By Rich Miller
Nov. 23 (Bloomberg) -- President-elect Barack Obama picked Timothy Geithner, head of the Federal Reserve Bank of New York, to be his Treasury secretary and Lawrence Summers is getting the top White House economic job, aides said.
Summers, former President Bill Clinton's last Treasury chief, would be positioned to succeed Ben S. Bernanke as Fed chairman in 2010. Summers will head the National Economic Council, a Democratic aide said. Obama is due to announce his economic team tomorrow.
Obama adviser David Axelrod said on "Fox News Sunday" the president-elect's recovery program will depend on topnotch officials to implement. "We need the best people we can find, the best minds in our country, to help us accomplish that plan, and people like Tim Geithner and Larry Summers are among those people," he said.
Geithner is a veteran who has helped lead the effort to end the deepest financial crisis in seven decades and at the same time has spent most of his career outside the public eye. The top task of the new team will be assembling Obama's pledged stimulus package to buttress an economy that may be in its worst recession in a quarter century.
Obama is assembling "very strong people, very qualified people," said Allen Sinai, chief economist at Decision Economics in New York. "But the reality of the problems of the economy, the financial markets, our banking system both domestically and globally, and the long list of problems we have to deal with as a society, that is very daunting."
Geithner, 47, has helped oversee some of the biggest decisions so far in the crisis, as head of the U.S. central bank's main liaison with Wall Street. Those include the government's takeover of American International Group Inc., the Fed's Bear Stearns Cos. rescue, and decision to let Lehman Brothers Holdings Inc. fail in September.
Both Geithner and Summers are veterans of managing financial turmoil, working together on the Asian financial crisis of 1997- 98 and staving off a Mexican default earlier that decade. Even with that background, Geithner would be taking on an unfamiliar role: the government's chief economic spokesman.
"He certainly has relevant experience," said Alex Pollock, resident fellow at the American Enterprise Institute in Washington and former president of the Chicago Federal Home Loan Bank. "The whole public part of the job, the political part of Treasury secretary, will, I expect, be a challenge."
Vote of Confidence
Investors gave Obama's pick a vote of confidence, sending the U.S. stock market's benchmark index rallying from an 11-year low. The Standard & Poor's 500 Index jumped 6.3 percent to 800.03 at the close in New York. The gauge is still heading for its biggest annual decline since 1931.
"Tim is held in high regard in financial circles and has been a thoughtful and effective leader throughout the recent financial turmoil," said Robert Nichols, head of the Financial Services Forum in Washington and a former Treasury spokesman in the Bush administration.
Obama is also likely to nominate New Mexico Governor Bill Richardson as Commerce secretary, the Democratic aide said. Richardson was Clinton's Energy secretary and former ambassador to the United Nations.
They were instructed by their leader, Senator Nelson Aldrich (later the grandfather of Vice President Nelson Aldrich Rockefeller) to arrive at different times and not talk to each other if they met in public. If any nosy reporters showed up, they were to claim they were going on a duck hunt. One man even brought a borrowed shotgun in a case, even though it later came to light that he had never fired a gun in his life
The seven were instructed to call each other by only their first names1 when they "met" in the railroad car on the way down to Jekyll Island in Georgia. In point of fact, they had already met each other because they were the heads of the largest banks in the US, the central figures of the well-known and hated "money trust" that ruthlessly ruled the New York banking scene. One of the seven was J. Pierpont Morgan, who three years earlier had helped spread a rumor that the Knickerbocker Trust Company was going to fold, and whaddya know, it did--along with hundreds of other banks, triggering a number of suicides. (You remember J.P. Morgan's top hat and bushy mustache from the Monopoly game cards.) Morgan hurriedly wangled $25 million from Teddy Roosevelt to buy out Knickerbocker, and thus he eventually became the hero of the campaign to save banking from the panic of 1907! Then 101 years later, JP Morgan Chase pulled a similar stunt, saving Bear Stearns (helped a little by the Fed!) from starting a global collapse. "The more things change..."
