Today's comment is by David Newman, our long-time Membership Director and new Market Analyst for The Sovereign Society.

I woke up this morning to a loud thud.

No wait a minute, it didn't really sound like a "thud." It was more like an explosion...a nuclear explosion.

Suddenly I remembered what our Investment Director, Eric Roseman said a few months ago just as the markets seemed to be stabilizing and everyone was running back in to buy financial and bank stocks at these "unprecedented lows."

Eric said: "Keep your powder dry...there's another shoe to drop"

Well drop it has...and it fell like a nuclear bomb. The U.S.'s two largest mortgage lenders, Fannie Mae and Freddie Mac have failed (or at least they WOULD have failed, if Paulson and Bernanke had not stepped in with "emergency finances").

In any case, stick a fork in Freddie and Fannie...they're as good as done.

The Great Actors on the Non-Existent Stage

I really have to hand it to our economic leaders...Treasury Secretary Paulson, Ben Bernanke, Congress and most of the CEO's of mortgage and banking companies. They're really, really great actors.

How many times can they get up in front of the public and read from their well-rehearsed scripts with straight faces? How many times can they lie to us? They tell us everything will be all right while they know, and are working on plans to the contrary.

How many CEO's will drive "their" companies into the ground just to receive HUGE pay checks...and then smile into the camera and try to explain why they deserve the money, the country club membership and use of the company plane.

How many times will Treasury Secretary Henry Paulson testify (lie) in front of Congress? (By the way, if you haven't watched this comedy show in a while you really should tune in!)

It's not a little white lie like the ones you told your teachers. This is huge, and it affects so many people's lives in so many ways. Yet they do it time and time again...looking straight into the camera.

These guys really should be allowed to compete for an Oscar...they're a shoe in.

The Congressional delegates on the panel will huff and puff...they'll interrupt the testimony and make believe they're really trying to get to the bottom of this. The media will show sound bites of the harsh words flying back and forth and then we'll get the usual statement

"We're from your government and we're here to help"

Oh please!

What to Do When You're Tired of Waiting for the Truth

So what do we do? Do we shake our heads...wring our hands, complain to anyone who'll listen and then do nothing? Or do we take back some control over our lives.

Politically, I'm really frustrated and don't know how to change the mess we've gotten ourselves into but...

Financially, I do have a solution and can help.

First, stop listening to Paulson. Bernanke immediately, all the Congressmen and most of the CEO's out there.

If their lips are moving...they're lying.

Second, stop listening to most of the talking heads on the financial TV shows. Talk about double speak. I've never heard so much hedging in my life. "I said to buy it...I said to sell it...I told you this was the top...I was the first to call them bottom."

Amazing how they're never wrong.

Third, re-assess your investments. In this market, you really need to be careful. I've spent over 25 years in the investment industry. I've been a broker and an investor and 3 things I've learned over the years are: Take a deep breath, remind yourself of your longer term goals, and adjust your portfolio accordingly.

Are you diversified? Have you re-balanced? Do you really know what the heck you're invested in?

If You Want Protection, Start With Your Serious Money

Let me help. Let's talk about your serious money for a moment. Your retirement money...that IRA that constitutes the bulk of your savings. What are your plans for it? How do you plan to keep it growing faster than you'll spend it?

Have you given it much serious thought lately? Not just some cursory quick pop into and out of your head. "Boy I really need to make sure I have enough money to retire on." Have you made some real adjustments?

For starters, have you packed a few gold plays around your usual stocks, bonds and mutual funds in your IRA? Gold is the one safe haven commodity that will keep going higher during this market misery — particularly when Bernanke and Paulson are chartering about their "strong dollar policies." (By the way, that's double-speak for "Oh no, the dollar is falling again — but if we say this, maybe no one will notice.")

As I said, Eric Roseman called this market turmoil back in February. And in case you don't know it, Eric is also the original gold-bug. As he said in his latest issue of Commodity Trend Alert — "Gold is where I continue to place new money."

Eric has recommended his Commodity Trend Alert readers be incredibly well positioned in precious metals since day one and is still calling for higher highs. Eric will be here tomorrow, to tell you all about his favorite metal. Make sure you tune in.

DAVID NEWMAN, Market Analyst

EDITOR'S NOTE: Get a sneak peak at Eric's favorite gold plays right now, in Eric's newly updated gold report. Read this special report here now absolutely FREE.

