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Obama’s Surprise Revolution

Staff Interview with Independent Living Founder

Lee Bellinger

Lee, so what’s really going on with energy?The sudden reintroduction of cheap, affordable gasoline for the masses. It’s not going away anytime soon. On Barack Obama’s watch, new sideways drilling technology has vastly increased the potential world oil reserve. So the Hub-bard’s Peak theory of drillable oil reserves collapsing is best renamed as a mountain on the dark side of the moon. America is suddenly energy independent.

Look around Lee. Why aren’t people happy about this?It hasn’t sunk in yet. And in the short term lots of oxen are getting gored by this unexpected sea change.

For Republicans, it’s hard to accept that energy independence happened under Obama. It’s a technological triumph that Obama hates. Both the left and the right

Independent LivingPrudent strategies for greater self-reliance, freedom, and wealth!

Volume 10, Issue 12 December 2015

Spare-Time Businesses You Can Start NowEnjoy Lucrative Tax Breaks and Greater Independence

By Seth Van Brocklin

4Go beyond financial investments – here’s how to bring more cash into your home.

4Micro-business opportunities are the way forward – see why here.

One of the keys to being financially resilient in the years ahead may be having your own business. Not necessarily something you do full-time as a primary income source. But something you can do in your spare time or in retirement, and ramp up or ramp down as your lifestyle needs dictate. This is what I refer to as a spare-time business.

A spare-time business is something you can establish without nec-essarily committing the time or capital expenditure associated with a traditional start-up enterprise. It’s something you can do with limited resources and without incurring huge risks. But by being in business, you’ll become eligible for lucrative tax write-offs that aren’t available to employees or passive income earners.

When you work for wages, the government automatically takes a big bite out of every paycheck. You’re forced to pay for your food, transportation, clothing, and entertainment with after-tax dollars. When you’re in business, you have more control over how much in taxes you pay, and when.

You deduct all business-related expenses and pay taxes only on the actual net income (profit) your business generates. If your business

See Spare-Time Businesses, next pageSee Obama’s Surprise Revolution, page 17

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Inside This IssueBeat the Market by Buying Stocks and Bonds BELOW Market Value . . . . . . . . . . . . . . . . . . . 4Nanny State Tactics: First “Smart Meters,” Now This?! . . . . . . . . . . . . . . . . . . 5Whoa, Canada! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Compulsive Hoarding vs. Sensible Stockpiling . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Ask Lee Now: Answering Readers’ Questions . . . . . . . . . 8Official Investigation Finds U.S. Banks Unsound . . . . . 12What a Cyber Attack Means to You and How to Survive It . . . . . . . . . . . . . . . . . . . . . 13Luggage Locks Now Rendered Nearly Useless . . . . . . . 15Whole Milk Findings Expose New Hole in Official Nutritional Guidelines . . . . . . . . . . 16

Independent Living2 December 2015

Independent Living • $139/12 issues • 377 Rubin Center Drive • Suite 203 • Fort Mill, SC 29708

generates losses, then you can use those losses to offset other forms of income.

First, Make Sure You Have a Business Mindset Needed for This Great Option

With that said, going into business isn’t for everyone. Most small businesses fail. They eat up too much capital or take on too much debt and fail to manage risk properly. You can reduce your risk of losing money by focusing on low-risk business models with minimal capital invest-ment required.

Even then, not everyone is well-suited for entrepreneurship. It takes a certain type of self-starter who is independent but open-minded, confident but careful, ambitious but realistic. If you possess these traits or are willing to work to develop them, then you may have what it takes.

A Hobby-Based Business Can Change Your Financial Outlook Fast

If you have no clue about what kind of business to start, then start with what you know and what you enjoy doing. Turn a hobby into a business by finding some way to provide value to people who are involved in your hobby.

It can be fishing, photography, model trains, stamp collecting, or anything else. If you’ve acquired skills or expertise, why not try to market them?

It’s important to keep in mind that while a hobby can be the basis of a business, they are very different categories of pursuit. You are in business to make money. So never treat your business like a hobby. If you do, you’ll likely make poor decisions from a business standpoint. And you’ll risk losing your business tax deductions.

The IRS doesn’t allow hobby expenses to be deducted.

It expects you to have a bona fide profit motive and operate in a businesslike manner.

Freelancing Opportunities For Businesses You Never Dreamed Of

It’s never been easier to offer your services as a freelancer. Whether you’re a handyman or a writer or a consultant, you can make a business out of doing gigs in your spare time. You can market your services to individuals or businesses. Increasingly, businesses prefer to deal with independent contractors whenever possible to avoid the regulatory hassles and costs of taking on new employees.

You can list yourself as a freelancer on web sites such as Elance/Upwork, TaskRabbit, Guru, Angie’s List, and Home Advisor. On the flip side, if you’re looking for some help with projects for your business but don’t

want to hire employees, you can hire a freelancer! (Beware of scammers who post flyers and ads on sites such as Craigslist.)

To be safe, only work with contractors who have verifiable track records.

Real Opportunities in Real Estate Can Put Your Broker to Shame

Businesses involving real estate transactions, manage-ment, or rentals are often well-suited to a spare-time commitment. It’s easy to get into real estate since it requires no specialized training or skills and can be financed on much better terms than a small business loan. It’s also easy to get in over your head.

Real estate business models range from safe and steady to highly speculative. You might, for example, be able to get into business by renting out your already furnished basement. In such a case, you would start enjoying immediate cash flow with no additional mortgage or capital investment required.

Your only risk is that the tenant trashes the place – but

Spare-Time Businesses continued from previous page

Independent Living (ISSN 1943-1686) (USPS 24-808) is published monthly by American Lantern Press, Inc. Known office of publication is 377 Rubin Center Drive, Suite 203, Fort Mill, SC 29708. Periodicals postage paid at Fort Mill, SC, and other mailing offices. POSTMASTER: Send address changes to Independent Living, P.O. Box 1240, Clover, SC 29710-4240.Editor, Lee BellingerKenneth F. Fairleigh Operations Center377 Rubin Center Drive, Suite 203, Fort Mill, SC 297081-803-802-1344 • Fax 1-803-802-1349 • [email protected]

Contributing Editors, Seth Van Brocklin & Heather RobsonToll-free customer service 1-877-371-1807

Visit www.IndependentLivingNews.comCopyright 2015 by American Lantern Press, Inc.

All rights reserved.

Continued on next page

Become eligible for lucrative tax write-offs.

Independent LivingDecember 2015 3


your homeowner’s insurance and the tenant’s renters insurance can minimize your potential financial losses.

In order to expand your rental property business, you’ll want to acquire additional homes or apartments. Focus only on established or growing neighborhoods where the rental market is tight. You’ll be better off targeting families, who tend to stay put, rather than singles or college kids who are likely to move out at the end of a 1-year lease (or sooner).

Yes, House Flipping Can Still Work.Investing in income properties isn’t a way to get rich quick. Speculating on properties you can turn around and sell for a profit (“flip”) is a way to generate profits quickly. Or lose your shirt just as quickly.