Another of the seven was Paul Warburg, a tall German banker and one of the wealthiest men on the planet. You remember him, lightly disguised, as Daddy Warbucks of Little Orphan Annie fame. The others were:
Frank Vanderlip, president of National City Bank of New York
Henry Davison, senior partner of the J.P. Morgan Co.
Charles Norton, president of First National Bank of New York
Benjamin Strong, head of Banker's Trust Company and the first chairman of the Federal Reserve System.
Together, these men controlled, by various accounts, one-sixth to one-fourth of the world's wealth.
The meeting at Jekyll Island was held in incredibly posh surroundings, all owned by Sen. Aldrich. For example, one of the "cottages" the bankers stayed in boasted 14 bathrooms! Some cottage. The regular staff at the central clubhouse were given a leave of absence lest they should recognize the men and spill the beans. Temps filled in.
The Fox Plot to Take the Henhouse
For six years, the seven denied the meeting ever took place, but later they wrote articles and books bragging about it. If the public had found out that these arch-rivals were laying the groundwork for a money cartel to take over as a central bank and issue all US currency, the outcry would have echoed to the moon and back. As outrageous as it sounds, Aldrich was chairman of the National Monetary commission, which was charged by Congress with reforming and decentralizing the rotten bank system, breaking the deadly grip of a few large New York banks on the nation's wealth. Quite a few politicians, including Pres. Woodrow Wilson, got elected by opposing the money trust (though he was firmly in their pockets, his election campaign having been financed by them). At that time, if you made speeches against the trust, your election chances would be considerably enhanced.
After their arrival at Jekyll Island, these foxes got down to the business of writing the bill for Congress that would put them in firmly in charge of the henhouse.
One task was to name the monster they were creating. They fastened upon "Federal" because it sounded like they were part of the government--which they definitely were not. Then they settled on "Reserve" so it would sound like the entity owned some money--which it didn't. Then they tacked on "System" so it would sound like a broad nationwide network of real banks. Honest, I'm not dumping on them; this was their actual discussion process.
Now watch this: Long after Jekyll Island, when the finished bill went to Congress in 1913, Aldrich and Vanderlip began making speeches, saying, "This bill will be terrible for the country. It'll ruin our banking. It's a disaster. Oh, please don't support it."
When Joe Blow read that in his newspaper, he thought to himself, "Wow! These big-money bankers really hate this bill, so it's got to be pretty good."
With that kind of "opposition" from the hated money trust, it passed. It was guided through a well-prepped Conference Committee between 1:30 a.m. and 4:30 a.m. on December 22, 1913. (Read between the lines.) Later that morning, the House passed it 298-60, and the Senate passed it 43-25, though many had taken off for Christmas, and most who stayed behind hadn't had time to read it or know its contents. President Wilson signed it in an enthusiastic public ceremony on Dec. 23.
Since that time, the Fed has presided over the crashes of 1921 and 1929, the Great Depression of 1929-39, the recessions of 1953, 1957, 1969, 1975 and 1981, Black Monday in 1987, and the tech bubble of 2000. So much for stabilizing the economy, keeping us safe from recessions and inflation.
The moral of this story: Beware of investments that are fragile, especially if they're based on scenarios that can be manipulated by central bankers with unlimited credit--or mass media publishers who buy ink by the barrel.
The New Inflation Will Eat You Alive
If You Don't Bite It First
You've been living with inflation for most of your life, so you probably think you know how tomorrow's inflation will work.
With all due respect, you don't know nothin'.
The inflation you're familiar with is like a nasty sinus infection. The inflation I'm talking about is like a head-on with a Mack truck.
By 2012, you should brace yourself for inflation of 15% at the best and a possible 25% at the worst. And this rate could persist for up to a year.
Why are my figures so much higher than other well-known advisors? Because I'm taking into account some factors that normal human beings just don't like to write about because they tie their stomachs in knots, and they have no solutions for them.
I'll spare you the full explanation. Here are too-brief mentions of a few of the major factors:
The solution to inflation of 15%-25%? Let Leeb's Energy World put you on the profit-making end of things, where the worse inflation gets, the more you come out ahead.
