapse. Library Journal named it: "Best Business Book" of the year. His two latest books The Oil Factor and The Coming Economic Collapse (a New York Times best-seller) are also predicting an era of sky-rocketing oil prices and soaring inflation. So far, Leeb's oil predictions have been right on the mark. It's probably why the major U.S. rating services have repeatedly named him as one of the top 5 market timers, and why he is often quoted in prestigious publications from the Wall Street Journal to Business Week to Forbes. Getting Rich From Inflation! Now in this special issue of Dr. Stephen Leeb's new publication, Leeb's Income Performance Letter, he will introduce you to little-known ways to not just beat inflation--but get rich from it. In order to soar through the new era ahead, you'll need a whole new financial plan. In this issue Dr. Leeb will introduce you to an alternative universe of outstanding (yet little known) inflation-proof investment opportunities. These are opportunities that although they're right there on Wall Street, and can be purchased just as easily (and as cheaply) as any ordinary stocks, most investors don't know they exist. And often, even the ones that do--dismiss them--wrongly assuming that they're too sophisticated for mere mortal investors. A Blueprint for a Rich Retirement What you hold in your hands could reverse the fate of your financial future. It is a blueprint for a rich retirement, and a brand new way of looking at the markets, your investments, and your future. We hope you will enjoy this special issue. You'll even learn some of the names and ticker symbols of some our best inflation-proof investments. If you find yourself nodding in agreement with Leeb's advice today, and with the wisdom and recommendations revealed in this special issue of Leeb's Income Performance Letter, then why not sign up for a risk-free trial subscription to this revolutionary new award-winning investment service. Just fill in the Charter Membership Savings Certificate today.We hope you'll join us!
Stephen Perkins | 
In 1999, the global economy silently underwent a monumental shift...a shift that in the short years to come promises to give rise to an inflationary era -- the likes of which America has never before seen... This shift that was probably the single most significant to occur since America abandoned the gold standard in 1973--though nobody seemed to notice it at the time--even though it was an event that changed everything: An event that shook up global energy markets and realigned global economic powers. Few people--even on Wall Street today--seem to be aware of this profound change--let alone understand the serious ramifications it is having on the global economy. Not to blow our own horns, but in my book The Oil Factor, we alerted investors about this change. In fact, it's how-- despite the financial massacres that have occurred this decade--we have managed to help others profit through what has been for most investors a painful period in economic history. We knew something that it seemed no one in any major Wall Street investment house knew--or at least something that no one was willing to admit... We knew that global oil prices were headed skyward. In fact, for the next 6 years running we predicted higher oil prices each year. After the book, I became known as "the $100 oil guy." And I was scoffed at by many of my peers. But I'm sure you well know what happened in the years that followed. Surprisingly no other major Wall Street firm in any of the last 6 years (except maybe Goldman Sachs) even predicted higher oil prices. And even Goldman's said it would only be a short-term spike. Probably because they didn't know (or understand) what we knew back then. In 1999 a momentous transformation occurred in the dynamics of the global oil market. Oil prices became supply-driven. And the reason that happened was largely due to OPEC. For the first time in OPEC's history, they were no longer just another player in the oil arena. Rather, they had become the controlling player. From 1982--1998, the major oil producing countries outside OPEC, had the ability to increase oil production in order to accommodate for global growth. But in 1999, these oil-producing countries hit a point where they could no longer increase production by any significant amount. The only countries outside OPEC with the ability to increase production were a handful from the Former Soviet Union and Africa. But the increases we've seen from these regions this decade have been negligible.
