march 2012 issue of tdv · the case of the ousted president of tunisia is typical: the wife of...

1 wwwdollarvigilantecom

March 2012 Issue of TDV


MARCH CHARTSDOWGOLD RATIO - 10 YEAR CHART

GOLD - 1 Year ChartDOWGOLD Ratio - 2 Year Chart

TDV Austrian Money Supply Measure - 3 Year

TDV Austrian Money Supply Measure - 10Year


Quotes of the week

ldquoEach Chevy Volt sold thus far may have as much as $250000 in state and federal dollars in incentives behind it -- a total of $3 billion altogetherrdquo

James Hohman Mackinac Center for Public Policy

A government that sets out to abolish market prices is inevitably driven toward the abolition of private property it has to recognize that there is no middle way between the system of private property in the means of production combined with free contract and the system of common ownership of the means of production or socialism It is gradually forced toward compulsory production universal obligation to labor rationing of consumption and finally official regulation of the whole of production and consumption

Ludwig von Mises Theory of Money and Credit

The wholesale socialization and subsequent destruction of the US economy continues apace The most recent example of the massive malinvest-ment brought on by the Federal leviathan is the saga of the Chevy Volt

GM recently decided to suspend production of the volt due to declining sales - they have also stopped releasing sales projections From AP

A GM spokesman said Friday that the company will shut down production of the Volt from March 19 until April 23 idling 1300 workers at the Detroit-Hamtramck assembly plant

General Motors was once the Jewel in the crown of American Capitalism The greatest manu-facturing company in America if not the world

the company was destroyed by the insidious nature of the Neo-National Socialism that has infected the USA for well on 80 years now when the merger of state and corporate power that swept across Europe was aped first by Hoover and then by FDR in the disatrous New Deal The unions that were encour-aged to eat away at GM from the inside were bailed out and the US Federal government took a 25 ownership in the now socialized company

The Volt is a kind of political machine not seen since the Ladas and Trabants of the eastern Block Built by a state-owned corporation the Volt was the child of the greenwashed brains of the Obama administration The Volt was built for no-one but a vision of the perfect ldquoNew eco-Socialist Manrdquo Righ-teously indignant statist in nature ready to have the government force eco-correct behavior on all who inhabit the land

The wheels are coming off the Global Warming Scam and the Volt is just the latest casualty We only hope that this trend accelrates at a greater clip than the Volt was capable of

In the March issue of TDV we have a full report from Tekoa Da Silva on life in Brazil and the first half of a full review of our current portfolio by Ed Bugos And of course insights from Jeff Berwick into TEOTMSAWKI

The Memory HoleRedmond Weissenberger


The Vigilantersquos ViewJeff Berwick

Leo Tolstoy who was an anarchist once stated ldquoThe truth is that the State is a conspiracy designed not only to exploit but above all to corrupt its citi-zensrdquo

Indeed when a system at its very root is based on theft and violence what else would you expect but for all of the institutions that grow up around it and eventually nearly every citizen in the country to become corrupt

Add to that the scourge of central banking and a system based on debt and perpetuated by never-ending counterfeiting and it should come as no sur-prise when the entire financial system also becomes corrupted in this global fiat currency system And that is the case today

BANKERS GONE WILD

In the final days of any system those in power start looking the exit door and of course they do their best to keep the lifestyle that they have become accustomed to The case of the ousted President of Tunisia is typical

The wife of Tunisiarsquos ousted president picked up some choice items before fleeing the country last week 15 tons of gold bars worth $56 million

Leila Trabelsi raided the countryrsquos gold reserves with the help of private militia and a phone call from her husband diplomatic sources tell Le Monde (via Daily Mail) The chief of Tunisiarsquos bank refused to hand over the money until for-mer president Ben Ali intervened Read more

Bankers appear to be stuffing their pockets andor jumping off the sinking ship like rats now Over 100 firings arrests or resignations of bankers and central bankers have been reported worldwide since the start of 2012 alone (as detailed in the 66 articles below)

Some are very high profile including the resig-nation of World Bank President Robert Zoellick in February and the resignation of Switzerland Nica-ragua and Kuwaitrsquos central bank chiefs Also a New Zealand and Kenyan central bank governor stepped down and the general manager of the Argentina central bank resigned This week Citigroup Chair-man Richard Parsons resigned from his post after a 16-year reign brought the institution to its knees (the stock lost 76 of its value under his leadership)

The list even includes four priests who were charged with laundering money out of the Vaticanrsquos official bank the Institute for the Works of Religion

Toronto Canada the Vigilantersquos current view


2712 (IRAN) Iran denies central bank resig-nation rumor (donrsquot believe until itrsquos denied)2912 (VATICAN) Four Priests Charged In Vatican Banking Scandal21012 (KOREA) Korea Exchange Bank chief steps down21012 (INDIA) Tamilnad Mercantile Bank CEO resigns21312 (KUWAIT) Kuwait Central Bank CEO resigns21412 (NICARAGUA) Nicaraqua Central Bank Pres Rosales resigns21412 (UNITED KINGDOM) Social finance pioneer Hayday steps down from Charity Bank21412 (UKRAINE) The National Bank of Ukraine announced the resignation of deputy governor Volodymyr Krotiuk21512 (WORLD) World Bank CEO Zoellick resigns21512 (SLOVENIA) Slovenia TWO largest Bank CEOrsquos resign21512 (KENYA) Governor of Kenyan Central Bank to Resign21612 (UNITED KINGDOM) The Financial Services Authorityrsquos (FSArsquos) interim manag-ing director Conduct Business Unit Margaret Cole is to step down later this year21612 (GHANA) Ken Ofori-Atta steps down as Executive Chair of Databank Group21612 (SAUDI ARABIA) Saudi Hollandi Banks Managing Director Quits21612 (AUSTRALIA) Anz Bank CFO Austra-lia resigns21612 (UNITED KINGDOM) Royal Bank of Scotland Bankers Arrested21612 (AUSTRALIA) Royal Bank of Scotland Australian CEO Stephen Williams resigns21712 (USA) Blankfein out as Goldman Sachs CEO by summer21712 (SWITZERLAND) SNB Council Presi-dent Hansueli Raggenbass To Leave Central Bank21812 (PAKISTAN) AJK Bankrsquos executive steps down22012 (RUSSIA) Head of Russian Bank Regu-lator Steps Down22012 (SWITZERLAND) Credit Suisse Chief

Here is the full listing

1112 (NIGERIA) The Board of United Bank for Africa Plc accepted the resignation of Mr Victor Osadolor from the board1112 (ISRAEL) Israelrsquos Bank Leumi CEO Maor steps down after 16 years1312 (USA VA) Suffolk Bancorp president and CEO steps down1312 (UNITED KINGDOM) Departures from Board at Arbuthnot Banking Group1512 (UNITED KINGDOM) Chief execu-tive of Saunderson House [Private Bank] steps down1912 (SWITZERLAND) Switzerlandrsquos central bank chief resigns11212 (UNITED KINGDOM) Lloydsrsquo head of wholesale quits11912 (SPAIN) Spanish bank Santanderrsquos Americas chief quits13012 (UNITED KINGDOM) Head Of UK Private Bank Steps Down [Butterfield Private Bank]12012 (JAPAN) Normurarsquos head of wholesale banking quits12912 (NEW ZEALAND) New Zealand Reserve Bank Governor Alan Bollard to Step Down in September12112 (GREECE) Banksrsquo top negotiator quits Greece but talks go on2112 (SOUTH AFRICA) ABSA falls as deputy CEO steps down [UK Barclayrsquos Bank Controlled]2112 (UNITED KINGDOM) Truett Tate - Lloyds Banking Group head of wholesale quits2112 (UNITED KINGDOM) Tim Tookey - Lloyds Banking Group leaving end of February 2212 (VENEZUELA) Key Chavez Minister Resigns Amid Banking Corruption Fallout2512 (USA) Two Top Morgan Stanley Bank-ers Resign2612 (INDIA) Dhanlaxmi Bank CEO Am-itabh Chaturvedi quits 2712 (USA) Bank Of Americarsquos Mortgage Business Chief Resigns2712 (INDIA) Falguni Nayar quits Kotak Mahindra Bank


