The so-called benefit was to be able to watch people make every conceivable bad money decision. It was almost as if it was a school for how not to do things. They weren’t stupid, far from it. They just had never had any opportunity to learn any other way of doing it.

Whether it was buying a car, a house, investing in the markets or a small business, it was a constant stream of disasters. They seemed to be drawn to the wrong choices.

This describes most small investors. My entire career in the money business has been spent pounding the table about the costly errors the average guy makes with his money. As we plow our way through this most recent economic tumble, the average person is being exposed to new and more expensive ways to throw their money away.

It seems investors can’t do anything right in this market. Treasuries have always been thought of as the ultimate safe haven. The recent huge move up in price, driven by the shift from the crumbling market of ‘08, is about to teach the uninitiated a very costly lesson.

The part that really upsets me is that this is no different from the usual beating the small investor takes.

Institutions such as insurance companies, banks, pension funds and mutual funds, moved into treasuries as a safe haven from last year’s stock debacle well ahead of almost all others. Institutions always move before the small investor.

This gigantic shift of money drove bond prices through the roof. In fact, some treasuries had gone so high the interest rate was ZERO. Most people miss the significance of this, since most people don’t think of treasuries as gaining or dropping in price. The popular concept is that these are just like bank CD’s, no fluctuation, and no risk. Dead wrong.

Unless you are planning to sit on your treasury bonds, notes or bills for the full maturity, you have almost as much risk in these as you do in almost any other investment.

As is always the case, the followers got in after the institutions drove prices out of sight. So, the price the little guys paid a few months ago will drop as the big players continue to sell their positions and move to higher yielding bonds.

When the individual investor sells, he will learn the hard way that treasuries fluctuate in price.  In this case downward from the top of the bubble, and the safe haven has just become another money hole.

Bonds are bonds; the US government guarantee is only good if you hold these to maturity. This may be stating the obvious for many of you, but after almost 20 years of talking to the average investor, believe me, this is big news to them.

The institutions get away with this because they anticipate moves and in most cases create the moves. The average guy follows, as best he can, based on information that is days and weeks old at best. Too little, too late.

Another developing problem with treasuries is that OPEC and China own a huge percentage of our outstanding debt. These same groups are being killed by the worldwide economic slow down and the drop in oil prices. If either of them decides to liquidate their holdings in treasuries, we could see a massive drop in prices beyond that of our own institutional driven drop.

Don’t get caught in this safety trap!

The place to be right now is corporate bonds. The shift from treasuries has just started. This has been prompted by a slight thawing in the fearful response that drove the institutions to treasuries last fall. As this thaw continues, more and more big dollars will leave treasuries and look for higher paying investments that do not carry stock risk.

There was a big jump in corporate bond prices, in some instances 25- 40 percent, in the last few weeks that marked the beginning of the shift to corporates. But this big move has started to correct with the new uncertainty about how the TARP monies will be distributed, the further weakening in the banks and financials, and the concerns about whether or not the banks will be fixed by the government’s efforts.

This temporary drop in prices is one of the best buy signals I have seen since last November. You can pick up investment grade companies at good discounts to PAR and I am seeing yields as high as 7.2% on maturities of six to thirty months.

Here’s an opportunity to get in ahead of the followers. Take a look at the Bond Trader. To date, it has not had a single loss and has taken capital gains in the last few months of 40-90%.

The average total return for the discounted investment grade bonds in the portfolio is between 15% and 33% with maturities under three years and current yields of 7.2%. That’s a lot better than watching your stock portfolio drop every time the wind shifts.

For once, be in front of the followers. Get in on this now. Don’t wait for the TV to tell you its happening. If the TV talking heads are saying it, it already happened.

I’ll be back next week. Keep your powder dry and your eye on the horizon.

Source: The Treasury Bubble

Gold Star Resources Corp. (the “Company”) (TSX: GXX.H) is pleased to announce it has purchased a 100% interest in a number of Coal Dispositions located on the east side of the Pasquia Hills of East-Central Saskatchewan. The Coal Dispositions lie in close proximity to the recently announced coal discovery by Goldsource Mines Inc., approximately 50 Kilometers north of Hudson Bay.

Goldsource Mines Inc. (see Goldsource News Release May 5th, 2008) announced the results from 47 coal samples submitted from the Saskatchewan coal intercepts for two core holes representing 26 meters and 32.5 meters respectively of coal seam, including 22.6 meters of continuous coal in each hole. The coal was reportedly intercepted starting 80 meters below the surface.

