Utility Tokens and Cryptos Finally Properly Explained

We have asked our trading partner Teeka Tiwari to explain to us what crypto currencies are and the difference in a crypto currency and the many tokens being offered in the ICO markets right now. Please take a few minutes to read his entire response, when you are done you will have a complete grasp of cryptos and utility tokens....

Cryptos are a brand new asset class. They're completely different from stocks, bonds, and traditional currencies. But that was over 18 months ago. Since then, Bitcoin has risen 1,600% and ether (the coin for the Ethereum network) is up 2,563%.

Perhaps you feel that crypto assets aren't assets at all. Perhaps you've missed out on this incredible run and think it's too late to get in. I want to show you why cryptocurrencies are not like the Dutch Tulip Craze. In fact, we're still in the early days of the cryptocurrency boom.

According to billionaire hedge fund manager Mike Novogratz, the entire crypto market is set to become 25 times larger in the next 5 years. That would be a 2,400+% rise from today. And he's putting his money where his mouth is. Novogratz recently put 10% of his net worth into crypto assets.

That means this asset class still has plenty of room to run and there's still time for you to join the ride. What I'm about to share with you could be very valuable. Like the internet before them, cryptocurrencies have the potential to reshape the economy and they offer a rare opportunity for ordinary individuals to make life changing gains.

The Cryptocurrency Ecosystem

To kick off your education, you need to understand there are two types of crypto assets: cryptocurrencies and utility coins (also called app coins). Think of cryptocurrencies as the digital equivalent of traditional fiat currencies such as dollars, euros, and pounds.

You can use them as a medium of exchange or to store value. The only difference is they're exchanged over the blockchain. Think of utility coins as crypto equities. They're like buying shares in IBM, Walmart, or Apple. Instead, you're buying a stake in a blockchain venture.

Cryptocurrencies and utility coins are similar in that they both operate on a blockchain. The blockchain is like an online public ledger. It's used to track cryptocurrency transactions [Blockchain is a public ledger of all cryptocurrency transactions executed. It's a shared network that can move value around and represent property ownership.]

Now that you know the two types of crypto assets, let me explain how each works.

A New Form of Money

Cryptocurrencies are the crypto asset that most folks are familiar with. So, we'll dive into this one first. The most common cryptocurrencies is Bitcoin. It was created to act as alternatives to fiat (paper) money. Two frequent questions we get are why would anyone buy a cryptocurrency that's backed by nothing and can be created by anyone.

These aren't only fair questions, but smart ones. Here's the thing to remember about money: It's whatever people mutually agree it is. In the past, beads, cowrie shells, silver, gold, and of course paper, have all been used as money. You'll notice that none of them have any intrinsic value.

At the end of the day, a sack of flour has more practical value than a $100 bill or even a bar of gold.

And yet, we value both far more than a sack of flour. That's the mutual agreement we've all come to.

When you think about it, it's not that rational. How does a piece of green paper or a bar of yellow metal hold more value to a human than a sack of flour that can be used to feed a family for weeks?

Because we all agree it does.

In my opinion, paper currency may be the most irrational form of money in human history. At least you can decorate yourself with gold, silver, beads, and cowrie shells. Not only that there's a limit to how much gold, silver, and shells that can be found. There's no limit on the amount of paper money that can be created.

The closest thing to true money (outside of food) is gold. Gold meets several historical rules that we use to judge value. It's prized for its beauty. It's difficult to find. It's expensive to extract. It's also a scarce resource. But there are problems with gold, too. We have to trust that the refineries that certify the gold's purity are telling the truth.

Gold is also difficult to transfer (think of carrying around bags of gold coins or chests of gold bars). And that makes it virtually useless as a practical medium of exchange in daily life. What I mean is you can't buy a new car, house, or even a book with gold bars.

Here's How Cryptocurrencies Are Creating Value

Well designed cryptocurrencies have many features that humans look for when measuring value. Let's talk about them now.

Pre-Programed Scarcity

Cryptocurrencies like Bitcoin are pre programmed to create a set amount of coins. Once this limit is reached, no new coins will be created. This creates scarcity. For instance, the algorithm that governs Bitcoin will create no more than 21 million Bitcoins.

Think about this, there are 35 million millionaires in the world. That means if every millionaire wanted to own an entire Bitcoin, they wouldn't be able to. There literally is not enough to go around. Contrast that with paper money.

With paper money, there's no limit to how much can be created. However, gold is finite. That limits how much new gold can be refined each year. You can see that cryptocurrencies actually have more in common with gold than with paper money.

Difficult to Counterfeit

Cryptocurrencies rely on a technology called the "blockchain." This blockchain uses cryptography to secure transactions. These complex mathematical algorithms make counterfeiting cryptocurrencies almost impossible. Now, compare that to cash. It's estimated that almost a quarter billion dollars of counterfeit paper money sloshes around the U.S. every year.