Joseph Tan resigns22012 (ISRAEL) Bank Leumi le-Israel Zvi Itskovitch Announces his Decision to Resign 22012 (USA) R David Land Submits Resig-nation from the Boards of Directors of Peoples Bancorporation Inc and Seneca National Bank22012 (USA) First Financial Northwest Di-rector Quits in Candy Austerity Push22112 (ARGENTINA) The general manager of the Central Bank of Argentina (BCRA) Be-nigno Velez resigned his position today22112 (BANGLADESH) Five bank insurance directors resign22112 (JAPAN) CITIBANK JAPAN Bakhshi is taking over duties from Brian Mccappin who the bank said in December would resign 22212 (USA) Wietschner Goldman Hedge Fund Advisory Chief Retires22312 (SOUTH AFRICA) Richard Gush resigns from Standard Bank22412 (INDIA) ICICI Bank GC Pramod Rao resigns22412 (HONG KONG) Citigroup Private Bankrsquos Co-Head of Global Real Estate Resigns22412 (NEW ZEALAND) FSF Executive Director resigns22512 (AUSTRALIA AND NEW ZEALAND) Goldman Sachs Fitz quits22712 (GERMANY) Deutsche Bank Americas chief steps down22712 (BAHRAIN) Ebra-him Ebrahim quits as CEO of Khaleeji Commercial Bank22712 (FRANCE) Societe Generalersquos Investment Banking Chief Steps Down22712 (MALAYSIA) Elaf Bank CEO Dr El Jaroudi resigns22712 (JAPAN) Nomurarsquos Head Of Wholesale Banking Quits22712 (INDIA) Falguni Nayar Quits Kotak Mahindra Bank22712 (GERMANY) Equiduct chairman steps down22712 (BAHRAIN) Al Zain steps down as Mumtalakat Hold-

ing CEO22712 (IRAN) Iranrsquos Bank Melli CEO Resigns Over Loan Scam22712 (INDIAKASHMIR) AJK Bankrsquos Ex-ecutive Steps Down22712 (UNITED KINGDOM) Moreno to step down at Lloyds Banking Group22812 (HONG KONG) Leung calls it quits

HOUSES TOO EXPENSIVE TO LIVE IN

ldquoAnd I sincerely believe with you that banking establishments are more dangerous than standing armies and that the principle of spend-ing money to be paid by posterity under the name of funding is but swindling futurity on a large scale ndash Thomas Jefferson

Thomas Jeffersonrsquos prescient warning not only applies to the US but now applies to most of the western world who have all followed down the path of allowing a central bank to have a monopoly on the issuance of currency

In Vancouver Canada those who have not owned a house prior to last decade are now finding that they have to leave the city as house prices have risen to extremes The average house price in Van-couver has nearly tripled in the last ten years


The Price-to-rent ratio is calculated as the Av-erage list price (Average Rent 12) Online resi-dential real estate site Trulia establishes thresholds for the ratios as follows

Price-to-rent ratio of 1 to 15 = much better to buy than rent

Price-to-rent ratio of 16 to 20 = typically better to rent than buy

Price-to-rent ratio of 21 or more = much better to rent than buy

Vancouverrsquos current price-to-rent ratio is nearly 60 times

In Australia a letter written in to the Noosa Journal in Queensland states

ldquoMy husband two children and I bought a lovely house in Noosa Waters six years ago and love it Opposite are 13 lovely houses - all empty We look out each evening on to all these homes So where are all the people When we moved here from Sydney all these houses were occupied now all gone Why Where Oh well wersquore still here and happy pity about all those dark lonely housesrdquo

No one can afford to live in them anymore This is just one of the many effects of the inflation-ary policy

Meanwhile in the US the inflation fueled real estate bubble which Keynesian eclownomists like Paul Krugman lobbied for has collapsed and now the US is becoming a nation of renters The number of housing units occupied by renters rose by 749000 in the fourth quarter of 2011 compared to a year earlier some 91000 fewer homes were occupied by owners

First by inflation and then by deflation most of the middle class in the west are and will be deprived of most of their property

THE END GAME NEARS

The most obvious picture you can paint as to why the end of the US dollar reserve based global currency system is coming to an end is the following chart

The two largest holders of US Government debt are the US Government and the US Governmentrsquos central bank the Federal Reserve They dwarf all other debt holders including China

Some point to the large amount of US Gov-ernment debt held by other departments of the US Government as being ldquoa good thingrdquo They state that ldquoitrsquos just debt they owe to themselvesrdquo

This is part of the ldquowe owe it to ourselvesrdquo argu-ment for that portion of the total public debt that is not owned by foreigners for instance Trouble with this argument is that the ldquowerdquo and the ldquoour-selvesrdquo in this assertion are never the same people Why if it were letrsquos just cancel it out now Itrsquos caus-ing us all this unnecessary worry The proper way to look at is that the US Government has duped the rest of the world into allowing them to spend over $4 trillion greenbacks that they just printed up

This worked for as long as the world had confidence in US capital markets as the ldquoisland of prosperityrdquo (Greenspan) that they seemed to be in a world of economic turbulence during the eighties and nineties

$468$165$115$105$026

$000

$050

$100

$150

$200

$250

$300

$350

$400

$450

$500

US‐IntraGovernmental

FederalReserve

China Japan Oil Exporters

TRILLIONS OF DOLLAR

S

LARGEST HOLDERS OF US GOVT DEBT


But times have changed Many of Americarsquos traditional buyers of Treasuries have begun to fore-stall their purchases at least at current yields China has been redirecting its FX Reserves away from the dollar for 5 years now and is showing no signs of stopping

With the Federal Reserve fast gaining and now the uncontested second largest holder of govern-ment debt it is becoming all but clear to even the slowest of former central bankers and investors that the entire market for US Government debt is a sham with the floor about to fall out from underneath it

WHATrsquoS THE NATURAL INTEREST RATE

Ben Bernanke has already committed to a Fed Funds Rate of 0 from 2008 and states he will continue until at least 2014 making for a total of six years of his Zero Interest Rate Policy (ZIRP) Thatrsquos the nominal interest rate But as we know in this wacky world of fiat currencies and a central bank monopoly on price-fixing the interest rate that isnrsquot the ldquorealrdquo rate of interest

There actually is no way to know what the ldquorealrdquo interest rate is because the market is so mas-sively manipulated but we can make a guesstimate The real interest rate would take into account the devaluation of the currency or inflation The gov-ernment would have you believe that inflation is defined by its Consumer Price Index (CPI) But it is a matter of plain fact that it is not possible to add up the value of all things in an economy and come to a

number that has any real bearing on anythingHowever if you did want to use a price index

a much more realistic index to use than the Govern-mentrsquos heavily massaged CPI number is the Ameri-can Institute for Economic Researchrsquos ldquoEveryday Price Indexrdquo (EPI) Rather than include large one-time expenses such as housing or cars the Everyday Price Index includes only the prices of goods and services that the average consumer purchases at least once a month

Here is a comparison of the EPI versus the CPI over the last decade

As can be seen by this measure the EPI is

often at least a few percentage points higher than the CPI and currently sits just below 5 YOY compared to the official current CPI YOY of 29 But again price indexes are a terrible way to gauge true infla-tion A much better way is to track the actual YOY change in money supply growth

Ed Bugos has his own proprietary version of the Austrian Money Supply which we feature in our charts at the top of each issue

When you take the true money supply growth and compare it to the current Fed Funds Rate the real interest rate if it were possible to calculate would be something closer to -12 rather than the 0-025 interest rate that price-fixer Bernanke has chosen for us

But again price indexes are problematic They assume fixed tastes and preferences over time for an eternal human that never changes They obscure the fact that the most important feature of a price mechanism is not the direction of prices but of the relationship (ratio) between prices They cre-

2006 752010 652011 54

2006 2010 2011Percentage of FX Dollar held

by China 75 65 45

0

10

20

30

40

50

60

70

80

75

65

45

0

10

20

30

40

50

60

70

80

2006 2010 2011

Percentage of China FX reserves Held in US Dollars


ate the illusion that price changes are uniform when the very cause of the business cycle is the result of the disproportionate changes in prices relative to one another caused by monetary expansion They are manipulated and abused by the biased interests which are usually the same ones publishing them

And finally they cannot be used as a measure of change in purchasing power because they con-found cause and effect ndashthey suggest inflation is the effect of too much growth rather than focus the

A much better way to gauge the potential in-flationary impetus on the boom and its ldquopotentialrdquo fall out on prices is to track the year over year rate of change in the real money supply The nominal interest rate is ultimately produced by manipulating this leading variable

As can be seen the real interest rate has been negative for nearly the entire last decade and is cur-rently near its lowest point of the decade