Applications were made in accordance with the Coal Disposition Act of Saskatchewan and granting of permits is dependent upon regulatory requirements to process the applications.

The Company is a mineral exploration company based in Vancouver, British Columbia.

SOURCE: Gold Star Resources Corp.

Read the current edition of Casey’s Daily Resource PlusLink: http://caseyresearch.com/displayDrp.php?e=true

On Behalf of the Board, “Patrick Morris” Patrick Morris, President and CEO

THE BOARD OF THE TSX VENTURE EXCHANGE (ALSO KNOWN AS THE NEX) HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

For further information, contact: Patrick Morris President and CEO Telephone: (604) 641-4450 Facsimile: (604) 669-9335 GOLD STAR RESOURCES CORP. 1128 – 789 West Pender Street Vancouver, British Columbia V6C 1H2

And both for what you thought I was saying: That nuclear power is The Answer to America’s (or the world’s) energy woes.

But I’d like to remind everyone reading this — pro, con, neutral, apoplectic or apathetic about nuke power — that I freely admitted in the first two parts of this series that I don’t know enough about nuclear energy generation to make an informed decision about its prospects. I never said atomic power was a panacea, or even that I believe it is. I only pointed out some realities about nuclear power generation so far in the United States…

First, that as far as I could discover from a good deal of research time, it has killed or sickened few, if any. Secondly, I reminded readers that the overwhelming majority of Americans favor nuclear energy, a fact that seems not to warrant much mention in the mainstream media’s portrayal of the debate. Also, I put a few numbers to some of the hazardous realities — both to humanity and the environment — of conventional American energy production. A side note on this:

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One less-than-adoring reader observed that if I were to mention the tens of thousands of deaths related to coal mining, then injuries and deaths related to uranium mining should also be pointed out. Of course, I considered this when I wrote Part Two, in which I touched on the dangers of coal mining in my discussion of the human costs of American energy production…

According to my research, uranium mining was only recently resumed in the U.S. after being halted in the early ‘90s. Since its resumption in 2001, domestic uranium mining has been predominantly “open-pit” — which is far less hazardous and manual-labor intensive that conventional underground mining (like for much of our coal). Long story short: I couldn’t find much on the dangers of modern uranium mining in America.

However, this reader’s letter spurred me to some further digging — which led me to some old newspaper stories and other sources indicating that uranium mining in Utah, Colorado and other places in the American Southwest (mostly in the 1940s and ‘50s) may indeed have sickened or killed a number of miners and residents of mining communities. In fact, many of these people and their families have received payments under a 1990 law called the Radiation Exposure Compensation Act.

Again, specific numbers were hard to come by — but since I’m nothing if not objective, I felt this was worth mentioning. Also, since the U.S. currently imports more than 80 percent of the uranium used by domestic reactors, the dangers of mining the metallic fuel in Russia, Australia, and other major supplier nations must be considered (finding hard info on this is another matter, however).

Lastly, I must once again thank Whiskey & Gunpowder readers for their voluminous feedback — pro, con and otherwise. Special thanks to the numerous bona-fide experts who wrote in to express support for this series, among them a former U.S. Navy nuclear submariner and numerous active and retired nuclear engineers…

Now, back to the business of neither defending nor exalting American nuclear power generation — but considering it as objectively as I can.

From Ukraine, With Bile…

Always on the tongue-tips of those who’d thwart the spread of nuclear power in America is the 1986 reactor meltdown and explosion at Chernobyl, Ukraine. Of course, this disaster embodied all of our worst fears about nuclear energy — and I, for one, would never try to minimize or understate the horrors those in surrounding territories (especially Belarus) have experienced for the last 22 years because of the accident. I also agree with nuke-power’s harshest critics on one point at least: We’ll likely never know the true extent of the incident’s impact…

However, even the most jaded of nuke-haters would have to grudgingly admit that in the history of nuclear power around the world, Chernobyl has been an anomaly, albeit one of the most terrifying sort. To make an informed assessment of the risks of nuclear power, one must look at the whole picture. That picture includes 31 nations that are generating nuclear power in 439 plants — apparently without significant loss of life or destruction of the environment so far, Chernobyl excepted.