Friday, August 7, 2009

A Financial World Gone Mad

The Dow slipped a bit yesterday - only 39 points. Everyone is watching. They want to see how far this rally carries on. Many think it is more than a bear market bounce; they think it is for real.

The prevailing opinion is that quick action by the feds avoided a more serious meltdown. Ben Bernanke says he was working to prevent a "second Great Depression."

And now that the crisis is past, the economy is slowly climbing out of its hole. The second quarter showed GDP falling at 1% per year in the United States...rather than the 6.4% rate recorded earlier in the year. Housing sales have perked up. Oil is trading above $71 - a sign of renewed economic activity. And gold seems to be getting ready for another assault on the $1,000 mark - a sign of growing inflation pressures.

At least...that's the way the world sees it.

Here at The Daily Reckoning, we look...we squint...we wipe the fog off our glasses and try to tear the scales off our eyes. What do we see? We see a financial world gone mad.

Or, perhaps we should say...a financial world that has still not recovered from the Bubble Madness of 2002-2007.

One bubble begat another. We have previously reported that the Bubble Era was over. Because the machinery that made it possible - the bubblelized financial industry - was broken. Well, we were only half right. The finance sector has exploded. Bear Stearns was sold for peanuts. Lehman Bros. went broke. Merrill was forced into a shotgun wedding with the Bank of America; with Hank Paulson holding the firearm. JPMorgan is still in business. So is Goldman. But now we know that even Goldman might have gone under if Paulson - ex-Goldman man - had not engineered a stealth bailout. He brought the feds in to save AIG, and in the process he saved his old alma mater too...AIG's biggest trading partner, Goldman Sachs.

And now Goldman is in the news almost every day. It reported spectacular trading results for the quarter, lifting the entire world stock market. What's good for Goldman must be good for the whole world economy, investors reasoned.

Then it was reported that Goldman made its money in a variety of ways - none of which had anything to do with providing genuine service to the economy. Goldman made a fortune on the feds' own money raising, it came out. And then it came out ...Goldman was making billions by trading at lightning speed - clipping investors for fractions of pennies each time a transaction passed through the markets.

Goldman... Goldman... Goldman... The Italians think Goldman runs their country. They've got the top three posts in Rome...Premier Romano Prodi is an ex-Goldman guy. So is the headman at the Treasury. And the chief of the central bank, too.

They think Goldman is like a cult...a semi-secret society of insiders with the power to rule the country - surreptitiously. Like the free masons...the Jesuits...or the Illuminati.

Goldman has its boys in important posts in the United States too - but not at the same level as in Italy. Tim Geithner is not a Goldman graduate. Neither is Ben Bernanke. But both have plenty of input from ex-Goldman associates, colleagues and handlers.

We confess an interest - we have relatives working at Goldman. But we doubt that Goldman rules the world. Just look what they said and did over the last couple of years; they had no more idea of what was going on than anyone else. No, they don't rule the world...but they do manage to persuade it in their direction from time to time...

During the bubble years, they urged consumers, bankers, and investors to borrow...to speculate...and to ruin themselves. Naturally, Goldman made out like...well...like a bandit.

And now Goldman guys urge the government to ruin itself too. Yes, dear reader, the Bubble Era is not quite over. Now, there's a bubble in government debt. Here as well, Goldman makes money...like a bandit. The more the feds borrow...the more debt there is to buy and sell. And the more the feds stimulate...the more acts of reckless speculation there are to finance.

And the more money Goldman makes...the more politicians the firm is able to buy. Of course, they welcome campaign contributions.

And of course, Wall Street is spending record amounts in lobbying. But the real appeal is the lure of being able to join Goldman itself...of being able to spend some time in Washington...pushing business Goldman's way...and then cash in big by joining the firm and getting a piece of the action...

[Still waiting patiently for your 'piece of the action'? Looks like the wait is over - due to a legal 'loophole' you could be getting your slice of the stimulus pie in the mail as soon as August 19. Don't delay...learn how you can get your first 'bailout' income check by clicking here.]

More on bubbles, below. But first, we turn to The 5 Min. Forecast:

"Looking for a raise this year? Better work for the government," writes Ian Mathias in today's issue of The 5.

"In another sad sign of the times, Washington DC is now the number one metro area in America for those seeking a salary bump, says a study from WorldatWork, a group of HR companies. 77% of companies operating in the District plan on giving raises this year, says the group, second only to the Tampa area. Of those receiving a raise in DC, it'll average 2.3%, the highest in the country.

"We can't say exactly what our forefathers had in mind when they spawned this union, but we really doubt it was a table like this:

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Ian writes every day for The 5 Min Forecast, an executive series e- letter that provides a quick and dirty analysis of daily economic and financial developments-in five minutes or less. It's a free service available only to subscribers of Agora Financial's paid publications, such as the Hulbert #1 Performing Investment Letter, Outstanding Investments.
And back to Bill, with more bubbles:

There are two big bubbles now. There is the familiar one in federal government debt. The other is the Peoples' Republic of China.

Andy Xie says China is a 'giant Ponzi scheme' fed by new investors hoping to get rich. Of course, the China story is an attractive one. China's growth rate is spectacular. Even in a worldwide financial meltdown...and the biggest depression since the '30s...China is still growing at greater than 8% per year - or so the figures tell us. New cities are still being built...at a breathtaking pace. Stocks on the Shanghai exchange are up 80% so far this year. China has the biggest pile of cash on the planet - $2 trillion worth. And it has more bright, well-educated engineers, accountants and economists than anywhere else... In fact, it has so many economists trained at Western universities, it is almost sure to blow itself up...

Maybe this is the Chinese Century. Maybe it is not. Either way, it seems inevitable to us that the Chinese bubble economy is going to pop. Banks are lending three times as much as they lent last year. You can't increase lending at that rate and still maintain credit quality - if there was any in the first place. A lot of buildings are going up that won't find tenants. A lot of factories are expanding that won't find customers. A lot of speculations are going on that investors will later regret. That's just how a bubble works!

Mr. Xie says, for example, that the cost of property in China is about the same as in the United States. But wait, the average income in China is only 1/7th what it is in the USA. How can the Chinese afford American prices? Well, they can't. They're all betting on the 'greater fool theory' - that they can pay any price, because some greater fool will come along and pay more. Trouble with that is that the Greatest Fool of All finally shows up...and then the whole structure collapses.

[In other words, if you're placing any faith in a whole new Asian miracle, you may want to reconsider. Especially if your wealth depends on it, as it might - in more ways than you might imagine. Learn about what simple 'super shield' moves you can make to protect yourself and your money by clicking here.]

Barron's says that "The Greenback is Broken." True, the dollar has been losing ground as the stock market gains it. Yesterday, it took $1.44 to buy a euro.

"I was amazed at how expensive everything is in Paris," said son Will. "You go into a shop to buy a few groceries... You expect to pay about $12. Instead, the bill comes to $40. Or, you stop to have a cup of coffee and a croissant. It costs you $10. I don't know how you can afford to live in Paris."

Will lives in Buenos Aires...with frequent visits to in-laws in Florida...

"You know, it used to be so much cheaper to live in Buenos Aires than just about anywhere. But now, I think the prices are about the same as in Florida. Everything seems so cheap in Florida. And you can make some very good deals on property...

"Remember that house that I bought in 2006? You warned me not to do it. But right after I bought it people were coming to my door asking if they could buy it. One guy offered to write a check for $600,000. Then another guy offered $675,000. I began to think I really had something hot.

"Of course, then the market crashed. Now, I'm thinking of selling it for $300,000 - if I could find a buyer.

"But that's in South Florida...only about an hour up the coast from Miami. There are places in the US where things are really, really cheap. In Iowa, maybe, or Arkansas...or Michigan. You can get a nice house for less than you'd pay for a garage in Paris. From that standpoint...the US seems like the place to be. You can live so cheaply. And fairly well, but quality of life is another thing..."

The dollar is low...America is cheap. Barron's is probably wrong about the buck. It's not broken - not yet. Our guess is that it will rise when stocks crash this fall.

We've thought a lot about quality of life. It is not a constant, fixed thing we conclude....

There are only three main decisions you make in life - what you do; who you do it with; and where you do it. Typically, these decisions are made without much real thinking - which is probably the best way. They are not things that lend themselves to thought...but to feeling. Pity the more man who marries a woman after a prolonged and logical thought process. The poor sap is doomed. His head may be in the game, but his heart will drop the ball. The next thing you know, he will be in divorce court or therapy. Likewise, the decision about where you live is not one that is readily subject to logical analysis. You like a place because you like it... And you may like it for a variety of reasons that defy analysis. There's no accounting for taste, as they say.

