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The Weekend Edition - June 6-7, 2009 Bill Bonner on France as the envy of the world... The Mogambo Guru on the dollar's future buying power... Rob Parenteau with a key currency idea we need to flag for you... Chris Mayer on why the Waxman-Markey bill is absurd... Chuck Butler on the world's biggest currency manipulators...and more! ----------------------- Special Offer ------------------------- You could have turned $5000 into $1 million in just over five years... Each week, readers to make just one investment buy. And since November 2006, not one pick has lost value! It's no wonder readers of this newsletter could have turned $5,000 into $1 million in just over five years! Now, they're quickly closing in on $2 million! Join them... ---------------------------------------------------------------- The Daily Reckoning's Highlight of the Week Baltimore, Maryland Another week's 'progress' from the US government as it continues its inflation stoking strategies. The most pronounced recent feature was US Secretary of the Treasury Timothy Geithner's trip to Beijing, to petition China for continued foreign reserves support for the dollar, a difficult - maybe impossible - endeavor. Using the recent rally as evidence that the US might be showing some signs of stabilizing, Geithner went on a road show, pitching confidence in the American financial system. Will it work? Perhaps for a short while, but as Bill Bonner explains below, the US is going down a road with few opportunities to turn back around... "Americans are in the habit of spending huge amounts of money...with no intention of ever paying it back. Consumers did it in the '09s and '00s. Now the feds are doing it. The federal deficit for this year alone is four times last year's record. The official US debt is exploding. Bill Gross says it will be 100% of US GDP within 5 years. Our guess is that it will reach that level even sooner. "At 100% of GDP...even mainstream economists believe the situation will be irreversible...interest payments will be more than the US can afford. At that point, forced to borrow more and more just to keep up with the interest, the system will go into a Ponzi-scheme endgame. "Our expectation is the government won't be able to exit" from its deficit spending positions, said Gross in an interview on Bloomberg Radio. The programs 'will be semi-permanent positions on their balance sheets.' "Once you go down that road, it's hard - maybe impossible - to come back. The US won't be able to pay off its debt...and it won't be able to unload GM. Nor will the Federal Reserve be able to sell its holding of bonds onto the open market - without causing yields to rise. "Even Ben Bernanke says that 'long-term deficits threaten the financial stability' of the nation. "As we've pointed out many times, the problem is more political than financial. The bums in Washington could still straighten up - if they wanted to. We've already told them how they could bring the deficits...and the economic downturn...under control. But they're not about to take our suggestions. Instead, they're "gonna have fun, fun, fun until Daddy takes the T-bird away..." "Daddy China, that is. The Middle Kingdom. The Red Menace. Now, the leader of the bond vigilantes. "Remember the bond vigilantes? They are supposed to keep a lookout for inflation. And when they see it increasing, they come riding into town guns ablazing...they sell bonds and force up yields, thus bringing inflation back under control. "Inflation rates and bond yields have generally been going downhill for the last 26 years...so the old vigilantes have retired. But now China seems to be strapping on its six guns." If you're interested in finding out exactly what Bill sees as China's next moves, you can read the rest of his notes on The Daily Reckoning's website here. ----------------------- Special Offer ------------------------- The "Forever Oil Crash" Has Already Begun The era of "cheap oil" is long gone...but there are two investments that could give you a powerful shield against the fallout ahead - and have the potential to soar, despite the current market turmoil. Keep reading... ---------------------------------------------------------------- ALSO THIS WEEK in The Daily Reckoning: This week we were honored to have tremendous insights provided by economist Rob Parenteau, value investor Chris Mayer, and currency expert Chuck Butler...as well as our usual favorite writers Bill Bonner and The Mogambo Guru, for a wide variety of insightful perspectives...read on below! The "French Model" of Economic Management By Bill Bonner London, England "And now, the "French model" for managing an economy is the envy of the world. At least, that's what you might think if you read The Economist. A recent issue has Sarkozy on the cover...looking confident and pleased with himself. By contrast, Britain's Gordon Brown and Germany's Angela Merkel look as though they needed a drink." The Gold Bull Market and the Fed it Rode In On by The Mogambo Guru Tampa Bay, Florida "The dollar index is just a measure of the relative monetary stupidity of governments and their central banks. If you want to know the future of the dollar in terms of its buying power, on the other hand, then look at the dollar-price of gold, you moron!" The Fiat Currency Doomsday Machine by Rob Parenteau San Francisco, California "Stepping back, one could see this as a doomsday machine for fiat currencies...Shades of Soros 1992, when he took on the Bank of England and broke the pound, except this one is larger scale, with much more at stake. We intentionally avoid sensationalizing our analysis - the world is a wild enough place without all the hype. But we feel it important to flag this one for you, because we can see how this dynamic could feed on itself..." Waxman-Markey Whacks Industry By Chris Mayer Gaithersburg, Maryland "So I think the bill is absurd. I think it is also a great blow to what is left of American industry. But who cares what I think? As the great Jeffers wrote, "Be angry at the sun for setting/ If these things anger you." This is the way the world works. Politicians do dumb things. We have to play the ball where it is. And that means we have to figure out who wins and who loses." China Isn't the Only Currency Manipulator By Chuck Butler St. Louis, Missouri "However, the S. Koreans weren't the only Asian monetary officials to speak... The Indian Central Bank is dying a death of 1,000 daggers watching their currency gain 11% in the past three months! And... Then the Big Kahuna... Japan... But, we all know that the Japanese are the biggest currency manipulators on this earth, and they would do anything to get the yen (JPY) weaker..." --------------------------------------------------------------- Thank you again for joining us this weekend...before you go we'd like to remind you of your upcoming opportunity to meet all of your favorite Agora Financial personalities. Beginning on July 21st and continuing through the 24th we're going to be celebrating Decade of Reckoning in Vancouver, Canada. Join us at the Agora Financial Investment Symposium and help us honor The Daily Reckoning in a four-day event designed to maximize your insight into the most profitable investment opportunities this coming decade. The event is sure to completely sell out, so secure your spot today, either call Opportunity Travel at (800) 926-6575 or click here for more information. We'll see you back here again on Monday. Best, Rocky Vega The Daily Reckoning ----------------------- Special Offer ------------------------- Only 63 People Know Why These Six Tiny Companies Will Change the World... You're #64 - and you're about to become Ultra-Wealthy. This will go down in history as the "story of our era..." - and you'll be rich because you took decisive action in 2009. See the full report right here.   The Daily Reckoning - Special Reports: Fiat Currency: Using the Past to See into the Future US Recession: By far the Weakest Recovery Introducing the Single Best Way to Make Sure You'll Never Run Out of Money... Click to Learn More About Mobs, Messiahs and Markets.