House flippers acquired a bad reputation after the housing market melted down in 2007 and 2008. They became emblematic of the greed-fueled speculation that drove house and condo values to unsustainable heights. But they didn’t cause the housing bubble. Ultra-low interest rates, irresponsible lending, and government incentives to put people into homes they couldn’t afford caused the crisis.

House flippers actually serve a useful purpose in the market. They buy ugly houses that would otherwise be hard to sell to actual owner-occupants. Flippers invest in improvements and renovations that boost the appeal (and value) of the homes. That’s how they make money – by adding real equity.

What You’re Not Being Told About House Flipping 2.0

If you find a house in a good neighborhood that is structurally sound but cosmetically challenged, that is an ideal candidate for a flip. A house flipper should have some design or handyman skills. Having to hire professionals to do everything will eat into your profit potential.

Much can go wrong during a house flip. Even if you do everything right, a sudden downturn in the local market could send your flip underwater.

Easy as 1-2-3: Set Up a Home Office, Use It for Business, Deduct Your Expenses

The home office deduction is one of the most lucrative tax breaks available to home-based businesses. Even part-time home businesses can be eligible for the deduction (if they meet certain criteria).

Even if you don’t have a separate dedicated office in your home, you can still claim a partial home office deduction. If, for example, you have a desk, a bookshelf, and a filing cabinet in your bedroom that you use exclusively for business, then compute the total area your work space takes up as a percentage of your home or apartment’s total square footage.

How much time do you need to spend at your home office in order to be able to claim the deduction? Actu-ally, there’s no particular time requirement. You don’t need to operate a full-time business or put in 40 hours a week in order to have a bona-fide home office.

However, the IRS says your home office must be a “principal place of business.” That means that if you do the bulk of your business outside your home office, most or all of your home office deduction could be thrown out. You should do at least half of your busi-ness out of the home office and be able to demonstrate that the home office is integral to the work you do.

Ins and Outs of Claiming the Home Office Deduction

As long as all your numbers add up (this is where accountants come in handy), you probably won’t be flagged for an IRS audit. It’s true that the self-employed in general are more likely than wage earners to be audited. But rarely is anyone audited solely on the basis of having claimed a home office deduction.

Many home-based business owners foolishly avoid claiming the home office deduction because they fear the IRS. If your deduction is legitimate and you can back it up, then by all means take it!

The key limitation on the deduction is that you cannot use it to create or deepen a business loss. In other words, your business must be generating net income. However, you can carry forward the unusable deduc-tion to future years when you have ample profits.

Spare-Time Businesses continued from previous page

Rental Properties House FlippingRisk: Moderate Risk: High

Profit Potential: Moderate Profit Potential: High

Up-front costs: Varies Up-front costs: High



Beat the Market by Buying Stocks and Bonds BELOW Market Value

Equity analysts can render opinions about a stock being overvalued or undervalued. But stocks don’t necessarily trade at prices analysts think are fair

value. They trade at the market price. Market makers set a bid and an ask, and you can’t buy securities at a discount to what sellers are willing to accept.

Unless you buy a basket of securities in a closed-end fund. Closed-end funds can trade at a premium or discount to the market value of their underlying assets. For example, a closed-end fund that holds a portfolio of stocks worth $500 million might trade for $400 million – a 20% discount.

Yes, it is possible to find funds that trade at discounts that high. When you buy shares in the fund, you effectively get to buy its underlying holdings at a 20% discount. You get more bang for your buck in terms of any income distributions. (Closed-end funds may hold stocks, bonds, real estate investment trusts, master limited partnerships, or other assets). And if the fund liquidates or starts trading on par with its net asset value, then you stand to reap the appreciation.

The following table shows the ten closed-end funds trading at the deepest discounts, as of this writing. We excluded any funds with market capitalizations of less than $100 million.

Closed-end

funds purchased at opportune times – ideally when they’re trading at an unusually large discount – give you superior risk/reward characteristics compared to other ways of investing. Yet virtually nobody on Wall Street talks about how ordinary investors can exploit the opportunities in closed-end funds. You never hear CNBC talk about them. Perhaps that’s because closed-end funds are dwarfed by mutual funds, ETFs, and hedge funds in terms of total size.

Investing in closed-end funds requires a bit more due diligence than investing in ordinary index funds. Some closed-end instruments specialize in obscure asset classes. Others may employ leverage or other higher-risk strategies. And just as some trade at enticing discounts, others trade at unjustifiable premiums.

Only when a closed-end fund’s portfolio construction and management style squares with your investing objectives should you consider owning it. You may find that a closed-end fund that trades at a discount meets your objectives just as well as a similar product that doesn’t.

Investing Ideas

10 Biggest Closed-End DiscountsFund Discount Market Cap (Million)

Boulder Growth & Income (BIF) -21.3% $821

RMR Real Estate Income Fund (RIF) -20.2% $140

MS China A Share (CAF) -20.0% $556

Advent Claymore Convertible Securities (AGC) -18.7% $180

Central Securities Corporation (CET) -18.3% $468

LeggMason BW Global Income (BWG) -18.2% $252

Western Asset Emerging Markets Income (EMD) -17.9% $283

Alpine Global Premier Property (AWP) -17.9% $500

LMP Capital & Income (SCD) -17.9% $225

GAMCO Natural Resources Income (GNT) -17.9% $119



Nanny State Tactics: First “Smart Meters,” Now This?!

By Roger King, Independent Living News

We’ve been neck deep in new research here at Independent Living, and I wanted to share just a glimpse of it with you…

As you probably know, we’ve been warning of “Smart Meters” for years now.

In fact, long before the mainstream media picked up on the Smart Meters story, we were warning that they were the perfect nanny state tool to monitor and control your power usage. Often sold on the promise of “energy efficiency,” and better power usage, they are an unequivocal tool for control.

With a so-called Smart Meter, bureaucrats in Washington and their cohorts and cronies in your local utility company can keep watch over your power usage.

The moment your power usage goes outside of “accept-able use ranges” they can just tell your meter to stop giving you so much electricity.

Blackouts Can Now Be Aimed At YouHouse by house, the nanny state can force compliance on you through brown-outs and blackouts, no matter if your bill is kept current or not.That’s the power they have over our power.

We’ve been warning of this for YEARS – Lee was among the first to really beat this drum for all indepen-dent-minded and freedom-loving Americans to hear.

But now the next phase is coming…

And I warn you…

It gets worse!

Maybe they haven’t gotten the picture. This isn’t power that we want to hand over to the state, or the monopoly utility companies that they’re working with, hand-in-hand. After all, check out these recent headlines…

“More than anticipated opt out of BGE smart meters…” – The Baltimore Sun

“Opponents of PSO smart meters want program

halted” and “Smart meters also contentious in other states.” – Tulsa World News

“Smart meter debate goes back to Maine supreme court” – The Associated Press

There are a whole lot of objections out there to Smart Meter technology. The least of which is the amount of control they hand over to central planners hell-bent on forcing compliance. They want to stifle our access to cheap, reliable, sustainable power sources.

Smart Meters were just Phase 1. Now all the talk is about “Smart Appliances.”