Living in rural Iowa probably wouldn't suit us. We don't have the stomach for it. We couldn't draw enough nourishment out of such lean meat. We need more stimulation.

We like Paris for the street scenes. Everywhere we look, we see something we like to look at - people, buildings, shop windows, streets, bridges, and river boats. Same thing out here at our summer place. We work in an octagonal office that sits in the park. No matter what window we look out of, we see something that pleases us. A stone barn with a red barrel tile roof. Those big limousine cattle grazing in the field. And there's the house itself...a conglomeration of a fortified farm house from the middle ages with a Renaissance-style faux-chateau cobbled onto it in the 19th century. And there is our grandson...16 months old...playing in the gravel...

Wait - what's he doing? Uh-oh...he's eating the gravel.

Gotta run...

Thursday, August 6, 2009

11 Ghosts in the Market Machine

Damn the fundamentals. . . full speed ahead!

That's the mojo of the bulls these days, as the greatest rally in history keeps pushing the markets higher.

But just because the markets have turned green again doesn't necessarily mean that the storm has passed, as I discussed last week.

That's because whether the bulls want to admit it or not, "irrational exuberance" is alive and well these days, since the S&P 500 is now trading at nosebleed heights ― with a price to earnings ratio of 65.32.

Of course, "irrational exuberance" is a phrase made famous by our old pal, Alan Greenspan. The down-beaten maestro uttered it a full four years before the dot-com bubble burst, costing investors $5 trillion in the process.

Even still, those two famous words turned out to be much more than a mere warning that stocks were overpriced. They also helped to turn the idea of the efficient market hypothesis right on its head.

A rational market?

Not hardly, according to Greenspan. And while I'm not exactly a member of the Alan Greenspan Fan Club, on this score he couldn't have been more right.

Behavioral Finance and Investing

After all, the tenets of behavioral finance and investing go hand in hand, since every market trades in some measure on the human condition otherwise known as emotion.

Because as we have now learned in dealing with two massive bubbles in only ten years ― first in tech and then in housing ― the markets are not rational at all. . . at least not in the short run.

As the concept of behavioral finance implies, there is always a ghost in the machine. And because of this ghost, things aren't always as they appear to be ― especially when it comes to the stock market. . .

The reason for this, of course, is simple: the markets are made up of people. That makes them messy at times and unpredictable, since market players sometimes behave irrationally.

But by understanding how and where your reasoning can go astray, you can help build up your portfolio by simply choosing to limit your losses on far more of those "irrational" losers. After all, when you ignore the fundamentals, you do so at your own peril.

The key here, though, is in learning to recognize how the cognitive biases related to behavioral finance have handicapped your investing in the first place.

I call these biases, "Eleven Reasons Why What You Think is Probably Wrong." Learning to recognize these reasons can save you a ton of heartache. . . but only if you're honest with yourself.

The eleven emotional hurdles that could be killing your portfolio:

  1. The Bandwagon Effect: This is the one that causes the most pain in a bubble. It's the idea that it's okay to follow the herd because so many other people believe in it. It's irrational because it places faith in the safety of numbers, while completely disregarding the fundamentals. Without it, a bubble is impossible.
  2. Loss Aversion: People tend to have a strong preference for avoiding losses over acquiring gains. It's the fear that puts them on the sidelines to stay.
  3. Disposition Effect: This is the tendency for investors to lock in gains and ride out losses. It prompts the sale of shares that are rising, while it also keeps investors tied to losers for far too long. It's closely tied to loss aversion, since it's the fear of loss that dominates the thinking.
  4. Outcome Bias: Judging a decision by its outcome, rather than the quality of the decision at the time that it was made. This is what makes investors completely disregard a proper decision if it turns out to be a loss.
  5. Sunken Costs Effect: Treating money that has already been spent as more valuable than money that may be spent in the future. It's what helps to build up losses because the investor believes that by selling at a loss, he is wasting money. That same money could be put to use elsewhere.
  6. Recency Bias: Weighting recent data more heavily than earlier experiences. It's what freezes investors, especially after a series of losses, even though there may be a much longer string of successes in the past.
  7. Anchoring: This is the tendency for people to rely too heavily on readily available information when making a decision. Investors often base their decisions on information that mat be faulty.
  8. Belief in the Law of Small Numbers: This is when investors base their conclusions on a slice of data that is too small. It's the equivalent of making mountains out of molehills, and it blurs reality.
  9. Endowment Effect: People tend to value something more once they own it. As in housing, people tend to overvalue what belongs to them. Of course, this only blinds to them to the real value.
  10. Disconfirmation Bias: This makes people critical of information which contradicts their beliefs, while uncritically accepting information that is in line with them. In short: it's a trap whereby people believe what they want to believe.
  11. Post-Purchase Rationalization: This is when investors persuade themselves through rational argument that a purchase was a good value. Of course, if a decision needs to be rationalized after the fact. . . it was probably wrong.

Individually, all of these biases are dangerous. And taken together, they are the stuff that bubbles are made of. Guarding yourself  against them in the future may be the one of the best investment decisions you'll ever make.

Because Mr. Greenspan nailed it when he said that markets were irrational. Fundamentals really do matter.

Wednesday, August 5, 2009

you can make as much as 668% on the top 12 stocks

Relieved to see oil prices back down?

Looking forward to the days when we can get to $2 gas?

Ready to dump all your energy stocks... if you haven't already?

If you answered "yes" to any of those questions, think again.

Because what you think you know might be about to change forever.

See, what nobody's telling you is that a single almost completely undiscussed event is about to permanently change the way you live and invest. More so than the recent crash. And forever.

Do nothing and you stand to lose a fortune.

Do something and you could get very rich. Here's the thing...

This signature event is not something far in the future. It already happened. It's not something we can stop. It's not even something we can prepare for.

That time has come and gone.

It's not a war. It's not something done by some bungling boob in Washington or on Wall Street. Instead, it's a single, seismic event that has already occurred.

By our best estimate, it happened in July 2006.

And now there's no turning back.

No, the nightly news did not cover it. Neither did Obama or McCain.

Even though there is probably no event with a greater impact on your financial security, the American way of life or the security of the world than THIS event.

We'll have to deal with this event not just for the rest of this year... or the next four years... but for at least the next 20 years. If not longer. That's not my estimate.

It's the estimate straight from the U.S. government's own research team.

What massive event am I talking about?

I'm talking about the almost certain end of "cheap oil." Not just a new oil spike up to $140 per barrel. But a permanent, sustained new crisis that will make the petro-busts of the 1970s... and even of the last two years... look like a Sunday drive through the park.

You must be warned about this.

Nobody else is willing to talk to you about it. Not your government. Not the Big Oil companies or the OPEC whackos. Which is exactly why I'm writing you today.

Because I want to show you what's already happened. To give you the shocking facts nobody else wants to share.

And most importantly, to show you how to prepare for what comes next...

Starting with $8�12 for a gallon of gas... huge fuel lines... even "gas riots" worse than anything we've ever seen before... empty supermarket shelves... empty suburbs... and empty airports.

Politicians will make lots of promises.

They'll use words like "energy independence." They'll try to dazzle you with vague pie-in-the-sky plans to reinvent the energy landscape.

But don't you believe 'em.

Why? For the very reasons I spell out for you in the proof that follows.

No matter what anybody tells you ― or what you want to believe ― we're heading into what could easily be the most vicious and unpredictable financial cycle of the past 150 years.

The war in Iraq? Afghanistan?

They're just hiccups in history compared with what lies ahead...

The rising Cold War on the shores of the Caspian... new terrorism and oil killings in Saudi Arabia... a coming military conflict over offshore oil under the South China Sea... these are all just shadows of a dark future...

We All KNEW This Crisis Would Come, but Few Understand... It's Already Here!

Let's be clear.

Even the most bright-eyed optimist KNEW this day would come eventually.

But only a handful are plugged in enough to realize... it's already here.

I call this event "E-Day." But if you run in the same circles I do... and care about markets and your money the way I do... you know it by another name.

It's the hugely controversial phenomenon called "Peak Oil."

What is "Peak Oil"?

Some people think it's the idea that we've just run out of gas. Literally, that the world's pockets of petroleum have been completely tapped. And that the world's oil wells have now run dry.

Actually, it's exactly the opposite. "Peak Oil" is the idea that we've just passed the point at which we're producing the MOST oil we'll ever produce.

To explain it to the people I care about, I like to show them this chart...

For more than 149 years, we've had it easy getting oil out of the ground. For decades, America DOMINATED world oil production. We were swimming in it.

All that cheap energy made us a massive industrial power.

