After last night, I’m ready to get out the 00 buckshot, myself.

I’ve got my eye out for good intentions, gone bad after spending the last three editions of Notes discussing the idea of financial regulatory reform.

During 52-mile commute home yesterday, they were all over the place, anything from idiotic signs to a couple of state cops setting a trap and writing tickets for not moving to the left lane when passing a stopped emergency vehicle.

The gung-ho troopers had rush-hour traffic slowed for over a mile.

But my mind really started spinning when I passed an out-of-state big rig. I could not help but notice the federal and state ID numbers stenciled onto his door followed by a host of annual registration decals from a cornucopia of states. Between the tolls, the permitting fees and the growing list of regulations, it’s no wonder the trucking industry’s bottom line collapsed.

Once I finally crossed the creek and pulled into my driveway, I was ready to sit down and relax by turning on the local news. Let’s just say it’s a good thing the guns are locked up. That TV would still be smoking.

Here’s what the local news “personalities” had lined up to tell us.

They started with a lead story about Harley Davidson’s plans to abandon its largest manufacturing plant at the heart of our local community. Unless it gets strong union concessions in the next few weeks, the company plans to pick up and move to Shelbyville, Kentucky.

Can’t say I really blame the company. The local union tends to form a picket line every other year.

After a short break to show off the latest products from GM (a commercial you and I paid for), the news was back on. This time they were discussing how a local homeless shelter had reached full capacity and is now forced to turn dozens of needy folks away each day.

The bright side of Harley leaving is the county will have all the space it needs. Most of the abandoned Caterpillar factory remains empty as well, just a couple of miles down the street.

Next up was the neighboring city’s news of layoffs and a tax increase. With revenues down and the state battling a budget crisis of its own, the mayor is writing up pink slips and preparing new tax calculations.

He’s even interested in sending local churches a tax bill, noting a third of local property owners don’t pay a penny.

After that cheery bit of news was another story of layoffs. This time it is the state of Pennsylvania cutting 319 jobs, taking the total reduction for the year to 769, plus 2,000 unfilled positions.

But don’t worry. The state’s lawmakers have decided to forego their annual cost-of-living raise. Their pay will stay at $78,000 this year.

I finally gave up on watching the newscast after the “investigative team” revealed we need to keep a close eye on those lobbyists hanging out with our lawmakers.

There’s a news flash.

The state’s two top lobbyists, natural gas drillers and the tobacco industry, appear to be better represented in the state’s capital than any of its constituents.

After missing a legally imposed budget deadline by well over 100 days, the state was hit with a bevy of new taxes and program cuts. The only two groups that came out ahead were, you guessed it, gas drillers and tobacco producers.

The smokeless tobacco industry kept its ultra-low retail tax and another 30,000 acres of Penn’s woods are now open to Marcellus Shale drilling.

With that much lobbying taking place, one would naturally think us tax-paying folks would be able to find out who was the grand recipient. But politicians are sneaky.

Because they write the legislation, they know the best way around it.

It turns out, no state lawmaker has surpassed the public-disclosure thresholds for lobbying gifts and contributions. Go figure.

I have to get a permit to nail a shed up in the back yard, but they can rob us blind and its 100% legal.

After that bit of news, there was twelve minutes remaining in the newscast but I couldn’t take any more. I went down to the garage and cleaned my gun.

*** It is good news for TFN Strategic Trader members. As natural gas prices plunged by close to 7% today, our recent play against the trend is paying off big time. All four of my recent picks are up by double-digit proportions, with one big winner now worth gains of a whopping 385% as the underlying position sunk to record low territory.

There is word spreading across commodity trading pits that the nation will continue to inject natural gas into its reserves throughout November, the month when withdrawals typically occur. I said this would happen months ago.

To see what will happen next, read this report.

*** Gold prices keep soaring. And investors keep wondering when they’re going to bump into the ceiling.

Some blame the weakening U.S. dollar for gold’s rise. Contrarian maven Bill Bonner extended that to the weakness of all “fiat” currencies — not just the dollar. My colleague Christoph Amberger over at TFN was a tad less general. He pointed out today that gold actually traded at $200 less per ounce in 2008… when the dollar’s exchange rate against the euro was even lower than today, at $1.63.