WHAT BACKS THE DOLLAR

The answer to the question of what backs the dollar is ldquonothingrdquo It has been that way since August 15 1971 But if you were to make the false presumption that the dollar is backed by the Federal Reserversquos gold and you took the market value of the Federal Reserversquos gold and divided it by the Fedrsquos balance sheet the following is the of Dollar that would theoretically be backed by the Fedrsquos gold

In these terms the all time low was in 2008 during the heat of the first wave of the financial system collapse It has since bounced slightly but

still sits at 158 as of 29212 If this ratio were to return to the same rate as it was when the dollar was fully backed by gold prior to 1933 it would have to increase 2463 If it were to reach the peak it hit during the last major inflationary episode in the late 1970s it would need to rise 7061

There is nothing that says this ratio has to re-turn to levels of the past But if the Federal Reserve wants the dollar to exist in ANY form in the coming years they will at least have to revert to a gold back-inghellip and if they were to at least return the dollar to previous gold backed levels the price of gold would have to rise a minimum of 242


THE OUTLOOK FOR THE JUNIOR GOLD STOCKS

At the risk of sounding overly simplistic since the beginning of the gold bull market there have only been two down years in the junior min-ing stocks as a sector (as shown below by the TSX Venture Exchange index (CDNX)) And with 2011 ending at near a low for the year and having bounced significantly off that low in the first two

months of 2012 the odds favor a good year for the juniors They havenrsquot had two down years in a row since 2001hellip in fact there has only been 2 down years period The brutal slide of 2008 which Senior Analyst Ed Bugos was a hero for anticipating and last year in 2011

For this reason we have gone overweight our holdings of the junior gold stocks this year and re-main committed to that stance


SECTOR SHORT TERM MEDIUM TERM LONG TERM LAST CHANGED

0-3 months 3-12 months 1 year+

US Stock Market Bullish Neutral Neutral 9182011 (ST)

USD Index Neutral Bearish Bearish 2272012 (ST)

US Treasury Bonds Bearish Bearish Bearish 2272012 (ST)

Gold Neutral Bullish Bullish 2142012 (ST)

GoldSilver Stocks Neutral Bullish Bullish 2142012 (ST)

Commodities Bullish Bullish Bullish 9182011 (ST)

Color shows in which direction it has moved from last change Red=Downgrade Green=Upgrade

Dollar VigilanteCurrent Macro Outloook


It has been a while since wersquove gone through our entire portfolio and reassessed all our assump-tions Wersquoll begin to do this here and wersquoll continue with Part II of this overview in next weekrsquos Interim Update

Our junior stocks as a whole performed very poorly last year As Jeff pointed out in the Vigilantersquos View this month however we are expecting 2012 to be a good bounce back year And it should be noted that these stocks are very volatile Drops of 50 are not uncommon and rises of over 500 also are not uncommon That is also why we say to keep the juniors to a small percentage of your portfolio They are more like lottery tickets than sure thing invest-ments at least in the short term If we are right about the next few years even the worst junior will rise hundreds of percent as a bubble forms in the junior miners

A Longer Term Perspective I started promoting gold stocks as serious

investments in 1999 I watched as stocks like Ag-nico Eagle initially fell 44 from $9 to $5 per share in 2000 how shares of Newmont fell 50 from $25 to $12 the same year These were both core posi-tions of mine back then This game is never easy and always has its ups and downs and you can never just take a 1 or 2 year perspective on many of these stocks

Take my experience withAgnico Eagle as an example It fell from $18 down to about $10 dur-ing 2002-03 on account of a rock-fall incident that caused it to shut down its only operating mine If you met me in 2001 I would have told you to buy it all the way up to the $18 high And then I would have told you to sell it at $12 a year later Luckily if you still listened to me I would have put you back into it at $12 in 2005 a few years later just before its big run to $80 in 2008but you would have sold most of it in 2006 at $40 on my advice You would have then bought it all back in the mid $20rsquos during

the 2008 crash (because you would have been short the SampP) and when I again pounded the table on it At the moment I feel a lot like we did following the 2003 rock-fall incident With regard to Agnico Ea-gle it may again be that we have to wait one or two more years before this stock performs But I donrsquot think so for what itrsquos worth I believe it will spring into action when the price of gold is ready to break out later in the year And it is worth holding anyway because in the 12 years that Irsquove tracked and traded this stock it has never been this under-valued

Irsquove owned and recommended Agnico Eagle all the way up but not every year was rosy Value investing takes patience I didnrsquot buy this stock back in 1999-2000 because it broke out of some kind of chart pattern but because I saw value in it in light of goldrsquos future

It Not Uncommon

That type of a buy and hold through the thick and the thin attitude is necessary with many that turn out to be big winners I remember being smart enough in buying Osisko TSXOSK at $390 in the summer of 2008 in the middle of the melt down It peaked at around $7 earlier that year but it was like trying to catch a falling safe then with some stocks They would fall right through your bid Before it was all over the stock had fallen back to $150 Ef-fectively we were trying to buy it all the way down By the time that we started TDV in late 2010 two years later the stock was trading at $10 and too expensive for an entry position It ultimately went to $16 But if you bought at $390 and watched it go down to $150 it would have been hard to imagine a 10-bagger (from the low) after that

This happened as well with IAMGOLD which I had recommended from $6 down to $2 at the bot-tom in 2008 It was at $18 when we started TDV and printed a high of $22 last year In fact the aver-age return on the shares that I recommended going into the crash (March to July 2008) is about 40

TDV Portfolio Review amp OutlookEd Bugos TDV Senior Analyst


now and that excludes the three stocks that I recom-mended at the very bottom Kirkland First Majestic and Guyana which are up an average 600 from my entry price I have had one or two outright losers in my career but not many My weakness is that I tend to be on the early side in my picks

There is no strategy that works year in and year out And it is in my view impossible to do just the right thing every year in the market ndash especially since the market often acts irrationally

For example who would have bought gold bullion and shorted the juniors in 2011 But what I want to emphasize most is that while good risk management helps dilute the negative impact of unforeseen events (note that our overall allocation is doing okay) the strategy of buying weak years even though you canrsquot get the exact bottom pays off as long as you are right on the secular big picture trend

Loose Ends

If in the above table detailing our specific posi-tions which you can find here with the quotes up-dated live we excluded my 17 individual picks over the 19 months that we have been up and running it would look like this

Clearly our saving grace is in our risk manage-ment and overall recommendation to keep back some cash and to invest the great majority of our al-location in gold silver and non precious metals eq-uity ETFrsquos Up to 70 of our allocation was invested this way until December when we reduced our 20 cash position to 10 in order to take advantage of the bargains we perceive in the junior sector and formally dip one toe into a short against T-bonds

Consequently while the un-weighted aver-age return on our various entry prices is -4 the weighted average return is actually a positive be-cause we kept the weightings in our worst perform-ing sectors to less than 25

For the record the return on our junior miners averaged a negative 15 which appears to be a wee better than the performance of the ETFrsquos that rep-resent our space (in the table above) which average -32 between them On the other hand our two major miners African Barrick and Agnico Eagle are down an average 29 from our entry prices That compares to an average decline of less than 10 for the large cap gold miners

Since we only have two producers in our major miners category and are not interested in spend-ing too much time on the individual major miners we will continue to recommend the Market Vectors Gold Miner ETF NYSEGDX

Our junior gold minersrsquo individual hold-ings and the explorersrsquo ETF (NYSEGDXJ and NYSEGLDX) holdings may seem redundant but the reason we have them in our portfolio is for those who do not want to buy our individual recommen-dations but want an easy way to buy the sector as a whole As well they are listed in our portfolio for

This happened as well with IAMGOLD which I had recommended from $6 down to $2 at the bottom in 2008 It was at $18 when we started TDV and printed a high of $22 last year In fact the average return on the shares that I recommended going into the crash (March to July 2008) is about 40 now and that excludes the three stocks that I recommended at the very bottom Kirkland First Majestic and Guyana which are up an average 600 from my entry price I have had one or two outright losers in my career but not many My weakness is that I tend to be on the early side in my picks



Loose Ends

If in the above table detailing our specific positions which you can find here with the quotes updated live we excluded my 17 individual picks over the 19 months that we have been up and running it would look like this

Junior Miners (20)

ReturnFrom

Inception Allocation

Weighted

Returns B-H-S Market Vectors Junior Gold Miners NYSEGDXJ -26 10 -26 Buy Gold Explorers ETF NYSEGLDX -38 10 -38 Buy Gold amp Major Miners (45) Central Fund of Canada NYSECEF 57 30 172 Hold Market Vectors Gold Miners NYSEGDX -6 15 -10 Hold Non Precious Allocation (35) Powershares DB Agricultural Fund NYSEDBA 12 15 18 Buy Aston Hill Global Uranium Fund TSXGUR 9 5 05 Buy Proshares Ultrashort Lehamn 20+ Treasuries NYSETBT -38 5 -19 Buy Cash na 0 10 00 na Unweighted Average Total Weighted Average -4 100 103