In the early 1970s, our huge oil supply "peaked." We started getting less every year out of the ground. And we had to turn elsewhere... like to the Middle East. You know the rest of the story.

Here's the thing.

"Peak Oil" is a very big idea to petroleum geologists.

In fact, I'll show you it was one brilliant geologist who started to figure all this out... nearly 60 years ago. Today, it has plenty more experts and industry insiders terrified.

In fact, one group compiled over 200 technical papers and 20 years of energy research and ― in October 2007 ― published a shocking report that backs our 2006 "Peak Oil" estimate.

Of course, you don't need anything close to a geology degree to understand what this could mean for you... for your children... for America and for the rest of the world... over the years ahead.

You have very little time before the last of the "deniers" lose all their credibility. You have even less time than that to get ready. Because the panic doesn't begin when oil runs out. It begins on the day the rest of the world understands the historical "wealth reversal" we're in for when "cheap oil" becomes a thing of the past.

Already, we're seeing the symptoms of a collapse. Think about it:

Military scrambles for oil resources

Pulpit-pounding petro dictators and terrorists

Soaring oil prices

Increasingly impossible gasoline prices.

You remember how it happened in the '70s. And you can see in the chart I showed you earlier how it played out too. Temporary supply shocks sparked two of the biggest market crises of modern times.

Only this time, it really is different.

This time, it's not really about ideology... it's about geology.

As warriors and cowards, CEOs and pundits, dictators and bureaucrats stake their territory and make their claims... deep underground, the world's source of cheap oil is on the brink of running out. And nothing you do to make or protect your money can or will ever be the same again!

I promise you, we're in for radical change. And not the kind guys in suits promise you on television. But I can promise you something better too. I can promise you you'll have a chance to come through this clean, if you follow the strategy I'm about to give you.

In fact, even while most Americans see their savings attacked, I can reveal to you exactly how a few smart energy investors could still get very rich! But not in the way you might imagine, buying major energy stocks.

How so?

Stick to the pages that follow. I'll show you at least two simple "safeguard" investments you can make RIGHT NOW to lock in leveraged gains as this situation unravels.

Not only can these two investments give you a powerful SHIELD against the fallout ahead... but they could soar, despite all the current market turmoil.

How high? On lesser moves in the same markets, I can show you how we've already booked gains as high as 668%. I expect this future move to send many more opportunities I'll identify soaring just as high, very quickly.

Possibly even higher, if your timing is right.

That's not all.

Because I'd also like to give you access ― FREE ― to nearly a dozen more blockbuster investments just like these. Each with huge prospects for investment gains when the permanently rising spiral of energy prices locks into place.

What you'll discover here will allow you to build a kind of fortress around your portfolio... and allow you to rake in gains at the same time. I know of no other strategy that will let you do this over the months ahead.

I'd like to start by sending you a FREE copy of a special investment report I've created JUST for this situation I'm about to describe. The report is called Crude Awakening: How to Survive the Total Global Energy Crunch of the Next 20 Years.

And again, I'm going to give it to you FREE.

Inside, you'll see why the danger of this event is very REAL. I'll give you evidence that's IRREFUTABLE.

And most importantly, I'll show you how the physical and financial devastation ahead could literally UNRAVEL a century and a half of American financial prosperity!

But of course, you'll also see why it doesn't HAVE to be that way. Because I firmly believe the two investments I'll show you in Crude Awakening: How to Survive the Total Global Energy Crunch of the Next 20 Years should play a key role in ANY intelligent investing strategy for the turbulent months ahead!

A few smart investors could get very rich... just on these two stocks. You're about to see why. Yes, you still have time to prepare. But not much. So let's start at the beginning...

The Beginning of Everything

Millennia ago, oil was a laxative.

Then in 480 B.C., the Persians used oil to dip and light fire-tipped arrows, which they launched over the walls of Athens. Back then, it's hard to believe, oil didn't mean much at all!

The world had the Renaissance, the Enlightenment and the American Revolution...

All without the benefit of oil. Then something changed. Something people didn't expect to make such a difference at the time.

Cities got bigger. Big cities needed better lamps. Along came kerosene!

In 1861, Nicolaus Otto invented the first gas-burning engine. Along came gas!

Then Ford showed us how to mass market cars. And build mass-market factories. Oil made it possible to mass-produce food, cities... and war...

For the whole of the 20th century, we soaked up cheap oil to run our cars and heat our houses... light our porches... and power our tractors. Oil gave us plastics. And petrochemicals.

Oil shaped America. It changed us.

More than the Internet. More than the stock market bubble of the 1990s. More than the Japanese bubble of the 1980s. More than the real estate bubble that's just burst under our noses. And that's what makes us so vulnerable to the shock "E-Day" will bring...

America's Dirty Secret: "Hooked on Crude!"

Without oil, America shuts down.

Farms close. Hospitals don't open. Streetlights don't burn. Trains and trucks don't run. Planes don't fly.

This isn't some fantastic doomsday scenario. It's just a simple fact.

We burn through nearly 30 billion barrels per year. Even 90% of the chemicals we use for farming, making drugs and making plastics... come from oil. It's a habit we can't quit.

Some of us commute 100 miles per day to and from work. Six billion people. Driving 700 million cars. Every day, each car uses four times more energy in fuel than people need for food.

At the airport, a thousand planes a day take off and land, each carrying as much as 24,000 gallons of fuel. Passenger jets alone burn about 1,200 gallons of fuel each hour!

The phones, Internet, televisions, washers, dryers, refrigerators and stereos in our homes... the trucks, trains, planes and ships that deliver food to our supermarkets... our factories, tractors, turbines and compressors...

Hot showers and hot coffee. Fried eggs and bacon. Your daily commute to work. And your commute home to your family in the evening. Air-conditioned skyscrapers and air-conditioned theaters. Late nights reading in bed by lamplight.

Weekend car trips to the beach. Thousands of boxes of cereal on grocery store shelves, fudge-ripple ice cream in the freezers, heaping piles of fruit on the produce rack...

None would exist or arrive without oil.

On average, most food in North America travels 1,300 miles from farm to plate!

How else do you get grapefruits in New England and maple syrup in New Mexico? Or salmon in Kansas or pineapples in Wisconsin?

The list goes on. Ambulances, firetrucks and police cars. Hospitals and hospital equipment. Modern dentistry. All need a steady, cheap supply of oil.

YOU SEE THE POINT.

As long as we can keep that oil coming, we've got no problem. Life goes on. If that source of cheap oil disappears... we're talking catastrophe. It's nearly unthinkable.

Yet now that we've passed the point of no return in world oil production, that's exactly the kind of cataclysmic disaster you can expect...

The New Oil ― "Cheap" at $150 per Barrel?!

Maybe you remember what the guys at Morgan Stanley said when oil passed $55.

It was back at the start of 2005, and they called it the "final frenzy." They said it was a panic spike. And that oil prices would cool for years to come.

Another 29 analysts called for oil to drop below $50 ― and stay there ― that same year.

Three years later, at the start of this year, oil had doubled to around $100. And George Bush had gone personally to Saudi Arabia, to beg the royal family to crank up production and lower prices.

Today, those same experts feel like $100 is a "breather." And those politicians tell us $3 gas is supposed to be good news. Compared with what's coming, they could be right.

Oil at $150... $200... or higher. This isn't a "maybe" scenario.

There are no politics to fix. No quotas to double or contracts to sign. "E-Day" ― the day when cheap oil disappears forever is not only coming. It's here. Come and gone.

All that's left for you to do now is prepare, starting with what I'll show you in the FREE report I want to send Crude Awakening: How to Survive the Total Global Energy Crunch of the Next 20 Years.

I'll show you how to get a copy sent to you in just a second. First, let me just continue showing you the shocking research that proves what we're up against...

The Day Big Oil Turned Its Back on Reality

In the 1930s, a geophysics professor at Columbia University named Dr. Marion King Hubbert made a discovery. He found a way for Big Oil to release petroleum trapped under deposits of hard rock.

The oil companies used his discovery to make billions.

Hubbert became a star for the industry. By 1956, he was working full-time as a highly paid expert for Shell Oil. But that's when the brilliant Dr. Hubbert made another discovery. And this time, it nearly ended his career.

See, what Hubbert realized was that the more oil you drain out of an oil field, the more those pockets of crude CHANGE. The first barrels come squirting out of the hole. But as pressure drops, the rest of the oil gets tougher to draw out.

It's like sucking the last of a milkshake out of a tall glass.

Years of pumping, said Dr. Hubbert, would turn rich fields into petro-pin cushions as the companies tried desperately to drain the last drops of oil. You can imagine, when your entire business ― and your company's share price ― depends on how much oil you have in reserve, this is a very big deal.