He thinks the main factor behind the dollar’s relative decline to gold is the fact that it doesn’t pay to own dollars any more: “Zero-point-seven-five percent APR on a CD? That’s just marginally better than the lint in your pockets! Now, gold is an asset notorious for not generating returns other than speculative gains. It doesn’t pay interest or dividends. But at this point, neither does the U.S. dollar. Or the yen. Or the euro, pound sterling, Icelandic krona: “The comparative opportunity cost of holding gold has been eliminated! Plus, the cash flows out of the dollar have created an asset bubble that will keep inflating!”
How long will this last?

As long as the Federal Reserve keep punishing dollar savers with non-existing interest rates! That may be at least another year: “Not because the world is abandoning “fiat currencies”… but because holding dollars is a losing game now — engineered and maintained by the U.S. government!”
So far, the team over at TFN’s Hot Stock Confidential has been rubbing their contrarian hands as gold went up: Bullion may be up twenty percent for the year. But HSC’s silver stocks are beating that yield by multiples! Just today, the team took 32% gains in just over a month on Silvercorp.  Amberger points out that this was double-digit gainer #70 for HSC members so far this year.

But they’re not abandoning precious metals. Not at all! Here’s what they’re up to: “Our next Hot Stock Pick is coming out this Thursday. With gold futures at record highs of US$1,151 an ounce today, we’re going to stick with a precious metals pick: At today’s levels, the gold reserves of this junior Canadian gold miner are worth a whopping $460.4 million!

“Let’s put that into the fuzzy math of financial newsletter marketers: With 333.42 million shares outstanding, $1.70 currently buys you 1.38 ounces or $1,589 worth of that gold! As gold prices keep moving up in the great game we call the Commodities Carry Trade, this U.S.-traded stock could snag you a cool 30% gain before New Year’s.”

Hot Stock Confidential members will be receiving this Hot Stock Pick of the week tomorrow before noon. You might want to be one of them. Join up right here.

In the days following Obama’s inauguration, Washington quickly passed a wide set of tax reforms. Part of the legislation included a $400 tax break for the country’s working class and increased healthcare funding for the country’s poor, unhealthy children thanks to increased taxes on the tobacco industry.

It is no surprise neither measure has worked out as planned.

According to reports today, more than 15 million of us will have to pay back the $400 we saved in taxes over the last few months due to an error on Washington’s end.

I hope Uncle Sam doesn’t expect interest on his loan come April.

The news out of the tobacco industry helps us continue our discussion on regulations. The good and the bad.

Winston Churchill once said, “If you have ten thousand regulations, you destroy all respect for the law.”

The great orator hit the notion perfectly. With Congress working on reform after reform, the American people eventually became deaf to the noise from Washington.

Worse yet, we became savvier at circumnavigating weak legislation. Just ask the tobacco industry.

In an effort to fund children’s healthcare, the Obama administration levied a massive 2,000% tax hike on the nation’s roll-your-own cigarette industry. Taxes for the tobacco used to roll a custom smoke rose from $1.10 per pound to $24.78 per pound.

Washington figured the massive increase would deter smoking and create well-needed revenue care of the folks that refuse to kick the habit.

As you can likely deduce, it didn’t work.

What happened was manufacturers ripped off one label and slapped on other. Roll-your-own tobacco production plunged while pipe tobacco production, with its $2.83 per pound tax, soared.

Before the tax, pipe tobacco demand was just 270,000 pounds per month. Just a few weeks later, it hit 1.7 million pounds.

Turns out Washington had no idea pipe tobacco was so similar to the roll-your-own stuff that it could be considered a direct replacement.

The mistake is now costing the government some $384 million annually in lost tax revenues.

Once again, it proves the markets are always a step or two ahead of new regulations.

Barney Frank may think he can write a law that tells Wall Street to behave, but in reality all he’s doing is pushing the action from one unlit corner to the next.

I can’t wait to see what they come up with next.

The response from the “real world” is almost always ingenious, like a classic Tom and Jerry cartoon.

*** I sure hope the Fed knows what it is doing. With Big Ben stubbornly clinging to record-low overnight rates, the top inflation cop needs another trick to keep market forces at bay while still enticing a skittish economy to come out of its shell.