The result is that now, we are fully reliant on OPEC--a politically unstable region--to make up for any shortfalls in our global energy supply. This has not only sent global oil prices soaring skyward, but it has precariously awarded OPEC with almost complete control over oil prices. As you'll learn in this report, this event, coupled with a rising China and India, by the decade's end could drive oil prices up to $200 a barrel, and give birth to an inflationary era the likes of which America has never before seen... Just like in the inflationary '70s, P/ E ratios will plummet across the board. Great growth stocks--like Cisco, Dell and IBM--may watch their stock prices crash 50--90%--even as their fundamentals remain strong and growth powers forward. Traditional investment havens like CDs, bonds and money-market funds will be turned into financial death traps. Markets will grow increasingly irrational. But even as the broader market gets blown to bits, there will still be one country...one commodity...one investment destined to outshine all the rest. This country was the only major economy that made a determined effort to become energy independent after the last oil shocks of the '70s. I'll tell you about this miracle growth economy in this report, and show you why it is poised to weather the coming inflationary storms better than any other country. Plus I'll tell you about the #1 company destined to reap the greatest rewards from the coming global energy crisis. It's the 8th biggest energy company in the world. It's won countless awards and accolades--yet most Americans don't know its name--yet! This company is the ultimate oil-shock proof, inflation proof investment to own today. Before I tell you its name, let me first tell you why it is truly one of the best bets you could make on the market today... The Coming Oil Shocks: The One Unavoidable Economic Reality Despite all the media spin and hype about oil today, few people have a true picture of the real state of our global energy situation. As Dr. Colin Campbell (one of the world's leading oil geologists) said at a conference on peak oil in 2004: "If the real figures were to come out, there would be panic on the stock markets. In the end that would suit no one." And the truth is, the figures just don't add up. It has become increasingly obvious to me and a number of top energy insiders, prestigious oil geologists, and oil moguls that we are careening toward an imminent energy crisis of unprecedented proportion. And unfortunately, thanks to the monumental mess we've got ourselves into, this time there's no easy way out. No easy solution.
What's more, for the first time ever, Saudi officials admitted to the world's leading industrial powers that OPEC will not be able to meet Western oil demand in 10--15 years. The world's wells are running dry. At Ghawar in Saudi Arabia, a field which produces over half of Saudi oil, Saudi engineers are injecting 7 million barrels of seawater a day into the field. This is a fatal sign that the world's largest oil field is nearing a collapse of output. And Farouk Al Zanki, Chairman of Kuwait Oil, announced that production of the world's second largest field (at Burgan) is "exhausted." The Burgan oil field is the source of more than half of Kuwait's output. Even worse, Iran, the world's 2 nd largest oil exporter, has said that within a decade it will need to become an importer!The world's wells are already pumping at capacity, and global demand is rising. By 2015 the global economy will need an additional 18 million barrels per day. Where will this extra oil come from? That's the problem. It won't come. At least not fast enough--and not in the quantities we need. We are careening toward an era where supply side shocks will become the norm--resulting in regular superspikes that will cause global industry, and the corporate world to wheeze. Any interruption in the supply chain will have dire effects.
| ||||
 But What About Alternatives? While we believe there will be many technological revolutions in the production of hydrogen fuel cells, solar energy, biofuels, wind power, thermal depolymerization, hydroelectricity, it's too little too late. We should've started decades ago. The problem is, we are talking about the need to retrofit the current $45 trillion global energy infrastructure in order to produce, transport and distribute these new forms of energy. No matter how great a scientific energy revolution, it will still take years--if not decades-- to retrofit the planet. The crisis is still upon on us. Even when we struck oil 150 years ago, it still took generations for that energy source to become widespread. Oil slowly transformed economies over time. It didn't happen overnight. The industry took lifetimes to develop the infrastructure to get oil to where it is today. To discover the wells, erect the refineries and build the pipelines that are needed to extract, transport, refine, process and distribute the 83.5 million barrels of oil the global economic engine needs each day to keep running. To supplant this existing structure with a new one would require a monumental effort. The cost alone would be in the tens of trillions of dollars. And because of the complexity and magnitude of the project it would take decades. The problem is we should've started decades ago. But we never did. We never planned for the day of energy reckoning. And now it is upon us. The pumps are running at full capacity. Populations are exploding. China and India, and many other emerging economies are undergoing sweeping industrial transformations. Our energy needs, according to the U.S. Energy Information Administration, will soar a staggering 54% by 2025. Thanks to a lack of planning on the part of successive administrations, civilization in the coming years may face one of its most violent disruptions ever...
You rely on oil in more ways than you probably think about. It's not just when you drive your car, or turn up the thermostat in your home. Virtually everything you own or consume has been touched by oil in some way--whether it was used in the transport of the goods, or the fertilizer on your foods, or the plastics in your products. Everything from combs to cameras... detergents to dresses...shampoo to shoe polish...tires to toilet seats has been touched by oil. When oil prices remain low, it doesn't just keep the price of our gas and our heating down, it also keeps the price of almost everything else down too. That's the inflationary or deflationary power that this black gold holds. The frightening thing is--and it's one the consumer has only begun to confront--is that when oil prices reach a tipping point-- a certain threshold--then it begins to seep into every nook and cranny of the economy.