The PR campaign started with the Nest Thermostat. This Silicon Valley darling keeps tabs on you. It watches your comings and goings. And it adjusts your house temperature to what it thinks you’ll like best.

To do this, it’s running sophisticated software, and connected to the internet.

It – in conjunction with your Smart Meter – provides a perfect toolset to force reduction of your energy usage.

See This Sneaky TacticAnd yet, it’s just the beginning. It may be optional (like Smart Meters were at first) but it paves the way for all sorts of so-called “Smart” appliances and other technology in the home. Smart Lighting. Smart Kitchens. Smart this and smart that.

They must think we’re dumb.

Every single smart appliance we install in our homes – by choice or by coercion – gives them one more access point into our homes. Into our private lives.

And what we’re going to see going forward is that they’re sneaking these in without us knowing it.

We recently got some feedback from a reader about his “Smart” wood pellet stove…

A pellet stove is a simple device. Simple fans to move air. A simple motor to feed the pellets into the firebox. A heating coil to ignite the pellets.

See Nanny State Tactics, page 20



Independent LIvIng is designed to provide the opinions and findings of its contributing writers. these findings are based on research, experience, and analysis of the subject matter covered. sources for information are believed reliable, but absolute accuracy cannot be guaranteed. this information is not provided for purposes of rendering financial, legal, accounting, or other professional advice. it is intended purely for educational purposes. the authors and publisher disclaim any responsibility for a liability or loss incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein. because the united states currently functions under an evolutionary system, the reader bears the burden of ensuring that the principle or law stated in this work is current and binding at the time of an intended use or application. caution: the law in this country is subject to change arbitrarily and without prior notice.

Whoa, Canada!President Obama’s rejection of the Keystone XL pipe-line serves as the latest blow to Canada’s energy-based economy. Low commodity prices have dragged down the Canadian dollar and stock market over the past year, and the recent election of a leftist government isn’t likely to inspire renewed investor enthusiasm for Canadian equities.

Nevertheless, Canada now offers some of the best stock market bargains in the world. Most of the top junior mining stocks trade in Canada (on the TSX Venture), and they’re trading down more than 80% below their highs of a few years ago.

Canadian energy companies used to gush out huge yields. Some still do, but many have been forced to cut or eliminate their dividends as share prices have plum-meted.

The Guggenheim Canadian Energy Income (ENY) exchange-traded fund holds oil and gas companies that pay (or aim to pay) income distributions. However, this instrument is no longer suitable for most investors, in our opinion. Assets in the fund have dropped below $30 million. That raises liquidity concerns and the risk that Guggenheim will eventually shut it down.

If you want to focus on Canadian energy income, you may be better off assembling a portfolio of your own. Another way to gain exposure to Canada’s energy sector is simply to own the Canada ETF – iShares

MSCI Canada (EWC). It dedicates 20% of its portfolio to the energy sector. And with $1.9 billion in assets, EWC has ample liquidity.

Canadian stocks trade at a valuation discount to the U.S. So U.S. investors who are looking for beaten-down value close to home should consider the opportunities available north of the border.

The Economics and Eco-Politics of Oil

Canada’s energy sector doesn’t ultimately depend on the Keystone pipeline. Low oil and gas prices gave the Obama administration the luxury of indulging in boutique environmental issues as an excuse to kill the project. President Obama’s rationale for cancelling a pipeline – that it would contribute to “climate change” – is absurd.

Oil from the Canadian tar sands will make its way to the U.S. and other export markets through rail and other existing pipelines. The question is whether the oil sands and other high-cost energy projects can return to profitability. And the

answer is that they will when oil prices start rising back into the $80 area.

That may not happen soon enough for some energy companies. But it will happen eventually as U.S. shale production peaks. If you think oil prices are now at least somewhere near a floor, then Canada is a buy.

05 06 07 08 09 10 11 12 13 14 15

12.5

15.0

17.5

20.0

22.5

25.027.530.032.5

© StockCharts.com19-Nov-2015 11:49 amEWC Canada iShares NYSE + BATS

Last 23.37 Chg +0.79 (+3.50%)

If you still like Canada this works well.

Canada now offers some of the best stock market bargains in the world.



Prepper’s Corner

Compulsive Hoarding vs. Sensible StockpilingYou probably know, or at one time knew, someone who could be described as a “hoarder.” These are people who compul-sively accumulate things they don’t need and refuse to get rid

of any of the useless odds and ends that clutter up their home.

A hoarder, in this sense, isn’t stockpiling in order to become more financially secure or resilient to disas-ters. This type of hoarder is stockpiling the wrong things for the wrong reasons.

Building stockpiles of essential items in a neat, orga-nized, and systematic manner is the opposite behavior of a compulsive hoarder. Some may view stockpiling as eccentric. But that implies that living paycheck to paycheck and putting 100% faith in just-in-time inventory is “normal.”

In reality, it makes rational economic sense to stockpile necessary items that could become scarce or a lot more expensive in the future.

This Major Online Retailer Is Big Into PreppingThe online mega-retailer Overstock.com recently dis-closed that it has accumulated $10 million in gold and silver coins, along with three months’ worth of food for every employee. Overstock CEO Patrick Byrne made a conscious decision to prepare his company for a worst-case scenario.

In the event that the banking system collapses or the dollar hyper-inflates, he’ll be able to buy inventory and pay employees using precious metals. In the event that a disaster disrupts food supplies, his food stockpiles will ensure his workers don’t go home hungry.

Cyber terrorism expert Ted Koppel (see page 14) is stockpiling freeze-dried food for himself and his family.

Non-perishable food, bottled water, household essentials, gold and silver coins, and guns and ammo are the sorts of items worth accumulating in sufficient quantities to survive a prolonged emergency.

MREs Are Handy… Before They Go BadYou just want to be careful with food items to avoid letting them go bad. Some amateur preppers buy huge quantities of “survival” foods such as pre-packaged Meals Ready to Eat (MREs). The problem is that most MREs have only about a 5-year shelf life – and that’s assuming they are stored in a cool place.

Some types of canned foods last longer. Raw grains, meanwhile, can last decades if stored in air-tight containers.

Adding some MREs to your food stocks isn’t a bad idea.

There’s just no reason to overdo it.

Be sure to diversify your food stocks among different types of foods. To avoid having to throw anything out, you can consume some of your stored food every year (or donate it to charity). And replace what you consume with fresh new inventory.

Basic Preparedness Checklist

A three-month food reserve (per family member) on hand.

Backup sources for heating, cooking, and light.

A water storage system or method(s) to purify water.

A fuel-storage system.

A bug-out bag already gathered together in case you must leave your house suddenly in an emergency.

A minimum 30-day back-up supply of all your medications.

Cyber terrorism expert Ted Koppel is stockpiling freeze-dried food for himself and his family.



Managing Parkinson’s Under ObamacareStephen C. writes: I now have Parkinson’s. There are some new therapies which could help considerably. One special one is FMT (Fecal Microbiota Transplant), a procedure in which fecal matter, or stool, is collected from a tested donor, mixed with saline or other solution, strained.