What about gold? Fake gold will never fool an expert. But counterfeit gold could be passed off to someone with an untrained eye. Cryptocurrencies share two important criteria that give value to traditional assets: scarcity and irreproducibility (hard to counterfeit). These are necessary to create value. But you need something else, too.

A Final Criterion

For a thing to have value, it needs one final thing: Some form of utility. Even art (which some will argue is worth little more than the sum of its parts), creates massive utility by stirring deep emotions in the hearts of people that can appreciate it. That emotional response is a very valuable form of utility. It's the reason people spend billions on art annually. So, what type of utility do cryptocurrencies provide?

Rapid Transfer of Funds

Unlike the transfer of gold or even cash, cryptocurrencies can transfer value almost instantly. And they can do it at very low costs. On the Bitcoin network, you can send $50,000 for about $3. The receiver will get it in about 10 minutes.

Compare that to a traditional wire transfer. The fastest I've seen a wire hit is 24 hours. The cost to send a domestic wire can vary from $35 to $70. International wires can eat up 1%-15% of the total amount of money sent. As far as sending gold, it takes 3-14 days domestically and is very expensive. So, being able to quickly send money anywhere in the world is a very valuable utility that cryptocurrencies possess.

Free from Government Control

Over the years, both gold and cash have been either confiscated or severely restricted through capital controls. Capital controls are government restrictions on your ability to access or move your money.

Even here in the U.S., we have capital controls. For instance, you can't just stroll through airport security with more than $10,000 in cash.

Unless you declare it, you're breaking the law. Even though it's our money, the government insists we report when and where we're moving it. This is an outrageous demand that we accept because there are no alternatives. That is until cryptocurrencies came around.

With cryptocurrencies, we are in complete control of our own funds. We can store them on our own devices free from government intervention. If you store your cryptocurrencies properly, it is impossible for the government to confiscate or control them. This is a truly liberating utility that is very valuable.

Highly Secure Decentralized Payment Network

One common criticism of cryptocurrencies is that anyone can make one. How can something have value if you can create a currency with just a few lines of code? This criticism is spot on.

But remember, anyone can buy a printing press and start making his or her own paper money. What stops people is that no one would use it. The same is true in crypto. Only currencies that gain widespread adoption actually take off.

One of the ways we measure this widespread adoption is by looking at the number of computers that are in a cryptocurrency network. For instance, more than 7,000 separate computers are running the Bitcoin blockchain.

That widespread adoption is a vote of confidence by the market. It's a way for us to objectively identify "good" cryptocurrencies from bad ones. As the network of users grows, so does the volume of cryptocurrency being transacted. This in turn creates a network effect that snowballs.

For instance, $143 million per day of Bitcoin changed hands in 2016. Today, it's over $4 billion per day. The widespread use of this currency is giving it value. Thousands of people are coming together and agreeing to exchange goods and services for Bitcoin.

That is the true test for any currency. Are people accepting it? The answer is a resounding yes. For these reasons, we believe you'll see more people continue to adopt cryptocurrencies like Bitcoin. They offer utility that neither cash nor gold can. Just a few of those companies already accepting Bitcoin or other cryptocurrencies are....Overstock.com, Microsoft, Intuit, PayPal, DISH Network and many more.

A Second Type of Crypto Asset

Earlier, I told you there are two types of crypto assets. The first is cryptocurrencies (which I've just explained to you). The second type of crypto asset goes by several names. Some folks call them "application coins" others call them "utility coins."

The terms are interchangeable. So, what is a utility coin? A utility coin is a crypto asset that is used to secure or deliver a service. Our biggest gains have come from investing in utility coins.

That's why I want to spend the rest of this email talking about them. If you can understand how utility coins work, you can make a fortune in them. In my Palm Beach Confidential service, I have readers that are transforming $300 investments into six figure windfalls by getting in early on utility coins.

Three Themes Driving the Value of Utility Coins

Over 2017, I've been to conferences in Silicon Valley, Boston, Austin, Las Vegas, New York City, Berlin, London, and Copenhagen. During these conferences, I've met with hundreds of people. I've met crypto project founders, venture capitalists, government regulators, central bankers, Fortune 500 executives, hedge fund managers, and digital currency miners.

These are the three primary themes that are driving their research, development, and investment decisions:

• Fat protocols
• Interoperability
• Scaling

If you don't know what these terms mean, don't worry. I'll explain each for you right now.

Theme 1: Fat Protocols

What is a "fat protocol"? I had to ask myself the same question. I stumbled upon this theme at the Consensus 2017 event in New York City in late May. And I heard about fat protocols in more detail in Berlin. Let's start with protocol. In the technology world, a protocol is a set of rules.

