“Wealth Fortresses … Profit from Today’s Monetary Crisis”

By Travis Johnson, Stock Gumshoe, April 20, 2010

On this bright and sunny Spring day our thoughts turn … to Mark Skousen. He’s selling subscriptions to his Forecasts & Strategies newsletter, and his pitch is that he predicted the 1980s boom, and warned investors that corporate profits were peaking in early 2007 … and that he’s got the best ideas for you to survive and profit from the current craziness.

Here’s his spiel about where we currently stand:

“Will That be Firing Squad, or Beheading?

“Every day now there’s another story heralding the recovery.

“But as much as I’d like it to be true, look closely and you’ll see it’s corporate America that’s recovering, not you.

“Your stock profits are rising, but they’re on shaky ground.

“As if spiraling debt, a sinking dollar, and microscopic yields aren’t bad enough, our government’s economic ‘fixes’ are putting even your safest money at risk.

“Of course, Wall Street and Washington have always greased each other’s skids.

“But since the 2008 bank bailout they’ve entered into an unholy alliance and private investors like you are barely an afterthought.

“The Treasury is giving banks billions of dollars at near-zero interest so the banks can turn around and loan it back to the Treasury at much higher rates by buying government bonds yielding around 3.5%.

“The dollar is plummeting toward its lowest level in history because Washington wants American workers to get cheap enough to win back manufacturing to our shores, and for foreign goods to become expensive so we buy fewer imports.

“That’s what’s good for America, they tell you. But what’s good for America isn’t always what’s good for you.

“Your choice: Next to zero yields or higher credit risk in a shaky economy….

“That means it’s time for you to protect your profits — and your wealth.”

So what does he think you should do with your hard-earned cash?

“I have identified the three investments to take you to safety and profit. Together they are a fortress that builds and grows your wealth through whatever the economic storm throws at you.

“My subscribers are already starting to building their wealth fortress with these three assets. You should too.

“One is a more solid hedge against trouble than gold, and I expect it to grow 87% in the next 14 months and 200% in the next 3-5 years.

“The second gives you steady 14% yield income that keeps increasing dividends — up165% in just the last two years. Plus unlike most income stocks, capital gains are taking off now with 233% higher returns than the S&P in the 30 days as of this writing.

“The third yields a fantastic 25% and pays monthly, which means a $25,000 purchase gives you $520.83 per month income.”

But of course, he won’t tell you what those three investments are — for that, you’ll have to sign on the dotted line and pony up the cash for his Forecasts & Strategies … or, if you’re feeling a little light in the wallet this month, just read on and we’ll see if we can figure them out for you for free. Don’t worry, we’ll wait while you make up your mind.

You’re back? Good to see you again. So what are those three picks?

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The teaser clues, please!

“Wealth Fortress #1

“The Most Underpriced Commodity on the Planet — Now Rocketing Toward 200% Gains.

“You’d have to be living in a cave not to see gold’s spectacular rise over the past five years, outperforming oil and gas, electric utilities, and just about every other investment you can buy or sell.

“Profits in gold funds have been sensational, and my subscribers are enjoying 73% gains in one fund and 18% in a second we added recently.

“Gold is going to keep going up, too.

“But even if it climbs to $1,500 (which I think it will) you can “only” make about 50% more on your money. That’s pretty good, of course, and I have two of the best gold funds as current recommendations for subscribers.

“But there’s something better.

“Like gold, it’s a safe haven against debt and devaluation. And like gold, it’s racking up exceptional growth today.

“But unlike gold, it’s grossly undervalued and unexploited.

“Legendary investor Jim Rogers says, “How can you talk about a bubble when assets such as [this] are 70% below their all-time high?”

“Super-investor Warren Buffet bought in at its lowest point, loading up on enough to turn his original $572 million investment into more than one billion dollars….

“Just as this asset soared 200% during the two worst years of inflation during 1973 and 1974, it could easily do it again now.

“Timing is perfect for it to spring off its historic low — and I mean its historic low since the year 1344! …\

“Plus this hard asset is much scarcer than most people think. The U.S. Geological Survey says it will be the first element on the periodic table to be tapped out.

“Right now this element is essential to some of the most sophisticated — and popular — technologies that exist. From solar panels to iPhones, and possibly the screen you’re reading on now, it is essential to modern technology….

“It gives you all the wealth protection of gold, and three times the potential for capital gains.”

OK, so that’s a long excerpt from the ad … but there’s more! I’ll just have to assume that you get the idea from that spiel, and the idea is …

Silver. Silver is one of the metals that really straddles the line between precious metal and industrial commodity, much like platinum. Gold is almost never “consumed,” it is just turned into coins or jewelry (with some exceptions), but silver or platinum that goes into a catalytic converter or an LCD screen is effectively consumed. Silver was the basis for much of the global monetary system for many years, so there is always a lot of interest in the stuff when inflation or monetary silliness seems to crest, which is why silver coinage and silver ETFs are so popular now, but we also certainly see a lot of volatility in the price of silver, in part because of that dual role as an industrial metal (remember, for a while when we all thought that the global economy was returning to the stone age, platinum actually got cheaper than gold despite the fact that it is far more useful and dramatically more rare).

So how to buy silver? Skousen doesn’t give much detail in his teasing, but the standard candidates are junk silver, physical silver ETFs, silver coins or bars, and silver mining stocks. If you’re curious about any of those I wrote about “junk silver” most recently here, and I’ve written about seemingly dozens of silver miners — the ones that get the most attention are Silver Wheaton (a streaming company, not an actual mine operator), Silver Standard Resources, SilverCorp Metals, Couer d’Alene, Pan American Silver, and I’m sure several others I’m failing to think of at the moment (if you’ve got a favorite, whether listed here or not, let us know with a comment below).

For ETFs that directly track silver, the most popular and highest volume is the Silver Trust (SLV), and there’s also the PowerShares Silver fund (DBS) and if you want to add some leverage to that you could of course use the options on the ETFs (or the stocks), or there is a 2X ETF that’s designed to move twice as much as the silver price (up or down, of course) — that’s the ProShare Ultra Silver fund (AGQ). I don’t think there’s a 3X leveraged ETF for silver yet, so if you need that kind of adrenaline you might just have to start driving faster, without a seatbelt (please don’t! That is not the official advice from Stock Gumshoe!) Of course, the conspiracists will tell you that the ETFs and the futures are rigged, so you need to actually own the silver — if you don’t want to deal with finding junk silver, you can always just buy Silver Eagles from a coin dealer, or coins or bars from someone else like the Northwest Territorial Mint, but all physical silver trades at a pretty decent premium these days so it’s tough to find a bargain — and of course, it gets heavy pretty fast if you want an appreciable amount, and you’ve got to store it somewhere safe.

How about his next idea?