It's time to stop the whining on housing, jobs, and banks.
If you don't like the current state of affairs in Washington and the politicians' cozy relationship with Wall Street — then vote the bums out.
If you don't like the way the fiscal picture has shaped up — then stop believing the banksters and find a better place to invest.
One of the great wonders of capitalism is that when one person, group, or company is mired in foolishness and fraud, there is always some up-and-comer waiting in the wings to take them off their high horse.
In other words, there's always a bull market somewhere.
Here are three profitable trends to invest in today.
Three Bullish Trends: Gold, Global Fracking, and Frontier Markets
Gold is about to break out...
That, my friend, is called an ascending triangle.
The fears of a prolonged recession, disgust with the Wall Street shills, and continued monetary easing have investors buying gold to protect their wealth.
If we break above the level set in June, we are off to the races. The rule of thumb in breakout patterns is that they go up as far as they went sideways. That would put the price chart around $1,500 per ounce.
Gold hit $1,254.73 yesterday — but the crucial turning point is the June 21st level of $1265.30 which was its all-time high.
Bloomberg reported that gold holdings in 10 exchange-traded products advanced to a record yesterday.
“In the second quarter, investors purchased 291.3 metric tons in exchange-traded funds, boosting demand by 36 percent.”
That could be the energy needed to break through to a new high. If you look at the ten-year chart, you'll notice that gold rises in a stair-step pattern; it consolidates, then launches. New highs are always bullish and breakouts are a buy. The magic number is $1,265.
Global fracking
According to the Energy Information Administration, there are 1,744 trillion cubic feet of technically recoverable natural gas in the U.S. — enough to supply the country for 90 years at current rates of production.
Fracking involves pumping water or sand into the ground, breaking up the rock, and recovering the natural gas. Right now the threat to ground water has some environmentalists up in arms, but it hasn't stopped the growth in exploration and development around the world...
The fact is that there is a lot of natural gas — and it's a viable replacement for coal for use in electricity generation. It is cheap, plentiful, and the cleanest burning of all hydrocarbon-based fuels.
Europe is particularly eager to gain new natural gas sources as they have been held captive to Russia's supply for the past decade. In response to the heavy handed threat of closed supplies, a dozen major natural gas pipelines are under construction that will link the major end-user in Europe to North Africa and Central Asia.
There are a number of large companies and a handful of small caps that will benefit from this long-term trend.
Frontier markets
I've been beating the table about Mongolia for almost a year now. And though it's not officially tracked by Bloomberg, the stock market is up 68% for the year, making it the best performing market in the world. It beats out the Colombo Stock market (which is up 21.7%), as well as Malaysia (up 15%).
There is one company that I recommended (in fact I called it my “favorite stock of the year”) which is up as much as a 727%. That makes it the highest performing stock on the best performing stock market. Not to blow my own horn, but I'm just saying...
And not just Mongolia is getting love from investors. Many out-of-the-way countries like Indonesia, Turkey, and Chile have also done well. JPMorgan Chase has reported that mutual fund investors poured $35 billion into emerging markets this year, even as they pulled $28 billion out of the U.S., Europe, and Japan.
Learned-from mistakes
This is because the last crisis was a multinational banking crisis. Smaller countries like South Korea, Indonesia, and Thailand are ten years removed from a global currency crisis. With memories of high-leverage defaults still fresh in their minds, they didn't get involved in the default swap scams.
It is telling that during the high of the crisis, Lehman Brothers turned to South Korean banks in an effort to get one last investor. The Koreans low-balled and a haughty Lehman refused.
Lehman is now the poster child for the 1998 banking crisis and is out of business. They join other infamous companies like Pets.com, Enron, and Long-Term Capital Management in the Parthenon of epic failures.
South Korea has a large Mongolian presence and has joined the global varsity team in terms of engineering and production of a range of cutting-edge products from high quality, low cost cars; safe, effective, and cheap nuclear power plants; shipbuilding; bridges; and high-end retail.
The Mongolians like that Korea is not Russia or China... And the Koreans like that Mongolians have a lot of natural resources.
But I digress...
The point I'm trying to make is that many emerging market countries had their crisis ten years ago. These nations have since tossed out the corrupt elite, changed their market regulation, busted up trusts and monopolies, wrote off debt, and brought their budgets under control.
Contrast this with Japan twenty years ago, or the United States today: Japan maintained monopolies, increased debt, and continued with the same corrupt elite — and sadly, the U.S. has chosen to take a similar path.
With very few exceptions, those people who were in power before the crisis are in power now. Our national debt is larger. Wall Street's toxic loans have been shifted to the tax payers. Record bonuses are still being paid at AIG, GS, and BAC.
Companies that were too big to fail two years ago are even bigger today, and still trading Credit Default Swaps. (And according to the Markit Itraxx Crossover Index, they are showing an upswing in volume and price.)
No one is even pretending to get serious about the budget. The government owns the most real estate in this country; the largest automakers; continues to own, control bailout, and reconfigure banks; and will soon control the vast majority of health care.
But I'm not angry.
I think it was Richard Nixon who said, “If something is unsustainable, it won't last.”
The American fiscal and political position is unsustainable. Something will have to give at some point — be it at the voting box, at the hands of international bond vigilantes, or with pitchforks and torches...
However, until that happens, I will gladly put my investment dollars in the safety of gold; the inescapable trend of growing energy demand; and hungry, young, up-and-comers in the global economic battle.
If you are sick of the whining and navel gazing offered up by the business media in America...
If you want to claim responsibility for your own profits instead of blaming others for your loses...
If you want to make triple-digit winners in places most sheep have never heard of...
Then I'd encourage you to join me now. I'm for the winners.
Sincerely,
Christian DeHaemer
Wealth Daily