We are at that tipping point today, and oil is about to spill over into every part of the economic universe-- causing not just consumers to wheeze, but all types of industries from airlines to auto-manufacturers from chemical companies to paper mills, from plastic producers to textile suppliers, from the agricultural industry to silicon chip makers... For example, though few are aware of it, oil accounts for a large chunk of agricultural costs, due to petroleum based fertilizers, herbicides, pesticides, irrigation and transportation. In 1999, when oil was just $16.55 a barrel, it accounted for 22% of agriculture's overhead. At $70 a barrel, it accounts for nearly 50%! At $100 oil, that percentage will climb to 70%. At $200 oil, it will be a devastating 83%. While in the past six years, farmers and growers have absorbed some of these costs, more and more (as you've probably noticed) they're having to pass them onto you--the consumer. This means that the costs of your tomatoes, corn, cotton, beans and peanuts will be headed for the clouds. And this is just one of the industries that will begin to pass the soaring costs of oil onto you--the consumer. | |||||
| Soaring Investments in an Oil-Strapped Future As the oil price continues to climb, as demand soars and supplies crash, its impact on our lives, and on the global economy will become more pronounced. Sky-rocketing oil prices will rock global markets, and send the investment arena spinning. It will be the fuel that will fire this new inflationary era. Your investments will become volatile. Many will crash and burn. And if you think your dividend checks from your bluest of blue chips will save you, think again. The rules will have changed. And the markets will deliver millions of unsuspecting investors some nasty surprises.
And if you think the oil-shocked, inflation afflicted _70s was bad. The coming era will be much worse. It will be the '70s on steroids. And it is retirees on fixed incomes that will be hit the hardest. They will suffer the shock of negative real returns. The modest rates of interest they will get on their CDs, money-market funds and bonds will not be able to keep pace with inflation. Their monthly income checks will buy them less and less. Their dollars won't fly them very far. The rising costs of everything will not only eat away at the value of their investments, but it will erode away the very quality of their lives. Their social security checks, their dividends, their yields will wither in the face of soaring costs of living. That's why I'm writing to you today. To tell you about the market's small clutch of alternative investments that will be hardwired to benefit from the enormous challenges facing the global economy today--rather than be crushed by them. In this report, you'll learn about the global market's most outstanding inflation-proof investment opportunities. Many of these opportunities may surprise you. Many you won't find in the usual places. In some cases, we've had to look beyond Wall Street. We've had to dig a little deeper, and go a little farther. We've had to learn how to tap into hidden asset classes of the hyper rich. While Wall Street is slow to catch up on the massive mega-trends that are unfolding today, and how they will impact investors, we've been putting them to work for years. For example, one group of alternative income plays, and one that is hardwired to benefit from the global energy crisis, can be found in international energy and resource stocks--yet many of these picks are off the Wall Street radar, and are trading with single digit P/Es. For example, while the big U.S. oil giants, stand to benefit from the coming global energy crisis, and promise to be a safe harbor in the volatile years to come, there's an even better way to play this. There is a select number of foreign based global energy companies, with decades of reserves and experienced management teams, who also enjoy one powerful advantage over many U.S. energy companies: They are perfectly poised to benefit from the unprecedented growth going on right now in many of the world's major emerging mega-markets, including China, India, Brazil and Russia. Plus these global energy plays have the additional benefit of enjoying revenues and profits denominated in currencies set to soar against the U.S. dollar in the years to come. This means every time one of these emerging market currencies edges up against the dying dollar, the income and capital gains you'll get from these global energy behemoths will grow that much bigger! You'll be able to buy a little bit more. And as the years roll by, and as the dollar continues to plummet, these growing new income sources will become ever more critical to your purchasing power, and your future. And in our opinion there is one oil and energy income play destined to outperform all the rest...
The Brazilian Energy Miracle The #1 Oil-Shock-Proof, Inflation-Proof Investment
Firstly, it's just found a giant new field with potential recoverable oil reserves between 700 million and one billion barrels--catapulting its already huge pool of reserves to 9.6 billion barrels--that's more than ConocoPhillips! It's also already producing 1.8 million barrels of oil per day, compared to Conocco's 1.6 million. Even at today's prices it's sitting on a pot of black gold worth around two thirds of a trillion dollars. But as global oil supplies evaporate, and oil prices escalate, this company's pot of gold will only grow more valuable. But if that wasn't reason enough to invest, this company goes one giant leap further. Not only is it one of the world's biggest oil producers, it is also one of its biggest alternative energy producers. And within as little as a decade it could be producing, consuming and exporting just as much alternative fuel, as it does oil. The alternative energy industry is one of the few sectors in the coming years that will enjoy such staggering growth that not even soaring inflation will be able to temper it.
