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The Daily Reckoning Weekend Edition Saturday, December 5, 2009 Taipei, Taiwan Joel Bowman, reporting from Taipei, Taiwan... "In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual." - Galileo Galilei, contrarian astronomer. In times of yore, annoyingly inquisitive skeptics were urged to avoid engaging in impolite subjects such as religion and politics and, instead, were encouraged to chitty-chat about more benign topics, like the weather. Alas, thanks to a rather inconvenient documentary, our atmospheric conversational safe haven was not to last long into the new century. Now even the weather - and, more to the point, who or what causes it - is considered out of bounds, certainly in politically "mixed" company. There is little doubt that global warming is a touchy subject. One questions it the same way one questions a man's right to bare arms south of the Mason Dixon line: with his hands above his head and at his own peril. But why so uptight? Is it simply that folks don't like to converse on topics they disagree on, as if - if they could only learn to ignore their differences - they might just resolve themselves naturally? Hmmn... It could be that the debate touches on a variety of other subjects, simmering close below the surface, that we humans are also uncomfortable discussing. Believers, perhaps, feel a sense of guilt. They've driven too far, watched too many YouTube clips, eaten too many hamburgers and, in doing so, generally contributed enough tons of CO2 to end civilization as we know it. That's gotta be hard to live down. No wonder they don't want the subject raised. But what about the skeptics? Well, they've got their own problems to deal with. To hold that anthropogenic global warming (AGW) is a farce, that the books were - if you'll pardon the pun - cooked, you'd have to believe that governments around the world are colluding to extort a crippling tax on citizens in an effort to save us from - gulp - ourselves. You'd have to suspect that those same governments were in bed with high- flying investment firms and individual insiders who might stand to pocket billions inventing and trading carbon credits and various other enviro-derivatives. And you'd have to believe that an Academy Award winning Nobel Peace Prize recipient is either a mildly convincing actor...or a menace to humanity...or, indeed, both. But that's not all. As of a couple of weeks ago, to suspect that AGW is a con, you must believe that private emails exchanged between climatologists responsible for providing the "consensus" data - emails in which were divulged methods of suppressing data, excluding dissenting viewpoints and manipulating evidence - were in some way damning or that they might actually undermine the scientific credibility of the heretofore unchallengeable AGW doctrine. By now you have surely heard about the "Climategate" scandal setting the blogosphere ablaze. In case you accidentally stumbled on this fringy outlet and you usually stick to the mainstream media, here's a very quick wrap of what you likely missed. In late November, hackers broke into the University of East Anglia's Climate Research Unit (CRU) in England, one of the four official sources of global temperature data used by the Intergovernmental Panel on Climate Change, or IPCC. The exposed emails and files were then leaked to various media outlets and published on Al Gore's "Internet." The results were, ahem, interesting... Here are a couple of teasers: "I've just completed Mike's Nature trick of adding in the real temps to each series for the last 20 years (i.e. from 1981 onwards) amd from 1961 for Keith's to hide the decline." And... "The fact is that we can't account for the lack of warming at the moment and it is a travesty that we can't. The CERES data published in the August BAMS 09 supplement on 2008 shows there should be even more warming: but the data are surely wrong. Our observing system is inadequate." Professor Phil Jones, CRU director, has stepped aside from his post at the University while an independent investigation is underway there. And, in what may be a sheer coincidence, the Oscar-decorated Nobel Laureate mentioned above has since canceled the lecture he planned to deliver at the crucial Copenhagen Climate Summit, due to kick off on Monday. Organizers would like disappointed fans and nut-job conspiracy theorists with long-range scopes to know that full refunds will be given in lieu of his presentation. But what does this have to do with finance and economics, readers wonder. Actually, quite a lot. Estimates vary on how much a proposed "cap-and-trade" plan might cost. Depending on where you get your figures - which seems to be a recurring caveat surrounding this whole discussion - annual cost to the US alone could be between $200-$350 billion, or roughly $1,750 - $3,000 per household. (We did see one global estimate of $23 trillion...but decided to discard that as a statistical outlier.) President