((RAIN)) Rainmakers-Island

[crudeoil24]

Here is an interesting e-mail I got recently:

After accurately predicting the three biggest collapses of 2008: LEH, FNM and FRE, I have decided it is time for me to address the state of our economy.

We are only in the second inning of a total collapse of our economy. LEH filing for bankruptcy today is only a sign of a much bigger disaster to come.

Real Estate prices haven't even crashed yet. Prices are only down 15% across the nation. Pretty soon... prices will need to come down to a level where everybody can afford to purchase homes for cash with no mortgages.

The next major disaster after Real Estate crashes is credit cards. Now that people can no longer take out home equity loans, everybody is maxing out their credit cards as their last lifeline.

Companies like JPM and BAC may have survived the Real Estate crisis so far, but they won't be able to survive the upcoming credit card crisis.

Don't vote for John McCain in a million years. He thinks interest rates should be zero. Whenever he is asked a simple economic question, he babbles on about lowering taxes and how he would consult with a laundry list of people who are responsible for getting us into the mess we have today.

I think Obama is a little bit smarter than McCain, but Obama won't cut government spending... he will expand government and make the situation much worse.

I predict Obama will get elected... and he will immediately talk down the economy and expose to the country how bad things really are. That way, he can place all of the blame on Bush... when in fact, it is BOTH the Democrats and Republicans that are responsible.

I predict four years from now, an independent will be elected. Somebody like Ron Paul who actually understands the economy, would do much better than McCain or Obama.

With the market down over 500 today, Gold was one of the only things up. That's why I have been telling you to put 75% of your portfolio into DGP, the double-long Gold ETN. Gold could be as high as $5,000 per oz by the time this crisis is over.

Gold has dipped from the high of $1,032 because we have seen a suckers rally in the U.S. Dollar. This is the last ever rally in the U.S. Dollar before we see hyperinflation.

The U.S. has absolutely no way of paying back it's $10 trillion national debt, because it doesn't produce anything. In NJ, all we have are banks, tanning salons, and Dunkin Donuts on every street corner. There are no factories. We import everything from China and give them our worthless Dollars in return.

China is perfectly capable of consuming their own goods. They don't need us. Once they cut us off and stop supporting our Dollar, they will prosper while the U.S. sees a great depression.

The $10 trillion national debt will only get bigger. FNM/FRE only represent half of the U.S. mortgage market. The FED will soon take on trillions more in bad mortgages and issue trillions more in new mortgages. Plus with the upcoming credit card crisis, they will need to bail out JPM, BAC, and other major financial firms.

Greenspan said today housing prices will bottom in early 2009. He has been saying Real Estate is about to bottom for well over a year now. Why people would still treat him respectfully is beyond me.

The Federal Reserve needs to be eliminated. Artificially low interest rates got us into these messes and created these bubbles.

FNM and FRE were created for the purpose of making housing affordable. They have done the exact opposite. It is kind of like how student loans drove college prices up to astronomical levels. If there were no student loans, colleges would need to cut back on the high salaries they pay administrators and lower their tuitions so that America could afford their product.

But colleges aren't teaching students the truth about our economy. The ivy league educations LEH and BSC management had... didn't do a damn thing but help them drive their firms into the ground.

Everybody I know from high school that went to college... can't find a job now that they have their degree. Most of them are going back to college now with the help of more student loans and digging themselves deeper into debt. They already have huge mortgages before they even buy a house.

Most of the volatility as of late in Gold is due to leveraged up hedge funds being run by idiots who don't care about the long-term and where Gold will be in a couple of years. They get paid based on their performance each quarter... so they need to follow the momentum like a bunch of sheep. Sheep get slaughtered.

I am sick and tired of watching these idiots on CNBC talk about how the Dollar is strengthening and claiming we had a commodities bubble. These are the same people who said to buy Internet stocks in 2000 and Real Estate in 2005.

I hope that CNBC is finally smart enough to kick Jim Cramer off the air soon. He said on June 15, 2007, "FNM must be bought here" when it was trading for $68.75. I first predicted FNM/FRE would crash on August 7, 2006, when they were $47.46 and $57.93 respectively.

The reason FNM/FRE made a suckers rally for ten months before they crashed, is because of the idiots on Wall Street who misread the situation... while I read the situation correctly.

When the government announced that they would allow FNM/FRE to expand their mortgage portfolios, the idiots on Wall Street treated this as good news. Well, I thought being able to make more loans to people who can't afford to pay them back was bad news and I was right.

People are misreading the situation again right now with TOL. There are so many stupid people out there that believe because TOL's losses are smaller right now than the other home builders, they are a better managed company that is about to turn around and become profitable as Real Estate rebounds.

The way I read the situation... TOL is sitting there with empty houses, when they should be heavily discounting their properties and selling them off. They are also not writing down their inventory nearly as much as they should. They are doing this to mislead Wall Street so that insiders can dump tens of millions of dollars worth of stock before they go bankrupt!

Wall Street is also misreading the situation with Gold. Adjusted for inflation, Gold's 1980 high of $850 would be $2,275 in today's Dollars... and the inflationary situation today is much worse than back then.

How could Gold be a bubble now... if I never hear normal people at a restaurant talking about it? Everybody was talking about the money they were making in Internet stocks and Real Estate during those bubbles. There are absolutely no signs at all that Gold is anywhere close to being a bubble. It is actually the complete opposite.

Our $10 trillion, soon to be $15-$20 trillion national debt must be paid back! The only way we can pay it back is by printing a massive amount of Dollars. This inflation will drive Gold to $5,000 per oz.

Not only is it completely stupid to own Real Estate, but it is stupid to be holding the U.S. Dollar. Gold is Real Money. Besides Gold, you can also buy silver, platinum, agriculture, oil and other commodities. Real asset prices will rise big as the Dollar collapses.