In fact, the biggest deal.

Hubbert's bosses BEGGED him not to release his controversial discovery.

But he did anyway. He told a roomful of oil executives and engineers how the U.S. was on track to hit its production "peak" as early as 1970. And the audience practically laughed him out of the room!

Now, you've got to picture this. At the time, America was the world's largest oil power. Black crude flowed like water from Texas wells. The controversy that followed nearly ruined Hubbert's career. Shell even hired other geologists willing to put the peak date in 1990 or even 2010... and Hubbert was all but shunned by the industry bigwigs.

Just 15 years later, the United States hit that peak.

Like clockwork, in 1971, oil wells in Texas and Louisiana started to dry up. U.S. oil production plateaued... then fell off a cliff. Within three years, oil imports tripled. Gas and oil prices soared. And OPEC had us at its mercy.

Hubbert was right all along.

No part of the U.S. economy escaped the crisis. When the stock market crashed, millions got wiped out financially. They got slammed again in 1979, when Iran twisted the screws and sent the U.S. into another tailspin.

But even that was just the beginning...

Crude Awakening: The Total Global Energy Crisis of the Next 20 Years

See, the data Hubbert had discovered a full 15 years before the U.S. oil peak didn't just predict a peak in the lower 48 states of the America...

The same data ALSO predicted similar peaks for the rest of the world's petroleum nations... until all GLOBAL OIL PRODUCTION hit a permanent downward slide!

Sure enough, look what's happening.

One by one, other oil-producing countries have started to fall.

Libya peaked in 1970. Iran peaked in 1974. Romania ― once Hitler's prize petroleum conquest ― peaked in 1976. Brunei peaked in 1979. Peru in 1982. Cameroon in 1985. Indonesia peaked in 1997. So did Trinidad.

Out of the 65 biggest oil-producing countries, 54 have already slammed into the wall of peak production. That's serious.

On average for the whole European region, the peak year for oil production was back in 2000. For the whole Asian-Pacific area, it arrived back in 2002. Even for the former Soviet Union, the oil peak came back in 1987. And the peaking dates for the rest of the major oil regions ― including the Middle East ― are right around the corner!

Forget what politicians and pundits tell you.

There is no "oil recovery" in the wings.

Recessions might give us a break on demand, now and then. But shrinking energy supplies always add up to rising prices. And what I'm showing you here adds up to a permanently shrinking supply.

What will this do to the stock market... to budding small businesses... to the job market... and to the prices of everyday goods? What happens with China? With India and the masses in other emerging markets?

Many, many people will get caught unaware.

Of course, you don't need to get caught along with them.

Not just billions... but trillions... in global wealth will disappear, as we scramble for a solution. However, others ― and I'd like to include you in this category ― could make hundreds of thousands of dollars simply by buying the right energy and resource investments.

This is why I want you to let me send you my new FREE report, Crude Awakening: How to Survive the Total Global Energy Crunch of the Next 20 Years. Inside, you'll discover two virtually unknown stocks that should soon start to soar...

Especially as one of the biggest "Peak Oil" coverups of all gets revealed. I'm talking, of course, about the LIES you've been fed for at least a decade by none other... than the royal family of Saudi Arabia...

The Saudi Princes' Dirty Secret: Dying Oil Fields and Shrinking Reserves!

Remember when Shell Oil shocked investors by admitting to overestimating its oil reserves by 4.5 BILLION barrels? Their share price collapsed by 9% in a single day.

Can you imagine, then, if the world's BIGGEST oil producer gets caught trying to feed you a whopper more than 12 times that size?

Energy expert Matt Simmons says that the day Saudi Arabia hits its energy peak, that's the day the rest of the world will wake up to the reality of "Peak Oil"... by tailspinning into chaos!

So maybe it's a good thing, in a way, that the crown princes of Saudi Arabia have been lying to us all these years. But they can't keep their charade going for much longer.

See, here's the real scandal...

The Saudis have some 300 oil fields. But 90% of their oil wealth comes from just a handful of those fields. Their crown jewel producer is the Ghawar field.

The Ghawar held an astonishing 87 billion barrels of oil when it was discovered in 1948. By the 1970s ― according to experts at Exxon, Chevron, Texaco and Mobil ― the Ghawar still had another 60 billion barrels left, the bulk of Saudi Arabia's 110 billion barrels of proven reserves.

But in 1979, the Saudis kicked out the U.S. experts.

Overnight, they claimed to have another 50 billion barrels. Nearly a decade later, they were claiming to have over 260 billion barrels of oil overall.

And for the next 17 years, they never adjusted that figure.

Magically, even after selling billions of barrels of oil to the U.S., China, India and anyone else who wanted it... that 260 billion barrel estimate never went down!

Without a single new major oil discovery during that period.

Even now, the Saudis claim they can kick out at least 10 million barrels of oil per day. And our own Department of Energy banks its rosy energy predictions on the Saudis' ability to churn out up to 20 million barrels per day, if they have to.

It's the biggest, most carefully guarded LIE in the industry today.

But the coverup can't last forever. Every day, the Saudis pump 7 million gallons of seawater into the Ghawar's 3,400 wells... just to maintain pumping pressure.

But now, more than HALF the fluid they're getting back out... is the seawater they pumped in to help force out the rest of the oil! That's no isolated situation.

The Saudis have five mega oil fields, all on the brink of collapse. Even U.S. Energy Secretary Samuel Bodman admitted recently that the Saudis are "right at the ragged edge" of their ability to meet oil demand.

Right now, 73% of all the world's new oil comes from the Saudis. So their big LIE is already a big enough deal all by itself. But ask yourself, if our "allies" in Saudi Arabia don't hesitate to lie about their reserves...

"Is Anybody ELSE Lying to Us About How Much Oil They Have Left?"

Here's the rest of the ugly truth...

The rest of OPEC is secretly running out of oil too!

Take a look at this chart...

See, here's what happened.

In 1986, OPEC made a new rule for its members: You could only sell as much oil as you held in total reserves. In other words, the bigger your reserves, the more money you were allowed to make.

Almost every OPEC country "upgraded" its reserves overnight.

Here's the thing: Those countries made the overnight "upgrades" in their reserves WITHOUT a single new oil well discovery being made... and WITHOUT a single new rig being built!

And just as the Saudis do, those same countries continue to keep and even add more "ghost oil" to their books. It's a scandal that has ALREADY cost investors and energy buyers hundreds of billions of dollars.

But as I said, the world doesn't have to run out of oil and gas to spark a crisis.

Remember, It's the Halfway Point That Matters

All that has to happen is for the world oil market to discover there's a lot LESS oil out there ― now and for the future ― than we need to keep on living like we do right now.

The day the truth comes out, catastrophe strikes.

That's why I hope you'll let me send you a FREE copy of my new Crude Awakening: How to Survive the Total Global Energy Crunch of the Next 20 Years special investing report.

Because even if I and dozens of other energy experts and geologists are wrong... even if we have a few years left before the peak arrives... you still need to start preparing for the inevitable. We already use much more oil worldwide than we produce or discover.

That can't last forever.

Here's something else. When Dr. Hubbert first revealed his "Peak Oil" predictions, he explained that just before and after the "peak," there would be short plateau of FLAT oil production... followed by a steep collapse. Guess what's happening right now.

This next chart shows the last 10 years of production for the world's 17 biggest oil companies... and for every one of them, production is completely flat!

Usually, when oil prices soar, Big Oil pours that money into new wells and new discovery... but this time, there's no new oil left to produce or discover!

Buying the Big Oil companies, though, even during price pullbacks and minor corrections, might NOT be the best way to make money on this move.

Which is why I urge you to send for your copy of new report, Crude Awakening: How to Survive the Total Global Energy Crunch of the Next 20 Years, as soon as possible.

Because it's going to show you better alternatives.

Including two powerful stocks that should soar as this dramatic trend unfolds. They won't stay this undiscovered forever. But if you wait until the rest of the market wakes up, you'll miss your chance.

You can read about them in your free copy of Crude Awakening: How to Survive the Total Global Energy Crunch of the Next 20 Years, just one of the SIX FREE reports in the new PEAK OIL PROTECTION LIBRARY that I'd like to give you, absolutely FREE.

Look, this is monumental.

The MOMENT news of this new data hits the wires... it's going to reverberate on Wall Street like an H-bomb with a bad attitude. In the crisis ahead, businesses will face serious choices. Thousands of investors will lose BILLIONS of dollars.

But before that happens, you can be ready.

Simply read your FREE copy of Crude Awakening: How to Survive the Total Global Energy Crunch of the Next 20 Years... and then let me send you the rest of the SIX FREE reports in the complimentary PEAK OIL PROTECTION LIBRARY that I'd love to send you today.