Silent Wealth Killer Strikes Again...

Inflation is rising at the fastest pace in 26 years.

Every dollar and every stock is worth less in real terms that it was the day before.

But one little-known U.S. currency is helping investors put a halt to the hemorrhaging dollar - while lining up potential gains of 341%.

To learn more about it, click here.

Northern Rock Comes to America:
Will Your Bank Be Next?

IndyMac Bancorp (NYSE-IMB) just became the latest mortgage casualty in the United States this month. More importantly, the headline-grabbing closure officially triggered the first attempted run on a U.S. bank since the 1970s.

IndyMac's collapse also marks the first time since the advent of the sub-prime mortgage crisis a year ago that a U.S. mortgage thrift has failed.

Last September, Britain's Northern Rock plc, a midsized mortgage lender, collapsed. Even though the Bank of England bailed the mortgage lender out, newspapers worldwide portrayed images of Northern Rock customers scrambling to access their funds for an entire month. It was eerily reminiscent of Depression era breadlines.

On July 14, IndyMac, the nation's 10th largest mortgage lender, borrowed a page from Northern Rock as major financial newspapers depicted crowds waiting to access their funds.

IndyMac reopened its doors under federal supervision on Monday. They promised homeowners a lifeline from impending foreclosures. The FDIC also stepped in to protect funds up to US$100,000. However, US$1 billion dollars of IndyMac's roughly US$19 billion in deposits was NOT insured affecting about 10,000 customers. But the FDIC has stated it would seek to return up to 50% of uninsured customer deposits.

If you're holding the bulk of your savings at a U.S. bank — including the largest money-center banks, I strongly suggest moving those assets to TD Ameritrade. Use those funds to purchase Treasury bills or exchange traded funds that invest in short-term Treasury securities like SHV or SHY.

Also, other discount or full-service brokers will work, but just make sure to invest your funds in Treasury designated securities.

Also, consider mutual funds that offer "Treasury" or Government Securities" money-market funds. These products, offered by low-cost Vanguard Group among others, are safe, liquid and maintain a high degree of credibility since assets are 100% invested in short-term government paper.

The only cash sitting in a bank today should be to pay ongoing expenses, bills, etc. Don't keep the bulk of your precious savings or liquidity stashed in a bank.

Until financial markets stabilize, head for the relative safety of government designated securities and products. These are uncertain times. Act now.

ERIC ROSEMAN, Investment Director

Tax Havens: What's in a Name?

In Shakespeare's lyrical tale of "star-cross'd" lovers, Romeo & Juliet, Juliet asks: "What's in a name? That which we call a rose by any other name would smell as sweet."

Well, apparently to some hyper-nervous types the traditional name "tax haven" doesn't smell as sweet as it once did.

In fact, it stinks, according to some public relations conscious officials and financial types. Most of these dissenters are located in various jurisdictions that until now have been called (you'll pardon the expression), "tax havens."

Or as Gertrude Stein so famously said: "A rose is a rose is a rose," probably her most famous quote, which she often interpreted as: "Things are what they are." Or: Plus ça change, plus c'est la même chose. Nothing really changes.

It seems that some tax havens worthies are buckling under pressure. They now want their locales to be known sweetly to the world as "offshore financial centers." Indeed, some of these nervous nellies don't even want to use the word "offshore" because they say that has a negative connotation.

Thus it was that the Isle of Man's Chief Minister, Tony Brown, last week pleaded with members of a U.K. House of Commons committee: "Don't lump us in with those other 'offshores.'" Brown said there is no commonly agreed definition of the term "offshore"' and use of what's now a scare word might lead to "unstated assumptions."

Brown insisted: "We've got a lot of recognition as being a very good financial center but we are still being lumped in with areas that maybe are not so good. Expressions like 'offshore' and 'tax haven' have no agreed standard definition. We tend to use the term 'international finance center.'"

According to the most recent Merrill Lynch World Wealth Report, financial wealth among high net worth individuals is expected to reach US$51.6 trillion (€32.8 trillion) by 2011, growing at an annual rate of 6.8%. Much of that cash will be stashed (legally) in tax havens.

Or as that rosy Gertrude Stein said: "Things are what they are."

BOB BAUMAN, Legal Counsel

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