For instance, the internet is governed by two protocols: TCP and IP. TCP stands for transmission control protocol. This is a set of rules that governs the exchange of packets of data over the internet. IP stands for internet protocol. This is a set of rules that governs sending and receiving data at the internet address level.

IP by itself is something like the postal system. It allows you to address a package and drop it in the system, but there's no direct link between you and the recipient. TCP/IP, on the other hand, establishes a connection between two hosts, so they can send messages back and forth for a period of time.

Nobody owns TCP/IP. But imagine if someone did. How valuable would the protocols be?

Think about this. According to a Harvard Business Review article, more than half the world's most valuable public companies have built business models on TCP/IP. That's $5.4 trillion dollars in value traced right back to TCP/IP. Think of the biggest names in the internet space: Amazon, Google, Facebook, Priceline, eBay, Netflix, Uber, etc... They are applications, not protocols.

In short: Applications (or "apps") are computer programs that run specific tasks. They include simple desktop apps like calculators, clocks, and word processors to mobile apps like media players, games, instant messengers, and maps. Google's YouTube, Facebook's Messenger, and Microsoft Word are examples of popular web applications. Companies own their applications.

Protocols are the rules computers use to communicate with each other. TCP and IP are examples of widely used protocols. Unlike applications, no one owns computer or internet protocols. For instance, the Ethereum platform has created a protocol for the issuance of crypto tokens (among many other things).

Ethereum has created rules that make it easy to launch and manage digital tokens. That's why more than 50% of new tokens coming to market are using the Ethereum platform. As more projects are launched on the Ethereum network, the demand for ether tokens increases. Said another way, the more the protocol is used, the more valuable the ether tokens become.

These protocols are called "fat" because most of the economic value and profits will be captured at the protocol level. All the tokens launched on the Ethereum platform are only worth $6.8 billion. But the Ethereum platform itself is now worth $34 billion.

Even as more and more companies go "public" on the Ethereum platform, we think Ethereum will be more valuable than the applications that end up running on it. The reason is that the more the protocol is used, the more demand is generated for the underlying protocol token. That's how utility coins like ether gain their value.

Theme 2: Interoperability

Hundreds of new blockchain ledgers are emerging. On top of that, there are hundreds of established centralized ledgers and payment networks. These established payment channels are used by banks and payment providers. We're talking about giants like JPMorgan, PayPal, Visa, and MasterCard.

As the world migrates from a centralized to a decentralized model, how do you get these different networks to communicate with one another? This is a huge problem. That's why we think the next boom will be in companies that allow different ledgers to "talk" to each other.

Imagine there's an English speaker, German speaker, and French speaker in the same room. And no one speaker understands any other speaker. This is the problem right now with blockchains and payment networks. They all "speak" different languages. But what if somebody could create a technology that would allow these different languages to understand one another? In the tech world, this is called "interoperability."

The Difference Between Financial Ledgers and Blockchain Ledgers

Today's financial system requires a lot of overlap. Financial institutions spend a lot of time and money maintaining their systems and even more time and money making sure their systems agree with other systems on common facts.

This is done so that there is no single point of control or single point of failure. The solution is decentralization. It eliminates single points of failure and the necessity for each institution to duplicate the data. The table below highlights the differences between a traditional ledger and a blockchain ledger.

Imagine a version of eBay or PayPal that can work with virtually any digital or fiat payment system. That's the goal of interoperability. Here's the key takeaway, The utility coins that are building in easy to use interoperability will be the ones that become highly valuable.

Theme 3: Scaling

While in Berlin, I met a group of executives from drug giant Merck. These folks oversee Merck's European innovation group. They are tasked with identifying and getting management "buy in" on implementing innovative technology. They have a terrific grasp of the blockchain. They know it could potentially save Merck millions of dollars in costs.

The problem is none of the current blockchain platforms scale. Meaning they just can't operate at the speed and level of complexity Merck requires. This is a common complaint. I've heard it from executives in London, Boston, Silicon Valley, New York City, and now Berlin.

The two most popular blockchains, Bitcoin and Ethereum, can only handle seven and 15 transactions per second, respectively. Like the old 56k telephone modems of the '90s, that's awful. But it would be a mistake to think that it will stay that way forever.

Just as those modems eventually transformed into the high speed internet we enjoy today, it's only a question of time before Bitcoin and Ethereum crack the scaling problem.

Bringing It All Together

The future for cryptocurrencies and utility coins is bright. As more people look to take control of their money, they'll turn to cryptocurrencies like Bitcoin and others. As I track the developments in fat protocols, interoperability, and scaling, I'm seeing more and more widespread adoption of utility coins like ether and many others.

