But our other big national deficit is creating a different problem, as well as the potential for one low-risk, high-return investment opportunity. Here’s the bottom line…

Because the United States has run such a large and persistent trade deficit for so many years, other countries – like China – have been able to run up large current account surpluses. These surpluses, in turn, have enabled them to accumulate substantial foreign exchange reserves.

For years, this money was invested in the world’s safest securities: U.S. Treasuries. But the returns from these securities haven’t been so hot lately. Especially when you’re a foreign investor watching the greenback wilt like last week’s roses.

Many world governments are now putting their money to work elsewhere. (Can you blame them?) Sovereign Wealth Funds are their vehicle.

Sovereign Wealth Funds are the financial assets of a country – usually part of the national savings – that are owned and organized into a state-controlled fund. These funds are increasingly moving money into global equity markets. And the sums involved are fairly staggering.

Current assets controlled by Sovereign Wealth Funds are estimated to be $3 trillion. They are expected to reach at least three times this amount over the next five years.

This is a bit scary to some investors, because these funds are entirely secretive. There is no world body to which they have to disclose what they are buying or when.

But here’s a common sense insight. They aren’t buying small or mid-cap companies. There isn’t enough liquidity in these to allow them to enter or exit their positions efficiently.

No, these funds must invest in the world’s biggest companies. As an individual investor, you might benefit from picking up giant companies like General Electric or British Petroleum or HSBC.

Or you can do it the easy way, by plunking for a few shares of the Dow Jones Global Titans Fund (AMEX: DGT).

This exchange-traded fund (ETF) holds 30 of the world’s largest publicly traded companies. It also pays a 2.5% dividend, 25% more than the average money market is paying right now.

Its major holdings include the companies I mentioned above, plus other market bellwethers like AT&T, Johnson & Johnson, Nestle, Microsoft and Proctor & Gamble.

The Global Titans Fund has several advantages. It is well diversified, liquid, and gives you instant foreign currency diversification. (60% of the holdings are in the United States, the rest are in international markets.)

It also uses a passive indexing approach, so it is both cost-effective and highly tax-efficient. Annual expenses are only one half of one percent.

This fund was originally brought to my attention by Eric Roseman, the Sovereign Society’s savvy Investment Director. (To read Eric’s views and learn more about international money flows, global investing and financial privacy, I suggest you check out the Sovereign Society’s Off Shore A-Letter. It’s quite good – and it’s free.)

In sum, the Dow Jones Global Titans Fund is holding exactly the mega-cap global companies that Sovereign Wealth Funds are likely to plow money into for many years to come.

My suggestion? Pick up a few shares now. And let the world’s most powerful creditors push your shares higher in the weeks and months ahead.

Good investing,

Alex

Source: How to Turn Sovereign Wealth Into Personal Wealth

Drug companies large and small have renewed their interest in one specific health care sector. It’s a true form of preventative medicine — a rapidly growing field that’s already decimated countless dangerous and deadly diseases.

Now biotechs and Big Pharma are in a race against time. Their mission is clear: Rid the world of the onslaught of superbugs and diseases that could cause the next great epidemic. And they’ll use second-generation technology to create some of the world’s most powerful drug saviors.

There’s money to be made in this field — and it hasn’t gone unnoticed by some of the planet’s top investors…

**********Only 10 Hours Remain **********

Respond Today and Get 50% Off the Millionaire’s Market

You’ve seen it before, so I won’t waste your time… If you act before tonight at midnight, I’m willing to do something very special for you.

I’ll give you a full 50% off the normal one-year price of Resource Trader Alert.

But space is extremely limited. And when the clock strikes midnight tonight, I’ll be forced to close this offer… So, read this before it’s too late…

**************************************

George Soros’ resume is nothing short of impressive. His legendary Quantum Fund returned investors an average 42.5% per year for 10 years — a total of 3,365% gains. In 2007, he raked in a staggering $2.9 billion, making him the Street’s No.1 earner for the year…

And then there’s Warren Buffett — an investor who needs no introduction. An initial $10,000 investment in Buffett’s famous holding company Berkshire Hathaway would have been worth more than $1.2 million at the end of last year…

Sure, they’ve made their money by occasionally taking different routes. However, Soros and Buffett are “sharing” some intriguing ideas these days, according to James Altucher, managing director of Formula Capital and author of Trade Like Warren Buffett. The two moguls are putting up big bucks for health care, he says, with a concentration on vaccines…

This bit of info may go against perceptions of Buffett as the ultimate value investor. Altucher claims this is a common misconception. Rather, Buffett is what he calls a “long-term demographic investor.”