Obama himself said that energy costs were likely to "skyrocket" under his plan. One memorandum cited by various newsagencies, which was prepared for Obama's transition team after last November's election, estimates that, "Economic costs will likely be on the order of 1 percent of GDP, making them equal in scale to all existing environmental regulation." Critics, predictably, rebuke those figures, claiming that they are typically inflated and that their government would never spend that much money on a bogus scheme. Besides, "how can you put a price on human life...huh, huh!?" Depending on what side of the debate you reside - skeptic or believer - action or inaction will cost you, respectively, thousands of dollars per year in additional taxes and the surrender of your liberty to a world government, or, your life and that of all future generations. That's quite a debate we're not allowed to have for fear of offending polite company, eh? Obviously we're being a tad provocative today, but it IS the weekend. In any case, if you'd like to drop us a line, please do so at the address below. But first, here are this week's columns... --- Triple Your Gold Gains With "Slingshot Options" --- Every time gold goes up $1, this "slingshot option" could pay you $3 or more... with gains as high as 620% by June 2010. If gold runs to $1,200 per ounce, this "slingshot option" could shoot up 332%. If gold hits $1,500, this "slingshot option" could jump 440%. Gold at $1,750 could send this "slingshot option" up from 530%. If gold tops $2,000, you're looking potential "slingshot option" gain of 620%. "[Slingshot options] are the investment opportunity of a lifetime." - Moneyweek Claim Your Special Opportunity Report Right Here --------------------------------------------------------------- ALSO THIS WEEK in The Daily Reckoning... The Collapse of Finance By Bill Bonner London, England Probably a good thing US markets were closed for Thanksgiving when this news came out. In Europe, the Dubai affair caused the biggest drop in 7 months. European banks have lent $40 billion to Dubai. Jim Chanos, a famous short seller, thinks Dubai is merely the camel's nose in the tent, so to speak. "China is Dubai times 1,000...if not a million." Gold... Selling is the Hardest Part By Eric Fry Laguna Beach, California Ten years ago, everyone on the planet knew gold was a "Sell." (Incidentally, everyone also knew that JDS Uniphase and Pets.com were "Buys.") Investors scorned it. Central bankers sold it. Economists eulogized it. Today, gold is hated less...which causes some gold investors to worry that their favorite precious metal has become too popular for its own good. Gold Gone Wild By Bill Bonner London, England Yesterday, gold closed at $1,200. Long-term Daily Reckoning sufferers can finally hold their heads up. We bought gold at the beginning of the bull market. New readers, with no gold buried in their back yards, may wonder: is it too late? The Single Best Trade for 2010 By Steve Belmont Chicago, Illinois What was the single, most damaging trade of 2009? There are a number of candidates: short stocks, short gold and long the dollar would all be in the running. These would have all been painful trades, but not nearly as painful as shorting Eurodollars - i.e. betting that short- term interest rates would RISE. Slow Motion Depression By Bill Bonner London, England Early this week, the world's largest central bank, the Federal Reserve, announced plans to exit its monetary stimulus efforts. It unveiled a new tool - reverse repos - to help speed the work. --------------------------------------------------------------- The Weekly Endnote: "It looks like the free coin set giveaway for AFR members is a hit," Joe Shriefer, our publisher, wrote to us yesterday. Here's what a few Reserve members had to say... "Wow! Thank you for the [free perfect proof coin] gift! I thought I would hear a sales presentation when I called, but had a wonderful experience on the phone. I am very grateful." - Reserve member E. Edwards "...one [gold options] trade more than covered my LIFETIME Membership in the Agora Financial Reserve. Also... "thanks" for the free perfect Proof 70 collector coins. The coins were absolutely free of charge (even shipping and handling was covered)... What a fantastic and completely unexpected surprise!" "Joining the Reserve was easily one of the best financial decisions I have ever made." - Reserve member Peter Gariff And, unlike some above-named institutions, we didn't even have to cherry pick our emails. Imagine! We still have some coin sets reserved for new members, but they're running out fast. Here's a link if you're interested. That's all for this Weekend Edition. Until next time... Cheers, Joel Bowman Managing Editor for The Daily Reckoning joel@dailyreckoning.com   The Daily Reckoning - Special Reports: Gold: The Truth About Gold Fiat Currency: Using the Past to See into the Future "THE GREAT AMERICAN RECOVERY RP-OFF" Brace yourself for what's about to go down