In spite of the impending crisis, the Wall Street establishment continues to plow ahead with business as usual. This is why you need to subscribe to Leeb's Energy World, the only investor service that doesn't depend on fragile scenarios in order to make profits.
Whether the US economy collapses soon or continues to muddle through a while longer, our unique recommendations will keep pulling in huge investor support no matter what, matching your thousands of dollars with many millions more.
Not so. A touch of natural global warming is happening, but man-made warming is a hoax. It is simply the biggest farce ever foisted upon mankind in the name of science.
Recently, much polar ice did melt, but in 2007, 95% of it refroze. Globally, 2007 was one of the coldest years on record. A February, 2008, report from NOAA (the National Oceanic and Atmospheric Administration) shows that the ice cover which had shrunk from 5 million square miles in January, 2007, to 1.5 million square miles in October, is almost back to its original size.
Global warming is not what Gore calls "settled science." Far from it. He cites a core group of about 600 U.S. scientists (many with shaky credentials) plus another 2,000 bureaucrats, industry lobbyists, and "environmental journalists" (whose jobs would vanish in a lash if the warming fraud were exposed to the light). Virtually all of them are feeding at the $4 billion trough filled annually by government agencies.
But when the 1997 Kyoto Protocol began to gain traction, thousands of true scientists rose up, incensed at this deeply flawed attempt to hijack the good name of science and prostitute it to the use of environmentalist propaganda. To date, 31,072 degreed scientists (9,021 with PhDs) have signed a petition firmly denying the idea of manmade global warming.
As for the "endangered" polar bears, their population has zoomed from 12,000 in the late 1960s to 25,000 today. Canada has to allow the Nunavut (Eskimo) authorities to issue 500 hunting licenses a year just to keep the bears from eating themselves out of a habitat.
The USA has a near-endless supply of coal, roughly estimated at 300 years' worth. We can turn coal into a liquid, and now it can be almost ten times cheaper than petroleum. Owing to a technology breakthrough in May, the process of cleaning up coal just became feasible--cheaper and far more effective.
The Fed has destroyed 95% of the dollar's value in 95 years, and there is no way to stop it.
The Social Security Trust Fund is the world biggest oxymoron. It has zero money. In fact, when you add in all the money that's been promised by Medicare in the future, we are officially, as of 2008, $101.7 Trillion in the hole. There is no hope for it at all.
And when Congress finishes locking up the entire healthcare field, you will be lucky to survive your first major health crisis.
It's time you abandoned the fantasy world created by the mass media and political operatives. Here is a much better option:
Invest in Leeb's Energy World, where reality rules, where spin doctors don't exist, and where your money is backed up by billions of dollars of other people's money.
Our Promise to You
No matter what happens with global cooling, coal energy, hyperinflation, or the Medicare collapse, Leeb's Energy World will find you the clearest, most obvious, infallible stocks and commodities on the planet.
No matter what happens in the realm of politically correct fantasy, Energy World will keep you in the very hottest investment vehicles on the planet, and right now, of course, that means ...
Most of the market is stuck in a channel, and a rather sad one, at that.
The happiest exception right now is energy. Six months from now, it might be something else.
Whatever it is, if there is heavy demand, and we can find a way to beat the market with it, we'll add it on. But until further notice, energy is it.
Energy World is part of the top-ranked Leeb Group, which is famous for finding innovative ways to beat the markets at their own game. For 31 years, Dr. Stephen Leeb has been showered with national awards for one-year and multi-year achievements in his various publications.
Even in his spare time, he has amused himself by trouncing the biggest names on Wall Street--via stock-picking contests! For instance, he likes to enter the annual Forbes contest, where he has won awards for first, second, and fourth. Plus, he has ranked first and second in The Wall Street Journal's contests, where he has been pitted against some of the country's hottest advisors--as well as the dreaded dartboard!