That’s why Buffett and Soros are investing in health care and biotech stocks like GlaxoSmithKlein, Johnson & Johnson and Sanofi Aventis. These companies have a lot in common — most importantly, they are the world’s most prolific developers of vaccine treatments.

We’ve found an opportunity Warren Buffett can’t get his hands on — an opportunity to get in on not one, but two emerging biotechs in a race to create the ultimate cancer vaccine. More on them in just a minute…

**************************************

Superleverage: The Secret to Getting Rich in the Market

Back in 2003, you could have bought AngloCold stock for $32 and done very well when it climbed to $41 three weeks later. That’s a nice gain of 28%…

But if you had used my Superleverage technique, you would’ve turned that 28% gain into 528% in no time flat, with limited risk. See how it works here…

**************************************

The New Way to Fight Disease

For years, the vaccine landscape was ruled by the basics — measles, mumps and rubella. And, of course, annual flu shots for the elderly and those affected with immune disorders. The market for vaccines was relatively stagnant. In 2005, vaccines accounted for less than 3% of the global pharmaceutical industry, according to the Wharton School of business.

It just wasn’t very profitable to make cheap flu shots. And the antiquated process of incubating the inactive viruses to go into the shots is time-consuming, and the shots are easily contaminated.

Now we’re looking at a transition to a different kind of vaccine. In fact, we saw the wave of next-generation vaccines hit the development pipeline as early as three years ago. Professors at Wharton saw the transition coming:

“In the past, a lot of attention was paid to the childhood vaccines, but more and more research and development is focusing on vaccines for adolescents and young adults, or even on adult vaccines for diseases such as cancer,” Wharton health care systems professor Patricia Danzon commented more than two years ago. “The health system approach to vaccines really has to adapt to accommodate these new products.”

This quote appears very prophetic today. Just look at Merck’s recent success…

Merck’s most recent quarter, reported in May 2008, saw revenue rising to $5.8 billion, with much of its sales growth attributed to Gardasil, the company’s blockbuster cervical cancer vaccine.

Merck, along with many of the other major drug companies, is in the process of developing numerous vaccine treatments for a variety of diseases — some common, some deadly.

We’ll keep our eyes open. Until next time…

Best,
Greg Guenthner

The “next big thing” our friends at The Daily Reckoning recently predicted, “will be downsizing, cutting back, making do. Barely on the radar screen now, thrift is coming into focus more clearly day by day. So far, people are a bit embarrassed about it…a bit ashamed that they have had to cut back. But soon, it will be popular…fashionable…and, finally, almost obligatory.”

This new austerity craze — if/as/when it arrives — will impose hardships on many American companies. But a select few might actually benefit.

The cause(s) of downsizing are pretty clear. Home values are falling so sharply that very few homeowners can still pull equity out of their houses. Stock prices are also drifting lower, more or less. Meanwhile, inflation is ramping up.

~~~~~~~~~~~~~Special~~~~~~~~~~~~~

At High-Yield International, we’re obsessed with finding the highest-yielding securities in the world — no matter where they hide. In the process, we’ve uncovered many foreign yields that U.S. investors thought were impossible.

What is the highest yield we have brought our readers so far in 2008?

(A.) 9.5%
(B.) 11.0%
(C.) 15.2%
(D.) 21.8%

Click here to learn the answer…it’s free!

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Prices are rising in Europe as in America. Bread is up 12 percent in Germany over the last 12 months. Butter has gone up 45 percent. Milk, 25 percent.

Higher prices often stem from printing more dollars. “Force-feeding the rest of the world $2 billion per day (more consumption),” Warren Buffett reminded us last week, “is inconsistent with a stable dollar (more inflation).”

We share Mr. Buffett’s concern. Bernanke keeps printing. Politicians keep promising. Bridges keep crumbling. Wars keep spending.

With regret, we read last week that the projected total cost of medical care for U.S. veterans of the Iraq and Afghanistan wars will top $500 billion, a figure on par with the total military spending to wage these wars to date. And speaking of military might, Defense Secretary Robert Gates estimated in testimony before the Senate Armed Services Committee that the Pentagon will spend upward of $685 billion next year alone. That’s $170 billion more than the $515 billion the president proposed in his first-ever $3 trillion budget.

If that weren’t enough, Gates doesn’t even expect that number to stick. “I have no confidence in that figure,” he admitted. You can expect the estimate to rise in the near future.

A hundred billion here…a hundred billion there. Who’s counting?

Apparently, no one.

But that’s not to say the S&P can’t weather the storm. The companies representing the Standard & Poor’s 500 index now derive 49 percent of revenue from foreign markets, up from 30 percent in 2001. Meaning, those with money to burn (Southeast Asian consumers) should keep earnings reports strong. Stronger repatriated currencies should only bolster this trend.

Unfortunately, many Americans believe a strong S&P equals a strong American economy. We tend to see another American economy. We see an economy riddled with debt, more debt and even more debt. We see the American consumer eerily close to tapping out. Thirty-four percent of Americans now believe they are among the “have-nots.”

It serves to reason. More than 405,000 homeowners lost their homes to foreclosure last year.

Most middle-income Americans, the ones driving our buy-now, pay-later economy, have spent well beyond their means. Americans currently perpetuate a negative savings rate. That can’t last forever.