But remember: These are still very early days. We'll see massive volatility ahead. It's unavoidable. The key to thriving in the chaos of the early days of a new technology is to remain rational. Friends, hear me when I tell you that it is irrational to expect the crypto market to be stable. Any market this new is highly unstable. The way we manage and profit from that instability is to use small position sizes. With crypto assets, we rely on asymmetric risk.

With crypto we can swing for the fences without putting the rest of our existing wealth at risk. This is a rare opportunity for ordinary people to make life changing gains without having to take life changing risk. That means we risk a small amount of money for a massive potential payoff. This strategy is working well for my readers.

The best part is this trend is just beginning. Right now, the entire crypto market is valued at about $195 billion. Novogratz, the hedge fund billionaire I mentioned earlier, sees the entire market growing to $5 trillion. That's 2,400+% upside ahead. That means we have many more opportunities in front of us to make life changing gains. So get out there. At the very least, buy some Bitcoin and Ethereum.

Remember, you don't have to own a whole Bitcoin. You can own just a fraction of a coin.

And as all these developments unfold – along with others like them – I'm confident that one day you'll be grateful you took action.

Let the Game Come to You!

Teeka Tiwari

Editor, Palm Beach Confidential

A Complete Breakdown of Teeka Tiwari's Investment Strategy....And It's All Free

In a few days, a special free event is about to take place, and I’d like to invite you to be among the first to take part in it. Former Wall Street hedge fund manager Teeka Tiwari is holding a FREE investment event about how you can get started making serious money from cryptocurrencies, like Bitcoin…

For the past 12 months, Teeka has been showing a small group of a few thousand regular people how to trade these “cryptos” for profit. He’s given them the chance to bank gains of 2,050% on May 24, 1,522% on August 8, and 14,354% on August 7 – and that’s just the beginning.

“$1,800 has grown to $29,000. My wife and I appreciate your wisdom more than you can imagine!” – David C.

“My original [investment] is now close to a 20 bagger. $600 going close to $10,000. Wow!” – Ron L.

“I was left nearly speechless last night when I discovered my $300 had grown to over $43,000. I have never heard of such gains in a short amount of time.” – Jon M.

But according to Teeka, the gains seen in cryptocurrencies is 2017 has just been the appetizer. In 2018, he believes there could be even more incredible investment opportunities.

That makes his event so special.

Teeka’s going to show you the exact strategy he’s used to spot all his biggest winners. And if you attend, you’ll have the chance to claim a portion of $1 million dollars in Bitcoin that he’s giving away.

Visit Here to Register for Free

Whether you’ve invested in Bitcoin before or you don’t know the first thing about it. This is a must attend event.

Among other things, Teeka – who’s traveled to more than 5 countries building relationships with the founders, CEOs, and investors behind some of the biggest cryptocurrency success stories of 2017 – will show you the exact strategy he’s used to help everyday people get the chance to capture returns of 582% in 8 months… 1,190% in 3 months… 1,241% in 6 months… 2,050% in 13 months… and even 14,354% in 6 months.

Here’s what you’ll get if you sign up right now….

*  Teeka’s 7 part Cryptocurrency Academy video training series – this is Teeka’s guide for how to get started in cryptocurrencies, even if you’ve never heard of Bitcoin before (the first special report will be sent to your inbox immediately after you register here.)

*  A complete breakdown of Teeka’s investment strategy (the exact strategy that’s helped him spot multiple 1,000%-plus winners)

*  A live Q&A session with Teeka – where he’ll answer your most burning questions (keep in mind, he can’t give personalized advice).

A 90 minute emergency briefing: Teeka and a special mystery guest – one of the co-founders of the second most popular cryptocurrency on the market – will reveal why cryptocurrencies could experience another major breakout, beginning January 2018.

Plus, you’ll have the chance to claim free Bitcoin during our $1 million dollar Bitcoin giveaway. That’s right, Teeka’s so bullish on Bitcoin that he’s buying $1 million (yes, $1,000,000) dollars’ worth of Bitcoin and giving it away during his emergency briefing. When you attend the event, you’ll have the chance to claim a portion of this money.

And those are just some of the things you’ll get for participating.

There’s no cost to attend, but everything will only be available for a limited time.

Simply Visit Here Now to Get Started

It costs you nothing to take his 7 Part Crypto Academy Video Training, or his free emergency briefing on Thursday, November 2nd. So please, don’t hesitate to Register. I already have.

See you in the Cryptocurrency Market!
Ray @ the Crude Oil Trader

The First Ever ‘Codeword’ Leak

By Porter Stansberry 

Today, an emerging story about the secret civil war being waged right now in Washington D.C. It is about to have a HUGE impact on our country. Two warnings before we begin. First, what I know so far is deeply troubling. We're approaching what will be the most dangerous period in our country's political history since the Great Depression. What could happen next scares me. But I continue to be optimistic that what will unfold will be great for our country.