Clearly our saving grace is in our risk management and overall recommendation to keep back some cash and to invest the great majority of our allocation in gold silver and non precious metals equity ETFrsquos Up to 70 of our allocation was invested this way until December when we reduced our 20 cash position to 10 in order to take advantage of the bargains we perceive in the junior sector and formally dip one toe into a short against T-bonds

Asset Class Investment Allocation Gold Bullion (CEF) 30 Cash 10 Gold Equities (major) 15 Gold Equities (junior) 20 Treasury (short) 5 Commodities-Agricultural 15 Uranium ETF 5 Totals 100




Loose Ends


Junior Miners (20)

ReturnFrom


Weighted





Basic subscribers who do not receive our junior stock analysis but still wish to participate in the sec-tor

Non-Precious Allocation Review amp Outlook

Commodity ETF Uranium ETF Treasury Short and Cash gtgt 35 allocation

Powershares DB Agricultural Fund NYSEDBA

BUY FOR LONG TERM EXPOSURE TO HARD ASSET THEME

We added the DB Agricultural fund to the TDV portfolio at the outset as part of the initial allocation mix (which hasnrsquot changed much except for the reduction in cash from 20 to 10 percent in December) back in September 2010 It broke out of a 2-year bottom with resistance at around $27-28 ndashroughly where the December bottom occurred in the chart above Technically speaking the ETF met the implied objective of that break out at $36 and has spent the last year retracing the move We believe the retracement is a normal bull market cor-rection and has completed Our intermediate target is for DBA to return to the $35 handle and then up up and away

One indication of a bottom from a contrarian point of view is this story by Forbes

ldquoLooking today at week-over-week shares out-standing changes among the universe of ETFs covered at ETF Channel one standout is the DB Agriculture Fund AMEXDBA where we have detected an approximate $233 million dollar

outflow mdash thatrsquos a 11 decrease week over week (from 71600040 to 70800040)rdquo

Go to the source to find out more details on this fund including a prospectus

It holds more than simple the agricultural com-modities It also includes some of the Softs like Co-coa and Coffee as well as livestock and cotton The grains make up about 38-40 percent of the weight with cattle and hogs making up 20 and sugar co-coa coffee and cotton making up most of the rest

Aston Hill Global Uranium Fund TSXGUR

BUY FOR ABOVE AVERAGE SHORT TO MEDIUM TERM GAINS

We added the Global Uranium ETF also at the inception of our letter September 1 2010 at $214 per unit just as it was breaking out of a yearlong downtrend ndashitself a correction to a strong 350 rally off the 2008 bottom in 2009 The rally we jumped on peaked at $5 early last year (see above) before news of the Japanese nuclear accident sent uranium shares into a tailspin Up until that unfortunate and unforeseen event we were expecting a relatively normal correction back to the $3 level over the course of several months The current rally that just started last month is the first attempt since then that the sector has tried to make a comeback I am par-ticularly bullish on it today as it seems more than likely the market overreacted about the future of the nuclear industry

One thing we do not like about Aston Hill however is that it is quite illiquid And since our addition to the portfolio a larger and much more


liquid Uranium ETF called Global X Uranium ETF NYSEURA has launched In next weekrsquos Interim Report we will go into more detail about how we plan to switch from GUR to URA But in the meantime if you currently hold GUR you can just continue to hold If you donrsquot currently have expo-sure to uranium we suggest buying URA instead of GUR And wersquoll have more info on how wersquoll replace it in our portfolio next week

Proshares Ultrashort Lehman 20+ Treasuries NYSETBT

BUY IMMEDIATELY FOR 5 TOEHOLD IN THE NEXT GREAT BUBBLE TO BURST

No need to spend too much time on the funda-mental premise here The government is bankrupt The path of least resistance is more inflation and more taxation The Fed has become a significant buyer now replacing the more traditional investors The whole process is unsustainable for reasons we constantly discuss and the Greek (and EU) situation represents in our view the first crack in a very sig-nificant bubble government debt created by central banks in a desperate attempt to avoid deflation AT THE TOP of a three decade long bull market in debt

The chief problem is timing the inevitability The above ETF was issued in 2008 and has steadily fallen from its peak level of about $75 As in any great bull market the shorts have played a major role in the bubbling up part ndashby being too early and having no stamina A great many bears have been short the Treasury bond in one way or another

since 2003 when the US dollar started coming apart The 35 yield then and in 2007 looked like it was unsustainable given the inflation outlook in those years The 2008 crash changed that as it pushed yields to new lows But the bears correctly believing that 2 yields were unsustainable took aim again Ironically the action in Europe the Fedrsquos QE2 and even downgrades of the Treasury itself were going to support the Treasury bond in 2010 and 2011 We started dilly-dallying in the TBT right from the outset in 2010 Our expectation was that the end of QE2 would result in the first big down leg in the Treasury bond as it would remove support that the market had come to depend on The fear of this and the other effects of the end of QE2 however saw the T-bond draw liquidity from stocks and other riskier assetshellipin a tsunami of Safehaven demand that lifted both the Treasury bond and gold prices at the expense of everything elsehellipand anything that smelled of any risk

The net result is that we got caught in the last down wave in TBT values The good news is that we have been emphasizing the relatively small weight-ing this trade should have within the overall scheme of the allocation

At any rate I feel this is a good place to get a toehold in the short against government bonds If you feel like us that this will inevitably be a correct trade then just wade in with a position so small that you wonrsquot lose sleep over it if it halved one more time but big enough to keep your interest for the right time The time could be right if the authorities are confident enough in the boomrsquos momentum that they would let bond yields back up a little again

Ideally it might be best to wait out one more stock price correction before pulling the trigger on this ETF

Our 12-18 month target reflects the expectation for yields to back up to 4 on the 10yr Treasury

For more information about this ETF go to httpwwwprosharescomfundstbthtml


Precious Metals Sector Review amp Outlook

The intermediate trends are still all downAs I have been saying we continue to expect to

see this trade under pressure in the short term with the potential for gold prices to retest support at the 1500 handle (plusminus) before the bull market starts up again in the fall

In this environment the gold majors are likely to remain weak in line with gold prices even though we concur that the value proposition there is as good as ever However the exception here includes any stocks that have seen outsized declines ndash like Agnico Eagle or the junior sector as a whole We view the values here as irresistible as this end of the market was undeservedly starved of liquidity last year on the basis of fears of a repeat of 2008

And this has occurred in the face of significant improvements in fundamentals ndashboth bottom up and top down

One chart that we donrsquot need to show here is the performance of the gold equities RELATIVE to gold prices As one barometer we can point to the HUIGold ratio which has declined 25 over the last year or so but the Gold explorerrsquos ETF GLDX charted below has halved relative to gold prices These ratios are considerably below their long run averageshellipthey are even below their short-term averages The XAUgold ratio is at a 20-25 year low and all of them are just a hair above their 2008 lows and their bull market lows As far as gold equities go there might as well not even be a bull market in gold prices Of course thatrsquos what the bears are try-ing to tell us ndash that the jig is up We donrsquot buy that for reasons discussed elsewhere and we believe it is possible that there is going to be a better buying op-

portunity ahead but valuations are not likely to get much more attractive than now

For the record neither do we buy the argument that gold stocks are cheap because there are other ways to buy exposure to gold these days like via the ETF I could write a few paragraphs about this Maybe even an article

This is not the place to do it but suffice it to say that the ldquosize of the doorwayrdquo relative to how much money there is out there has not changed The gold equities still represent a very small sector by mar-ket capitalization And valuation has absolutely nothing to do with volumes If suddenly there are more buyers than sellers for whatever reason that has nothing to do with a change in the companyrsquos fortunes then the bears will still show up to correct the anomaly Irsquove heard this argument far too many times Gold stocks are not an option on gold They benefit from increases in gold prices presumably but they are a business with risks that are unrelated to the gold cycle

The bull market in gold just provides us with a relatively forgiving environment compared with other sectors but nevertheless all the reasons why business has become tougher for other companies is true for the gold miners