You can even download it just a few minutes from now, if you're ready.

I expect you to make at least 668% gains on these breakthrough energy investments. Perhaps even more. Because the worse the situation gets, the more I'll be there to show you exactly what to do next.

Yeah, you say... but still, we've already seen new record prices... and then they pulled back. So how bad could this really get?

All I'm saying is, even if you don't send for your FREE reports, I urge you not to get too comfortable.

Because even today's high prices are just a taste of what lies ahead...

We'll Pay "As Much as $378 per Barrel," Says a White House Insider

Plunging supply and soaring demand... it's the purest law in economics.

Matthew Simmons is a former Harvard professor. Now he's an investment banker who manages nearly $56 billion in energy investments. He's been a White House adviser under both Bush and Clinton.

Here's what Simmons recently said:

"It works out as much as $378 a barrel. Yes [I can see it reaching that high]." CBS MarketWatch says the coming Peak Oil crisis will "dwarf that of 1973."

And the San Francisco Chronicle is saying we're looking at "social and economic upheaval across the globe... "

And it's not just the geological crisis that will make energy scarce.

For instance, take a look at China...

China had just 700,000 cars in 1993. Now it has 7 million. It also had only 15 million motorcycles then. Now it has over 100 million!

China's energy use alone has already doubled over the last 20 years. Suppose China started using oil at a rate like, say, Mexico?

Right now, China uses just 1.7 barrels of oil per year per Chinese citizen. Mexico uses 7 barrels per person. If China matched those rates, total DAILY oil demand in China would soar to 24 million barrels per day. More than in the United States. And about 30% of the total oil demand worldwide!

China expects to import TWICE as much oil as the United States within the next 15 years. Its rate of oil demand growth is already double the percentage demand growth worldwide.

The current economic bust might slow oil demand temporarily. But in the bigger scheme, it will come roaring back. Because the foundations of future demand have already been laid.

In fact, according to the International Energy Agency (IEA), global demand has already grown in the very recent past at its fastest pace since 1980. Average global demand is 88.1 million barrels per day. Aside from today's extreme financial events, we're sure to meet and exceed that level of demand in the future. And out of that, about 20 million barrels of daily oil demand comes from the United States.

If you can't get your head around that number, imagine an Olympic-size swimming pool. Drain the water. Fill it with crude oil. Now do that 1,272 times. Every day of the year.

THAT'S A LOT OF OIL!

And remember, once it's burned, it's gone for good.

"Yes, but Couldn't One Huge Discovery... or Alaska... or Deep-water Drilling... Change the Equation?" Unfortunately, Absolutely Not...

What are the chances of finding another 90-billion-barrel oil field?

Or two fields of 45 billion barrels each?

Close to zero.

You could go broke looking. In fact, many oil companies already have.

(In the 1950s, for instance, George Bush Sr. made millions from his Texas oil business. In the early 1980s, George Jr. had to get OUT of his own businesses... after just about every drill they dropped came up BONE-DRY!)

The dynamic has completely changed. And why? Because there hasn't been a major new oil field discovery in more than 20 years. Even the "untouched" deep-water fields and Alaskan oil ― while they might hold what seems like a lot of new oil ― likely don't hold enough.

Worldwide, net oil discoveries have plunged every five years since 1980. Some of the biggest fields are now between 30�100 years old! And they're starting to run dry too!

Over the last five years, the world burned 27 billion barrels per year. But the oil industry discovered only 3 billion new barrels per year.

How long can you use up nine times what you're finding in replacement?

Not long!

There were 16 large discoveries of oil in 2000, eight in 2001, three in 2002 and NONE in the year that followed. It hasn't gotten any better since.

Worldwide, peak discovery was in the 1960s. In the 1990s, that average was one-sixth that total... 9 billion barrels per year!

That's next to nothing compared with world oil demand. Even if we DID find another Ghawar... it would only delay the inevitable impact of "E-Day" by less than 24 months.

Meanwhile, your whole way of life is in danger.

So what's the solution? Yes, there is one. Some of it will come from a wave of breakthroughs for tapping the rest of the oil... some will be new ways to burn what we already have more efficiently... and a string of alternative energies ― wind, solar, clean coal, safer nuclear energy, hydro and even hydrogen ― all hold lots of promise.

But not every one of these will have the same payoff. And some will take longer to give you gains than others. What I'd like to help you do is find the few market moves that do make sense for the turbulent crisis ahead. For instance, I have two I can share with you right now. Both will help make a few smart investors exceedingly rich. Provided you know which stocks to buy and the right time to get in...

Huge E-Day Profits by Buying When the Time Is Right!

I should introduce myself.

My name is Byron King. And when it comes to oil, gas, energy, war and politics, I think I can politely tell you ― I know what I'm talking about.

See, I'm what you'd call an "old rockhound." Which is my way of saying that, years ago, I graduated with honors from Harvard with a degree in geology.

In the 1970s, I took that background to the oil industry, and I worked as a geologist in the exploration-and-production division of a major oil company.

When natural gas whipping out of a 21,000-foot well got too routine, I dropped it all and joined the U.S. Navy, logging over 1,000 hours of flight time in tactical jets.

I've even pulled off more than 127 carrier landings.

After I left active duty, I became a practicing attorney in Pennsylvania.

But with all that excitement and experience... I found that I couldn't get my passion for oil and energy out of my blood. I kept up with my contacts in the field. And dove deep into energy research.

I started reading and writing about new discoveries in the field. I studied them. I gave speeches about them, every chance I could get. To this day, I've done more radio shows and have written more published articles on the topic than I can count.

Years ago, I even got the chance to meet M. King Hubbert himself.

If you know anything about oil, you know that for an oil guy and geologist like me, that's like meeting Mick Jagger. But I'm not telling you all this to brag.

I just want to show you how it is that I linked up, just a few years back, with someone you might already know ― New York Times best-selling author Addison Wiggin. See, Addison is also has a pretty high profile in the investment world, including in the energy markets.

He's been interviewed by Forbes, ABC Money Matters, CBS Sunday Morning, Fox, Bloomberg, CNN Money, MotleyFool.com, TheStreet.com, Money, The New York Times Magazine and more than 350 different local and national radio shows about his best-sellers Financial Reckoning Day and Empire of Debt: The Rise of an Epic Financial Crisis.

He's even the co-writer and executive producer of the new Sundance-nominated financial documentary, I.O.U.S.A. So it was only a matter of time that we crossed paths.

What really drew me in, though, was that Addison manages a nearly prophetic multimillion-dollar financial research group... that specializes, in part, in energy market analysis.

When I realized just how much he and I saw eye to eye on many of these forces... I jumped at the chance to join his international team of experts. And here I am today.

That's why I'm writing you now.

Because I'd love to let you into our private network, where I can help you track these opportunities... discover these trends... and turn them into the huge, protective opportunities that most other investors will miss.

Our group is one of the fastest growing out there.

And we'd love to have you on board... 

The #1 Performing Investment Letter Over a Five-Year Period

The service I now run is called Outstanding Investments. And I'm proud to say that unbiased and meticulous industry watchdog Mark Hulbert ranked Outstanding Investments the No. 1 Performing Investment Letter over a five-year period in 2005, 2006, and 2007.

Sorry for bragging... but I'm thrilled to be on this team, and I can't help but be proud. Especially with our No. 1-ranked track record. But you don't have to hear it from me.

Let's listen to what some of my Outstanding Investments subscribers have to say. For instance, guys like reader Jeff B., who wrote in:

"It's difficult to be unhappy when all of the recommendations I hold from Outstanding Investments are up a minimum of 36%!"

Then there's reader Charles B., who says he's done even better:

"I made a 140% gain with Tocqueville Gold ― great pick! And 64% on Northgate, another winner!"

I'm not cherry-picking these accolades.

We get letters like this in the office all the time:

"My stock portfolio has increased 52% in eight months as a result of the insight of Outstanding Investments. I plan to be a subscriber for years to come... " ― Fred H.

"I made back the cost of the subscription on my first buy, within about a week... Your newsletter is a great deal!" ― A. D.

"Thanks for all the good advice. Subscribing to Outstanding Investments is one of the best investment decisions I've ever made." ― Wade G.

Here's my point.

Readers like you have done very well so far following our recommendations. Now before this critical moment of upheaval, I'd like to invite you to join them. And in a very special way.

See, I think it's so important that you don't miss this chance, I'd like to invite you to try Outstanding Investments for yourself... free for up to a full year.

That's correct.

No charge for as many as 12 months.