His latest trick? Paying interest on banking reserves left with the Fed. It is a trick used at other central banks to create a “corridor” that keeps rates from sinking too low or rising too high.

But many pundits don’t think the Fed is ready for such management “tricks”, especially as it sits on a massively inflated balance sheet.

I am one of them.

I am against the measure not because I feel it won’t work. It most certainly will work and has in the past.

I am against it because who in the world wants to give anybody in Washington any more power?

The Fed already owns the banking industry and now it wants to create even more opacity.

Over the last three days, we have seen more than enough examples of how increased government power fails. The more we mess with the markets, the harder they are to control and predict.

For all of you that constantly shout, “Fire the Fed,” here’s a tip of my hat. I’m starting to see the light.

The distortions from reality are mind-boggling, yet all of us depend on the status of the simple fiat for our financial wellbeing.

The person with the most skin in the dollar game is, no doubt, President Obama. The nation’s economy hinges on the fate of the greenback and the White House knows it. That is why it is doing anything it can to slow the slide.

Even if it is entirely psychological.

Today, reports are flowing from Washington that show Obama may have plans to use up to $210 billion in TARP money to lower the nation’s ever-increasing deficit.

It is creative accounting at best and a $210 billion bribe at worst.

While the average Oprah-watching, Crocs-wearing American won’t take a second out of their do-nothing day to read below the feel-good headline, there is a handful of us that are actually paying attention.

With this idea of “paying down our debts,” it is vital to remember the Treasury didn’t pull the $700 billion in TARP funds out of some cavernous account.

We borrowed that cash. And now Obama wants to use the borrowed money to pay back our debts, minus a year’s worth of interest of course. It’s like taking out a loan to pay off your mortgage.

The timing of these rumors is more than suspicious.

Just yesterday, China slapped the currency markets in the rear by once again raising the notion of dumping the dollar and making a sudden change in its exchange-rate policy.

Ironically enough, less than 24 hours later, Obama has a $210 billion check in his hand ready to “repay” our debt.

It is money from one hand, around the back, and into the other.

But it gets better.

Obama is not the only one trying to mask Uncle Sam’s debt problems. Just about every exporting country in the world is desperate to keep the dollar strong.

They have to. Their economies depend on it.

Rumor has it countries like Russia and South Korea have been buying dollars on the open market over the past few weeks, in an effort to keep the greenback’s slide from gaining even more momentum.

The governments would rather risk devaluing their reserves than allow their economies to suffer from the effects of a weak dollar.

Looking forward, the question is how long can the manipulation last? How long can the dollar remain artificially inflated? And how long until the markets naturally take care of the situation?

While we may not know the exact answer to any of those questions, it does not take an economics scholar to realize the outcome will be horrific, at least for those of us with dollars in our pockets.

*** The solution? Buy gold. According to the top dog at Canada’s behemoth gold miner, Barrick, we have every reason to believe we surpassed “peak gold.”

That means all the easy gold has already been stripped from the ground and supplies are only going to shrink from here.

According to the CEO, Aaron Regent, global gold production peaked in 2000 and is expected to continue declining into the foreseeable future. So far, mine production is down by nearly 10%.

The news of increasing supply constraints comes at a time when demand is already surging. For those of you that were under the bleachers during Econ 101, it means prices will continue to rise.

There has been a lot of discussion about a sudden collapse in gold prices as many investors believe the current boom is merely a fear-induced bubble. Two or three months ago, I would have bought the story. But not now.

The dollar is simply too weak and foreign reserves are accumulating gold too quickly for prices to fall sharply.

China’s immense buying alone is enough to limit near-term fallout. The country has already doubled its gold reserves and Beijing continues to be a major buyer.

Just one more reason for bulls to send prices higher.

*** Just so you can’t say I don’t let you in on anything for free, I’m going to toss a freebie your way.

With gold prices reaching into record territory, it is a perfect week for Van Eck to release its Market Vectors Junior Gold Miners ETF (NYSE:GDXJ). The freshly created fund gives investors a stake in 38 small- to mid-sized gold miners.

For investors looking for a simple way to take advantage of the gold bull with some additional leverage, this is the ETF to do it.

Thanks to the speculative nature of junior miners, expect shares to beat the market when gold prices are surging and underperform when the bears return. For now, there is plenty of upside potential.

