Yesterday in the UK publication, Metro,  Jim Rogers advised investors to move to China if they spoke Chinese. Today, I have my own piece of cultural advice: Tell your children to take French and German in school. And while you’re at it, grab your own Rosetta Stone guide to foreign languages… You might need it sooner than you think.

We now have a government that wants to dictate how we live, work and earn money. Tax cheats can aspire to running the IRS, with the recently confirmed Timothy Geitner as their model. In addition, it seems that a large enough majority of the country wants the government to provide healthcare for everyone, as well as manage our banks.

All of which begs the question… What’s next?

There’s no need to speculate since we already know the outcome. With an annual deficit of over a trillion dollars, the government and the American people will have to face a choice: either accept a lower standard of living or fork over some extra cash in the way of higher taxes.

Guess which one we’ll choose.

The easy answer of course, is taxes. That is unless we want to become the next Weimar Republic. If you don’t remember it from your history books, that’s part of the point. Suffice it to say, it didn’t work out.

Too Much Convenient Cash Is Going To Make Gold Soar

That’s the problem in a nutshell, and there is a solution for the individual investor. Justified or not, the more money we print to prop up the various institutions, the less valuable that same money is going to be.

Naturally, that will make precious metals more valuable, so continue adding to your gold holdings whenever it pulls back. Because there will be pullbacks. Take yesterday when gold broke the $900 barrier before pulling back again.

Gold stocks tend to be a leading indicator for the price of bullion, such as late last year when the shares hit 52-week lows only to bounce back sharply, gaining 50% across the board.

That time, readers of The 400 Report, Xcelerated Profits Report, and Strategic Income, all participated in the rally through ownership of low cost producers. There was money to be made, and bottom line: we made it thanks to our plays on Goldcorp (NYSE: GG) and Yamana (NYSE: AUY).

And there are more profits to be made in the long run.

You should also be buying up municipal bonds, through high quality muni ETFs if you can.

That might sound like strange advice considering that last year everybody was terrified of municipalities going under. But with the new government promising to pump money into everything, there’s little worry of that happening now. The Obama administration has already signaled aid to the states as a cornerstone of the new stimulus package.

If you’re in the 25% to 35% bracket, you can rack up yields of over 9% in high quality muni funds. Look to Nuveen or Blackrock to buy into high quality (AA, AAA and insured) funds.

The Index of Leading Economic Indicators Tells All

With all of the changes being made, it’s obvious that we’re in uncertain times. But there was an interesting ray of light yesterday when the Index of Leading Economic Indicators (LEI) turned up instead of pointing down. Take it as you will…

The LEI stands out as a predictive indicator, as it factors in jobless claims, factory orders, housing starts, money supply and consumer sentiment to predict what will happen over the next 6 to 9 months.

Jobless claims just skyrocketed yesterday in what the media quickly dubbed as Bloody Monday, housing prices continue to fall despite an occasional upturn here and there, consumers still aren’t spending what they used to, and factory orders are unsurprisingly down thanks to the slew of economic bad news.

In fact, there is only one factor that I can see which is actually increasing… Money supply! Yup, the LEI went positive because we bailed it out just like everything else.

Source: How Do You Say “Higher Taxes” In French?