You've no doubt heard of it by now. It's called BioFuels. And everyone from Willie Nelson to Richard Branson_from Bill Gates to the Google Billionaires are getting in on them. But this little-known energy giant has been a pioneer in BioFuels for decades.And this is where the investment opportunity gets very interesting. For this company lies in the only major economy on the planet today that bothered to learn from the last energy crisis: The one economy that set upon an ambitious path toward energy independence. Today, it has achieved just that, and now enjoys a thoroughly snug and highly envied position among an oil-addicted world.This country is Brazil. And as far back as the '70s it began transforming its #1 crop--sugarcane--into the fuel of the future. Now as the rest of the world and global industry wheezes as oil-prices climb higher, Brazil is poised to not only weather the coming energy storms, but get rich off them. Add to that the fact, that it is also one of the four biggest and fastest-growing emerging mega-markets on the planet, and you have an investment poised for growth... The Brightest Star in the Energy Universe
The #1 company destined to reap the greatest rewards off the coming energy crisis is Brazil's biggest energy company: PetroBras (Brasileiro Petroleo) enjoys a unique position shared by no other energy company in the world today.
Not only it is one of the world's biggest oil producers, it is also the world's biggest BioFuel producer. It is perfectly positioned to ride what will most probably turn out to be two of the greatest bull markets in stock market history. It is decades ahead of practically very other company in the world in its production and distribution of renewable energies. In fact, PetroBras already helps fuel 48% of Brazil's cars with its BioFuels. It also imports its BioFuels to many other countries too, including India, Venezuela, Nigeria and even to us here in the U.S. Plus it's just penned a new deal with Japan, with many more countries showing keen interest. And now it's building the world's first major BioFuel pipeline. What's more, it plans to spend $54 billion dollars on its BioFuel and oil production and distribution facilities by 2010. The company is poised to become the brightest star in the energy universe. And it's about to leap into the consciences of not just the American public, but the international public too! On top of that, the company has won countless awards, including best company in Central America, world's best refiner, plus an award for transparency. Plus it has also just won the award that the New York Post refers to as: "the business world's equivalent to the Oscar." This event covered 600 nominations for companies performing in all sectors in more than 30 countries. And it ranked #1!All this, and the company's trading with a P/E ratio in the single digits! But it won't remain cheap for long. And on top of all that, this company can also offer you fat rising income checks. It pays a dividend, which thanks to its breath-taking growth and skyrocketing profits should continue to rise for literally decades to come!What's more, this investment looks destined to be an outstanding currency play. Brazil is in the throes of a sweeping industrial, agricultural and technological transformation. It is fast becoming a leader in not just energy, but in outsourcing, infotech and telecommunications. Annual Foreign Direct Investment is exploding. In the past decade FDI has gone from next to nothing to tens of billions of dollars a year. Its GDP is projected to soar a staggering 10-fold in the next 40 years. And already Brazil is exceeding these predictions by a wide margin. The country is currently the fourth biggest emerging mega-market on the planet. And when the world starts to withdraw from its oil addiction, Brazil will power ahead. Its currency at the moment is one of the most undervalued in the world, and should rise to a stunning degree against the U.S. dollar in the years ahead. That means your capital gains and your dividend checks should grow fatter and fatter, as the dollar grows leaner and leaner. It's a perfect way to protect yourself from oil shocks, falling dollars and rising inflation.
The New Income Kings
 America's Last Great Income Kings! There's a small clutch of generations-old stalwarts that we believe will shock Wall Street and defy the markets! They are those players with the money, the marketing resources, and the distribution channels required to successfully penetrate the world's biggest new megamarkets: China and India--what we call Chindia. They are among Wall Street's most unloved stocks, and right now many of them are trading at 1993 prices. We believe they will be the surprise winners of the next generation. They are the ultimate buy and forget stocks. They will sail tall and strong in a sea of sinking equities. We'll tell you our two top picks. Sign up for Leeb's Income Performance Letter today and we'll rush you a copy of this hot-of-the-press special report! But these great new income plays are not the only way to ride out this inflationary market safely. In fact, there's another aspect of this market, that although stands to crush many a player, and many an investor, has the potential to make those on the right side of it very rich indeed... | |||||
|
Meet the Gurus Who Will Guide You Through the Oil-Shocked, Commodity-Strapped, Inflation-Afflicted Times Ahead...
From the 57th Floor of our 5th Avenue office, we enjoy a unique birds-eye view of the financial landscape, that not even Wall Street's most seasoned veterans enjoy. Our office is filled with a dynamic team of researchers, writers, analysts and economic forecasters headed by the acclaimed and well-known bastion of finance, Stephen Leeb. Here are just some of the members of our dynamic team who will help guide you through the volatile times ahead.