Plus, to make it even more tantalizing, I've arranged for nine free gifts that are also yours the moment you get started. Including a new library of six special investing reports I've pulled together. I call it my Crude Awakening Crisis & Profit Library.

Inside, you'll find a three-step strategy for safeguarding your money against the new oil war of 2008... brilliant alternative energy plays that will soar as a new wave of violence overcomes the Middle East... innovative, safeguard strategies that can work even in whipsaw markets... plus much more.

And it's all yours at no charge, as soon as you're ready.

Let me just give you a glimpse inside...

The Breakthrough Energy Stock All the Insiders Want to Own

When cheap oil finally does disappear, the world will search desperately for something... anything... to fill the void.

But wind, solar, hydrogen, thermal and more... most of these alternatives to oil energy are just NOT READY for prime time. They're either just too expensive to use or too different and complicated to develop SOON enough to make a difference.

However, among the most immediate options that DO work is an incredible commodity you might have overlooked... plain-old natural gas.

It's been quietly booming lately ― starting even before the current energy crunch hit. Liquid natural gas trade soared 55% in the 10 years ending 2004. This little market is growing like crazy.

Some analysts even predict natural gas will surpass King Crude to dominate the world's energy markets. The CEO of Shell says within 10 years, gas will be a bigger part of the company's business than oil.

The problem is that gas, unlike oil, is hard to transport. Because of the transportation problems, the price of natural gas is much higher in North America than in the countries that are swimming in the stuff.

This "Energy Bottleneck" is your chance to multiply your money many times over.

How much exactly? Possibly 300% or more...

An American Natural Gas Play That Could Easily Grow 300%

First, here's the thing...

Plenty of in-the-know experts share my view on natural gas. But finding the right investment can be tricky. For example, you could always buy Exxon Mobil. But that's like trying to buy a ranch to own a steer ― even in a serious market turnaround, you wouldn't make more than a couple percentage points.

I'd rather swing for the fences... for gains of 200%, 300% or more.

Which is why I've prepared another special report for you, called Riding the Natural Gas Boom to Triple Your Money.

Inside, you'll discover my top pick right now. It's one of the top three independent natural gas producers ― with a fat $21 billion market cap ― but in the energy business, that qualifies this company as a small, nimble player.

It's U.S. based. And owes its success to active property acquisition and consistent drilling. This isn't a new strategy, but this company is doing it on a large scale in the right market. This company is a master in every facet of the natural gas business.

I'm not the only one who thinks this company is about to skyrocket...

What's one indicator that great investors have always used to predict upward movements in a stock price? Insider buying.

Who knows the business better than the management of a company? No one. If company execs are putting large chunks of their hard-earned dollars into the stock, you know that they believe the price will go up.

This company's CEO has been stocking up on shares. For the past couple years the CEO has been filing SEC form-4's ― the forms you have to fill out if you are an insider buying your own company's shares.

Do you think this CEO would be sinking his hard-earned money into something that he didn't believe in? No way. He knows what I know about natural gas. And right now, it's at a great time to buy.

The Worldwide Natural Gas Boom

This company is in a great position to profit, but they are in an even better market. Natural gas is quickly becoming the energy of choice internationally.

As oil prices increase, natural gas demand will also become a cheaper and more viable energy source. And this company will stand to make money. And here is the kicker...

Alone, this natural gas producer is a strong candidate for growth, but it may be an even stronger candidate for a buyout. With a company this well positioned, it may just be a matter of time before one of the big guys buys it out...

You'll learn all about it in your free special investment report, Riding the Natural Gas Boom to Triple Your Money. You receive this report and up to five more when you subscribe to my newsletter.

Meanwhile, here's another way to profit...

Earn a 6% Dividend and Double Your Capital, Too!

LNG is a possible grand slam homer in natural gas. But you can also profit from North American companies that don't need to ship their gas across an ocean.

And if you're fed up with the pitiful interest rates you get on bank accounts and CDs, I've got the best news you've heard this year.

Your free copy of Riding the Natural Gas Boom to Triple Your Money recommends a Canadian gas company that pays a 6% dividend as I write these words.

Here's something more...

Profit From a Nuclear Breakthrough

This next breakthrough sounds like a miracle. But it's real. And it could easily fatten your personal bank account. See, if things play out the way I expect, fossil fuel power plants ― utilities that use coal and natural gas to make electricity ― will join wood-burning stoves on history's dustheap.

And you can make a fortune owning a piece of the power revolution that will follow. You'll learn the details in Turning on the Juice: Power Plays for the Electricity Crisis Ahead, another of the six FREE reports I'm ready to send.

One of the key ways to profit, for instance, is a coming worldwide boom in nuclear power. Yep. After a couple of freak accidents several decades ago, Americans decided they wanted nothing to do with nuclear power ever again.

But guess what?

The rest of the world didn't have that luxury. They had even less access to cheap fossil fuel. So they took a second look at nuclear... and reinvented it completely. Now it's safer and more efficient than ever.

France now gets 77% of its electric power from nuclear plants. Japan and South Korea get 39% ― and the two of them have more than 20 new plants on the way.

Belgium, Sweden, Finland... they've all gone nuclear. It seems like everyone but us is building nukes. China plans to boost its nuclear power capacity by 500%.

In fact, for the past 40 years, nuclear has been the fastest-growing power source in the world. And now it's really taking off.

What's more, all the hundreds of plants worldwide have logged thousands of reactor years without a single accident. You see, Asians and Europeans have discovered something some Americans refuse to see: Nuclear power beats fossil fuels hands down.

It's safer... it's cheaper... and it's cleaner.

And it's about to enjoy a whole new age, worldwide. With or without the U.S. In Turning on the Juice: Power Plays for the Electricity Crisis Ahead, you'll find out how... including how to make a bundle on the new trend.

Already, you could have gotten rich on the soaring price of uranium. It's up many times over, just in the last few years. But there's still room to make plenty more.

Turning on the Juice reveals my favorite ways to gain from the new nuclear boom... including a company with huge uranium reserves, plus ready access to China and its massive nuclear program. Best of all, this company controls a production bottleneck the U.S. nuclear industry can't do without. But even that isn't my No. 1 play that you'll read about in your FREE copy of this report...

Nuclear Power Plants Will Roll off an Assembly Line

The Chinese are charging ahead with a new type of nuclear power plant.

I predict utilities will build hundreds, maybe thousands, of these new plants all over the globe. Electricity will become super cheap.

And eventually, we'll see an economic boom worldwide like we've never seen before:

The new plants will be walk-away safe. A meltdown is not just unlikely, it's impossible

There's no danger of radioactivity venting into air or water

There's no chain reaction involved

No need for huge cooling towers or water. No billion-dollar pressure dome

Almost no waste, and what waste there is can be stored safely on the premises

No need to fear a terrorist attack.

You'll learn all the details in your free special investment report, Turning on the Juice: Power Plays for the Electricity Crisis Ahead.

The technology uses an alternative way to harvest the energy of the atom ― a way that Americans discovered and then rejected decades ago.

The Chinese plan to mass-produce the reactors.

The plants will be modular and factory made, built to last 40 years, ready to ship anywhere in the world and assembled like Lego.

A Chinese scientist boasts, "Eventually, these new reactors will compete strategically, and in the end, they will win. When that happens, it will leave traditional nuclear power in ruins."

The man has reason to be cocky. The prototype has already been tested by turning off the coolant and letting the plant cool down by itself. That would be totally unthinkable with a conventional reactor.

This could be the ultimate solution to global warming.

These plants will get built by the hundreds because the world needs cheap, clean energy. But they'll get built by the thousands if the world decides to get serious about global warming. Selected stocks will take off into the stratosphere.

I think the Chinese will pull it off, and we're going to see a new industrial revolution.

You need to move soon, because the Chinese are plunging full speed ahead. Subscribe now and get your free copy of Turning on the Juice: Power Plays for the Electricity Crisis Ahead.

In fact, you need to move quickly to get all of the FREE reports in my PEAK OIL PROTECTION LIBRARY. Here's how to get started...

Your First 3 FREE Reports Plus up to 6 FREE Months of My Research

So here's a quick recap of the first three FREE reports I want to send you immediately...

Special Investment Report #1:
Crude Awakening: How to Survive the Total Global Energy Crunch of the Next 20 Years

Special Investment Report #2:
Turning on the Juice: Power Plays for the Electricity Crisis Ahead

Special Investment Report #3:
Riding the Natural Gas Boom to Triple Your Money

In these three reports alone, you'll already find 10 specific investments I recommend right now, including...

The brand-new gas company with a massive infrastructure other companies can't hope to match! When natural gas prices take off, this one will almost certainly be along for the ride

The uranium company with millions of pounds of undervalued reserves ― an almost sure double ― even if you forget it owns one of the only two reprocessing mills in America

Which "alternative energy" investments will fly... and which won't. Including one solid player that's got plenty of growth potential.

