Turn on the printing presses, impose lots of new taxes and regulations, eat the rich. But… America is now the world’s largest debtor nation. What will our foreign creditors and trading partners do if the dollar continues to fall? If the rice market is any indication, we will face dozens of additional export restrictions, as more and more countries refuse to accept the U.S. dollar in trade. I wonder what will happen then? Perhaps a war to gain access to raw materials? Canada, be careful.

You think that sounds crazy, I’m sure. But listen to what U.S. Sen. Chuck Grassley told reporters recently: “If part of our problem is that the Chinese are going to eat meat and you’ve got to have corn and soybeans to feed the Chinese their meat, then why isn’t it just as legitimate for the Chinese to go back and eat rice as it is for us to change our policy on corn to ethanol?”

Here you have a United States senator suggesting our most important foreign creditor should eat rice so we can power our SUVs with corn-based ethanol, the production of which actually consumes more energy than it produces. It’s not often I’m surprised by the stupidity of our government officials. But this one got me. Grassley would be wise to consider that the Chinese can afford to pay higher prices for grains, because their currency continues to rapidly appreciate versus the dollar. Meanwhile, we’re going to have a hard time buying rice if the Chinese don’t lend us their savings.

I wonder what our readers make of these events – of U.S. citizens demanding to keep their homes even though they can’t pay their mortgages; of U.S. senators demanding our trading partners stop buying our corn; of major retailers placing limits on the purchase of rice; of banks blowing up day after day; and of the dollar falling from one new low to the next.

We’ve been advising people to buy gold and silver for at least the last five years as a hedge and protection against the risk of hyperinflation. Now, it has arrived. But how many subscribers, I wonder, have bought gold or silver? My bet? Less than 10%. It’s still not too late, though. And our own Matt Badiali has found a way to buy gold and collect big dividends, too. Click here for the details.

The IRS started mailing the economic stimulus checks this week, and Goldman Sachs already compiled a list of the 10 companies that will benefit most from the extra cash: Cheesecake Factory, Best Buy, Darden Restaurants, Home Depot, JCPenney, Kroger, Kohl’s, Royal Caribbean, Safeway, and, of course, Wal-Mart. Wal-Mart was an easy guess considering that 8% of U.S. retail sales already go there.

From a reader: “Why are your recommended trailing stops always 25%?”

In my newsletter, I frequently adjust the stops of my positions based on the risk of the investment and our desired holding period. But a 25% stop loss is a good place to start. With an initial allocation of 4%, a 25% stop loss puts 1% of your original capital at risk.

If you use a trailing stop loss and the position moves up at all, your principal at risk can quickly fall to zero. Using stop losses and trailing stop losses must be done in conjunction with position sizing. The goal is to minimize the impact of any loss. Once you learn to avoid big losses, you’ll find it’s much easier to make money investing.

Billionaire real estate mogul Sam Zell is buying Brazil, “It has the chance 30 years from now of being a bigger economic power than China,” Zell told the Milken Institute Global Conference. Zell said the country’s 180 million people, skilled work force, and wealth of natural resources has made it largely self-sufficient.

He also mentioned Brazil’s biggest mall operator was seeing retail sales growth of 10% annually. And what’s stopping China? The country’s one-child policy, which Zell believes will decrease the number of workers in China and “come back to bite them big time” in 2020.

International Strategist editor Tom Dyson is also hot on Brazil. He took an agricultural tour of the country earlier this year. In his travels, he found the future of the world’s agricultural production, Protein City. This mega complex will produce the world’s cheapest commodities and make an absolute fortune shipping them all over the world. Tom found the best way to profit from Protein City, and his pick is up 25% in less than two months.

Tom holds three Brazilian stocks in his portfolio, all three are up double digits. And he’s got three more Brazilian stocks on the radar. To learn more about International Strategist, click here…

Regards,
Porter Stansberry and Dan Ferris

Just a few days ago I was joined by Eric Roseman, Jack Crooks, Erika Nolan, and David Newman for a special conference call. We all jumped on the phone to share investment ideas that we’re discussing in Panama.

I heard the most compelling case yet why you MUST take the escalating global food crisis seriously. This could have a major impact on your wealth!

In just a moment, I’ll tell you how you can eavesdrop on this call to hear more details from our private conversation. But first, let me tell you some of the most interesting topics we discussed on the call.