These are just some of the advisors that make up the dynamic team at Leeb's Income Performance Letter. To gain access to their latest and hottest tips sign up for Leeb's Income Performance Letter today. Just fill in the Charter Membership Savings Certificate today.
| |||||
|
Now while rising oil prices is the largest single factor that will fuel this new inflationary era, it is by no means the only one. In fact, another deeply inflationary force is rising right now that promises to send inflation up into the stratosphere. Together, this crisis along with the energy crisis, by the end of the decade will boost inflation far beyond the tipping point--where it will take on a life of its own. It's not a matter of if inflation is coming or not--it's a matter of how high will inflation go before it begins to rupture the very fabric of American society. Get ready for wrenching market reversals...new mindsets ...and dramatic shifts in the usual way of doing things_ But if you understand the key inflationary forces building in the global economy at the moment, rather than be crushed by them, you can turn them into the kinds of profits that only come along once-in-a-generation.
These momentous events in history allowed 3.3 billion new players to suddenly become an integral part of the global economy virtually overnight. Communist and socialist cultures, not to mention subsistence farming and struggling agricultural communities, that were once almost completely isolated (even barricaded) from the global trading game--suddenly within the blinking of an eye became an integral part of it. The information revolution melted the iron curtain, opened up the world's last major trading and communications channels, and drew these new players onto an already creaky and crowded industrial stage. Together these two events changed the shape, redistributed the power, and greatly expanded the size, complexity and reach of global commerce in a way never dreamed possible... And now these new capitalists are hungry to taste of all the fruits, and enjoy all the wonders that the great American Experiment can bring. Problem is this is placing unprecedented strains on an already stressed system. Largely we are facing a colossal commodity crunch--everything from oil shocks to zinc gaps...from copper crunches to silicon squeezes. In most cases it's not the fact that we're running out of the resource (for copper and silicon we still have millennia of supplies)--what we're running out of is human capital and time. We simply don't have enough workers, engineers, geologists, miners, scientists, chemists, and architects to build the enormous infrastructure needed to keep the global engine running. What Wall Street doesn't realize is that it takes years to educate and train the workforce required to build this essential infrastructure. What's more it takes even more years to build the oilrigs, the copper mines, the refineries, the zinc mines, the pipelines, the power stations, the supertankers, the megamachines, and the distribution networks. It takes up to ten years to build a nuclear reactor. Seven to get a copper mine online. Five to build an oil rig. Six to lay an international pipeline. The Human Capital Crunch!
In the '70s, we had a glut of mining engineers, geologists and surveyors. The industrial world was awash with them. They were among the hottest, and most sought after professions, and they helped flood the market with what seemed an endless supply of cheap natural resources. But as the green organizations, the popular press, the scientific community and the conservationists began sounding the alarms about global warning, acid rain and pollution, these professions became the dirtiest in industry. And as economic booms pursued in electronics, computers, telecommunications, healthcare and finance, these old economy careers and corporations were the thorn on industry's side...
In the _80s, everyone had geared up for an industrial world, but these vital commodities no longer seemed critical to global commerce. The commodity industry had spent billions ramping up production. New mines. New machines. New steel mills. Demand had been met, and exceeded. Suddenly, a new technology-driven economy was awash with old resources that it didn't need. But an expensive industrial resource machine was already in place. Powering it down proved financially crippling. Oil companies were forced to merge. Copper mines were forced to shut. Furnaces died. Refineries went offline. And commodities began their 18-year bear market. | |||||
| The Commodity Conundrum But in 1980, there were only 1.7 billion players on the industrial stage. As the decades went by, with communism collapsing, the Internet exploding, and mega-markets like China and India industrializing, this brought billions more new players onto the global stage. New Economy giants like Cisco, WorldCom, Global Crossings raced to connect the capitalist west to the emerging east. It spent over a hundred billion dollars wiring the world for global commerce. What they did, in essence was wire the East, and the emerging economies for commerce...for industrialization... for capitalism. These fiber optic cables tied them to the west in an intimate way that was not possible before. They became like commercial tethers to the free market.
