How to Make a Buck, Euro and Yen off Bernanke's Moves Yesterday

Today's comment is by Sean Hyman, Currency Analyst for The Sovereign Society.

Dear A-Letter Reader,

Well, Bernanke's move yesterday brings the tally up to seven rate cuts in seven months. And the U.S. dollar index has fallen over 12% in those seven months, more recently (including yesterday) the beaten down buck rallied.

Here's my take on the Fed action yesterday: For starters, not everyone voted for this rate cut. Two of the Fed officials dissented. They wanted to hold rates where they were. However, the majority (eight others) overruled those objections so the Fed cut by 25 basis points.

Personally, I think this will be the very last cut unless the economy contracts significantly more than it already has. And with GDP expanding a hair as of yesterday's reading and some inflation gauges edging higher (like Bernanke's favored PCE Deflator)...I say he's going to hold rates steady and not cut any more barring some unforeseen catastrophic event.

Then I think he's going to be forced to start raising rates again sooner than many think. Bernanke will simply have to deal with inflation now that his beloved stock market has stabilized. That should bring some strength back to the dollar over the coming months.

However, in the long run, "anti-dollar" currencies will probably win out (like the euro). Overall, many Asian currencies will continue to dominate the dollar (such as the Singapore dollar, Taiwan dollar and Chinese yuan).

How to Make a Bundle in the Currency Markets -
Without Opening a Trading Account

As I've said before, you don't need a foreign-exchange account to take advantage of trends in the currency markets like these. In fact, you can invest in foreign currencies even you don't have the slightest clue about what's going on with other economies outside the United States.

The secret is diversification. With the right combination of foreign currencies to balance your portfolio, you're prepared no matter what Bernanke decides to do next.

The problem is which currency should you choose? And once you're invested, currencies move fast, so do you have to keep a sharp eye on the markets to know when to sell? Answer: Not necessarily.

My colleagues and I have uncovered two long-term buy and hold strategies that both allow you to add multiple currencies to your portfolio and get maximum protection against the falling dollar. In the near term, the dollar may catch a break for awhile; but the longer term picture still looks pretty bleak.

You'll find both of these portfolios at EverBank - a U.S.-based bank. EverBank created these two currency baskets with two different objectives. I call them "baskets" because they are spread out over several currencies.

Introducing the FDIC-Insured, "Anti-Dollar" Portfolio

The first is basically an "anti-dollar" portfolio. It broadly invests in six different foreign currencies, so you can easily and quickly diversify your assets away from the dollar - just in case. This is an extremely long-term portfolio that's betting on the long-term demise of the dollar. That means you buy and hold through the short-term dollar rallies.

It's call the EverBank All-Weather Portfolio . This portfolio holds the euro, the Japanese yen, Swiss franc, the Singapore dollar, the Chinese renminbi (yuan) and the Canadian dollar. Plus, it also holds the long-term strength of gold - which traditionally shoots up in price as the dollar falls.

Just holding this portfolio gives you long-term peace of mind about the falling dollar. It means when you turn on the news and hear the dollar's falling you'll think, "Good, that means my portfolio is going up in value."

The Currency Portfolio of the Next Superpower

Another interesting currency portfolio I love is the EverBank Asian Currency Portfolio. This is my personal favorite because I'm extremely bullish on Asian currencies in the long-term. When I look at Asia, I see the economic growth of the future. And in the next 10-15 years, I see her currencies rising by as much as 50% to 140%. In fact, Jim Rogers has recently stated that the yuan could rise "two to the dollar" in that same time frame.

This dynamite portfolio carries currencies the Indian rupee, Australian dollar, Chinese renminbi, Singapore dollar and the Japanese yen.

So as you hear of so much "booming" in China, India, Singapore, Australia you can say "Good, my portfolio must be doing well."

If you compiled either one of these portfolios yourself, you'd pay as much as US$65,000 to US$75,000 a piece. But as a special offer to our readers, it only costs you US$10,000 to compile either of these portfolios. And both come with FDIC-insurance, so your investment is protected on the off chance that EverBank ever became insolvent.

Best of all, both of these are "invest and forget" type of portfolios. They do all of the work for you. And then you can literally hold them forever, if you choose.