Leeb Group publications today reach over 200,000 readers through The Complete Investor and other general interest services. But now we are proudly launching an exciting new service that aggressively focuses on the biggest sources of major profits in the marketplace: energy, precious metals, industrial metals, and food. In other words, tangible commodities that are in enormous, insatiable demand around the world.
Meet Your Editors
Under the strong leadership of Editor Ivan D. Martchev (MARchev), Leeb's Energy World is guaranteed to add tremendous sizzle to your investing goal, whether that's growth, income, early retirement, or preservation of sanity.
Co-author of The Silk Road to Riches: How You Can Profit by Investing in Asia's Newfound Prosperity (Prentice Hall), he has an intensive knowledge of how global cash lows create super-wealth.
He was a senior investment manager for high-net-worth clients, then graduated on to become one of the select "brain trust" behind the prestigious Personal Finance newsletter from KCI Communications (100,000 circulation). He was their long-term mutual funds editor, and also worked on other publications focused on natural resources and emerging markets. (By the way, performance standards for big-letter analysts are far higher than in brokerages, where a mediocre analyst may receive a "free ride" as part of an institution.)
Mr. Martchev has come to us specifically to bring an intense focus on energy in Energy World. However, he expects to make regular "bonus profits" on gold and other metals and foodstuffs, plus occasional bonanzas in the nonstop, demand-driven world of India and China.
He has that golden touch that simply can't be taught. Here is a sprinkling of some of the calls from Silk Road that speak for themselves:
However, Energy World is not a one-man show. At our annual Reality Check Conferences you will enjoy getting to meet and mix with others on our advisory staff who will be writing regular articles and special reports for you, including the gray eminence who hovers over all six of our investor services ...
Dr. Stephen Leeb
Steve was the first well-known figure on the Street to figure out that because of OPEC, oil had shifted from a demand-driven commodity to a supply-strangled political time bomb.
When oil was at its low of $10.50 in 1999, he began sounding the alarm. (His own book publisher said he was nuts!) Wall Streeters started calling him "the $100 oil guy."
But Steve knew that $100 a barrel was in fact just a start because he had been watching the output numbers from the Saudis year after year, and he realized their stated reserve figures were becoming more and more phony.
Today, it's pretty plain that the Saudis are lying through their teeth, and investors must switch into emergency mode. Because all of civilization runs on energy, and most of it on oil, Steve sees most investments as hinging on the price of energy. That makes things simpler! A quick review of a few of the most recent short-term trades by the Leeb Group shows the following profits--mostly related to oil in some way or other:
Oil service ETF options: up 28 percent in 3 days
Gold miners ETF: up 56 percent in 12 days
Valero calls: up 34 percent in 6 days
Transocean calls: up 44 percent in 2 days
Freeport McMoRan: up 29 percent in 3 days
Solarfun Power Holdings: 35% in 43 days
Shorting the NASDAQ 100: 26% in just over a month
Shorting CarMax: 92% in 21 days
Shorting Amex's Broker/Dealer Index: 50% in 25 days
NVIDIA: 37% in six days
Nabors: 69% in 29 days.
You can see that combining the insights of Steve Leeb and Ivan Martchev is going to put you in a whole different investing category! Turn to the last page and join Leeb's Energy World now.
At the Top of the Pile in Good Times and Bad
Every decent investment advisor makes nice profits in fat years. During most of the '90s, you could throw a dart at the stock pages and make 20% a year.
Yet Stephen Leeb was ahead of the herd even in those days.
And since September, 2003, (when we began tracking), the growth portfolio of The Complete Investor has had a track record that left Warren Buffett in the dust: up 108.2%, compared to Buffett's 61%. This has kept him safely in the top echelon of all growth stock analysts.
By the way, in that same period the S&P 500 has been up only 40.4%.
Put another way: He beat Buffett's Berkshire Hathaway by 47.2%, and he trounced the general market by 67.8% over the course of less than five years.
Does that sound like Energy World might be worth $1,000 of your money?
The Top-Ranked Accidental Timer
It's hard to be a top-rated bull and a top-rated bear, but Dr. Leeb has been one or the other for 29 years now.