This from Marketwatch:

Sales were quite weak across a broad swath of the retail sector in October, an indication that the fourth quarter could be worse than the just completed third quarter, when inflation-adjusted consumer spending fell at the fastest pace in 28 years. Retail sales account for about half of consumer spending and about one-third of domestic demand. Retail sales are down 4.1% in the past year. Sales fell a downwardly revised 1.3% in September. Sales in August were also revised lower to a 0.7% decline. The dismal report confirms what the business sector has been saying: Consumer spending is falling rapidly.

This from Today’s Financial News:

It is a fact that the real estate industry has historically been a leading indicator of the American economy. When it falls, Wall Street falls. When home prices rise, so does the Street. If that continues to be the case, the American economy is on the rebound.

For proof, look at today’s new-home sales figures released by the Commerce Department. Compared to sales in August, the amount of new homes that sold in September rose by an unexpectedly high figure of 2.7%.

Over 464,000 freshly built houses traded hands across the country. Three years ago, that number was nearly three times higher. But that is all in the past. What matters is that this month’s figure marked an end to the real-estate landslide.

So what has caused buyers to return to the markets? Two things, falling prices and fear of the stock market.

As for falling prices, take a look at these figures. One year ago, the average new home sold for $240,300.  Right now, that figure is just $218,400.  Buyers smart enough to realize home prices are not going to drop any further are getting an instant 10% discount on their homes.

Next, there are plenty of folks unwilling to take a leap into the stock market right now. With the nation facing a deep recession, the equities market is a scary beast for the uninitiated. They figure if they invest in real estate, their investment will always hold at least some value. After all, a piece of land cannot go bankrupt and disappear overnight. Smart idea. Instead of burying their money in their backyard, they are making it work for them.

News you can use

Even with the strong selling last month, inventory levels are still near record-high territory. Over 390,000 new homes remain unsold across the country. According to the experts that calculate such things, that is a 10.4-month supply. Inventories dropped by over 7%.

With prices falling and such a high inventory of homes still on the market, few builders are willing to raise a new house unless it is already sold. That simply means the market is correcting itself and the free economy is working.

As long as the government stays out of the industry, it should recover in short order.

So where is the investment potential? It depends on how much you have to invest.

If you have plenty of cash and have access to the markets along the western coast, buy all the deeply discounted properties you can afford. Rent them now and sell them in a few years. Your investment will pay off handsomely.

If you don’t have a few hundred thousand dollars lying around, you can reap equally large gains by investing in a few choice real estate investment trusts (REITs). Trusts like Post Properties (NYSE:PPS), which is involved in apartment rentals and condo sales, and American Campus Associates (NYSE:ACC), which is taking advantage of the shortage in student housing and a real-estate industry bottom, will do well. And just as almost all REITs do, they both pay nice dividends of 9.7% and 5.5%, respectively.

The facts are obvious. The real estate market is turning around, proving the American economy will be on the rebound fairly soon. We have seen the worst of this crisis.

Now is the time to re-allocate your portfolio and ensure you are properly positioned to take advantage of the bull that lies just over the horizon.

Source: Last Chance for Deep Discounts In Post Properties (PPS) and American Campus (ACC)

Despite the worst monthly cut in US payrolls in five years, US stock market indexes were poised for increases of 3% to 5%, according to Dow Jones Market Watch.

The gains come ahead of next week’s round of earnings estimates.

The Dow Jones industrials are up 24.59 points to 12,650.62, a weekly gain of 3.6%. The boarder S&P 500 is 4.7% north of where it stood one week ago.

“The one indicator to watch right now is the the Volatility Index,” says Jeff Clark in The Growth Stock Wire.

“This measures the implied volatility factored into the price of S&P option contracts. In simple terms, it’s a measure of fear. When traders are afraid of losing money in stocks, they’ll often pay up to buy protection in the form of index put options. The increased demand for puts inflates the option premiums… and the VIX rises.”

“Invest in the nation’s essential goods and services and your money will be protected against inflation and will still work towards making you rich,” says Andrew Snyder in Today’s Financial News.

“There are dozens of companies out there that meet this criteria, but only one of them offers the kind of profit opportunity that makes my balding head break out in sweat.”

Click on the following link to find out what hot medical stock has Andrew so excited.