Now we have over six billion people drawing on the finite resources of the planet. And in just a single generation, we'll have another two billion. It would seem that the tables have turned, and we have come full circle again. But this time, society, finance, industry is far more complex, and requires far more resources to keep it going. And the infrastructure that once provided an excess only two decades ago, is now woefully underequipped to handle today's demands. What's more, the pains of the last commodity meltdown, still linger with the sector. And the sector is all too well aware of the risks and expenses involved in powering up again, so they're not too keen on fulfilling the monumental industrial challenge required of them. This will cause one of the most colossal commodity crunches the global economy has ever faced. And with the next great wave of industrialization--bigger than any we've experienced in the past--the situation will become dire. It, coupled with the global energy crisis, will turn Wall Street on its head. Industries and corporations--once thought immune to such squeezes--will be affected. Commodity crunches have already begun to bear down on many a player. Rubber shortages are deflating tire companies...zinc gaps are closing in on sunscreen manufacturers... copper crunches are impacting electric and construction companies...silver shortages are tarnishing the profits of watch-makers and jewelers...the energy crisis is crippling chemical companies, automakers, food producers, airlines and all kinds of manufacturers--even silicon squeezes are taking the breath out of computer company's profits. The Deathly Inflationary Spiral As global commodity prices continue to soar skyward, industry will be forced to pass these extra costs onto the consumer, further adding to inflationary pressures. Higher energy and commodity costs will force businesses to charge more for goods, which in turn will force workers to demand higher wages, which will further add to the cost of goods. And that will hurl us into the next deadly leg of the inflationary market. It's the critical point at which the inflationary psychology takes over. Investors begin to realize that they can get a much better deal from hard assets than from stocks and bonds. It is then that the Wall Street crowd flocks en masse into oil, gold, silver, platinum, copper and other commodity investments_ putting even further upward pressure on commodity prices--sending the price of these investments to dizzying heights--thrusting us into the very same deathly inflationary spiral that almost ruptured the fabric of American society in the 70s.
The power will have shifted once again from the New Economy to the Old Economy. The New Economy, and its industries will be dependent on these commodity producers. Their available supplies, their infrastructure, and their volatile values will have the power to determine the fates and fortunes of companies, industries-- even entire countries! The tables will have turned on global industry. The commodity kings will rule once again. And there is every reason to believe that this new commodity bull (that'd been waiting in its chute for 18 years) will far outrun the one that came before it. In fact, we've had three major commodity bull markets in the last century. And each one has outrun its predecessor. And it's about to do it again. In 1982, then Chairman of the Federal Reserve Paul Volcker, managed to put the breaks on the economy by raising interest rates far above the rate of inflation, nipping the inflationary beast in the bud, current Fed Chairman Bernard Bernanke will have no such luxury open to him. | |||||
| Why Bernanke's Hands Are Tied
If he applies Volcker's medicine to the markets, and raises interest rates to a height that it will temper growth, he's sure to get far more than he bargained for. It won't be just a recession he'll engineer. It will be a Second Great Depression. Problem is, unlike the '80s, we are drowning in a sea of debt. Corporate, private and public debt have reached levels never before seen in American history. What's more, private debt is being funded largely with our homes. We have put a lot of faith in our houses-- so much so that we've been willing to bet our futures on them. If Bernanke began raising interest rates to levels far above the inflation rate (like Volcker did in 1982), then the repayments on our debts would become unsustainable. Those with adjustable rate mortgages would be crippled by rising monthly repayments. And high borrowing rates would dampen the desire to buy homes. What's more, the value of our homes would then not be able to keep up with the inflation rate. The housing bubble--the one thing that is keeping the entire global economy afloat--would burst. An event that would bring the entire house of cards down with it. This has left Bernanke with one of the toughest jobs in the history of central banking. No wonder Greenspan wanted out. Bernanke, in order to prevent a major economic cataclysm, must carefully engineer a market that for all intents and purposes is teetering on the brink. The slightest wrong move on Bernanke's part, and the entire global economic universe could be sent spinning. And it's not just his own moves that he must consider. He must also increasingly consider the moves of the Central Bank of China, for they have begun to exercise more control and influence over our own markets than Washington. Increasingly Bernanke must dance to the beat of Beijing's drum. But one thing is for sure, whatever these Central Bankers do, they only have one policy left for them to pursue. And that is a policy of growth at any cost--expansion at any cost. These Central bankers will do whatever they can, despite soaring oil and commodity costs, to keep the global economy growing. In order to do this, Bernanke will have to ensure America gets the easy money it's enjoyed for so long. Unfortunately that means allowing inflation to reach levels that were previously unacceptable in the past. Resource Wars... Medicare Meltdowns... Social Security Fiascos...