The sad part of Parkinson’s, I will need a care taker. Where do I find one?

Lee responds: Parkinson’s disease can be debilitating over time. However, there are some things you can do to fight back against the encroaching symptoms. Getting adequate exercise is key. A physical therapist who works with Parkinson’s patients can help implement an appropriate exercise regimen based on your age and current physical abilities. As for fecal transplants, they do show some promise – though they are not yet widely accepted as treatment for Parkinson’s disease.

It’s a good idea to begin planning for your professional care needs before you reach a point when managing your condition becomes overwhelming. Look into in-home care services provided by registered nurses or therapists. Your doctor may be able to point you to some reputable local providers.

About Portable Emergency HousingJim Hensley writes: I read with interest your article on RVs as emergency housing. I’ve talked this up all along and even used my gas refrigerator in times when the power was off.

I’ve been associated with the RV industry for about 45 years. You mainly talked about motorized RVs. The more practical RV is the travel trailer that cost a lot less to purchase and maintain. You don’t have to take your house to the store. A lot of people already have a vehicle suitable for towing.

I invented a NO SWAY towing system for travel trailers. Google the Jim Hitch Story to check it out.

Lee responds: You are right in noting that a detached travel trailer RV (also known as a “fifth wheel”) has some practical advantages over a motorized coach. The main advantage of a fifth wheel is that it gives you more versatility. You can park it and go into town with just your pickup truck. Or you can hitch it up and take it along like a true motor home.

The main disadvantage is that the driver (and any passenger in the hauling truck) is physically detached from the RV and any passengers inside of it. Also, if you’re looking for a super-large, super high-end RV, you’ll probably find that the best equipped ones are the fully integrated coaches.

Ask Lee Now: Answering Readers’ QuestionsWe love to hear from readers! Please email your question or comment to Independent Living editor Lee

Bellinger ([email protected]). Please include your name and home state. You may also reach us via postal mail (P.O. Box 1240; Clover, SC 29710-4240).




Overcome These “Dumb” Ideas When Converting to a Roth IRAObed S. writes: In the August issue, Mr. Van Brocklin quoted Will Howard as saying that converting a traditional IRA to a Roth IRA is a dumb idea in most cases. This over simplified advice is a disservice to your readers. Over the years I have converted gradually my IRAs to Roths. Now that I am retired, I am very happy that I did. The conversions accomplished several goals.

1. I paid the taxes that I would eventually pay anyway, at a known rate. I limited each year’s conversions to ensure that the additional income would not kick me up to a higher bracket.

2. I avoid the RMDs on Traditional IRAs. 3. All gains in my accounts are now tax-free.

4. I have reduced the odious income taxes on my Social Security income, because so much of my investment income is tax-free, which lowers my “Provisional Income” calculation.

Mr. Howard’s “tip” is “dumb”, and you should know better than to print such misleading advice.

Seth Van Brocklin responds: I don’t deny that converting to a Roth could work out for the better. But there are potential downsides as well.

It’s not matter of an IRA conversion being objectively right or wrong. It’s a matter of making a prudent decision in the context of not being able to predict your future life circumstances, including your post-retirement tax bracket. The truth is, none of us can know with certainty what our financial situations will be like years down the road – let alone what tax rates will apply or what new rules Congress (or a future President who rules by executive order) may enact with respect to Roth IRAs.

Even assuming the government keeps its hands off Roth IRAs, converting to a Roth is still a roll of the dice. For many people, converting to a Roth (and taking an immediate tax hit) won’t work out for the better. They’ll never reap enough benefits from future tax-free withdrawals to outweigh the up-front tax cost. And frankly, most people won’t plan out their conversions and distributions as carefully as you have.

Everyone is free to have their own opinion. In mine, the decision to convert requires the burden of proof, because that’s the decision that will result in an immediate, unforced transfer of wealth to Uncle Sam. Remember that every dollar you pay in taxes today is money that could have been invested. So that lost opportunity for growth has to be factored in to your decision.

I don’t second guess yours, as you’ve obviously put a great deal of thought into it. If your IRA conversion ultimately results in a lower overall tax drain from your retirement assets, then you will have made the right call.

Mirror, Mirror to Hide Your Buried ValuablesCharlene Q. writes: Some time ago, Lee mentioned in the newsletter that it might be helpful to use a mirror when burying something, but he did not elaborate. What is the benefit of doing so?

Continued from previous page




Lee responds: When you cache a stash of valuables (such as gold and silver coins) in the ground, they can potentially be located by anyone with a metal detector. The idea behind burying a mirror in the ground on top of your contents is to deflect or confuse metal detectors. A mirror won’t make your buried treasure completely invisible to detection, but it might make it somewhat less visible.

Burying old metal pipes or construction rubbish above and around your valuables is another way to thwart treasure hunters – in this strategy, by inundating them with false positives. Anyone who digs up an old piece of piping will be disappointed, assume all the hits in the area are from old construction debris, and move on. The deeper you bury your valuables in the ground, the less likely they are to be detected or dug up by a thief.

Take This Picture Before You DieTom W. writes: I keep records of where items are hidden so that, in my absence (dead), someone else can retrieve them before the house is sold. One way is to photograph the location (without indicating the contents) & add a paper print to a file of instructions for heirs, etc. It will serve as a reminder to them.

Lee responds: That’s a good idea. There are other reasons to obtain photographic (or video) evidence of your home’s features and the possessions you keep inside it. In the event that you need to file a police report for theft or an insurance claim for stolen or destroyed property, you may need to provide evidence to back up your claim. You may also need evidence of your home’s condition or the existence of something(s) inside your home in the event that you are initiating a lawsuit (against a remodeling contractor, for example) or defending yourself against one.

When Your Questions Get Scary!Alex J. writes: Which of the presidential candidates come closest to advocating sound money policies?

Lee responds: Most of the candidates on the GOP side have criticized the Federal Reserve’s loose monetary policies. Donald Trump accused Fed chair Janet Yellen of playing politics with the money supply. She seems to have a vested interest in protecting Obama and the Democrats, at least until after next year’s election.

Ben Carson has talked about reintroducing gold into the monetary system. But Senator Ted Cruz has been most vocal about tying the dollar back to a gold basis. He and Senator Rand Paul are leading the fight in the Senate to audit the Fed. Paul and Cruz have the most credible track records when it comes to fighting for sound money policies. I am encouraged that other candidates are now also moving in that direction, at least rhetorically.

Your Problems Boil Down to ThisKim W. writes: Not being sarcastic when asking this question. But what happens if we’re in a crisis & don’t have access to boiling water?

Lee responds: It’s a question that deserves a sincere answer! There are many ways to ensure that you and your family have access to clean drinking water. Most water sources can be purified through filtering it and/or adding sterilizing chemicals.

Water purification tablets can be bought at stores that sell camping gear. You’ll probably see





purification tablets based on chlorine compounds. Others are based on iodine (the iodine tablets don’t taste very good but do a fine job of killing parasites and germs). In a pinch you can use a few drops of liquid iodine or chlorine bleach to purify water.