Also, I'm certain that you simply won't believe much of what you'll read in today's essay. In fact, until I did my own follow-up research to verify what I could from my sources, I disregarded this story as "political nonsense" or just another D.C. conspiracy theory. Besides… it was all too horrible to believe. But then… almost everything my sources told me would happen started happening.…

Let's begin here.…
Did you know the U.S. government has a secrecy designation so restricted that virtually nobody – not even lifetime members of the intelligence community – even knows what it's called? It's not "TOP SECRET." It's way beyond that level. In late 2009, President Obama created this new level of secrecy inside our government with an executive order (No. 13526) – so Congress never approved it. Administered by the CIA, this new level of secrecy has created a covert government within the government that almost nobody knows and absolutely nobody is monitoring.

If you've ever heard the term the "Deep State" – the secret government within the government that actually holds power – then you know why a level of secrecy beyond "top secret" is so important. This new, more restricted level of secrecy was created so that the most powerful leaders of our government could communicate in total isolation. This level of secrecy is such a closely guarded secret that the name of the program itself is classified – and divulging the name is a crime, punishable by at least 10 years in a secret prison. So this level of security clearance is known only as "codeword."

At the highest levels of our D.C. government, only two dozen or so people have codeword clearances.…
I learned about this earlier this month. I was invited to lunch with someone who has held that level of security clearance. He told me about the existence of the codeword-level program. This isn't a rumor. It's a fact. For the last 30-plus years, my source has worked for and around the highest levels of our government. He is currently regarded as the president's most likely choice to become our next Federal Reserve chairman. Today, however, his clients include the world's top hedge fund managers and the leaders of America's biggest corporations. He is, in short, America's corporate representative of the Deep State.

We call him the "Metropolitan Man."

We met about a year ago. He reached out to me through a mutual friend – one of the best, young hedge fund managers in New York. He asked me to join him for dinner at the Metropolitan Club in New York, one of the most elite clubs in the United States. (Legendary banker J.P. Morgan founded the club. It's where billionaire investor Warren Buffett held his 50th birthday party. And it sits at the southeast corner of Central Park, across from The Plaza Hotel, with a great vista of Columbus Circle.) At the time, the Metropolitan Man was forecasting correctly that the world's central bankers and their negative interest rate policy were failing and that they would soon trigger a global run out of paper money and into gold. Over the next several months, gold and gold stocks soared (as you may remember).

A few days ago, the Metropolitan Man asked to see me again.…
He wanted to talk about something he had never seen before in all his years working in the government. For the first time ever, a codeword-level secret was leaked to the press. Nothing this sensitive has ever been leaked before – ever. Among senior leaders in D.C., it is widely believed that the director of the CIA himself was responsible for the codeword leak. And the rumor is that this information was then passed to the press through New York Senator Chuck Schumer's office. What was leaked?

A codeword secret briefing the CIA produced about a meeting in Trump Tower last December between a Russian ambassador and two senior Trump administration officials – Jared Kushner and Michael Flynn.
When Flynn lied about the meeting to the White House staff, he was fired. But the deeper question is: How did the CIA know about the meeting? How did it know how long the meeting lasted? How did it know exactly what was discussed? And how did that information end up in the hands of a New York Times reporter?

This backstory explains how Trump knows the CIA was spying on Trump Tower. And the counternarratives – Trump's claim that Obama was spying on him and the Democrats' claim that Trump is in league with Russia – are the beginning of a serious war. A civil war inside the Deep State itself.

Reading the newspapers won't explain how this war is being fought.…
They will never publish a clear explanation of the battle lines – or even who is fighting or why. But the outcome of these battles is likely to determine the fate of our economy for the next several decades. Let me explain why and tell you what this fight is really about. For the last 40 or so years, the U.S. economy has been built around a model that created vast power in D.C. The model has a few important components.

First, we have a highly "progressive" income tax. That ensures that anyone who makes high wages will pay for the lion's share of the government's expenses. Without extremely progressive income tax rates – where about half the country pays nothing and the top 10% pay for roughly 80% – the electorate would never continue to vote for more and more government. But it does, mostly because it doesn't have to pay for it.

Second, the government has an incredibly powerful regulatory regime in place. This allows D.C. to essentially control vast segments of our economy. Take Wall Street, for example. Who gets to sell a bond or a stock to the public? Nobody the Securities and Exchange Commission doesn't like (i.e. yours truly). This power results in tremendous amounts of "tribute" – legal fees, fines, and hidden lobbying that flows into D.C. and feeds its economic ecosystem.