To quote a famous song: "the only way is up." The government will need to keep spending an enormous amount on maintaining America's military machine. Its military superiority will be paramount in a world of diminishing oil supplies. America will use its might to ensure it gets its fair share of this oil. Resource wars will explode the world over. You only have to look at the world today to notice that all the world's hotspots also happen to be right beside major oil-producing regions: Nigeria, Iraq, Venezuela, Iran, Pakistan. This is no coincidence. But it's not just a trillion dollar military machine the U.S. needs to fund, it also needs to fund an aging and ailing population. The nation's workforce is getting older and retiring. What's more, those retirees are living longer and longer. This is expected to place a crippling strain on the system. The nation's future Medicare and Social Security bill is estimated to be as high as $81 trillion. This represents a multi-generational crisis... one that will impact not only your future, but your children's future as well. The only way America will be able to pay that bill is to print more dollars. Again a highly inflationary pressure...and one that will further plummet the value of the dollar.
How to Outsmart an Inflationary Market While Bernanke and his followers at the Ministry of Economic Magic will do whatever's in their power to keep the official published inflation rate (the CPI index) below the psychological level of 5%, they will only be able to stave off the day of reckoning for so long. From January 2002 to June 2006, the inflation rate almost quadrupled--going from 1.14% to 4.32%. And it's been on a volatile ride since. Whilst depressed prices and rising interest rates have momentarily tempered the beast, it is still one of the greatest fears gripping Wall Street and the Fed right now. As the London Time's recently warned inflation is the "greatest concern" facing America today. One more oil shock...one more economic or geopolitical disaster...or even just the real launch of the super bull market in commodities is all it may take to unleash the inflation monster on the markets. Either way, we are fast approaching the inevitable: The day when the inflation rate becomes not just another figure--but becomes the one force above all others that will define the parameters of the entire investment environment. The time to prepare is now.That's why there has never been a more poignant time for an investment service like Leeb's Income Performance Letter. Inflation is a force Wall Street is not adept at following... force your average analyst doesn't understand... yet it is about to become the most potent force directing and swaying future markets...a force that's been kept under tight control for over two decades. But only in the past few years has it begun to rare its ugly head. Fortune magazine calls it "the retiree's worst enemy." Others say it is, "the cruelest tax on your wealth." But while it can be one of the most destructive forces in the economic universe, as we've said there are ways you can profit from it. That's what you'll learn how to do when you sign up for Leeb's Income Performance Letter. In fact, another major benefit you'll receive when you sign up is a special report called Getting Rich From High Inflation.
Copper Kings... Asian Energy Plays... and Modern Financial Miracles!
These investments are already profitable, and already rising. But once the energy crisis starts to heat up, and inflation starts to fly past 5%, these investments should ratchet up to dizzying heights very quickly. Wall Street will gape in awe as the broader market gets blown to bits, and these alternative plays reach valuations they haven't seen since the inflationary seventies. This may be your last chance to get in on them cheap. Sign up for Leeb's Income Performance Letter today, and we'll rush you a copy. Booming Commodities
Each month you'll also get:
In addition, you'll receive instant investment alerts, notifying you immediately of any buy/sell recommendation we make in our portfolio. What's more, we'll also send you important news bulletins and instant alerts on any kind of event that may be impacting our portfolio. This is the kind of blue chip type service that other investors pay $1000_$5000 for. But as a subscriber to Leeb's Income Performance Letter you'll receive all these powerful benefits as part of the package. Your Risk-Free Charter $39 Offer! A one-year subscription to Leeb's Income Performance Letter costs just $72. But as a special charter subscription offer, we are giving you the opportunity to sign up for just $39! That's $33 off the regular price. And if at any time you decide that The Complete Investor is not for you, we'll let you cancel and give you a full refund. Plus we'll let you keep all the issues and special reports you'll have received as our gift to you--just for giving us a chance. You won't owe us a thing! All you need do is just fill in the order form and we'll rush you your Membership Benefits package immediately. Or for an even better deal, sign up for two years for just $78. (That's $66 off the regular fee). Plus we'll rush you a copy of my latest book, the New York Times best-seller, The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel. In it, you'll discover:
We are fast approaching the tipping point for oil, inflation, the economy, and most importantly your investments. Now is the time to take action. Don't waste another minute. Sign up for Leeb's Income Performance Letter today, and we'll rush you details on many of the top investments that can make you rich in the oil-shocked, inflation-afflicted times ahead. Sincerely,
Dr. Stephen Leeb Senior Editor Leeb's Income Performance Letter P.S. As oil and commodities ratchet up in price, more and more investors will exit the mainstream markets, and pile into commodities. Most however, will wait until it's far too late. But you have a once-in-a-generation opportunity today to get in on these investments before the Wall Street crowd. Oil, commodities, international resource stocks are still trading at very low levels. But not for much longer. This may be your last chance to buy oil, copper, gold, silver, Brazil, China, India, alternative energies at reasonable prices. In the scheme of things--these resources, metals and countries--have not even begun their bull markets yet. But once inflation edges up past 5%, these alternative investments will fly off the Richter scale!