The reason gold stocks are cheap is because equity risk premiums have risen across the board and they were (nominal) market leaders early in the post 2008 cycle So they have suffered the brunt of it in the last year with fear over macro events bubbling up to the surface ndashexpressed by Safehaven runs right into bonds and bullion

The neglect of gold equities wasnrsquot the only counterintuitive event of 2011 So was the run into Treasuries on the news that they were downgraded We see both these trends reversing ahead but not without turbulence

Hence we remain cautious in MarchThat is one of the reasons I chose this issue to

write a review instead of releasing another stock pick

The other is that we have at least 15 good picks already and if we are right about the buyerrsquos market lasting in the months ahead this report should serve as a reference list or shopping list for new money to put to work


One concern that I have is that even though I see the decline in gold and rally in the stock market as temporary factors related to generally improv-ing economic sentiment and not something more terminal for the bull market (in gold) perhaps I am underestimating the psychological impact on inves-tors in the gold shares and maybe we will see many throw in the towel in the final inning of the correc-tion ndashas doubt about the gold story resurfaces

Refer to the following charts to get the gist of our view on each specific segment of the precious metals equity sector Donrsquot fret about the technical jargon The main point of the exercise is to tame all the bullish stuff Irsquom going to say about our individu-al picks with our less sanguine top down outlook for the sector in the short term

NYEGDXJ

NYEGLDX

Please note this is part one of a two part series reviewing and updating all of our positions We will conclude in next weekrsquos Interim


One of my greatest regrets so far in life is not having spent more time in Brazil But itrsquos almost like the country has been keeping me out on pur-pose

The first time I tried to go to Brazil was when I was in Buenos Aires Argentina about seven years ago I had a wonderful time in Buenos Aires for about a week and even had acquired a girlfriend there On my last night before my flight to Rio I partied a little too hard and had one of the worst hangovers of my life for the flight The entire four hour flight I kept dreaming of landing and going to the beach and lying in the sun and recuperating But upon arrival the Brazil immigration person asked merdquo where is your tourist visardquo

I only had my Canadian passport at that time but it was usually quite rare when I needed a visa The only places I could remember needing to apply in advance for a visa were China India Russia and Burma But as it turns out Brazil also has a policy Whatever other countries do to their citizens they do to theirs

I really respect that policy actually Basically do unto others as they do unto you As example because the American Government fingerprints Brazilians and requires them to get a visa the Brazil-ian Government fingerprints Americans when they arrivehellip they just throw the fingerprints into the garbage afterwards but it makes a point And it just so happens that the Canadian Government re-quires Brazilians to apply for a tourist visahellip so the Brazilian Government does the same with Canadi-ans Boy did I wish I had a second passport at that time

And so they sent me on the next 4 hour flight back to Buenos Aires With my brutal hangover It was not fun

I then went to the Brazilian embassy the next day and was told that because I had recently been in Peru and Colombia that I needed to show proof I had a yellow fever vaccination I didnrsquot have one so they told me I could get a yellow fever vaccination in Buenos Aires and then wait 10 days for it ldquoto workrdquo then I could go to Brazil Not being a fan of most

vaccines and not wanting to wait 10 days I gave up on that attempt

About two years later though and I finally made it to Brazil I arrived in Rio in January and had intentions to go to Carnival but once again other plans interrupted and I ended up only stay-ing about a week in Rio before having to leave for Acapulco

For natural beauty I consider Rio to be the most beautiful bay in the world Interestingly I con-sider Acapulco to be second What is most amazing about Rio is the colors Dining at a cafeacute near Co-pacabana the view was of white sand beaches very clear looking blue water blue skies with puffy clouds and big birds that looked to be a mile or two up just lazily circling overheardhellip in the restaurant a lot of people were drinking bright red and yellow colored fruity drinks and the restaurant had a few huge trees above the patio that would literally shower down large (like the size of your fist) yellow flowers While having lunch a few landed on my table add-ing to the idyllic nature of it all And at either end of the beach are huge almost straight up rocks and lush green covered hillshellip it really is one of the most spectacular settings I have ever seen

But unfortunately I never visited anywhere else in Brazil except Rio Itrsquos a massive diverse country and I am certain I missed out on a lothellip something I hope to rectify in the coming years In the meantime I was happy when the man who wrote BulletProof Shares for us Tekoa da Silva offered to write up his thoughts and experiences in Brazil after having now lived there for a period of time after expatriating from the US Here are his thoughts

The Permanent TouristJeff Berwick


My name is Tekoa Da Silva and I am a 28 year old American born male investor In October 2011 I decided to fly to Brazil with the serious intent of evaluating the country for opportunities in invest-ments and residency It is now March 2012 and Irsquove had a significant number of experiences so far to share But before I go into the details of what Irsquove seen heard and felt let me give you some back-ground on myself and some of the ldquobehind the scenesrdquo work it took for me to get where I am now

35 years ago my father emigrated to the United States from Brazil He met my American born moth-er some years later and I was born in Boston Ma His citizenship was informally passed down to me but in order for it to be realized I was required to visit a Brazilian consulate and jump through a series of administrative hoops This process didnrsquot begin until I was about 25 Up until that time I had no de-sire to obtain a Brazilian citizenship and it was one of those ldquothingsrdquo that tend to slip by in life However due to the structural changes taking place in the Western economies it became increasing clear and urgent to me that I needed access to emerging market growth for my-self and my future family Therefore I decided to visit the Brazilian consulate in Boston and obtain my citizenship and passport

Obtaining my Brazilian paper-work was a long ordeal It took close to two years to complete During that time I probably made ten or more trips to the consulate and more than 50 phone calls Such is the process of life For you reading I understand your life situation may be far different than mine Most people do not have Brazilian lineage and will need to obtain Visarsquos and other entry forms of access into the country At this time I cannot provide specific guidance

and insight into these areas outside of saying that a tourist visa is routine and very easy to get from most countries Moving forward I will accumulate information regarding marriage entry visassitua-tions and ldquoinvestorrdquo visas and documentation and provide those in the form of an update but for now letrsquos continue on

Early in 2011 I received all my official Brazilian paperwork (passport birth certificate amp citizenship) and was finally a Brazilian This was very exciting for me and it also coincided with a time that my concern for the direction of the US (as I was resid-ing in Boston) became increasingly heightened So the timing couldnrsquot have been any more perfect In October 2011 I flew to Vitoria Espirito Santo Bra-zil and was greeted by my father (who had returned to Brazil 6 years earlier) We returned to the home in which our family built more than 50 years ago By Western standards it was brick shack falling apart

The Unique Economic Circumstance Called Brazil

Tekoa Da Silva


But by Brazilian standards it was average My first two months in Brazil were a culture

shock and struggle in which I needed to go through the process of shedding my ldquoAmerican Diaperrdquo which my father jokes about quite often This means accepting unreliability big changes in small things and as Westerners itrsquos very difficult to become accus-tomed to this Let me give you an example

Most retail stores in Brazil are only open 6-7 hours a day from 10-5 Now for stores that sell products Westerners have interest in (washing machines cell phones home goods etc) there is a strange bottle-neck which manifests itself in very long customer lines almost all the time (this is seen even more dramatically at Brazilian savings banks for example) When you wait in a line to receive service from a salesperson you often need to stand in two additional lines afterwards One to pay for your product and another to receive your product During mid-afternoon this can easily add another 20-30 minutes of wait time for buying something as simple as a towel

So when you look at it from the outside there is an extreme unpredictability in any errand you may need to run You may be lucky and complete something in 5-10 minutes or you may have the ldquocommonrdquo experience of needing to set aside an hour or two of wait time to purchase a cameramdashwhich would take no more than 5 minutes in most American electronic retail stores

So what does this bottleneck mean Well this unpredictability extends into any and everything you can imagine in Brazil As a tourist staying in

a hotel your life is contained and stable but as a resident (especially a foreign resident still learning the language) one afternoon of errands one might make in the US can take as much as a week to do in Brazil So the country appears very ldquoslowrdquo and in fact it is by Western standards

Circling back around to the concept of shed-ding the ldquoAmerican Diaperrdquomdashitrsquos meaning to me is something along the lines of ldquogoing with the flowrdquo No matter how long or frustrating that flow might be you cannot allow yourself to be lost in frustra-tion or anger but instead learn to replace those feel-ings with humor and entertainment It is simply the only way to prevent yourself from going crazy living in Brazil and once you embrace this attitude you discover that yoursquove finally ldquojoined the partyrdquomdashas that is what embodies the Brazilian cultural attitude

Opportunity

Now that we have a light understanding of the cultural framework of Brazil letrsquos walk through the economy for a moment and discuss the opportuni-ties as I see them The major areas for economic expansion are technology applications tourism and importexport commerce