Finally, a device called SteriPEN is useful to have around in case of an emergency. The SteriPEN employs ultra-violet light to kill any microbes in a small container of water.

Full Obamacare Implementation Looms – Watch Out for ThisN. Sween writes: Lee, do you have any indication when the Obamacare employer mandate is likely to be implemented and what the results of such action might be? My recollection is that the White House postponed the implementation of the mandate in mid-2014, most likely for political reasons. At the time, some pundits were suggesting that the implementation would have caused 60 to 90 million policy holders to lose their coverage. Your thoughts please.

Lee responds: The mandate on employers to offer health insurance plans to workers is now being implemented. As of this year, businesses that employ more than 100 full-time workers must provide government-approved health coverage for 70% of their employees.

Starting next year, the mandate gets more stringent and more expansive. The government will require large businesses to cover 95% of their employees. And for the first time small businesses that employ between 50 and 99 people will also be subject to the mandate. They will be required to file new tax forms along with the names and Social Security numbers of all employees and their dependents detailing the coverage being provided.

This has the potential to be devastating to small businesses that lack the financial resources and bureaucratic staff needed to comply with Obamacare mandates.

Small businesses that are able to cope with the Obamacare mandate will pass the compliance costs onto customers. Some businesses are already implementing Obamacare surcharges.

Another Obamacare disaster that is coming down the pike is the collapse of the government-subsidized healthcare co-ops put into place by the Affordable Care Act. As of this writing, 12 of Obamacare’s 23 health cooperatives have shut down, with most of the ones that remain operating at losses. Taxpayers are now on the hook for a bill of at least $1.2 billion to bail them out.

If you’re in an existing insurance co-op, be prepared for double-digit premium increases in 2016. Similar increases will be seen in some conventional individual policies. Health insurers have so far managed to keep costs in check only by selling policies with deductibles so high that many people can’t even afford to use the insurance they’ve paid for.

Under Obamacare, the healthy and responsible pay inflated premiums to subsidize the sick and irresponsible. If you’re going to be stuck paying high premiums for a health plan that does you little good, you might consider dropping your coverage completely in 2016. Obviously, that’s a risky approach and one that could subject you to a tax penalty. But it may make financial sense for some people.


“Ask Lee Now” is presented for general educational purposes only. Because we don’t know enough about readers’ personal situations, the opinions expressed here should not be construed as a recommendation to buy or sell any financial instrument at any time. We will not be responsible for financial decisions that readers make, and they should be made in consultation with their own advisers.



Official Investigation Finds U.S. Banks UnsoundBy Simon Black

In November, a consortium of financial regulators in the United States, including the Federal Reserve and the FDIC, issued an astonish-ing condemnation of the

U.S. banking system. Most notably, they highlighted “continuing gaps between industry practices and the expectations for safe and sound banking.”

This is part of an annual report they publish called the Shared National Credit Review. And in this year’s report, they identified a huge jump in risky loans due to overexposure to weakening oil and gas industries.

Make no mistake; this is not chump change. The total exceeds $3.9 trillion worth of risky loans that U.S. banks made with your money. Given that even the Fed is concerned about this, alarm bells should be ringing.

Bear in mind that, in banking, there are three primary types of risk, at least from the consumer’s perspective.

The first is fraud risk. This ultimately comes down to whether you can trust your bank. Are they stealing from you?

MF Global was once among the largest brokers in the United States. But in 2011 it was found that the firm had stolen funds from customer accounts to cover its own trading losses, before ultimately declaring bankruptcy.

It’s unfortunate to even have to point this out, but risk of fraud in the Western banking system is clearly not zero.

The second key risk is solvency. In other words, does your bank have a positive net worth?

Like any business or individual, banks have assets and liabilities. For banks, their liabilities are customers’ deposits, which the bank is required to repay to customers.

Meanwhile, a bank’s assets are the investments they make with our savings. If these investments go bad, it reduces or even eliminates the bank’s ability to pay us back.

This is precisely what happened in 2008; hundreds of banks became insolvent in the financial crisis as a result of the idiotic bets they’d made with our money.

The third major risk is liquidity risk. In other words, does your bank have sufficient funds on hand when you

want to make a withdrawal or transfer?

Most banks only hold a very small portion of their portfolios in cash or cash equivalents.

I’m not just talking about physical cash, I’m talking about high-quality liquid assets and securities that banks can sell in a heartbeat in order to raise cash and meet their customer needs to transfer and withdraw funds.

For most banks in the West, their amount of cash equiva-lents as a percentage of customer deposits is extremely low, often in the neighborhood of 1-3%. This means that if even a small number of customers suddenly wanted their money back, and especially if they wanted physical cash, banks would completely seize up.

Each of these three risks exists in the banking system today and they are in no way trivial.

Every rational person ought to have a plan B to hedge these risks. And I would propose three methods:

1) Transfer a portion of your funds to a much safer, stronger banking jurisdiction, preferably one with zero net debt.

2) Hold physical cash. Physical cash serves as a great short-term hedge against all three risks, with the added benefit that there’s no exchange rate risk. All you have to do is go to your nearest ATM machine, take out a small amount at a time and build up a small pool of cash savings.

3) Hold gold and silver. While physical cash is a great short-term hedge against risk in the banking system, gold and silver are excellent hedges against long-term risks in the monetary system and global financial system as a whole.

There may be a time where we are faced with the con-sequences not only of a poor banking system, but also of decades of wanton debt and monetary expansion. At that point, the only thing that will make any sense at all is direct ownership of real assets.

Guest Commentary

Editor’s note: Guest commentator Simon Black is The Sovereign Man (www.sovereignman.com). His publications are highly recommended for those who wish to consider expatriating or getting a second Passport. To get started, go to his web site and sign up for his informative emails.



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What a Cyber Attack Means to You and How to Survive It

By Seth Van Brocklin

What is the greatest threat to national security? Some experts believe it is cyber warfare – whether waged by terrorists,

government-sponsored hackers, or militaries. A cyber-attack has the potential to disable communication systems, knock out the power grid, and send cities into chaos.

That’s the message of a new book by veteran journalist Ted Koppel called Lights Out: A Cyberattack, A Nation Unprepared, Surviving the Aftermath. Koppel begins by painting a picture of a hypothetical doomsday scenario in which the power is out, grocery store shelves are quickly emptying, and millions of unprepared people are panicking.

“The assumption that the city, the state, or even the federal government has the plans and the wherewithal to handle this particular crisis is being replaced by the terrible sense that people are increasingly on their own,” Koppel writes.

Of course, most people will lack the means to be self-reliant. Under the Obama economy, dependency on food stamps and other government programs that provide basic needs is at record highs. Habituated dependency can be deadly in a crisis. You don’t want

to be among the desperate people waiting in lines for rations of emergency provisions. You need to prepare now for a cyber-attack.

Russia, China, North Korea Have Cyber Warfare Capabilities

How likely is the scenario Koppel outlines to play out? More likely than most people imagine. The probabilities of at least some disruptions occurring in some areas of your life due to a cyber-attack are off the charts. Whether it’s a malicious computer virus target-ing the financial system or a physical attack on Internet infrastructure, you need to be Ready for Anything.

