While Washington’s all-powerful ego may have our leaders believe they still control our fiscal fate, they lost that power long ago. Now, the Fed and the Treasury may dictate who gets what, but China decides how much and when.

That’s scary.

After yesterday’s unnerving trade-deficit report, Americans are waking up to Beijing’s power and its dangerous shenanigans. If it continues unabated, this nation’s role as a supreme power is over.

It is absolutely no coincidence China unveiled new banking reserve requirements on the very same day the Commerce Department reveals the largest trade gap in ten months. With a seriously undervalued currency working to its advantage, China needs to appear like it cares about America’s financial future.

In reality, we know the truth. China doesn’t care. It already owns us.

All across the globe, calls for yuan (China’s currency) appreciation are growing louder by the day. Of course, you won’t hear much from the Obama administration. After all, it’s hard to talk when an important appendage is getting squeezed in a vice.

But France’s Nicolas Sarkozy has the, um, guts to say what needs to be said. He doesn’t have a $400 billion trade imbalance to worry about. Flat out, he tells the world “The monetary disorder has became unacceptable.”

But as American voters have learned. Talk is cheap. It won’t get you anywhere, especially with China.

If America is not willing to politically attack Beijing’s manipulation, it will have to do it by good old-fashioned belt tightening. Stop asking China for so much of its goods and free cash and the country’s ears will quickly bend our way.

Obama has his chance to stand up for you and me next month. But will he do it? Has he ever?

The political and financial pundits will be all over the president in February as he reveals his latest budget proposal. If he does what is best for this country, this will be a watershed event for the world markets.

But if Obama falls to the pressure of ever-political Pelosi and the constituents that elected him, it will be a non-event that proves we are enslaved to Asia.

As for me, I’m hoping Obama does what he’s promised (for a change) and cuts the nation’s spending by at least 5% next year. That would show China that we’re not ready to lie down just yet. Even better, it would slow down our government’s massive growth.

You and I know Obama is not about to cut tens of billions of dollars without slipping an equal amount through some sort of accounting loophole, especially when the Peace Prize winner is about to ask for another $33 billion on top of an already record-shattering defense budget.

If all goes as planned, Obama will allocate close to $750 billion in Defense Department spending next year.  Who will be lending us that money? You guessed it, China.

But don’t expect that to be a line item on Obama’s upcoming budget. If Bush managed to hide defense spending, you know this “ultra-transparent” administration will find an even better way.

We are in the midst of a critical year for this country’s fiscal fitness. By my calculation, we have not fallen of the cliff yet, but the ground beneath us is crumbling. If we don’t swallow our pride and jump to safety now, we will likely never get another chance.

China has open arms, awaiting our fall.

*** As investors, this is heavy stuff. If the value of the dollar falls, so does our wealth. If national security weakens, so does our wealth. And if our taxes rise, we lose even more wealth.

The future is scary. But inaction will make it even worse.

For many investors, gold is the fallback. But I don’t buy it. If America fails, Washington will either steal your gold or unload its own onto the market.

Diversification is the key. If you are holding a portfolio filled with domestic stocks, you are sitting on a time bomb. You don’t want to own American companies when the Chinese are increasing their share of the global market. You want Chinese companies.

And you want Indian firms. And you want Japanese companies. And you most certainly want exposure to Australia’s vast natural resources.

You don’t need any more exposure to the land of broken promises and empty rhetoric. Talk is cheap and Obama’s only making it cheaper.

Baltimore — (TFN): Maybe it is time we took a lesson from the French. Not the new-age work-fearing, café-going French, but the old-school, take-back-the-country kind of citizens alive during the French Revolution. Those folks knew how to stand up for themselves.

History buffs will be quick to point out the similarities of late-18th century France and modern America. There was a financial meltdown, runaway government spending and a constituency fed up with aristocratic fiscal shenanigans.

Minus the heads on pikes (give it a year), the situation is eerily similar to today.

Whether it is on the federal, state or local level, government ineptitude is  at all-time highs throughout the country. The powers that be want our guns, our freedom and most importantly, our money.

Whether they know it or not, the nation’s most populous states are on a fast-track to bankruptcy. California gets the most press time, but big-hitters like New York, Pennsylvania and Maryland deserve just as much space on the front page.

There is big trouble brewing.

At home in Pennsylvania, our governor took time last week, not to wish the state a Merry Christmas (that would be hell on poll numbers), but to warn us the state’s financial future looks very, very bleak.

Governor Rendell tells us once Obama’s stimulus money runs dry in the next year or so, funding for the programs that keep the state moving forward will dry up. Unless new revenue sources are created, upcoming budgets will have more holes in them than O. J. Simpson’s murder defense.

What’s his answer? Gambling and blackmail. What else would you expect from the raspy talker from Philadelphia?

Pennsylvania’s governor is using the state’s workers as pawns in a high-stake chess match with the legislators in Harrisburg. Last week, he set out a January 8 deadline to get a tax-heavy gambling bill passed.

If the state’s congress does not legalize table games by that date, another 1,000 workers get the axe.

How’s that for the aristocracy sticking it to the citizen?

*** If you have been watching the headlines, you know just about every cash-strapped state has plans of opening its borders to slot machines and gambling. It’s a great way to shake out the pockets of citizens without imposing a new tax.

It’s still stealing. But it is a much more sinister way of doing it.

Beyond gambling, legislators have their eye on an even bigger tax source… the Internet.

Right now, the World Wide Web is a veritable tax haven for shoppers. Sure, a few shoppers here and there are forced to pay state sales tax, but if you want to save the extra 5% to 10% you’d pay at a brick-and-mortar joint, just a few clicks will get the job done.