And finally there's the North American Free Trade Agreement (NAFTA) and "free" trade. Our country has the ability to export all of the inflation generated by our central bank. This has led to decades of lower and lower interest rates and the government's ability to borrow essentially endless amounts of money without any serious inflationary consequences. These three components form the foundations of Washington's power.

Attack any of them and you risk a huge fight with the Deep State. What Trump is doing right now via his border adjustment tax, additional tax reform, and regulatory rollback is targeting all three of them at the same time. If he wins, all of the power that has been consolidated in D.C. over the past 40 years will evaporate.

Trump has put a metaphorical gun to the head of the Deep State…
And now, the Deep State is fighting back, tooth and nail, to protect the system it has built. Look at what has happened to the middle class in America over the last 40 years. Did NAFTA prevent price inflation by allowing America's consumer economy the luxury of accessing the world's cheapest labor? Yes, it did. But the flip side was devastating to the entire manufacturing industry in the U.S. And where did the resulting wealth flow? To D.C. and to the top 1% of America's wealthiest people who were able to access foreign markets and shield the resulting income from America's tax system.

Meanwhile, America remains the only industrial country in the world with global income taxation (you have to pay federal income tax, no matter where you live) and without a value-added tax. In short, we've chosen a system that punishes wage earners, while rewarding individuals and corporations who use overseas labor. The result has been a decline in real, after-tax wages over the last 40 years. That's a recipe to destroy the middle class – and that's what has happened.

Trump's plan to effectively lower income taxes to 25% and implement a value added tax to discourage foreign production of U.S. products will turn this entire economic structure on its ear and disenfranchise the Deep State that controls it. The winners will be the middle class, small business owners, wage earners, and America's manufacturing base. The losers? Those who have invested heavily in the current Deep State regime.

Why is this scary?
Well, unlike the health reform issue, the Metropolitan Man assured me that Trump's tax reform agenda would certainly pass. "It's a done deal," he said. He told me that his job lately "has been to help major corporations understand what will be in the new laws and how they will impact various markets." That means the Deep State has been pushed into a corner. What it might do next, no one knows. "That it would leak a codeword secret. Well, I would have told you that couldn't happen. I've never seen it before, not in more than 30 years in D.C. It's scary because if it'll do that, it'll do anything. Stage a terrorist attack? Start a war with China? Nothing is impossible anymore."

That's the downside. The next several months could see our government erupt into open civil war. The FBI accusing the president of treason… The president accusing a director of the CIA of breaking the law and having him arrested. Who knows where this will lead? On the other hand, assuming the government doesn't collapse into a civil war, Trump's new economic model will become a reality before the end of the year. For some industries (and for most Americans) these changes will bring massive prosperity. And for others – especially for companies and individuals who have been living at the government trough, tough times are looming.

Here's the best part.…
I believe these coming changes are so important and could lead to so much wealth creation that I've convinced the Metropolitan Man to come forward.

We will hold a meeting with him, at our offices in Baltimore, on April 5, 2017.
The meeting with start at 8 p.m. Eastern Time. It will last approximately two hours. Security will be very tight, so plan to arrive early. Everyone will be searched. At this meeting, the Metropolitan Man will "take off his mask" and tell you about his role in the Deep State. He'll explain the importance of the codeword-secret leak. And he'll discuss what the new Trump economic model will mean for various industries and parts of our country. He'll also explain how he knows the tax reform/border adjustment laws are certain to pass Congress and what those policies will mean for our country. If you'd like to attend the meeting via a live conference call, you can listen for only $19.95. Yes, that's right. $19.95.

This is easily the most important and valuable meeting I've ever arranged. 
It has taken more than a decade of work to gain access to information like this… And I want you to benefit from the incredible access we've gained. For successful investors and wealthy business leaders, meeting the Metropolitan Man in person and having the opportunity to ask him questions is invaluable. His normal consulting fee is $250,000. So I believe there's tremendous value at both price points. But no matter how you plan to attend, please do whatever you must to be at this meeting. There isn't a more important event you could attend this year.

Sign Up Here

Regards,
Porter Stansberry

The article The First-Ever ‘Codeword’ Leak was originally published at caseyresearch.com

How Saudi Arabia and OPEC are Manipulating Oil Prices

About eighteen months ago the international price of WTI Crude Oil, at the close of June 2014, was $105.93 per barrel. Flash forward to today; the price of WTI Crude Oil was just holding above $38.00 per barrel, a drastic fall of more than 65% since June 2014. I will point out several reasons behind this sharp, sudden, and what now seems to be prolonged slump.

