[LOCOAZ2008]

Long term success does not depend upon the positive things that happen to you, but on how you handle adversity.

-Common theme in several notable quotes

Governments everywhere have been slow, and some politicians have been unequivocally unwise. Those in the real estate, mortgage banking, insurance and investment communities who started the mortgage and derivative scandal that we have warned of for six years are to blame, and will carry the stigma for the remainder of their lives. Many will go to jail. Let us hope that we can avoid a great depression, but for now the wise course of action is to continue to protect yourselves

TO PROTECT YOURSELVES

How? In our opinion, you should hold your cash in excess of insured levels in treasury bills, and not money market funds. Hold 10% to 20% gold. Where possible, work to hold assets in private banking institutions where legal documents state that the client assets are not commingled with the assets of the firm or any other depositor. We believe that this is critical. Some people want access to trade via their computer on a daily basis, but typically the firms that provide cheap trades and instant computer access do not provide legal safeguards against commingling that private banks provide.



IT SHOULD BE OBVIOUS BY NOW THAT GOVERNMENTS ARE NOT HONEST WITH THEIR PEOPLE

The U.S. has been in a recession for months, and the only reason that the statistics don't show it is that they are using an inflation number that is much too low. If the real inflation number were to be inserted, we would see that U.S. economic growth is negative...and has been for a long time. Total growth minus inflation is real growth. If total growth is 3% and inflation is 4%, then growth is negative. Currently, total growth is 3%, and they are saying inflation is 1%. This is patently absurd. Some other countries are honest about recession. Recently, New Zealand and Ireland admitted to being in recession. Much of Europe is in recession, and only the Chinese, Brazilian, Indian, and a few emerging economies are growing on a real basis. The question is how much longer can this last?


PEACE & LOVE