We’ll cover all these points in much greater detail in just a few more weeks at the Total Wealth Symposium in Panama. However, I feel compelled to share the intriguing highlights of our conference call with you right away…

World War Food

Eric Roseman has discussed the growing global food crisis in the A-Letter recently, but it’s quickly escalating into agricultural Armageddon.

Just last week Kazakhstan, one of the world’s largest grain exporters, imposed a TOTAL ban on wheat exports. In other words, wheat can NOT leave the country. This is just the latest of many desperate attempts to hold down soaring local prices.

Wheat has skyrocketed 92% higher in the past year, but may soar even higher, as export restrictions in Russia, Ukraine and Argentina have closed one-third of the global wheat market.

Meanwhile panic is gripping Asia as rice prices have more than tripled in the past year. Rice is a staple food source for three billion people in developing nations of Asia and Africa. It’s easy to see why there is panic and rioting in the streets. The price of benchmark Thai rice broke through the US$1,000 a ton mark for the first time ever last week, up from just US$300 this time last year.

The escalating food crisis is easily the biggest problem facing Asia and other emerging markets – much more troubling than the credit crunch. After all, people in these nations can do without bank loans or new credit cards, but they can’t stop eating!

Corn, wheat and rice have already made big moves, however Eric is very bullish on other “soft” agriculture commodities that haven’t skyrocketed in price yet. With this market, it’s only a matter of time before they do. In fact, soft commodities have quickly become the best-performing sub-set of the commodity bull market.

The “softs” are stealing the show from gold and crude oil.

The best part is you don’t have to trade futures or options contracts to cash in on this boom in agricultural commodities.

In fact, Eric will be recommending some ultra-specific ways to tap into this bull market without trading on margin or making risky leveraged bets. He will be providing all the details, and naming names in Panama.

Warming Up to the Comdols…
and Has the Dollar Finally Bottomed?

Currency expert Jack Crooks confirmed Eric’s bullish stance on ag-commodities. Jack just returned from a trip to Chicago, where he says, the grain traders at the Chicago Mercantile Exchange (CME) are working overtime to keep up with skyrocketing futures prices and surging demand for commodities.

Closely related to this, Jack is also seeing some interesting trading opportunities set up in the so-called “comdols.” These are the currencies of commodity-rich exporters like Australia, New Zealand and Canada. At the upcoming Total Wealth Symposium, Jack will be talking about specific strategies to play the comdols for maximum upside, with strictly limited risk.

Jack also believes there could be some major surprises in store for currency traders this year. Everyone knows the dollar has been beaten down to all-time lows against the euro. The Japanese yen has also rallied mightily against the beleaguered buck this year. Jack makes a convincing argument however, for why the buck may see a reversal of fortune ahead. For instance, did you know that the dollar has actually risen in value during four of the past five U.S. recessions?

While the U.S. is most likely already in recession, Jack believes that Europe probably isn’t very far behind. There’s been plenty of recent evidence of slowing growth in the U.K. and the Eurozone, yet the European Central Bank (ECB) has yet to cut rates.

Unlike the Federal Reserve, the ECB is more concerned about signs of inflation and has opted to keep interest rates tight. So far, that’s supported the euro, but if those cracks in Europe’s growth spread to recessionary proportions, they’ll be forced to start cutting over there too. That would knock out a big pillar of support for the euro.

Jack plans to discuss all of these scenarios, complete with his awesome array of charts and graphs, in Panama. I’m looking forward to it!

When Will This Bear Market Ever End?

Investors in global stock markets have been bruised by this unrelenting bear market since last October. Eric has his own list of signs to tell you the credit crunch is over, and I can tell you, we’re not there yet. Just last week big financial firms including J.P. Morgan, Merrill Lynch, and Citigroup collectively reported about US$30 billion in additional losses and asset write-offs thanks to the ongoing credit crunch.

But a funny thing happened on Wall Street last week amid all this negative news flow… shares actually rallied about 4% higher – the biggest gain in months. Financial shares also surged on this bad news. While the credit crunch itself is far from over, the market has already anticipated and discounted a lot of this bad news. So we may be in store for a powerful (and far overdue) rally in stocks that should give you lots of short-term profit opportunities.