He has been ranked in recent years as the #1 market timer by both of the major U.S. rating services.
Timer Digest has been following him since 1987, when he began editing The Big Picture along with Personal Finance, which he ran for 13 years.
Currently, Timer Digest ranks him as the #1 Long-Term Timer (meaning the last two years). The punch line: Dr. Leeb has never aspired to be a market timer. He seldom dodges in and out of the markets. All these awards have been an accidental benefit of knowing when to get in and out of specific investments!
In 2003, Dr. Leeb began editing The Complete Investor newsletter, which currently ranks in the top 10 in the U.S. for the most recent 52-week period.
Tomorrow's Books Today
Dr. Leeb is the author of six books on investments and financial trends. His newest, The New York Times best selling business book The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel (Warner Books), co-written with Glen Strathy, was released in February 2006. It outlines the biggest challenges facing the American economy, and the steps individuals and government can
take to forestall them.
His previous best-seller, The Oil Factor: Protect Yourself--and Profit--from the Coming Energy Crisis (Warner Books, 2004), accurately predicted the surge in oil prices and was rated among the top investment books of the year by Stock Trader's Almanac, 2005. It also forecasts a longer-term energy squeeze and further price rises, and lays out a detailed investment plan for coping with this new world.
His earlier best selling book, Defying the Market: Profiting in the Turbulent Post-Technology Market Boom (McGraw-Hill; 1999) predicted the collapse of technology stocks and the growing importance of oil, real estate, and other hard assets in a portfolio strategy. The book was selected by Library Journal as one of the Best Business Books of 1999. Dr. Leeb co-authored both books with his wife, Donna Leeb.
Other books include Getting in on the Ground Floor (Putnam, 1986) Market Timing for the 90s (Harper Collins, 1993) with co-author Roger Conrad; The Agile Investor (Harper Collins, 1996) also with Roger Conrad.
Broadcasts and Journals
He is frequently quoted in the financial media, including Investors Business Daily, USA Today, Business Week, The New York Times and The Wall Street Journal. In addition, Dr. Leeb has been a recurring guest on Fox Business News and Bloomberg, and he has appeared on Business Insiders, CNN, and the late Louis Rukeyser's Wall Street Week.
His talent for mental gymnastics first showed up at the University of Illinois, where he still holds the record for academic speed. Coming from the University of Pennsylvania's Wharton School with a bachelor's in economics, he switched majors and earned three advanced degrees in just three years: master's degrees in both psychology and mathematics, plus a Ph.D. in psychology!
Now 62, he stays as sharp as ever, playing tennis and bicycling near his weekend home in Connecticut.
The Hottest Needles in the Energy Haystack
Oil passed its production peak two or three years ago. Coal is still cheap, but wary of being Gored. Clean natural gas is starting to climb. Nuke power is coming back big time. Wind and solar are less reliable, but getting cheaper every year. Biofuels, including syngas, offer dozens of fascinating ways to save civilization as we know it. And engineered geothermal systems hold immense promise (20 centuries of energy right underneath the US)!
On the consumption side, plug-in cars may turn back the clock to an era equivalent to dollar-a-gallon gas. And another drawing-board engine we are tracking could make the cost of petrol downright irrelevant.
Yes, all these sound exciting, but The Hottest Needles in the Energy Haystack will bypass them all and steer you straight to the most profitable stocks and commodities of today. Examples:
The aggressive Wyoming exploration and production driller that has grown their proven reserves 3,000% in the last seven years. Their production has increased at a compounded growth rate of 60% a year for five years.
The uranium holding company that is poised to cash in on the huge shortfall in mine production. The unstoppable crescendo in global demand will clash with the expected total runout of uranium
Gold and Silver: Prepare for Liftoff
Over the next ten years, you'll need an investment portfolio that will do well during the coming wave of inflation while at the same time insuring yourself against possible bouts of deflation (and war or economic collapse).
