Continuing Improvements in the Human Standard of Living

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The Daily Reckoning | Saturday, June 25, 2011 One giant leap for man...one giant opportunity for your portfolio, Reckoners weigh in on "crisis vacationing," flaccid bank lending and possible "igniter events," Plus, all the rest of this week's reckonings, neatly archived for your high-flying enjoyment... ------------------------------------------------------- The Beginning of the End For Money-Grubbing OPEC Israel just discovered what could be the 2nd largest oil basin in the world - officially giving OPEC the middle finger. Watch this urgent briefing for your chance to profit from Israel's world-changing $27 trillion discovery. Continuing Improvements in the Human Standard of Living Joel Bowman Checking in from Buenos Aires, Argentina... Actually, we're not checking in from Buenos Aires at all. In fact, by the time you read this, your editor will be flying 40,000 feet above the Andes, somewhere between Lima, Peru, and Cartagena, Colombia. We'll be cruising along at a terrific speed, probably reading a newspaper or enjoying the in-flight entertainment...anything to avoid thinking about the plotline of the movie Alive. Such are the marvels of modern technology. For all its flaws (and there are many), there is surely little doubt that the standard of living we enjoy today is infinitely higher than that of our cave- or desert- dwelling ancestors. Imagine, for example, the look on Y-chromosomal Adam's face if you'd told him about jet engines, or Mitochondrial Eve's expression had she been shown an email, or an iPhone...or even a reasonably well-crafted wineglass. Theirs was a time to which even the most committed hippy would not reasonably wish to return. As a species, we've had our share of evolutionary fits and starts. One century we get a Galileo or a Newton or a Darwin, and the whole of humanity appears poised to take a giant leap forward from atop their mighty shoulders. The next we are weighted with a Roosevelt or a Greenspan or a Bernanke, and we have to wonder if we've really learned anything at all. But against the persistent and devolutionary aspirations of the political class, human ingenuity continues along its upward, onward trajectory. And in few arenas is this progress rendered clearer than in the field of medical technology. In fact, as Patrick Cox explains in this week's feature column, we may well be on the verge of another renaissance in this most important of fields. "In all my years of research," writes Patrick, "I have never seen such an era of innovation and breakthroughs in the medical field as we are witnessing today... "We are seeing more and more small biotech companies racing toward the next big breakthrough. To be on the forefront of technology in this day and age can lead to outstanding profits... "In the coming years," Patrick continues, "we could see major developments in the treatment of cancers, Alzheimer's disease and many other life-threatening diseases - in fact there are many companies coming close already." In this week's feature column, Patrick gives us the scoop on "one biotech area that sometimes gets forgotten by investors...an area that has not seen a major breakthrough since the 1920s." For our technology expert's full essay, please see here: Profiting from the War Against Bacteria Cancer "Magic Bullet?" Small Biotech Set to Rocket? A little-known biotech company is making medical history... but with FDA fast track review status for their cancer treatment, this small company might not stay "little-known" for long... So you must move fast if you want to get in on the ground floor of what could be the biggest medical breakthrough in decades... Click here to learn more now. ALSO THIS WEEK in The Daily Reckoning... Debt: America's Bi-Partisan Blame Game By Addison Wiggin Baltimore, Maryland Following the economic policy of the US, [Treasury Secretary Tim] Geithner at the Treasury, and even the Federal Reserve, the hubris with which they make the decisions, they're expecting the dollar to remain the reserve currency of the world [no matter what they do] and for US Treasuries to be the "flight to safety" trade for as far as the eye can see. And now we're seeing China, and even India and South Korea, raising the alarm, saying, "Look, we are holding this debt. We expect it to be paid back. We expect it to be worth something in the future, and we don't think the path that the US is on is a very sound one, and you better do something about it." Are We Running Out of Silver? By Jeff Clark Stowe, Vermont Silver has been on fire for the last three years - substantially outperforming its spotlight-grabbing cousin, gold. Because we believe this bull run is far from over, we advise investors to always maintain exposure to the precious metals markets. But the question every investor faces in a bull market is: Do I buy now, anticipating prices will continue higher - and chance getting clobbered if a correction arrives? Or do I wait for a pullback and possibly miss out on big gains? Buy Food! By Chris Mayer Gaithersburg, Maryland A headline caught my eye last week, beyond all the ink spent on European debt woes. It read, "Hungry China Shops in Argentina." China already buys most of Argentina's soybean exports. And now China's largest farming company is trying to lock down acreage for more soybeans. It also unveiled a plan to grow wheat, corn, vegetables, fruit and even wine - all for export to China. Bubble to Bubble, Dust to Dust By Bill Bonner Waterford, Ireland On our recent trip to China, all of a sudden we felt 10 years younger. For in the coffee bars of China's futuristic cities were entrepreneurs, dreamers and lunatics who still thought it was 1999. A group of young techies filled us in: "We don't worry about profitability. We can worry about that later. We want traffic. Because we know we can monetize the traffic on the stock market." Here were people who still believed they could take eyeballs to the bank. Government-Backed "Pension Program" Shows You Riches Each Year On September 30 last year, your U.S. government sponsored "safety net" officially shrunk. That's why you must start collecting safe, legal money every year with this "other program" today. Get full details here. The Weekly Endnote... And now, as has become customary in this space, we turn the floor over to our Fellow Reckoners... First up, Reckoner B.M. writes: I read with interest (OK, not a good pun) Eric's article on bank profits and lending, and particularly his quotation of Mr. Yun. As a member of the board of directors of our local Credit Union, I can add