The Big Push

Despite a combination of factors triggering the fall in prices, the biggest push came from the U.S. Shale producers. From 2010 to 2014, oil production in the U.S. increased from 5,482,000 bpd to 8,663,000 (a 58% increase), making the U.S. the third largest oil-producing country in the world. The next big push came from Iraq whose production increased from 2,358,000 bpd in 2010 to 3,111,000 bpd in 2014 (a 32% increase), mostly resulting from the revival of its post war oil industry.

The country-wide financial crunch, and the need for the government to increasingly export more to pay foreign companies for their production contracts and continue the fight against militants in the country took production levels to the full of its current capacity. In addition; global demand remained flat, growing at just 1.1% and even declining for some regions during 2014. Demand for oil in the U.S. grew just 0.6% against production growth of 16% during 2014.

Europe registered extremely slow growth in demand, and Asia was plagued by a slowdown in China which registered the lowest growth in its demand for oil in the last five years. Consequently, a global surplus was created courtesy of excess supply and lack of demand, with the U.S. and Iraq contributing to it the most.

The Response

In response to the falling prices, OPEC members met in the November of 2014, in Vienna, to discuss the strategy forward. Advocated by Saudi Arabia, the most influential member of the cartel, along with support from other GCC countries in the OPEC, the cartel reluctantly agreed to maintain its current production levels. This sent WTI Crude Oil and Brent Oil prices below $70, much to the annoyance of Russia (non-OPEC), Nigeria and Venezuela, who desperately needed oil close to $90 to meet their then economic goals.

For Saudi Arabia, the strategy was to leverage their low cost of production advantage in the market and send prices falling beyond such levels so that high cost competitors (U.S. Shale producers are the highest cost producers in the market) are driven out and the market defines a higher equilibrium price from the resulting correction. The GCC region, with a combined $2.5 trillion in exchange reserves, braced itself for lower prices, even to the levels of $20per barrel.

The Knockout Punch

By the end of September 2014, according to data from Baker Hughes, U.S. Shale rigs registered their highest number in as many years at 1,931. However, they also registered their very first decline to 1,917 at the end of November 2014, following OPEC’s first meeting after price falls and its decision to maintain production levels. By June 2015, in time for the next OPEC meeting, U.S. Shale rigs had already declined to just 875 by the end of May; a 54% decline.

The Saudi Arabia strategy was spot on; a classic real-life example of predatory price tactics being used by a market leader, showing its dominant power in the form of deep foreign-exchange pockets and the low costs of production. Furthermore, on the week ending on the date of the most recent OPEC meeting held on December 4th, 2015, the U.S. rig count was down even more to only 737; a 62% decline. Despite increased pressure from the likes of Venezuela, the GCC lobby was able to ensure that production levels were maintained for the foreseeable future.

Now What?

Moving forward; the U.S. production will decline by 600,000 bpd, according to a forecast by the International Energy Agency. Furthermore, news from Iraq is that its production will also decline in 2016 as the battle with militants gets more expensive and foreign companies like British Petroleum have already cut operational budgets for next year, hinting production slowdowns. A few companies in the Kurdish region have even shut down all production, owing to outstanding dues on their contracts with the government.

Hence, for the coming year, global oil supply is very much likely to be curtailed. However, Iran’s recent disclosure of ambitions to double its output once sanctions are lifted next year, and call for $30 billion in investment in its oil and gas industry, is very much likely to spoil any case for a significant price rebound.

The same also led Saudi Arabia and its GCC partners to turn down any requests from other less-economically strong members of OPEC to cut production, in their December 2015, meeting. Under the current scenarios members like Venezuela, Algeria and Nigeria, given their dependence on oil revenues to run their economies, cannot afford to cut their own production but, as members of the cartel, can plea to cut its production share to make room for price improvements, which they can benefit from i.e. forego its market share.

It’s Not Over Until I’ve Won

With news coming from Iran, and the successful delivery of a knockout punch to a six-year shale boom in the U.S., Saudi Arabia feared it would lose share to Iran if it cut its own production. Oil prices will be influenced increasingly by the political scuffles between Saudi Arabia and its allies and Iran. The deadlock and increased uncertainty over Saudi Arabia and Iran’s ties have sent prices plunging further. The Global Hedge Fund industry is increasing its short position for the short-term, which stood at 154 million barrels on November 17th, 2015, when prices hit $40 per barrel; all of this indicating a prolonged bear market for oil.

One important factor that needs to be discussed is the $1+ trillions of junk bonds holding up the shale and other marginal producers. As you know, that has been teetering and looked like a crash not long ago. The pressure is still there. As the shale becomes more impaired, the probability of a high yield market crash looks very high. If that market crashes, what happens to oil?  Wouldn’t there be feedback effects between the oil and the crashing junk market, with a final sudden shutdown of marginal production? Could this be the catalyst for a quick reversal of oil price?