Of course, state governments do not like the idea. Billions of dollars in taxable sales are crossing state borders, yet very little of it is getting taxed. Even when the law states web-purchased goods are supposed to be taxed, the vast majority are not.

As of now, Internet tax laws are virtually impossible to enforce and large retailers are getting better and better at taking advantage of the many loopholes.

But that will change. You can count on it.

As state governments run out of easy revenue sources, they will turn to the Internet. Over the next twelve months, we will see an increasing amount of legislation aimed at getting more of your money out of your wallet and into their hands.

Even scarier, on November 1, 2014, the Internet Tax Freedom Act is set to expire. If not renewed, Web-vitals like email access and bandwidth could be opened up to federal and state taxes. Taxing these entities souned preposterous when the law was created in 1998, but now that Uncle Sam is in debt like never before, you can count on Washington getting its greedy hands on this one.

Soon, the Internet will no longer be a tax-free zone.  It is not good news for investors. It’s not good news for shoppers. And it certainly is not good news for the American economy.

*** Let’s talk gold. After early-morning gains, the precious metal just hit negative territory once again. With gold now trading for $1,100 an ounce, its speculative value is dwindling, but its attractiveness as a long-term store of security is rising.

As noted above, there is no doubt taxes will be on the rise in coming years. Estate taxes, short- and long-term capital gains and just about anything related to real wealth will be eyed by a greedy, desperate government.

While they will do their best to shave a few pieces off your bullion, gold is a great way to protect yourself from a government gone mad. Now that prices have come down out of sky-high territory, now is a good time to grab some gold, stash it in the basement and walk away.

But don’t go too far. You may need the shiny metal sooner than you think.

What a time to be part of such a popular, well-regarded newsletter. From what I’ve heard and read, Notes subscribers are some of the most-informed, thought-provoking readers anywhere. I sincerely look forward to opening a dialogue with all of you.

As you know, there has never been a more pivotal time in this country’s financial future than right now.

The dollar is weak.

The word “jobs” has become an atrocious four-letter symbol for economic despair.

The government owns Detroit, Wall Street and is desperately trying to get its hands on healthcare.

And, worst of all, China could eat our economy for breakfast.

Indeed, there will be no shortage of topics to discuss over the next few months.

But first, you are owed a proper introduction. I am hoping to get to know many of you through commentary and feedback, but before you can drop me a line, you have to know who you are writing to.

First and foremost, if you are looking for Wall Street flash, I’m not your guy. Far from it.

I’m not a Mercedes and gold watch kind of investor. In fact, I drive a pickup truck to the office and wear a digital watch that I bought on Amazon for $14 a few years ago.

When they were handing out made-for-TV personalities, well, I must have been out fishing that day.

That’s fine with me.

Too many folks talk too much and think too little. After all, what is talking? In most cases, it’s nothing but a bunch of hot air, especially in this game.

Like that bunch on CNBC. Don’t get me started. How a few headline reading clowns became the face of finance is beyond me. For most of them, it’s dissecting Wall Street in the morning and hocking OxyClean in the evening.

These guys won’t ever let facts get in the way of their opinion.

If you want facts, I will give you facts.

How about a market that is still 30% below its highs?

Or $80 oil in an economy that is screaming, “No mas!”

Or an American dollar that is weaker than Obama’s economic acumen?

Or a Fed Reserve with more power than any unelected board in global history?

I could go on and on about the subjects that keep today’s investors up at night, but what would we discuss in the coming days?

Like I said, there has never been a more pivotal time in the nation’s economic outlook. Even better, there has never been a time to be at the helm of a popular contrarian newsletter.

You are my kind of people. The thinkers. The realists. You don’t talk just to make noise. You think, then discuss. I am excited to see what we get into.

*** Now that you know a bit about me and the way I think, let me share some of my recent work with you.

As you know, the commodities market has been off the charts over the last eight months or so. Just about everything that can be pulled from the ground has soared in value as investors from across the globe have flocked to anything with a tangible value.

With a weakening dollar, the appreciation is understandable. With everything but natural gas, that is.

Natural gas is America’s fuel. The vast majority of what we produce is used within our borders, with very little demand contained in the export or import business.

Even though a nasty recession has significantly reduced natural gas orders, production is on the rise and prices have more than doubled in recent months. With natural gas reserves nearly full and the winter’s increased demand yet to show up, the markets are about to realize they made a horrific mistake.

Natural gas is unlike any other commodity. It has nothing to do with currency or global economic health, yet speculators treated it just like oil or even gold.

Bad move.

Traders are now paying for their mistakes.

Besides writing articles and commentary for TodaysFinancialNews.com, I am also tasked with running an options trading service called TFN Strategic Trader. It is a fast-moving easy-to-use options service that loves to take advantage of short-term market mistakes.

Less than two weeks ago, I lifted the curtain on my latest special report, an in-depth look at the nation’s natural gas industry. At the bottom of page 5, I listed three trades that offered triple-digit gain potential.

I admit, I made a mistake.

I said the gains would come by January 15. I was too conservative!

Already, two of the plays are up by 140% and 170%, with the third up by just 13%. Those two big gainers and one soon-to-be big gainer alone could easily make up for two years worth of market losses for investors still suffering.

But we are not cashing in yet. The best is yet to come. You can read the full report here.

*** The next few weeks and months are going to be quite interesting. I am not one to scream and shout, but let’s face it. Our nation and economy ain’t what she used to be.

Instead of protesting with a teabag or pleading with your congressman, I’d rather you protect your wealth, make you some more money and ensure that no matter what happens, the life you know is not going anywhere.

We’ll fight back, but not in any way they are used to seeing.