The American coal company that's poised to jump. Maybe it'll dethrone King Crude once and for all!

Two natural gas plays positioned at one of America's most vulnerable energy choke points. One pays a cash dividend that wallops any CD.

All you have to do is sign up to get one year ― 12 monthly issues ― of my popular market research letter, Outstanding Investments ― at half off the regular subscription price.

That's like getting the first six months of your subscription absolutely free.

This special deal is just $49 for the full year, which includes the six months of free issues and all three of the FREE reports I just named, at no extra charge. And here's an even better deal...

THREE ADDITIONAL GIFTS... and a FULL YEAR of My Research, FREE

Let me send you double the number of special research reports... plus up to a whole year of FREE issues when you try Outstanding Investments for two years (24 issues).

In other words, you get all three special reports named above, plus...

Special Investment Report #4:
Two if by Sea: Shipping Stocks That'll Sail on the Oil Boom

If the price of oil is headed up, the obvious play is to buy oil stocks. Problem is, everyone knows that. I've got a better idea. Often, the best way to play a boom is by investing in supporting players most people never think about.

When it comes to crude oil, tanker companies are a great way to multiply your profits. While the price of a barrel doubled, the cost of shipping the oil went up nearly four times! Revenues for shippers soared a 1,000% in 2004, and all 1,500 oil tankers worldwide are booked solid.

Let me show you how to profit in Two if by Sea: Shipping Stocks That'll Sail on the Oil Boom. Yours free with a two-year subscription.

Special Investment Report #5:
Tailpipe Riches: The Race to Build the Car of the Future

No matter what happens to the U.S. economy over the next five�10 years... no matter what new foolishness grips Washington... one thing is absolutely certain.

The way we drive will change. The days of SUVs and gas-guzzling sedans are history. To survive in the new era, all of the major carmakers are retooling and redesigning just so they can survive.

And whichever way it goes, you could easily get very rich.

For instance, in Tailpipe Riches: The Race to Build the Car of the Future, I'll reveal the three front-runner technologies... plus the unlikely company that's most likely to make a fortune as these breakthroughs take hold (hint: it's not a car company at all!)

Special Investment Report #6:
Solar Flare: Getting Rich in the Coming Energy Revolution

What's the untold secret that made solar power a no-go option for decades... and how has the tide suddenly turned toward huge profitability? Maybe you remember how solar power used to be a hippie technology nobody took seriously.

But energy insiders take it seriously now.

Especially guys like Shi Zhengrong, the richest man in China (worth $2.2 billion) and now one of the biggest backers of what could be the richest solar power moneymaker in the world today.

You could probably find out which company I'm talking about on your own. What you won't find, though, is the secret catalyst that's about to make this a must-own stock for 2009 and the years to follow.

Unless, that is, you let me reveal it to you in the copy of Solar Flare: Getting Rich in the Coming Energy Revolution, just one of the free reports I'd love to send.

That's six FREE reports altogether.

Plus, you'll get two years (24 issues) of Outstanding Investments at half off the regular two-year price ― you pay just $99 ― which like getting a full year of issues, absolutely FREE.

I certainly feel like that's a pretty solid deal.

And I'm positive that once you've had a chance to look everything over, you're going to agree. But the most important benefit you'll receive is...

Professional Forecasting vs. Crystal Ball Gazing

My surprising and often disturbing predictions are more than just talk.

This is serious information for serious readers.

I publish this analysis in my newsletter. People act on it. Real people. And when they do, they make money. Real money.

Dow Jones, Reuters, The Wall Street Journal and others take me very seriously.

Two years in a row, independent tracking and rating service Hulbert Financial Digest named Outstanding Investments the top-performing newsletter over a five-year period.

I'm proud of that. But even more important to me is that you get a chance to tap into these opportunities too. Which is why I hope you'll act soon on this special invitation, while there's still time...

Act Now to Protect Yourself From "E-Day"!

Send for my PEAK OIL PROTECTION LIBRARY and see for yourself.

Short term, nothing can cushion the U.S. economy against the next wave of the "forever" oil shock. Not the president, not the Prius.

But for yourself and your family, there's plenty you can do.

Simply knowing what to expect next is an excellent start.

Shocking events like...

A coming 50% global shortfall in energy supplies: After "E-Day," the GAP between rising energy demand and plummeting energy supplies will just get wider. At today's rates, it will grow by at least 5% per year. That means that within a decade, we could face a shortfall in available energy of as much as 50%! That means serious consequences. It also means a mad scramble for the kinds of energy-focused stocks I'll discover for you in issues of Outstanding Investments

OPEC will try to SEIZE all the purse strings: As country after country peaks out in energy production, OPEC will certainly look like the last man standing. Suddenly, it'll have all the cheap, exportable oil reserves. But don't make the mistake of thinking OPEC is the only game in town. In fact, I can show you a half dozen EXTREMELY LUCRATIVE energy investments that most of the world hasn't even heard of yet. But they will, absolutely. It's only a matter of time!

Expect many more brownouts and blackouts: America's aging power grid is already in trouble. What happens after 'E-Day' when the grid doesn't have enough cheap juice to meet demand? Simple. It crashes. Expect many more brownouts and blackouts in the months ahead, just like in LA and New York City during hot summers! But expect to make a FORTUNE on the energy companies that will help America stock and rebuild that grid

Brace yourself for the new cold war between the United States and Russia: The latest crisis in the Georgia republic was no accident. In the war on terror, the United States planted an incredible 19 new bases around the oil-rich regions of the Caspian Sea, just north of Afghanistan. The bases are permanent; we're not budging. But Russia also wants free access to those reserves. The days of soldiers glaring across fences are back!

Get ready for a new "hot" war with China: Even with oil prices skyrocketing, we'll still need our cars and our refrigerators and our electricity. But so will China, India and the rest of Asia. And they're willing to fight for that right. Japan and China are already squaring off over oil rights deep in the South China Sea. Taiwan, Indonesia and others will follow. America can't sit this one out. What happens if we find ourselves in the thick of it? War means even more pressure on oil and other resources!

We're looking at oil as high as $200, $300...even $378 per barrel: Imagine paying $7 or $8 for a gallon of gas. Then double that to nearly $15! In hyperinflation, every hard asset that isn't nailed down gets snapped up. Prices on everything skyrocket. And the dollar falls apart. The only way to protect your money and your future is to transfer wealth into the real resources that will become so rare in the crisis ahead.

Again, the last thing I want is to leave you unprepared.

Eventually, the amazing new technologies I've described will take the place of crude oil. But meanwhile, difficult times lie dead ahead, like the iceberg in front of the Titanic. And like the Titanic, the American economy is too big to turn on a dime.

But there's still room for you in the lifeboat.

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You keep everything. No questions asked.

Sure, I know that means I'm putting a lot on the line. But frankly, we're not worried you'll cancel, because by the end of two years, most of the forecasts I've made in this book will be in the mainstream news outlets.

And you'll have already reaped your rewards.

We're Sitting in Wall Street's Catbird Seat

Knowing which stocks to buy and when is a beautiful thing.

It's a skill that's beyond difficult to master but, once perfected, can have life-changing implications. And it can be a bit easier if you focus exclusively on specific sectors.

Someone claiming to be able to rattle off winning stock advice on any company with a ticker — Cramer comes to mind — is either lying in the first place or has never been held fully accountable. (A recent study of his picks showed that his risk-adjusted returns were barely above the market average.)

But honing in on one sector, like Green Chip has been doing for years, has allowed us to become intimately familiar with a certain group of stocks. So much so that I'm confidently familiar with dozens of companies pursuing clean technology — both the good ones and the bad ones.

For instance, I know the comfortable price ranges for no less than ten Chinese solar stocks. I know where they should be trading based on future earnings forecasts; how well their peers (other Chinese solar stocks) are doing; outside factors like government; and most importantly, investor confidence.

And it's what allows me to give an edge to readers of the Alternative Energy Speculator, day in and day out. It's how I've helped them play the same Chinese solar stock SIX TIMES for profit in the past eight months:

Stock

Bought

Sold

Gain

JA Solar (NASDAQ: JASO)

11/13/08

11/24/08

30.45%

JA Solar (NASDAQ: JASO)

12/01/08

12/31/08

43.91%

JA Solar (NASDAQ: JASO)

03/03/09

03/04/09

13.66%

JA Solar (NASDAQ: JASO)

03/05/09

03/09/09

9.89%

JA Solar (NASDAQ: JASO)

04/07/09

05/06/09

36.56%

JA Solar (NASDAQ: JASO)

05/08/09

05/27/09

10.13%

And we're back in that same stock right now. . . even as you read this!