~~~~~~~~~~~~~Special~~~~~~~~~~~~~

Here’s How the “Millionaire’s Market” Paid Me to Retire From My 9–5 Office Job at 32 Years Old…

No more ironing shirts and tying ties at 6:15 in the morning…no more sitting in rush hour…and no more waiting around at 5:00 p.m. on Friday to pick up my weekly check…

The Millionaire’s Market changed ALL of that. Now I’m my own boss. You can too, but only if you get in on it now… Read this, before you miss your chance…

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Cheap oil and cheap credit have fueled this era of consumption…this gilded age of instant gratification.

Consider Basilea, a Swiss drugmaker focused on antibacterial and antifungal remedies. The company’s lead drug, ceftobiprole, is a promising treatment for complicated skin infections. But last month, the FDA issued the company and its Big Pharma partner, Johnson & Johnson, an approvable letter – the regulator’s notorious maybe-yes/maybe-no ruling.

Without pausing to see if the company can satisfy the agency’s concerns, investors dumped the stock. It fell from 187.40 Swiss francs to 148.50 on the day of the ruling. It closed yesterday around 150.

But these dramatic, emotional reactions give us excellent opportunities to profit. Our own Dr. George Huang has developed a proprietary method for trading these approvable letters. It’s a strategy that offers huge upside and very limited downside.

The FDA will issue 55 more rulings in 2008, and we have exact dates for all of them. The next one happens on Tuesday. Dr. George Huang has written a primer explaining his system, and we’re offering the primer and his new trading service at a big discount that ends this Monday. To learn more about Dr. Huang’s S&A FDA Report, click here…

Oil trades for more than $117 per barrel, and for the first time China, India, Russia, and the Middle East will consume more crude than the U.S.

The International Energy Agency estimates the emerging markets will consume 20.67 million barrels a day this year, a 4.4% increase. Meanwhile, U.S. consumption will fall 2% to 20.38 million barrels a day. We doubt oil prices are going anywhere but up.

Look at the chart below (courtesy of U.S. Global Investors) showing international oil consumption per capita. Every country’s oil consumption exploded following the industrialization of that country… except China. China has not even begun to whet its oil appetite. Wildcatter T. Boone Pickens thinks we’ll see $125 oil, but according to this chart, it could go much higher

Oil consumption per capita, 1900 to present

Ali al-Naimi, Saudi’s oil minister said, “Limited capacity along the entire supply chain is the real source of current global supply tightness and represents the greatest threat to ensuring adequate energy to fuel future economic growth.” Al-Naimi says the world needs more infrastructure investment to find new oil wells. Saudi Arabia is the third major oil-producing nation to warn of shortages. This month, a Russian oil executive announced his country’s oil production has peaked, and Nigeria claimed its output may fall by one-third due to under-investment.

One thing is for sure: Americans are going to see their standard of living fall dramatically as prices for energy continue to rise. And no amount of solar-panel rebates is going to change this harsh fact.

Alberta, Canada, is one area with sufficient energy supplies. Alberta has a patch of land the size of Florida containing more oil than all of the Middle Eastern countries combined. The oil is mixed with dirt, and harder to process. But with oil at $120, it is worth trying to sort the dirt from the oil.