Russia recently raised fear levels among some national security experts after Russian submarines and spy ships were found to be positioned near under-sea internet cables. Even in an era of wireless communications, these networks are still ultimately dependent on high-speed fiber-optic cables to carry bandwidth.

According to the New York Times, fiber-optic cables transmit more than 95% of global communications, including $10 trillion in daily global transactions. The economy as we know it would grind to a halt if these

Book Review

See Surviving a Cyber Attack, next page



cables were all disabled or cut.

U.S. intelligence officials believe Russia has deep-sea submarines that are capable of cutting fiber-optic cables, some of which were installed by the U.S. military. The speculation is that Russia wants to be able to shut off U.S. communications or possibly intercept some of the data being transmitted.

It’s speculation. Some of it may be overblown with regard to Russia’s strategic aims. Some in government and the media are all too eager to paint Vladimir Putin as more of an adversary than he actually is or intends to be. The U.S. and the Soviet Union narrowly averted a nuclear war in the last century. A new Cold War with Russia would be extremely dangerous for all involved.

But there’s a very real possibility that geopolitical tensions could escalate with Russia, China, or other dangerous powers.

During the most recent Republican presidential (undercard) debate, Chris Christie vowed, “If the Chinese commit cyber warfare against us, they are going to see cyber warfare like they have never seen before.” The New Jersey governor says he was the victim of a massive electronic data theft by Chinese hackers targeting U.S. government databases.

EMP Bombs Can Disable Our Power Grid At a Stroke

Then there’s the threat of an electro-magnetic pulse (EMP) attack.

In Lights Out, Koppel notes that it would be relatively easy for a nuclear-armed power such as North Korea to take out much of the U.S. electronic infrastruc-ture. All the enemy would have to do is detonate specialized nuclear weapons in the sky, causing electronics-disabling EMPs to spread for hundreds of miles. Top-level CIA sources confirm this, with some suggesting that Russia has shared some of its EMP bomb technology with the North Koreans and Iranians.

Potentially any electronic device you own – including your phone, appliances, and even your car – could be wrecked by an EMP bomb. You can shield devices from electro-magnetic pulses by placing them inside an insulated and sealed metal container (also known as a Faraday cage). It’s a good idea to have Faraday cages

ready in case of a threat – and to use them for storing some of your devices now. That way in the event of a sudden, unexpected EMP event, you’ll still have some functioning devices to access when it’s over.

Your “Attack Surface” VulnerabilitiesOther types of attacks against electronic devices can be carried out over the Internet. Ted Koppel calls Internet-connected devices “attack surfaces,” because they can be targeted directly by hackers and serve as gateways to larger-scale attacks. Among the examples he gives are “smart” thermostats (which are connected to smart meters, which are connected to the power company).

From Lights Out: “The ‘smart’ thermostat that automati-cally lowers the temperature in a customer’s home at night or warms his kitchen before he gets up in the morning has to be connected to the company’s billing department, which in turn needs to be connected to whatever department actually conveys electricity to the home. Each connection provides another potential attack surface.”

Anything that connects to the Internet can be hacked, even if you think the connection is secure. Nothing that connects to the Internet – whether it’s a computer or a “smart” toothbrush – should be regarded as innocuous. They are all potential attack surfaces and privacy violators. If you want to minimize your risk, then minimize the number of Internet-connected devices in your home. And physically disable your Internet connection when you’re not using it.

The Practical Utility of PreparingKoppel’s book offers other practical steps people can take to guard against the threats he discusses. He dedicates an entire chapter to “The Mormons,” who are taught to keep a three-month supply of food and water. Mormons also have strong formal social networks (with each ward having an emergency plan in place). Preparedness habits like these are certainly worth emulating.

Prepping isn’t just something to do for a doomsday scenario which may never come to pass. It’s something to do to improve the quality of your life here and now.

As Koppel puts it, “…the overall utility of preparing for hard times, with a rotating larder, participation in a social network, and the establishment of a financial safety net, is eminently adaptable and useful even in the absence of catastrophe.”

Lights Out shouldn’t be mistaken for a how-to manual. Reading it will make you more aware of the

Surviving a Cyber Attack continued from previous page




Luggage Locks Now Rendered Nearly UselessYou already know that when you travel through an airport, you pretty much surrender any expectation of privacy. Your whole body will be scanned, as will any bags you’re carrying.

TSA agents can rifle through the contents of your luggage after it’s been checked, even if you’ve locked your suitcase. You probably knew that, too.

But at least by locking your luggage using a TSA-approved lock, you can keep other unknown and unauthorized persons from opening it at the airport, at your hotel, etc. After all, only TSA agents possess the master keys needed to open them. Right?

Not anymore. Earlier this year, templates for creating TSA master keys spread on the Internet after photos of the keys were posted by a careless journal-ist. Now anyone with a plastic material printer can download the instructions for producing TSA master keys and create a set of identical keys that can open virtually any suitcase.

You can try putting your own padlock on. That may work when you’re not checking luggage through an airport. But when TSA agents encounter padlocks, they just break through them using bolt cutters, which they are authorized to do.

A determined thief, too, could easily break through padlocks and luggage locks. But locks do at least deter casual opportunists and the overly curious.

Shipping Your Bags May Be More Secure Than Checking Them

If you want to be able to lock your luggage and

avoid the possibility of TSA agents going through your personal possessions, then your best option may be to ship your bag(s) in advance of your flight. You can use UPS, FedEx, DHL, or even the Post Office. There are also specialty full-service luggage shipping services such as Luggage Forward (866-416-7447; www.luggageforward.com) and Luggage Free (800-361-6871; www.luggagefree.com).

Shipping a suitcase can be expensive, especially if it’s large and heavy. If you have to overnight ship your luggage, that can cost as much as your airfare. But you can reduce costs dramatically by shipping it at least two to three days ahead of your arrival. With some airlines now charging as much as $40 per bag for checked luggage, shipping a suitcase may be in the same ballpark.

Shipping your bags will save you time and hassle at the airport. It will also prevent TSA agents and airport thieves from going through them.

Property thefts remain a huge problem in airports. According to CNN (September 15, 2015), “A CNN analysis of passenger property loss claims filed with the TSA from 2010 to 2014 shows 30,621 claims of missing valuables, mostly packed in checked luggage.”

CNN also notes that TSA has had to fire more than 500 of its own officers for theft. TSA agents at airports across the country are regularly caught pilfering everything from cash to jewelry to electronic devices. (And many more, presumably, aren’t caught.)

Flyer beware!

Privacy Alert

Surviving a Cyber Attack continued from previous page

threat of cyber terrorism, and it will give you a few sug-gestions on how to prepare. But Ted Koppel seems to see it as his primary mission in this book to help wake up policymakers. He advocates new legislation, new expenditures to make our vulnerable grid system more secure, and more of a recognition among Homeland Security officials as to the cyber threats posed by

foreign governments and malicious hackers.

