Paul Ferraresi

A great new web site by FraudAvengers (www.fraudavengers.org) has recently started. It is a non-profit group with the goal to educate the public on how crooks use online payment options and technologies to commit fraud.

It is a Texas-based group with the slogan, “Pros preventing cons.”

The site has blog articles to inform individuals and businesses on how to reduce their risk of fraud.

Check it out and sign up. I think it will be very helpful.

I experienced this with a close friend. We will call her, “Marg.” She is 72 years old and had a double mastectomy done about 20 years ago. She has recovered wonderfully and lives a full life. Every two years she goes in for a special test to determine if any cancer cells have developed in her body. The test costs about $2800 to $3000 per exam. Medicare usually covers the majority of the expense except for her office visit costs and a deductible.

She recently had the test done. When the bill came in, it stated…“the test costs are no longer covered under “Obama Care. You will have to pay the bill in full.”

So look at this convoluted Government thinking…. If she cannot pay for the test out of her own pocket, then, she will not find out if she has cancer. Now the treatment will be covered if cancer is detected, but if she does not pay for the tests, she will never know if she has cancer. Looks like the old Abbott and Costello routine, “Who’s on First?”

Do you see this sleight of hand? They laughed at Sarah Palin when she said the plan has “death panels.” The way these new rules are set up…sure looks like “death panels.”

There are so many wonderful options that could be instituted to cover people with health insurance at a lower cost but the Government won’t allow it. You have seen how all Government programs like AmTrack, the Post Office, Social Security, Medicare, and Medicaid work. They are all losing money and are insolvent. This program is in the same league and will follow the same route. It is slated to go before the Supreme Court. Contact your representatives to let them know how you feel.

I bring this to your attention to help you (1) plan for increased costs for your insurance when you retire, and (2) better plan in your budget to help pay big money for your parents’ health insurance retirement needs.

Jean Chatzky, personal money expert, was interviewed in the June 2010 issue of Success Magazine. She described the “Four Habits of the Wealthy”:

1. Work hard.

The wealthy work harder –and sleep less – than other people. They are more likely to mix work with their own downtime, sacrificing personal time for professional success. But because they tend to be passionate about what they do, it’s less likely that they see it as a chore.

2. Save habitually.

Wealthy people certainly have the funds to be crazy spenders, but most are not. In fact, some seven out of 10 say that saving more money has been an absolutely essential financial goal as an adult. They typically pay off their full credit card balance each month.

3. Invest soundly and aggressively.

The wealthy are more likely to invest in stocks and mutual funds. They understand the need to take risks in the market in order to make their money work as hard as they do. They are also more likely to invest in real estate (above and beyond owning their own homes).

4. Give back.

The wealthy are grateful, and they show it by giving back to their communities, to organizations they believe in and to people they care about.

In my 40 years of working with individuals in personal finance, I could not agree with these habits more.

“A man is rich according to what he is, not according to what he has.”

The last few weeks have shown completely different approaches to managing energy by China and the U.S. China has lent $10 billion to Brazilian oil giant Petrobras to further its offshore exploration. In return China will get a future flow of oil equal to 160,000 barrels per day (bpd). China has lent Rosneft, Russia’s oil firm, $15 billion and Russian pipeline operator Transneft $10 billion for agreeing to supply 300,000 bpd from the new Siberian fields for the next 20 years.

In Venezuela, China will contribute $8 billion to a strategic fund for oil development mainly to increase Venezuela’s oil exports to China. China is paying now at today’s prices to insure growth in the supply of oil and their long term access to its share.

Meanwhile here in the U.S., the Obama administration is planning to severely tax exploration and production companies operating in the Gulf of Mexico (our core area of production). Boy, that will be a real incentive for any company to consider looking for oil (tish-tish). This will also make U.S. oil production more expensive (duh!).

The government has delayed and rescinded the opening of other offshore areas for additional incremental exploration and possible production (higher prices for us and less supply. Oh, and you did not know about this? HMMM! I thought we were to have full transparency in this new administration).

Since October 2004 the U.S. Department of Energy claims the global oil supply hasn’t grown much even though we had huge price increases. Most experts agree that large new oil supply is not in the picture.

So, if the supply for oil will be, say, “X” and China has already “bought up” an amount equal to “Y,” then, X-Y will equal the remaining supply. With the demand for oil rising and supply only at “Y”…..well better prepare for higher prices. Experts are predicting a price of $150-$180 a barrel very soon. That is without a major interruption in flow (war, terrorism, etc.) Ah, yes higher gas prices. Better prepare as well as make investments to benefit your family. Once again…discipline or regret.

One of my Finance Instructors that I admired was Nobel Laureate Milton Friedman. He was a monetarist and built the “Chicago School” of Finance. He advised many world leaders and showed that inflation was, is now and forever will be a monetary phenomenon.

As many of you learned in your economics courses – inflation comes about as too many dollars are chasing too few goods.

The money being printed in Washington for TARP, the Stimulus Bill, and the 2009 budget is astronomical. Never in the history of the U.S. has so much money been printed (I wish I would have told everyone to invest in WD-40 to oil the printing machines. We would have all been wealthy).

None-the-less, my role as my client’s advisor is to look out into the future, note trends and have them invest ahead of the crowd. With all this money being created in Washington it will lead to a HUGE increase in inflation very soon (somewhat like a snake eating a rat, it will take a little time to go through the system).

I advised all my clients in December to increase their asset allocation position in metals, especially gold. I am not a gold bug, but, it is obvious what will take place. Last December prices for gold were at $750. It increased to $1000 recently (a 33% increase) and as of this writing is in the mid $900. Experts predict a rise to $1500+ in the next two years. Please do not follow the crowd and get into gold after the price rises (you know buy high sell low). You can, and should have long ago taken a position in gold via stocks, mutual funds or exchange traded funds. I am suggesting that you buy the physical gold. Coins are an acceptable method to do this and you must take possession. Do NOT store them at the coin company.

Remember you will never make money in gold. It is simply a hedging or insurance mechanism. That is, if gold is going up, then other asset classes are going down and vice versa. Make sure you work with a reputable coin dealer.

Watch the short video below that came from Glenn Beck’s show; it does show how dramatic money creation has been recently.