Canadians will invest $22.2 billion over three years on Alberta infrastructure. Most of this investment will relate to natural gas, which is becoming the most important fuel source in the region. Matt Badiali noticed the Alberta trend early and has several recommendations in his S&A Oil Report portfolio with operations in the region. But he recently discovered a little-known Canadian oil patch that may prove to be even more profitable for investors who get in now. To learn more, click here…

Regards,

Porter Stansberry and Dan Ferris

But on July 1, 2002, the FDA issued told Alkermes it wasn’t ready to approve the drug. The agency wanted some data reanalyzed and repackaged. Investors panicked. Alkermes stock dropped from $16.01 to $5.15 in one day. Shareholders assumed the drug would face a three- to four-year delay.

Wrong.

On April 29, 2003, J&J submitted additional data, and the FDA approved the drug about a year and half later (the drug became a blockbuster in 2007, with more than $1 billion in sales). Alkermes shares soared from roughly $4 to $14 – a 200% gain for investors who bought at the bottom.

The biotech sector sees dozens of similar stories every year…

The stock market is mostly efficient, but occasionally it gets things wrong… and creates a few super-lucrative windows of opportunity. We’ve discovered a way to take advantage of such rare occurrences with biotech companies, specifically in their dealings with the FDA.

Last year, the FDA approved only 19 new-drug applications, down 10% from 2006. The remaining decisions were “negative responses,” which the investing world absolutely hates. In the ensuing frenzy, the market drops stocks 25% on average… without ever bothering to figure out whether they still offer value.

Bottom line is, when the FDA speaks, biotech stocks move, often violently. And I’ve learned that when stock prices react to such announcements, they create enormous opportunities for folks who know what they’re doing…

Here are three ways you can make a fortune from an FDA setback:

1. The “Oops” Factor. Not all drug rejections are created equal. And profits can be made when the market realizes, “Oops, I shouldn’t have unloaded the stock without reading the press release first.”

For example, in June 2006, the FDA told Pozen that it wasn’t ready to approve its migraine drug, Trexima. The stock traded down from $14 to $6 per share. The market wrote off the drug without bothering to find out Pozen’s Big Pharma partner, GlaxoSmithKline, had anticipated the setback and was running additional clinical trials to satisfy the agency’s concerns.

After six months, the market realized its mistake and sent Pozen back to $18 per share – a quick 200% gain.

2. Pipeline Boost. Positive news from a company’s other developmental drugs can get a damaged stock back on the right track. The best example comes from a company called Amylin…

Byetta, the diabetes wonder drug from Amylin, was progressing through early clinical trials when the company received an FDA setback on its lead drug, Symlin. The market was so focused on Symlin’s delay that Byetta was forgotten. But as positive news about Byetta’s progress through clinical trials trickled out in the next 12 months, Amylin shares made 200%-300% gains.

Today, Symlin generates measly sales around $100 million per year… while Byetta is poised to crack $1 billion.

3. Big Pharma Buyout. Faced with dwindling pipelines, expiring patents, and a fickle FDA, desperate Big Pharma companies simply can’t say no to a good, cheap biotech buyout.

At the end of 2006, MGI Pharma received an FDA setback on Saforis, a drug to treat mouth ulcers from chemotherapy. Add on concerns about the stalling growth of its top-selling drug Aloxi at the time, and MGI’s stock was hovering near multiyear lows of three times sales. (Similar companies typically trade at seven to nine times sales.)

In December 2007, Eisai, a Japanese pharmaceutical company, offered to buy MGI Pharma for $41 per share cash, about $3.9 billion. That represented an easy double for traders who got in after the initial setback about one year earlier…

As you can see, investing in biotech is much like investing in the precious metals sector.

It is not for the uninformed… and much of an investor’s success here depends on contacts and sifting through data. (Click here for one resource I use to track what the FDA is doing in the market.)

The hard work can be well worth your time. Many biotechs have the potential to gain not hundreds, but thousands of percent.

Good investing,

George Huang

P.S. I’ve developed a four-pronged strategy to trade on these FDA events. Using this system, you can pinpoint potentially lucrative trades – months in advance. Right now, I’m monitoring a trade I think could generate a minimum of 75% gains in the next year. Click here to find out more.