Technological Applications

This is a challenging concept to explain with-out seeing the country with your own boots on the ground (or flip-flops as most people tend to use here) 90 or more of the countryrsquos technology ap-

plications vary between what one might expect in to see in 1980-1990s US and a large portion of the country is still using the same technology over the last 50+ years When I say technological applicationsmdashI mean anything which requires a machine in order to be built cell phones door knobs anten-nas plastics books glass wear clothing etc Itrsquos beyond com-prehension that an average city in Brazil has the technological


advancement of what one might expect of the aver-age 1970s US city but that is quite often the case Why is this so Letrsquos take a bigger picture look as to what might be causing this and in order to do that we need to look at the importexport business of Brazil

Brazilian Import Restrictions and Their Social amp Economical Ripples

Brazil currently has about a 40 import tax on everything coming into the country and some products ldquomysteriously disappearrdquo on their way in through customs I suppose the intended purpose for import restrictions is to protect domestic Brazil-ian industry and employment From a consumerrsquos perspective however this restriction can manifest itself in the form of 50-1000 higher consumer goods prices at retail stores when compared to the same products on US shelves When we also take into consideration that the minimum wage salary in Brazil is $650 reals ($380US per month roughly) it takes the average family a very long time to be able to afford a $1800 real washing machine ($1000US +-) This might also help explain the lack of techno-logical applications at the consumer level

Another aspect I began noticing is the same absence of technological application exists on the industrial level in Brazil I will bluntly say that 99 of Brazilian processed and technology-based goods are inferior to Chinese and other foreign equivalents For the consumer this boils down to a buying circumstance of ldquoone third the quality at three times the pricerdquo when compared to products available in most other countries

Understanding Inferior Industri-ally Produced Brazilian Consumer Products

So the question bothered me during initial weeks and months in the countrymdashwhy are Brazilian com-panies producing such poor clothing and retail goods and why must I pay 3-10 times the US price equivalent

in order to obtain anything of high quality My conclusion is that the import restrictions have had the ripple effect of stunting domestic manufactur-ing innovation and advancement when compared to other countries Itrsquos like keeping a child in third grade without ever allowing himher to advance and learn more It will be ldquoeasierrdquo for the child from one perspective but from another more realistic perspectivemdashthe child may never grow to reach his or her full intellectual capacity Much of the same can be said about entire sections of domestic Brazil-ian industry Let me give you an example

You and I decide to start a towel manufactur-ing company in Brazil We get our business plan in order form the company get funding and identify commercial space Once we find our space we need to locate machinery to process and weave the cotton As we travel the country searching for the ma-chinery we discover that every piece of processing equipment available is more than 20 years old Ad-ditionally every machine is falling apart In order to fix the machines we need to import tools and com-ponents which will take 3-6 months and may not even make it through customs due to their inspec-tions If we do in fact get our hands on everything to fix the machines then we need to travel the country looking for skilled labor who can fix the machines Many of these people donrsquot have telephones (because


of the prohibitively high costs) so we must rely on newspaper ads

Can you see how much of a song and dance this process can turn into

We might also choose to purchase brand new domestic high quality towel manufacturing machin-ery which could be anywhere from 3-10x the foreign cost which might completely wipe out any profit-ability the company would have We could also risk importing the machinery which once again might be sequestered by customs and possibility never seen again These are just a few variables found in the song and dance environment of the Brazil-ian manufacturing industry As you can no doubt imagine the political restrictions severely hamper the international competitiveness of Brazilian labor and intellect

However a great opportunity can be had for entrepreneurs who can find ways to use local ma-terials to innovate and create without needing to import heavily High quality at low price in the retail goods space is extremely rare in Brazil and ifwhen the country finds ways to innovate many new bil-lionaires will be made

Exports Are Just Easier

From what Irsquove seen and heard so far in Brazil the tax and regulation environment heavily favors exporting to other countries So what does Brazil export This is where the country becomes excit-ing Everything that comes from the ground can be prepared for export and Brazil is the most abun-dant country Irsquove ever seen (although my travel experiences have been limited to Asia and North America) Brazil is slowing building itself up to be the bread basket of the world and along the way the opportunities in participating will be enormous

Here is a short list of the items Brazil exports Coffee cotton corn sugar soybeans beef

wheat rice cocoa oranges Considering the country heavily favors exports

any and all industries supportive of exports will encounter fewer challenges as well This includes shipping and transportation concerns which leads me to one of the largest challenges and growth op-portunities for innovation in Brazil shipping and

transportation One of the biggest challenges Brazil faces is its

cumbersome transportation system connecting the farming states of Brazil to the coastline states for exportation Let me explain a bit more

In the United States most of the heartland is flat therefore trucking and railways are pretty straight forward to build American farmers can grow their corn and easily load their stock onto a train to be shipped to a coastal port for export However the terrain in Brazil is extremely ldquohillyrdquo and mountainous A trucking route that might take 6 hours to travel in the United States would take 10-12 hours to travel in Brazil with higher percentages of accidents and mortalities To build railways would require cutting through mountains and there has yet to be enough capital and political support mobilized to build such systems through Brazilrsquos farming inte-rior If and when this eventually occurs there will be an infrastructure boom which will create countless millionaires and many billionaires in the process

Tourism

The easiest thing to do in Brazil today is to book a plane ticket into the country reserve a hotel room and walk out onto the beach Brazilian beach culture is one of the most fascinating aspects of Brazil and additionally the coming World Cup and Olympic games will place Brazil at the forefront of the world much like China experienced a few years ago During this period the world will be awash in Brazilian culture Carnival the beaches Brazilian food and music will be more heard and embraced by the world and those groups and individuals who can deliver those items to the world will profit immense-ly Therefore I think there is a great opportunity in ldquouser-friendlyrdquo high quality tourism which Brazil currently lacks Hotels resorts theme-parks eco and agro-tourism is all still in its infancy and ripe for innovation in marketing and development of the consumer experience


Risks and Challenges

There are a number of entrepreneurial and individual risks and challenges when considering Brazil As investors we seek to scour the earth for the cheapest investment opportunities constantly valuing them against one another to obtain high-est value However I must inform youmdashBrazil is no longer cheap by any stretch of the imagination As is often said ldquoA bull market will protect you if you make mistakesrdquo at this time I DO NOT believe the ldquobull marketrdquo of Brazil over the next two decades will protect you from your mistakes It is becoming a pool filled with many fish and many sharks Brazilians are now armed with more capital than ever beforemdashdriving up local real estate prices which in many areas can be considered extreme bubbles The last players I ever want on my field are ldquosoccer momsrdquo and unfortunately many Brazilian ldquosoccer momrdquo equiva-lents are heavily moving into real estate construction and land acquisi-tion

Additionally the Brazilian Real is extremely strong which further dampens domestic asset acquisition value for foreign investors I currently feel the greater opportunities are offered to those individuals who are seeking not only investment op-portunities but to learn Portuguese fluently com-prehend the culture and slowly seek out the nectar of opportunity should it begin to drip in their favor For well financed entrepreneurs their exists incred-ible opportunity in working with translators public relations firms and localregional governments to create business activity I will be working towards building connections in Brazil with those who can bypass the traditional red-tape of industry and will provide further commentary on this in the future However as a final point on investment in Brazil my opinion is that it is simply not a country in which investors are advised to ldquothrow money intordquo At cur-rent prices it is simply too risky

Lifestyle Food and Culture

Looking past the hyper-strong currency and buoyant real estate values in Brazil the most excit-ing aspect of the country is the culture and lifestyle For a person looking to relax gain access to cheap household labor and the most nutritious foods on the planet Brazil is the place to be To top it off the music dance and beach culture is enough to make a person forgot the rest of the world exists

Letrsquos start by discussing the average beach experience in New England US When you visit the beach in Cape Cod Massachusetts for example you find yourself in an organized quiet setting surrounded by families reading books and quietly talking amongst themselves Occasionally there are some young teens throwing a football around (which has just become in illegal in Los Angeles by the way) but otherwise this quiet scene carries on for the next 8 hours until yoursquore ready to go home Most Brazilian beaches for example are a gigantic party During the summer season there are music bands playing all day and all night beer and mixed drinks are served right on the beach and there are always lots of food vendors and ldquokiosksrdquo which sell fresh fish and other local foods Quite often there are beach volleyball gamestournaments that last for


more than 8 hours and there is even a sport called ldquofoot-volleyrdquohellipwhere the same rules apply as regular volleyball except all the players use their feet This is an exciting game to watch