The strategic interests, primarily of the U.S. and Saudi Arabia; the Saudis have strategically decided to go all in to maintain their market share by maximizing oil production, even though the effect on prices is to drive them down even further. In the near term, they have substantial reserves to cover any budget shortfalls due to low prices. More importantly, in the intermediate term, they want to force marginal producers out of business and damage Iran’s hopes of reaping a windfall due to the lifting of sanctions. This is something they have in common with the strategic interests of the U.S. which also include damaging the capabilities of Russia and ISIS. It’s certainly complicated sorting out the projected knock-on effects, but no doubt they are there and very important.    

I’ll Show You How Great I Am

Moreover, despite a more than 50% decline in its oil revenues, the International Monetary Fund has maintained Saudi Arabia’s economy to grow at 3.5% for 2015, buoyed by increasing government spending and oil production. According to data by Deutsche Bank and IMF; in order to balance its fiscal books, Saudi Arabia needs an oil price of$105. But the petroleum sector only accounts for 45% of its GDP, and as of June 2015, according to the Saudi Arabian Monetary Agency, the country had combined foreign reserves of $650 billion. The only challenge for Saudi Arabia is to introduce slight taxes to balance its fiscal books. As for the balance of payments deficit; the country has asserted its will to depend on its reserves for the foreseeable future.

Conclusion

The above are some of the advantages which only Saudi Arabia and a couple of other GCC members in the OPEC enjoy, which will help them sustain their strategy even beyond 2016 if required. But I believe it won’t take that long. International pressure from other OPEC members, and even the global oil corporations’ lobby will push leaders on both sides to negotiate a deal to streamline prices.

With the U.S. players more or less out by the end of 2016, the OPEC will be in more control of price fluctuations and, therefore, in light of any deal between Iran and Saudi Arabia (both OPEC members) and even Russia (non-OPEC), will alter global supply for prices to rebound, thus controlling prices again.

What we see now in oil price manipulation is just the mid-way point. Lots of opportunity in oil and oil related companies will slowly start to present themselves over the next year which I will share my trades and long term investment pays with subscribers of my newsletter at The Gold & Oil Guy.com

END OF YEAR SPECIAL GET 12 MONTH OF TRADE ALERTS FOR THE PRICE OF ONLY 6 MONTHS!

www.The Gold & Oil Guy.com

Chris Vermeulen

Get our latest FREE eBook "Understanding Options"....Just Click Here!

Peek Inside this Private "Hedge Fund" that is up 22% this Year

What if I told you there was a private "hedge fund" that regular people (not just the super rich) are quietly using to rapidly grow their wealth?

As you may know, you must invest a minimum of 250K or more to buy your way into most private hedge funds.
And even then -- nothing is guaranteed.

In fact, hedge fund managers (who make millions in fees) produced dismal results in 2015. Business Insider reports that through the 3rd quarter, most of the big-name hedge funds were returning between -4 and -17%.

Ouch!

Which makes the "fund" I'm telling you about today even more interesting. First, it's not really a fund. It's a trade advisory service. Second: Regular people, even those with smaller accounts, are able to follow these trade recommendations and go after double and even triple digit gains.

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See for yourself:
This Private Trade Advisory Service Finally Reveals Full List Of Closed Trades

Of course, there's no guarantee of future performance but even those billion dollar hedge fund managers will tell you that. Speaking of those managers, had you handed that 250K to one of the top hedge fund managers this year, you'd have LOST between 10 and 45K! And paid massive fees for the privilege!

That's why this program just might be one of the last remaining ways for the "little guy" to get ahead. But hurry, before Christmas they opened the doors to new members for the first time in months and the program filled to capacity in 4 days flat. Now that things have settled down, they've opened a few additional spots for new members but the doors won't stay open for long.

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See you in the markets,
The Stock Market Club

p.s. John Burbank, a private hedge fund manager who made a fortune betting big against the sub prime housing market in 2007, is predicting another big crash. If he's right, ordinary investors will probably get hammered. But members of this private trade advisory service could actually grow six times richer in a hurry.

                                 This "tell-all" videos reveals why...

New video.....How to Profit From Momentum by Trading Market Phases

Today Michelle "Mish" Schneider and the great staff at MarketGauge put their years of experience commodity trading and managing hedge funds to use for us. Showing us how when you define the market phases you put yourself at an advantage on how to approach your trading, because market phases help you determine which direction the market is headed next.
 

Come learn how professional traders apply specific  ‘trade rules’ depending on what phase the market is in to produce greater gains.

Follow the link below to watch a quick video from my friends at MarketGauge that highlights how you can ‘Trade With The Wind At Your Back’. It’s easier than you think to use market phases to gain momentum, and pack BIG gains in your portfolio.

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