a couple more reasons why there isn't more lending going on. First, potential borrowers are not coming in the door. As you have pointed out many times, the private sector is deleveraging, which means fewer people want to go further into debt. Second, the regulators have, belatedly, clamped down on loan underwriting, which forces financial institutions to only make loans to folks who have a reasonable expectation of paying the loan back. So, those with good credit are choosing to pay down debt, and those without good credit are precluded by regulatory oversight from adding debt. A reduction in lending shouldn't be a surprising result. And Reckoner K.S. wrote in with this: I enjoy The Daily Reckoning and look forward to every issue. I just wanted to note that, while a lot of people fall into the "favorite pastime" category you described about crisis vacationing, some of us send money sacrificially through organizations with great track records of high percentages (over 85% in the case of my church) of the amount actually getting to the people needing the assistance. I can't speak for all church groups (in fact, I know I couldn't say this for some!), but for many, most donations sent to distressed areas that have suffered catastrophes get resources to the ones who need it. And most of us don't have the time and/or money to make trips to these areas to directly support the restaurants, etc., although my own denomination has teams of people who go to places to help who spend their own money to get there and buy the provisions they need to both support themselves and the projects they are there to accomplish. And finally, Reckoner H.M offers a few parting thoughts: As we watch world events, it is only a matter of time, a short time I believe, until an "Igniter Event" triggers a worldwide financial collapse. There is truly an amazing confluence of circumstances. The US is looking like it cannot bring itself to really get debt under control and, in fact, may not be able to do so under any circumstance. Greece is ready to implode to the point of outright revolution and will likely sink the euro. The ripple effect will be something to behold as US interests suddenly realize that the only thing left of those "promissory" notes is "sorry"! The Middle East is a collection of flashpoints, united by hatred of Israel. The planned flotilla to run the Gaza Blockade is planned for later in June. Turkey, now under radical Islamic control, has warned Israel not to attempt to stop the flotilla. Add to this Libya's intractable leader, Syria's brutal suppression of protests, and Yemen's troubles. And then there is Egypt and its peace agreement with Israel soon to be in the trash bin. The UN may take up the issue of a separate Palestinian state in September. This issue, regardless of outcome, will be a call to arms for Palestinian youths. I like the advice of The Daily Reckoning contributors. It's time to be out of stocks and bonds and have a plan for independent living. --- In a final note, your managing editor is this weekend en route to Colombia along with a couple of Kiwi investors. We'll be reporting, as usual, from the road during our little excursion. If you plan to be in Bogotá on Thursday or Friday (30th-1st) and would like to meet up for a drink and a chat about the local goings on, drop us a line at the address below. First round is on us. And, as always, enjoy your weekend. Cheers, Joel Bowman Managing Editor The Daily Reckoning ------------------------------------------------------- Here at The Daily Reckoning, we value your questions and comments. If you would like to send us a few thoughts of your own, please address them to your managing editor at joel@dailyreckoning.com Bubble to Bubble, Dust to Dust On our recent trip to China, all of a sudden we felt 10 years younger. For in the coffee bars of China's futuristic cities were entrepreneurs, dreamers and lunatics who still thought it was 1999. A group of young techies filled us in: "We don't worry about profitability. We can worry about that later. We want traffic." The Divergent Paths of Growth and Human Progress Economic Growth in the Internet Age China: Where Money Is Treated Best I am sure that Mr. Pento is right because every country on the Face Of The Planet (FOTP) is desperately creating more and more money, and the money will eventually find its way to the place where it is treated best and/or has the best prospects, which is, in this case, Bob. Oops! I meant "China." Buying Gold on the Price Inflation Guarantee Awaiting the "Zero Hour" of Available Credit Elitism in China: Understanding the Communist Party Despite rampant corruption in government — which the US itself is no stranger to — the Communist Party of China (CPC) will be celebrating its 90th anniversary a week from today, on July 1st. Although much discussed, the one-party system is little understood outside of China. Trichet Deep-Sixes Euro Rally Who's Really More Productive? Ranking the Top-20 US vs European States The Daily Reckoning: Now in its 11th year, The Daily Reckoning is the flagship e-letter of Baltimore-based financial research firm and publishing group Agora Financial, a subsidiary of Agora Inc. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas. Published daily in six countries and three languages, each issue delivers a feature-length article by a senior member of our team and a guest essay from one of many leading thinkers and nationally acclaimed columnists. Cast of Characters: Bill Bonner Founder Addison Wiggin Publisher Eric Fry Editorial Director Joel Bowman Managing Editor The Mogambo Guru Editor Rocky Vega Editor Additional articles and commentary from The Daily Reckoning on: Twitter Facebook DR iPhone APP To end your Daily Reckoning e-mail subscription and associated external offers sent from Daily Reckoning, cancel your free subscription. If you are you having trouble receiving your Daily Reckoning subscription, you can ensure its arrival in your mailbox by whitelisting the Daily Reckoning. © 2010-2011 Agora Financial, LLC. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This newsletter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the World Wide Web), in whole or in part, is strictly prohibited without the express written permission of Agora Financial, LLC. 808 Saint Paul Street, Baltimore MD 21202. Nothing in this e-mail should be considered personalized investment advice. A lthough our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice.We expressly forbid our writers from having a financial interest in any security they personally recommend to our readers. 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