That's more than a fluke. That's more than luck.

That's knowing exactly where a stock should be trading and pouncing on every opportunity it presents — that's the Alternative Energy Speculator.

And it's not just JA Solar. . . my readers closed ten other Chinese solar winners in the same time.

And solar stocks aren't the only plays coming up big. . . from wind to water, we've closed 30 winners so far this year in everything cleantech.

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A Clean-Tech Case Study

In early June, I put out a new buy recommendation to my my readers. It went something like this:

I wanted to take a minute this morning to bring your attention to our smart grid plays.

We're currently doing well with XXX and XXX. They're up 38% and 18%, respectively. We've only held the latter for six days!

XXX, which also has exposure to the smart grid, is up 13%.

And we've successfully played Intellon (NASDAQ: ITLN), Comverge (NASDAQ: COMV), and American Superconductor (NASDAQ: AMSC) in the past.

We'll revisit past plays as I see opportunity. And I want to do just that with American Superconductor today. I think it's a $35.00 stock. So let's buy shares of (NASDAQ: AMSC) today below $28.00.

I'm also raising the buy under and target prices for XXX and XXX. You can see them in the portfolio.

I guess I probably should've said, "I know it's a $35.00 stock," because last week it climbed to $36.24 on the heels of a stellar earnings report.

Had you taken my advice and invested. . . you would've been sitting on a 35% gain when it popped. And while that's impressive, focusing solely on gains means missing the bigger point here.

In the company report that accompanied that recommendation I highlighted the following key points:

  • Company revenue guidance is conservative

  • Has already contracted 85% of expected revenue for fiscal 2009

  • Wind division is growing quickly

  • Can benefit from multiple markets: voltage, wind, transmission

Well, the second quarter numbers came out a few days ago. . . and you can probably guess what happened.

The company shattered revenue estimates — even mine — by about $12 million. And earnings per share of $0.04 blew away most analysts who were looking for flat earnings to a slight loss.

So the guidance was clearly conservative.

And my statement that American Superconductor's "wind division is growing quickly" turned out to be one of the understatements of the year. Chinese stimulus funding for wind energy could spark 100% growth in two years or less, and that was evidenced on AMSC's balance sheet in the form of increased orders from Chinese wind developers.

Beijing's Sinovel increased orders by $20 million and accelerated the term by eight months — meaning they'll be ready for next order sooner than expected.

I knew all of that in June. . . and so did my readers. But the rest of the investment world didn't find out until last week, when the stock had already soared 30% in one day.

Only Going Higher

That winner is just one of 13 still sitting in The Speculator portfolio. . . just waiting to be cashed out.

And that's on top of the 30 others we've closed for gains this year. As a Green Chip reader, you had to see this coming. We were predicting a renewable revolution two years before First Solar was even publicly traded.

That was half a decade ago!

Take a look around you today. Companies from Aflac to Yahoo! are touting their green credentials while we've been busy taking profits on the companies making it all happen — from American Superconductor to Zap.

All major cleantech segments have estimated growth rates that outpace the most beloved Wall Street sectors. . . I'm talking about a doubling of the solar and wind industries in the next three to five years.

No other industry is growing like that: not metals, not oil, not retail, not biotech.

We're in Wall Street's catbird seat — the position all other industries want to be in.

We're getting Federal dollars, being looked to as a solution to the recession. We're viewed favorably by the media and global governments. We're providing clean energy and sustainable practices.

And above all, we're making money.

If you haven't yet, now is the time to let us help you do the same. And you can do it, risk-free.

Use this link to sign up for the Alternative Energy Speculator with a 30-day trial. You can check out the portfolio, past updates, and the in-depth reports featuring earnings estimates and company-specific information.

You'll also begin receiving buy and sell recommendations. At our current success rate, it won't be long until you receive your first one. . . we've closed a winning stock for every week so far in 2009!

And if you still don't like the service after 30 days. . . you can get back every cent, no questions asked. 

But you can't see how great it is — or how much money you'll make — if you don't try it.

Tuesday, August 4, 2009

Hunky Dory

Whenever the herd mentality lines up along a compass point leading to "permanent prosperity," or a yellow brick road lined with green shoots, or something like that, I tend to see the edge of a cliff up ahead. We are now completely in the grips of the deadly diminishing returns of information technology. The more information comes to us about How Things Are, especially from TV, the more confused or wrong the conventional view gets it.

A broad consensus has formed in the news media and among government mouthpieces and even some "bearish" investors on the street that "the worst is behind us" in this tortured economy. This view is completely crazy. It will only lead to massive disappointment a few weeks or months from now, and that disappointment might easily transmute to political trouble. One even might call the situation tragic, except a closer look at the sordid spectacle of what American culture has become - a non-stop circus of the seven deadly sins - suggests that we deserve to be punished by history.

The reason behind this mass delusion is not hard to find: it's based on wishing, especially the wish to retain all the comforts, conveniences, luxuries, and leisure that had become normal in American life. These are now ebbing away in big gobs for most of the population - while a tiny fraction of the well-connected pile on ever-larger heaps of swag, enjoying ever more privilege. Those in the broad bottom 95% were content as long as there was a chance that they, too, could become members of the top 5% - by dint of car-dealing, or house-building, or mortgage-selling, or some other venture enabled by easy credit and a smile. Those days and those ways are now gone. The bottom 95% are now left with de-laminating houses they can't make payments on, no prospects for gainful work, repo men hiding in the bushes to snatch the PT Cruiser, cut-off cable service, Kraft mac-and-cheese (if they're lucky), and Larry Summers telling them their troubles are over. (If I were Larry, I'd start thinking about a move to some place like the Canary Islands.)

Too many disastrous things are lined up in the months ahead to insure that we're entering a new phase of history: The Long Emergency.

Government at every level is worse than broke.
Our currency, the US dollar, is hemorrhaging legitimacy.
Inability to service old debt at all levels or incur new debt.
Bad (toxic) debt lurking off balance sheets everywhere.
The housing bubble fiasco is far from over.
Commercial real estate fiasco just getting started.
Unemployment rising implacably.
So-called "consumers" unable to consume consumables.
Crucial energy import supply lines fragile.
Food supply subject to energy problems and climate abnormalities.
A world full of other societies who would enjoy watching us fail and suffer.
When The Long Emergency was published in 2005, I said then that the greatest danger this society faced would be its inclination to gear up a campaign to sustain the unsustainable at all costs - rather than face the need to make new arrangements for daily life. That appears to be exactly what has happened, and it didn't happen under the rule of some backward-facing, right-wing, Jesus-haunted crypto-fascist, but rather a "progressive" party led by a dynamically affable young man unburdened by deep cultural allegiance to Wall Street. Barack Obama has been sucked in and suckered. "Change you can believe in" has morphed into "a status quo you will bend heaven and earth to hold onto."

Whatever else you might think or feel about Mr. Obama's performance so far, this strategy on the broader question of where we go as a nation pulses with tragedy. What's remarkable to me, to go a step further, is the absence of comprehensive vision - not just in the president, but in all the supposedly able and intelligent people around him, and even those leaders not in government but in business and education and science and the professions.

History is clearly presenting us with a new set of mandates: get local, get finer, downscale, and get going on it right away. Prepare for it now or nature will whack you upside the head with it not too long from now. Attempting to maintain anything on the gigantic scale will turn out to be a losing proposition, whether it is military control of people in Central Asia, or colossal bureaucracies run in the USA, or huge factory farms, or national chain store retail, or hypertrophied state universities, or global energy supply networks.

These imperatives are so outside-the-box of ordinary experience right now, that to drag them into the arena of politics can only evoke blank stares or nervous giggling. But whether we like it or not, these are the things that will really matter in the years ahead - not whether General Motors can ever make a profit again, or what Target Store's sales figures are next quarter, or whether the latest high-rise condo- and-gambling complex in Las Vegas will be successfully marketed.

Here, in the dog days of summer, it seems to me that the situation in the USA is so fundamentally bad, so unpromising, so booby-trapped for failure, that I wonder if there has ever been a society so badly deluded as ours. We're prisoners of our wishes, living in a strange dream-time, oblivious to the forces gathering at the margins of our vision, lost in a wilderness of our own making.

Anything can happen now. I certainly wouldn't rule out international mischief as we arc around into fall. The air is so full of black swans that the white swan now seems like the exceptional thing. Whatever else happens, it sure will be interesting to see the public's reaction to Wall Street's announcement of Christmas bonuses. The folks at Rockefeller Center better be thinking about getting a fireproof tree.

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