The nightlife culture in Brazil heavily revolves around restaurant eating and musicdancehall shows For meat eaters Brazil offers a heaven of choices The name for Brazilian BBQ cuisine is called ldquoChurrascordquo This is a style of restaurant eat-ing where meats are cooked on large sword skewers and waiters repeatedly visit your table to slice off for you choice cuts of steak chicken pork and more This combined with the classic plate of rice beans and a few other traditional side-dishes and you likely wonrsquot want to ever leave the table

After having a nice meal and a beer (Skol amp Brahma are popular Brazilian brands) a music show or dance night is one heck of a fun time For music there are lots of different traditional styles and beats but this writerrsquos favorites are Samba ldquopagoderdquo and ldquoforrordquo Most of the world has been familiarized with the Samba beat as itrsquos been displayed in Brazilrsquos an-nual Carnival but pagode and forro are very excit-ing dance beats which the young crowd in Brazil gets very excited about Even if yoursquore not a dancer just attending the show and enjoying the sight of watching everyone else dance is worth a $5 entrance fee many times over For those looking to learn how to dance the traditional styles of Brazilian dance classes are very cheap ($40-$80) per month as labor is still relatively cheap in Brazil

Another exciting aspect of Brazil is the cost of unskilled labor A full time housemaid can be hired for the national minimum monthly wage which is about $650 reals per monthmdashor a bit over $360 US The housemaid can be instructed to wash and iron all your laundry and cook and prepare your meals The cheap labor becomes exciting when you combine it with the very cheap Brazilian agriculture prices All locally grown produce is extremely cheap when compared to Western Standards Most fruits and vegetables can be purchased for about $50 cents US per kilogram (a kilo being a bit over 2 pounds) Another consideration regarding food is that 99 is grown by small local farmers who cannot afford chemicals pesticides or strange fertilizers that many Western farmers use Therefore the Brazilian con-

sumer is by default eating 100 organic foods nearly all the time (processed foods always include strange ingredients of course)

Cost of Living

In the event you do choose to live in Brazil you will be able to find a very nice apartment in most cities for the cost of the Brazilian minimum wage ($360 US +-) If you bump up that price a bit to say $1000-$2000 US then you have access to the best handful of apartments or houses in nearly any city of the country Strangely as real estate prices in Brazil have skyrocketed in many areas rents have remained cheap by Western standards

When looking at utility bills water and elec-tricity each cost about $50 US per month Brazilrsquos utility infrastructure systems are struggling to keep up growing demand so prices for those items are equivalent to what you might find in the US Tele-phone and communication systems are much like the systems existing in the 80s and 90s in the US Prices are high (by Brazilian standards) and ser-vice is poor Most of the country does not have call waiting or voicemail A reliable cell phone will cost $200-$300 up front and $75-$100 per month for service A home telephone line will cost about $50 a month as well

Published in an article last fall on my website BullMarketThinkingcom here is a price list of com-monly purchased goods and services in Brazil

Agricultural goods (local street market)

Large Carrots 5-10 for $1-$2Green Peppers 5-10 for $1-$2Pineapples 4-5 for $1-$2Large Heads of Lettuce 3-4 for $1Tomatoes 15-20 for $1-$2Mangoes 5-10 for $1-$2Oranges 10-15 for $1-$2Green Coconuts $50 cents eachProcessedHandled foodsSmall Carton of Orange Juice $2501kg Bag of Black Beans $1501kg Bag of Corn Flour $1001kg Bag of Pasta $2-$3


Beef Pork Chicken Slightly cheaper than the US amp Canada2L Bottled Water $1Can of Tuna $3Small Jar of Mayonnaise $35kg Bag of Rice $5-$6Butter $3-$5Small Carton of Milk $150-$2Bread Dinner Rolls($2-$3) Sweet Breads($150-$3)Domestic Chocolate Bar $3-$4Imported(American Brand) Chocolate BarsCan-dies $10-$20Honey $6-$8Olive Oils $6-$8Vegetable oils $4-$5

Consumer Electronics

Clothing Iron $30-$40StereoBoombox $500Refrigerator $600-$700VegetableFruit Juicer $300Low-grade Laptop $700-$800ApartmentHouse RentalsCountryside 2bd $150-$250 per moEconomic 2 bd in the city $400-$500 per mo2bd Beachfront condo rental $1200-$1800 per moMonthly Wage AveragesMinimum Wage $380-$400PoliceFireMechanicTeacher Salary $800-$1200Politician $7500-$10000+Real Estate Prices in the CityBeachfront Condo $500k-$750kMultifamily City House $100k-$400kCountryside House $50k-$100k

Services

Menrsquos Haircut $7-$8Manicure $10Gym Membership $40-$70UtilitiesElectric bill for 2-3 bd house $35-$60 per moTelephoneInternet Service $50-$70

So when looking at the cost of living a person with a reliable income of $2000 US per month will be able to live very comfortably in Brazil Healthy

foods beautiful beaches and people and a lifestyle that will allow you to forget about the rest of the world is there for the taking

Additional Items

Precious Metals Investments in Brazil - To my great surprise the retail physical precious metals market in Brazil simply does not exist outside Rio or Sao Paolo Irsquove only heard of one or two dealers in those cities but outside of that buyers will be required to purchase industrial forms of the metals from jewelersmdashwhich many people are not interest-ed in or qualified for Irsquove wondered many times why Brazilians are not interested in physical bullion and I believe itrsquos because of the abundance of investment opportunities in real estate and agricultural prod-ucts What still appears to be a fairly priced invest-ment in Brazil is a farm filled with cattle

Tourist Visarsquos from US Canada amp UK

Brazil is very lenient when it comes to issuing foreigners travel visas A Brazilian tourist visa offers multiple entries and is valid for a period of 5 years

UK passport holders visiting Brazil do not need a visa A valid passport is all thatrsquos needed along with a return plane ticket and proof of suf-ficient funds to carry out your stay UK passport holders can stay for a period of up to 90 days

All US citizens are required to obtain a visa before entering Brazil The type of visa granted will be determined by the consulate but in my own experiences obtaining a Brazilian tourist visa two times in the past it is a very easy process US citi-zens are offered 90 days and it is the writerrsquos under-standing that all tourists can apply for an additional 90 day stay in Brazil by visiting a Brazilian Federal Police Department

Tourists coming from Canada will also need to apply for a Visa at the nearest Brazilian consulate but from what Irsquove seen and heard Canadians are required to submit a lot of personal information in order to be granted a travel visa There are Brazil-ian consulates in Toronto Montreal and Vancouver which can offer guidance on the process


Is Brazil For Right You Letting Go of the Western Craving For Organization amp Structure

Irsquove pondered the question many times over the last few months of whether or not Brazil is right for me for the long term Itrsquos been very challenging accepting a slower pace of productively and lifestyle But what Irsquove found is that once you go through a frustration cycle enough timesmdashyou simply discon-nect and accept the flow of things Brazil will put you through that emotional cycle over and over again if you let it But once you step back and dis-cover there are so many things you cannot controlhellipthatrsquos when someonersquos beautiful smile reaches in and pulls you out thatrsquos when the pulse of samba drums begin to nod your head and thatrsquos when you can grab a beer begin speaking Portuguese with a ldquomorenardquo (brown-skinned woman) sitting next to you and forget the rest of the world exists

Have you visited Brazil yet Thinking about it Feel free to get in touch

Thanks

Tekoa Da Silva

tekoacontraryinvestorscafecomUS 508-202-4761BR 55-27-9956-5719wwwbullmarketthinkingcomyoutubecomtekoadasilvalinkedincomintekoadasilvatwittercomTekoaDasilvaFacebook ldquoTekoa Da Silvardquo


Grow 1 million pounds of food on 3 acres

Yes you read that right That is how abundant land can be if utilized with efficiency In this video they show how they grew 1 million pounds of food utilizing only one pump and producing 10000 fish and 500 yards of compost Not only would a per-son be able to survive a complete currency collapse but theyrsquod have a good income (at least in barter if there were no money for a period of time) and could easily support a large community as well (reducing tensions and chances of violence outbreaks as people get desperate)