By far your best hedge is gold. It's more steady than oil, and in fact, is such a matchless store of value in tough times that Roosevelt felt it necessary to confiscate it to keep people from protecting themselves.
Right now, gold is cheap. Over the past forty years or so, the ratio between gold and oil has been about 18 to 1. At this writing, that ratio is well under 10 to 1. But we expect gold to reach at least $5,000 within a decade. Often, gold will even overshoot that historical average if inflation is high enough. Thus, gold could easily trade at 30 times the price of oil. That means with oil at $200, gold could reach $6,000.
In Gold and Silver: Prepare for Liftoff, you will find direct pipelines into fast precious metals profits. For instance:
The world's only pure silver company. It scrounges by-product silver from other mines at fixed prices, then sells it at gouging, opportunistic prices.
The South African mining company that bought vast, unused mining rights very cheaply and will sell their gold soon--when the market is right. Their official motto is, "A Long-Term Option on Gold," and, we might add, "...one that never expires."
Energy is hot. Any amateur can make money on it. A pro can make good money. But only a few world-class pathfinders can show you the way to compound your profits at a breath-taking record pace.
When the times look chaotic and uncertain, that's when fortunes are made. Five years from now, you will look back on today as the turning point in your financial quest, the day when you began to focus on the world's most important tangible assets:
The leading forms of energy (both fossil and renewable)
The key metals (both precious and industrial)
And food (production, processing, and food itself).
The $997 Non-Gamble
We never like to talk about investments being a "sure thing," but we can come within an inch or two of offering you just that: a slam dunk, can't-lose way to get top investment advice without risking a penny of what you're paying for it:
Our introductory Charter Member discount offer is guaranteed to double your subscription fee.
That means you must make investment profits worth twice the price of your membership fee. What's more, you don't even have to wait until the year has gone; if at any time in the first two months you don't think your profits will eventually be twice the cost of your fee, in your own personal judgment, you may request a refund of your subscription fee.
Frankly, however, we will be disappointed if you do not increase your trading profits.
How are such gains possible?
As a member of Leeb's Energy World, you will be updated twice a month, electronically and instantly, by what used to be called a newsletter. But whereas newsletters often came to be viewed as a duty and a chore to read, your EW Updates will be composed of fast-moving, market-driven action items centered on your portfolios.
For many members, the Strategic Portfolio will be the basic one. With up to 30 stocks, distributed among four to five sectors, it will keep you well anchored in the fastest-growing companies and commodities of our time--mainly in the energy field, yet also wisely committed to a 10%-15% position in gold and other "runout metals" in increasingly short supply.
If you are looking for even faster growth, you may tend to favor our Trading Portfolio. It features the cream of the cream--stocks and commodities backed by the most overwhelming array of forces in the markets. It's also something of a no-brainer, where you just follow directions. No iffy scenarios, no tough decisions, no brain-bending graphs.
It's not for "day traders," as holding times will typically range from a couple of weeks to a couple of months. But often, positions will show a good profit in as little as two to three days, and we may choose to take them. Again, the heavy emphasis will be on energy.
Regular Podcasts, E-mail Alerts, and Special Reports
Although your EW Updates will be action-oriented, we also want you to be broadly informed of the big picture. For that reason, you will receive regular (and irregular) electronic notices, 24/7 bulletins, and backgrounder reports, all designed to make you into a second-to-none investment expert, at least in the fields of energy and other commodities with high intrinsic value. This includes the two introductory special reports you saw above. It's all part of our effort to make you into an energy-savvy investor who is totally in touch with the real world, not just the politically correct, popular world of investments favored by the herd.
To that end, we'll send you editor Ivan Marchev's e-mail. Forgive the corn, but our motto is "No Member Left Behind." We want you to be an insider, not a peripheral spectator.
That includes joining us at our annual Reality Check conference here in New York City. Of course, you could choose to stay at home and view the whole thing on our live Web feed, but then you'd miss out on the camaraderie among the newly and obnoxiously rich! And you couldn't share in popping the champagne corks for the huge profits you've made.
So take advantage of our slam-dunk guarantee today.