No piece of legislation and no amount of spending on security will eliminate the cyber threat, of course. When the lights do go out, will you have what you need to survive – and survive comfortably – for days or weeks at a time? If not, then it’s time to get busy preparing…



Whole Milk Findings Expose New Hole in Official Nutritional Guidelines

Skim milk may do your body harm. As Indepen-dent Living reported last December, milk isn’t as healthy as its reputation would suggest. And the milk products long thought to be the healthiest – namely, low-fat and skim milk varieties – may be the least healthy of them all. That’s what the latest research suggests.

In October, scientists reported in the Journal of Nutrition that consumers of whole milk are less likely to suffer from metabolic syndrome (a precursor to heart disease and diabetes). According to the researchers, “Dietary recommendations to avoid full-fat dairy intake are not supported by our findings.”

In other words, the government’s Dietary Guidelines, which have long recommended only low-fat or non-fat dairy products, are misguided.

The Real Skinny on FatsRemoving the natural fats found in milk removes some nutrients in the process. Moreover, low-fat milk contains a higher proportion of carbohydrates. A growing body of research suggests that it’s primar-ily carbs and sugars behind the obesity epidemic. Fats aren’t the main culprits.

As The Guardian (October, 2015) reports, “research has shown that because fat is more satiating, or filling, eating some higher fat foods can lead to lower calorie intake overall.”

The most important dietary decision you will make is not whether you include high-fat foods in your diet. Some fatty foods are fine – in moderation. What matters is how much total calories you take in.

Not all calories are created equal, of course. High-quality calories from fresh fruits and vegetables need to be included in your diet. But if you like butter on your broccoli and whole milk in your cereal, don’t feel guilty about indulging a little bit.

The extreme low-fat diet has been discredited again and again. Yet government health “experts” are so slow to get with the latest research, so resistant to admitting they were wrong, and so bound by group-

think, that it can take years or even decades for them to change the Dietary Guidelines.

Washington Post columnist Peter Whoriskey wrote that the latest findings on whole milk have “under-scored the idea that millions of people might have been healthier had they ignored the government’s advice.”

Unfortunately, it’s true. Since 1975, consumption of whole milk has dropped by 60%. Over that same period, sales of 2% milk, 1% milk, and skim milk have increased between 105% and 170%, according to data from the U.S. Department of Agriculture. Americans went low-fat because they thought it would help them get thin. Instead, their waistlines continued to expand. Because health officials spread the wrong advice.

Are Raw Milk Risks Overblown?The government’s credibility when it comes to raw (unpasteurized) milk is also suspect. The Food and Drug Administration warns, “Raw milk is milk from cows, sheep, or goats that has not been pasteurized to kill harmful bacteria.…raw milk can harbor dangerous microorganisms that can pose serious health risks to you and your family.”

Federal law prohibits the distribution of raw milk across state lines. And 17 states prohibit farms and grocers from selling raw milk to the public.

Advocates of raw milk say it is healthier than the milk that comes from factory-farmed cows that are injected with hormones and antibiotics. Moreover, pasteurization can destroy natural digestive enzymes. Unpasteurized milk from organic farms retains more nutritional properties that may be beneficial to the immune system.

This isn’t an endorsement of raw milk. There are benefits as well as risks you should consider. But ultimately the choice should be yours. Since raw milk is largely an underground market, it can be difficult to get good information on whose raw milk products are safe. In general, if you don’t know where the raw milk came from, then don’t consume it.



have reasons to downplay the triumph of new drilling technology.

It’s harder for foreign policy hard-liners to justify policing the Middle East when we don’t need their oil anymore. Green fanatics can’t stand the thought of American businesses and drivers having access to so much cheap fossil fuel.

Anti-USA regimes with nationalized energy face financial collapse under cheap energy.

Forgive the phrase Lee, but please drill down on all this. Fracking is a process of drilling sideways. In the drilling world, fracking is the equivalent of warp speed versus sub-light impulse drive. Every land-based oilfield in the world that’s depleted is potentially brand new and brimming with newly reachable crude.

Remember this global energy glut is coming but from a tiny fraction of private U.S. lands where sideways drilling is permitted.

Now apply this sideways drilling breakthrough to massive oil fields outside the USA. For example with Mexico’s long-declining Cantrell oil fields alone, you have a massive new bump in the global oil reserve.

It won’t be long before sideways drilling technology works on the entire world’s depleted off-shore oil rigs, too. In essence, world oil reserves are now much larger.

Lee, why did the Saudis step up their production right into the maw of the energy glut?Because they are shrewd and this is their best option under the circumstances. They know the USA has a bit of instability in the energy development sector. Lots of Fed-created cheap money has over-expanded that sector and they know it is a probable bubble (just like student loans).

By pumping even more oil into global markets, the House of Saud creates even more downward price pressures in the U.S. energy sector – the net effect being to derail more investment in sideways drilling technology. They know full well what happens to them once fracking technology spills over to massive sea

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based oil fields and revitalizes their oil flow.

This is a case where dismay, consternation and Obama fatigue is clouding a whole lot of people’s judgements about where energy is. It’s hard for them to politi-cally acknowledge that, despite Obama’s best efforts to create energy shortages that his bureaucrats can manage, in fact America is now swimming in cheap energy.

Lee, cheap gasoline hasn’t translated into stronger consumer spending.Yes, that’s an amazing testimony to how badly the economy is performing. A major reduction in energy prices is like a massive tax cut. But we already know from George W. Bush’s presidency that tax cuts alone don’t work – they have to work in concert with real regulatory restraint, lower government spending and a sound monetary policy.

Even if implemented in moderation (I would like extreme implementation), those four changes would cause the economy to boom.

Who would have thought America would achieve energy independence under Barack Obama?In politics and investing the law of unintended conse-quences rules. The irony isn’t lost on me, but Obama presiding over America’s newfound energy indepen-dence is still a blind spot for many investors. Not that he is pleased with it, mind you. But with ideologues who hate fossil fuel use in power, and with regulators gunning for energy mishaps, energy companies have been forced to operate in a smarter mode.

And they hit oil – lots of it. Yes, sometimes when a company or industry is under political threat they manage to innovate their way out of trouble. I think that’s the case here and the result is plentiful energy. Energy independence for America is not what the greenies intended when they elected Obama.

What other political effects are you looking at from American energy independence?Of course, giants like Exxon-Mobil are far from the dumb, big-box corporations that dominate so much of the bleak corporate landscape. They’ve always been

politically sophisticated in their communications with the public, and in their criticism of the political system.

So much so that energy developing companies are next on the left’s list of private sector pillars to cripple, discredit and ultimately nationalize.

Why is the left so motivated to mess with Exxon and others?The global left got caught off-guard by epic improvements in drilling technology and the plentiful energy era it has introduced. Exxon is under private sector control and the left prefer state owned energy sectors that cannot innovate. Regimes that control all a nation’s energy produc-tion have a built in cash cow.

The explosion of the world’s energy reserves under fracking spells extreme fiscal hardship for petty dictatorships that are hugely financially dependent on their nationalized energy sectors. Oil dependent regimes face a permanent, sudden, disastrous 30-50% drop in state revenue. Ouch for Russia, Venezuela and lots of fake global players.