Avoid Aspartame

If you drink soda or chew gum chances are you are ingesting a fair amount of aspartame Many donrsquot know that aspartame accounts for 75 percent of side effect complaints received by the Adverse Reaction Monitoring System (ARMS) of the US Food and Drug Administration Dr Betty Mar-tini popular anti-aspartame advocate She explains that it is an ldquoaddictive exitoneurotic carcinogenic genetically engineered drug and adjuvant that dam-ages the mitochondriardquo Moreover Dr Janet Hall another famous advocate against aspartame shares on her website that all artificial sweeteners create an artificial need for more sweetness She goes on to add that forced sweetness being a class of altered

food is a trap that cause people to become addicted to sweeter tasting food with no nutritional value Read more at NaturalNewscom

Never too late to change your dietary habits

View this amazing video which shows Annette Larkins who is 70 but looks 40 who has eaten a raw vegetarian diet for decades (note vegetarian diets arenrsquot for everyonehellip it depends on your body type ndash but raw foods are important and are for everyone) In stark contrast is her husband who like most Americans is on a litany of pills and chemicals after decades of eating a standard American diet If he were to change and eat a diet more like his wife hersquod likely be off all his medications and lookfeel much better in a matter of weeks

The Big 5 Workout Many people believe that exercise must last for

long periods of time and in many cases be monoto-nous like running on a treadmill for 40 minutes This simply has been proven wrong over time The critical factor with exercise is intensity Short bursts of intensity is what your body needs to stimulate it into producing all the hormones your body needs to be lean and fit Check out the Big 5 Workout for a smarter way to exercise

Survival amp Health News and NotesJeff Berwick



Disclaimer

The Dollar Vigilante needs no disclaimer Everything we say here is what we believe Furthermore we need no disclaimer because we believe that all na-tion states governments securities agencies or other legislative bodies are illegitimate and we do not recognize them nor believe we need their permission to say what we feel about any topic and frankly think it is hilarious that people think a government body should be there to protect them

However because we know that all manner of Government agencies will come after us just for showing such disdain for them we are going to include a standard cookie-cutter disclaimer below just to keep them off our backs Enjoy reading it bureaucrats at the SEC

Information contained in The Dollar Vigilante Emails or on The Dollar Vigilante website (wwwdollarvigilantecom) is obtained from sources believed to be reliable but its accuracy cannot be guaranteed The information contained in such publications is not intended to constitute individual investment advice and is not designed to meet your personal financial situation The opinions expressed in such publications are those of the publisher and are subject to change without notice The information in such publications may become outdated and there is no obligation to update any such information

Jeff Berwick Ed Bugos and other analysts or employees of The Dollar Vigilante may from time to time have positions in the securities or commodities covered in these publications or web site

Any Dollar Vigilante publication or web site and its content and images as well as all copyright trademark and other rights therein are owned by The Dollar Vigilante (TDV) No portion of any TDV publication or web site may be extracted or reproduced without permission of The Dollar Vigilante Unauthorized use reproduction or rebroadcast of any content of any TDV publication or web site including communicating investment recommenda-tions in such publication or web site to non-subscribers in any manner is prohibited and shall be considered an infringement andor misappropriation of the proprietary rights of TDVTDV reserves the right to cancel any subscription at any time and if it does so it will promptly refund to the subscriber the amount of the subscrip-tion payment previously received relating to the remaining subscription period Cancellation of a subscription may result from any unauthorized use or reproduction or rebroadcast of any TDV publication or website any infringement or misappropriation of TDV proprietary rights or any other reason determined in the sole discretion of TDV

If we are to keep the term ldquocapitalismrdquo at all then we must distinguish between ldquofree-market capitalismrdquo on the one hand and ldquostate capital-ismrdquo on the other The two are as different as day and night in their nature and consequences Free-market capitalism is a network of free and voluntary exchanges in which producers work produce and exchange their products for the products of others through prices voluntarily arrived at State capital-ism consists of one or more groups making use of the coercive apparatus of the government mdash the State mdash to accumulate capital for themselves by expropriating the production of others by force and violence

Murray Rothbard This article was originally published in

Outside Looking In Critiques of American Poli-cies and Institutions Left and Right

New York Harper and Row 1972 pp 60-74

Murray N Rothbard (1926ndash1995)

Was dean of the Austrian School He was an economist economic historian and libertarian political philosopher


MARCH CHARTSDOWGOLD RATIO - 10 YEAR CHART

GOLD - 1 Year ChartDOWGOLD Ratio - 2 Year Chart

TDV Austrian Money Supply Measure - 3 Year

TDV Austrian Money Supply Measure - 10Year


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Tekoa Da Silva





Avoid Aspartame










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FederalReserve


TRILLIONS OF DOLLAR

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2006 752010 652011 54


by China 75 65 45

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ReturnFrom


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NYEGDXJ

NYEGLDX





















Tekoa Da Silva









Opportunity



























Tourism















Cost of Living










Services




Additional Items











Thanks

Tekoa Da Silva





Avoid Aspartame










Disclaimer

















BANKERS GONE WILD






























THE END GAME NEARS






$468$165$115$105$026

$000

$050

$100

$150

$200

$250

$300

$350

$400

$450

$500


FederalReserve


TRILLIONS OF DOLLAR

S
















2006 752010 652011 54


by China 75 65 45

0

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Loose Ends


Junior Miners (20)

ReturnFrom


Weighted



















































NYEGDXJ

NYEGLDX





















Tekoa Da Silva









Opportunity



























Tourism















Cost of Living










Services




Additional Items











Thanks

Tekoa Da Silva





Avoid Aspartame










Disclaimer


































THE END GAME NEARS






$468$165$115$105$026

$000

$050

$100

$150

$200

$250

$300

$350

$400

$450

$500


FederalReserve


TRILLIONS OF DOLLAR

S
















2006 752010 652011 54


by China 75 65 45

0

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65

45

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2006 2010 2011





































It Not Uncommon








Loose Ends










Loose Ends


Junior Miners (20)

ReturnFrom


Weighted







Loose Ends


Junior Miners (20)

ReturnFrom


Weighted



















































NYEGDXJ

NYEGLDX





















Tekoa Da Silva









Opportunity



























Tourism















Cost of Living










Services




Additional Items











Thanks

Tekoa Da Silva





Avoid Aspartame










Disclaimer


























2006 752010 652011 54


by China 75 65 45

0

10

20

30

40

50

60

70

80

75

65

45

0

10

20

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2006 2010 2011





































It Not Uncommon








Loose Ends










Loose Ends


Junior Miners (20)

ReturnFrom


Weighted







Loose Ends


Junior Miners (20)

ReturnFrom


Weighted



















































NYEGDXJ

NYEGLDX





















Tekoa Da Silva









Opportunity



























Tourism















Cost of Living










Services




Additional Items











Thanks

Tekoa Da Silva





Avoid Aspartame










Disclaimer















































It Not Uncommon








Loose Ends










Loose Ends


Junior Miners (20)

ReturnFrom


Weighted







Loose Ends


Junior Miners (20)

ReturnFrom


Weighted



















































NYEGDXJ

NYEGLDX





















Tekoa Da Silva









Opportunity



























Tourism















Cost of Living










Services




Additional Items











Thanks

Tekoa Da Silva





Avoid Aspartame










Disclaimer
















Loose Ends










Loose Ends


Junior Miners (20)

ReturnFrom


Weighted







Loose Ends


Junior Miners (20)

ReturnFrom


Weighted



















































NYEGDXJ

NYEGLDX





















Tekoa Da Silva









Opportunity



























Tourism















Cost of Living










Services




Additional Items











Thanks

Tekoa Da Silva





Avoid Aspartame










Disclaimer



























































NYEGDXJ

NYEGLDX





















Tekoa Da Silva









Opportunity



























Tourism















Cost of Living










Services




Additional Items











Thanks

Tekoa Da Silva





Avoid Aspartame










Disclaimer































Tekoa Da Silva









Opportunity



























Tourism















Cost of Living










Services




Additional Items











Thanks

Tekoa Da Silva





Avoid Aspartame










Disclaimer




















Opportunity



























Tourism















Cost of Living










Services




Additional Items











Thanks

Tekoa Da Silva





Avoid Aspartame










Disclaimer


































Tourism















Cost of Living










Services




Additional Items











Thanks

Tekoa Da Silva





Avoid Aspartame










Disclaimer

























Cost of Living










Services




Additional Items











Thanks

Tekoa Da Silva





Avoid Aspartame










Disclaimer
















Services




Additional Items











Thanks

Tekoa Da Silva





Avoid Aspartame










Disclaimer
















Thanks

Tekoa Da Silva





Avoid Aspartame










Disclaimer















Avoid Aspartame










Disclaimer














Disclaimer












march 2012 issue of tdv · the case of the ousted president of tunisia is typical: the wife of...

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