And much more!
| |||||
To put it another way: 
The math is simple. Limited supplies just can't keep up with soaring global demand. For example, in just 150 years we have burned through oil reserves that took an eon to form. And no significant world-scale oil discoveries have been made since the North Sea and Alaska in the 1970s. In fact, in 2003 the top 10 oil companies spent $8 billion on exploration, but only found less than $4 billion worth of oil and gas. And in the last few years, the 70 largest energy companies returned well over $100 billion to their shareholders in dividends and share buybacks, rather than spend the money on exploration. 
The Costs of Your Tomatoes, Corn, Cotton, Beans and Peanuts are Headed for the Clouds.
Prices for all types of goods and services, from gas to broccoli, start to rise with them.
During the inflationary '70s, markets constantly zigged and zagged. From 1967_82, U.S. stock markets went through their worst 15-year period ever_
While ExxonMobil, Conoco Phillips, Chevron and other oil super-mergers dominate the headlines, there's another oil company--whose reserves are even bigger than many of these oil superstars, and whose prospects for growth far outshine them--yet most Americans aren't familiar with its name. But this energy company harbors a number of unique advantages over practically every other energy company in the world today.
And this company is an almost unrivalled global leader and pioneer in alternative energies. It is the biggest producer of what the U.S. Department of Energy calls: "
The Brazilian energy and new income king, PetroBras, is just one of the outstanding inflation-proof investment opportunities you'll learn about in Leeb's Income Performance Letter. In fact, one of the first benefits you'll receive when you sign up for a risk-free trial subscription is a special free report called The New Income Kings: Hidden Asset Classes of the Hyper-Rich! In it you'll learn about:
Stephen Leeb, Ph.D. 
Genia Turanova, 
The other major force that will help drive inflation to unprecedented levels is the coming commodity crunch. This crunch is already starting to bare down on global industry. And it is heating up thanks to a number of profound economic events that were set in motion many years ago now. The first was the collapse of communism. The second was the rise of the Internet. 
Another great problem is that the engineers and the upper management (the key workers in the natural resource sector) are largely babyboomers, and they're all retiring. Unfortunately they're retiring at the worst possible time. 
The amount of undergraduates signing up for programs in the natural resource sector dropped dramatically. In 1981 we were graduating 700 mining engineers a year. Today we are graduating a mere hundred. The amount of universities offering mining engineering degrees has dropped from 25 to 15. One school closed in 2001, after graduating only one student.
It was a monumental investment that come 2000 fell very flat for the companies that laid them. But despite the Great Tech Wreck, the groundwork was laid. The East, Central America -- even Africa (a market of 3.3 billion people) were suddenly part of the global economy, and were hungry for everything the west had enjoyed for many years, like TVs, mobile phones, dishwashers, dryers, PCs, bright lights and flash cars...
While this will spell terrible news for the broader market--for commodities (and for those invested intelligently in them)---it will mean riding one of the greatest bull markets history has ever seen.
There is one major reason why Bernanke will be unable to tame the inflationary beast... and why he will be forced to allow inflation to reach levels previously unacceptable...
And if you have any doubt left that this new inflationary era is not about to descend upon us, consider the future of the federal deficit...
On March 26th, the Fed stopped publishing the M3 figure. This significant event went almost unnoticed in the popular press. To put it simply the M3 figure is the amount of all currency (that is all the dollars) in circulation. It's the largest aggregate figure of the money supply. It takes into account all the money held in savings accounts, CDs, eurodollar deposits and deposits held at foreign banks. It is one of the most accurate ways of measuring just how many dollars the Fed is printing.
In Getting Rich From Inflation: The Investor's Worst Enemy you'll learn about:
Getting Rich From Inflation: The Investor's Worst Enemy and The New Income Kings: Hidden Asset Classes of the Hyper-Rich are just the first of many powerful benefits you'll receive as a charter subscriber to Leeb's Income Performance Letter.
Opt out of this and other future offers of Leeb's Income Performance Letter, other than renewals or other 'transactional or relationship messages' as defined under the CAN SPAM Act of 2003 by clicking here or by sending an email to lipmaill@sovhomestead.com with "OPT OUT" in the subject line