Russia’s finances are brittle, and, for all their bravado, they are weak and overextended. The sudden loss of energy scarcity to keep their bloated coffers full is a nightmare for them.

Even if left-wing forces in the U.S. could overcome fracking’s popularity and banned it completely, too many other countries can easily fill the gaps now.

The left are frantic to put an end to further energy innovation. Expect attacks on Exxon to escalate. And if the energy giant stumbles in any way, the feds will seize upon it big-time. Nationalization of American energy giants is the left’s next big priority.

Sometimes big market events trump politics, and sideways drilling technology is one of those situations.

What are your conclusions as an investor?I am no longer excited by energy pipeline projects. Energy and precious metals tend to travel together, so low energy prices are a downward pull on metals for now. But I still like gold and silver, and just see this as a buying opportunity as many others do.

And as much as I like Canadian natural resources, it may be awhile before that’s a great place to invest. The


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strength of USA oil reserves has blown up the dollar for now as well.

Cheap oil takes pressure off China to seize oil fields in the South China Sea. This may be bullish for the emerging countries in the region, including Vietnam.

In the meantime some of the oil majors, including Exxon and Chevron, continue to pump out dividend payments to shareholders. Even though earnings are down across the sector, Exxon hiked its dividend this year for the 33rd year in a row. So if you’re an energy investor, you can still find places to get rewarded.

Does cheap energy hurt the stock market?CNBC seems to think so. I don’t.

Cheap energy over time leads to a renaissance in USA-centric manufacturing because it offsets the crushing burden of regulations. That’s certainly a backdoor way to grow an economy. Even a big-government Republican president who merely slows the rate of regulatory imposition could see a pronounced impact on manufacturing.

Yet corporate earnings have begun to disappoint. What’s keeping the stock market propped up? Most stock market growth comes from stock buybacks driven by cheap money to publicly traded companies. It’s not real growth, just a parlor trick. The Fed knows this, but most investors won’t consider that fact.

Were the Fed to eliminate ZIRP [Zero Interest Rate Policy] that would spell the end of cheap stock buybacks by publicly traded companies. I predict that the Fed will be forced to attempt what amounts to negative interest rates to keep the illusion of a growing stock market alive.

Market forces will eventually drive up interest rates in one form or another, but the political system won’t be leading the way.

So if cheap energy is here to stay, what impact does that have on your prediction that the American power grid is dangerously vulnerable?Those are separate issues. The USA power grid is ter-ribly exposed to widespread attack because its ancient

electricity delivery systems are stressed, rickety and subject to super-easy attack. Test attacks in California foreshadow a larger assault against thousands of exposed transformers that are very hard to replace.

Test attacks against the World Trade Center foreshad-owed the 9/11 disaster, much as probing attacks against energy infrastructure foreshadow power grid chaos.

Not to mention the growing probability of a massive electromagnetic pulse attack from Russia, China or other powers taking out half the country’s electricity at a stroke. A recent Congressional Research Service Report said that “Russia has their leading physicists focusing on EMP.”

The evidence for the potential of an overwhelming strike on the power grid is massive. But the political system is far too dysfunctional to take proactive steps to prevent it.

How can they be so stupid?The political system we have is strictly reactive. It is not designed to stop bad things before they happen.

It’s hard to accept when there are so many warning signs, I admit. Take the comment of Vladimir Luken, former Russian Ambassador to the United States:

“If we really wanted to hurt you, we would detonate a nuclear weapon at high altitude above your country…and shut down your entire power grid…without fear of retaliation.”

I think a desperate proxy attack emanating from Russia is a real possibility. Cheap energy has absolutely crushed their nationalized energy industry. That regime is desperate and they may do something really stupid if we are distracted by other major events.

Oil-desperate Japan attacked in 1941 under similar delusions, when even the top Admiral who carried out the attack knew their warlords were leading Japan to catastrophe.

Russia has a history of making aggressive moves when the USA is distracted. In 1956, they moved into Hungary as Eisenhower was distracted by the Suez Canal Crisis. In 1968, when the U.S. was wracked by Vietnam protests, the Soviets rolled into Czechoslova-kia. In 1979, as the U.S. dithered over its Iran hostage crisis, the Kremlin sent forces into Afghanistan.


See Obama’s Surprise Revolution, next page


Lee Bellinger is Editor of Independent Living. A 28-year veteran to newsletter publishing, Bellinger has made it his life mission to help his subscribers protect their freedoms, assets, privacy, wealth, and health from geometrically increasing threats, especially from the federal government and its corporate cronies and other “stakeholders.” A Capitol Hill insider for 30 years, he is a graduate of Hillsdale College in Michigan, worked as an aide to two congressmen, and led a grassroots advocacy group.

You see America as the world’s policeman?No, I prefer armed neutrality in a dangerous world. Heavily armed – with great intelligence and a global power projection capability that is second to none. The global community is akin to a prison culture. The appearance of weakness can actually trigger stupid acts of aggression.

Do you fear the rise of China?No. They are bragging about soft landing a probe on the moon. Seriously? An advanced spacecraft launched by the Western democracies recently overtook a distant comet and soft-landed on its low-gravity surface. A massively complicated 10 year journey using technological sophistication that should give any anti-U.S. power pause. We are stronger and better than we think.

The Chinese are consummate copiers – their last original invention was gunpowder I think.

More seriously, I continue to think that Obama’s passive-aggressive foreign policy could lead to a direct clash with China in the South China Sea. I could see Beijing making some sort of punitive strike on Japanese forces in that region. The threat may have receded though. Since the bottom has fallen out of energy prices, the rich oil fields in the South China Sea may be less alluring to Beijing’s military planners.

You worry about the general lack of preparedness on the part of the people.Yes, that’s why my website offers tons of Do It Yourself videos on how to improve your individual defenses (www.independentlivingnews.com). It’s all yours with my thanks for being an Independent Living reader.


Nanny State Tactics continued from page 5

But when this customer tried to plug in this pellet stove to anything other than a “Smart” power source, it didn’t work. It took some sleuthing, but he discovered it was because of the computer chip snuck inside.

Presumably, there’s nothing in a pellet stove that needs a computer chip, or to connect to the internet to operate.

And yet, there it was. Our reader had no clue prior to this that his pellet stove was a Smart Appliance. But it turns out it’d been snuck in right under his nose.

This will become a more and more common occurrence.

You won’t even realize until it’s too late the amount of “Smart” technology – appliances and otherwise – that you’ve brought into your home.

It’ll be like cars. You can’t work on a new car these days without a computer. If they wanted to shut down your engine while you are driving down the highway, the tech is there.

We’re growing all the more dependent on all this tech and the nanny state that controls and regulates it. They’re making it harder and harder to be independent. To live free of state coercion and control.

You don’t have to stand for it, though.

Not only has our research led to us an under-standing of how big this problem is becoming… It’s also leading us to solutions. To ways that we can take back power from the ever-growing nanny state.

More to come on that front soon.

independent living - amazon s3in order to expand your rental property business, you’ll want to...

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