And you'll be protected even if Bernanke continues to cut rates all the way down to 0%.

SEAN HYMAN, Currency Analyst

P.S. While I'd recommend these portfolios anyway, I want you to know that my publisher has a commercial relationship with EverBank so The Sovereign Society may receive compensation if you choose to invest in this or any of their offerings. But by mentioning The Sovereign Society you can take advantage of this opportunity for only a US$10,000 minimum — that's US$55,000 to US$65,000 less than you'd expect to invest if you assembled this portfolio on your own. Click here for the application to secure your own All-Weather or Asian portfolio.

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No More Easy Oil: Why a 40 Billion Barrel Find by Petrobras Didn't Make a Dent in Crude Prices...

Brazil's Petrobras made headlines recently with the discovery of potentially rich offshore oil fields. This new find promises more than 40 billion barrels of recoverable oil... the largest oil find in the Western Hemisphere in three decades.

So, with a discovery of such titanic proportions, why hasn't it put a dent in skyrocketing crude oil prices? Perhaps it's because the Petrobras discoveries were found more than six miles beneath the South Atlantic Ocean.

It's been said that all the "easy" oil reserves have already been found and exploited long ago. Nothing drives that point home quite as well as this story of Brazil's promising Tupi and Carioca oil fields.

These promising new offshore oil discoveries lie more than 150 miles off Brazil's coastline. This oil is hidden in water that's 32,000 feet beneath the surface. That's nearly twice as far down as the world's deepest producing offshore wells.

At such depths, the water pressure on drill pipes is 18,000 pounds per square inch - that's enough to crush a pickup truck like a beer can.

The engineering challenge in extracting oil from such depths is mind-boggling. An oil company executive says: "What we do at that water depth in the ocean is similar to NASA's space program, but they get to do it without any pressure trying to attack them."

On the ocean floor, the drilling equipment must be capable of operating at temperatures near freezing. Once there, the oil is still deep beneath the seabed under a layer of salt more than one-mile thick.

Once Petrobras successfully taps into its offshore oil bonanza special pipes are needed to carry it to the surface. These pipes must be designed to carry oil at temperatures above 500 degrees Fahrenheit.

The reality is: the oil from these offshore fields would most likely never make it to a refinery without crude above US$100 a barrel.

As far as making a dent in the global supply-demand imbalance, the first significant oil from Tupi isn't expected to flow until 2012 to 2015 at the earliest.

MIKE BURNICK, Senior Editor & Director of Research

For Sale in Thailand: Girls, Guns...and Fake Passports

If you have the money, and know where to look, you can get just about anything you want - legally or otherwise - in Bangkok.

In recent years, Thai police have cracked down on drug trafficking, prostitution and weapon sales. But one of the most profitable industries - manufacturing fake passports - remained relatively untouched, until now.

On April 26, Thai authorities arrested Mohammed Karim, a Bangladeshi man living in Bangkok, for creating counterfeit passports. They also confiscated more than 1,000 finished and unfinished Malaysian, Singapore, Japanese, and U.S. passports - all of them fake. That's the largest fake passport discovery in at least five years.

Karim allegedly sold the passports to middlemen who in turn sold them to gangs engaged in prostitution, terrorism and smuggling. Each passport cost just US$95.

Thailand has a long history of passport fraud. In 2005, authorities shut down much smaller fake passport ring and confiscated over 100 counterfeit documents. And now this.

It makes you wonder why the U.S. Government Printing Office chose Thailand, of all places, as the location for assembling its supposedly state-of-the-art, ultra-secure electronic passports. (I wrote about this decision here.)

Fortunately, none of the fake U.S. passports were the new electronic variety. But the company that helped design these passports has accused the Chinese government of stealing its patented technology, so it may just be a matter of time.

In the meantime, if you look in the right place, you may be offered the opportunity to purchase a fake passport. Should you receive such an offer, don't take it. If you're caught with a fraudulent passport, you could face not only loss of that document, but fines and imprisonment.

Fortunately, you have several options to obtain a legal second passport. Read my blog right now to get the full details on how.

MARK NESTMANN, Privacy Expert &
President of The Nestmann Group
www.nestmann.com

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To find out more about what a second passport can do for you, click here.