MAY Dispatch

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Contents

A Letter from the Editors

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The Memory Hole Redmond Weissenberger

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Vigilante’s View Jeff Berwick

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I’m Starting to Think the CIA Developed Bitcoin… But I Still Love It Jeff Berwick

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TDV Report Ed Bugos

TDV’s monthly gold and stock analysis 16

TDV Q&A 24

TDV Groups: Rio De Janeiro Luis Fernando Mises

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In Closing... Sharon Harris

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A Letter from the Editors

Jeff Berwick provides us with some terrific insights in this issue regarding Jubilee 2016 and related events. Begin with an update on Jade Helm and the European effort to further militarize police and ending with some fascinating speculation about bitcoin and the CIA. Without giving too much away (go read, below) Jeff’s reporting pulls together a lot of what’s been going on at bitcoin regarding the sudden ­ supposed ­ identification of the founder of bitcoin, Satoshi Nakamoto. He provides insight into reasons why Nakamoto’s heir apparent, Gavin Andresen may be acting the way he is. When it comes to Jade Helm and police militarization, the news is not fascinating so much as depressing. The powers­that­be seem obsessed with civilian military conflict. They seem to intent to hold onto power and to do so via violence and incarceration (into FEMA prison camps that do not exist) as necessary. More and more it looks like Jeff’s previous speculation was correct: Jade Helm is not a military exercise so much as a way of covering up massive redistribution of military resources to areas in the midwest and west that the US government has identified as probable arenas of civilian unrest. Of course the more disturbing question is why the government has identified possible regions where unrest would take place to begin with. Either there are plans for some fairly serious reductions of freedom or upcoming economic disruptions have been identified as possible or probable. This latter possibility is certainly a reasonable one. The world’s economy is a mess from the US to Europe to Asia and beyond. Our very own senior gold analyst Ed Bugos has been achieving tremendous TDV portfolio gains by observing and then acting on this evident economic weakness. His investment bets, while speculative, have exploited perceived difficulties in numerous areas. Importantly, Ed understands the ongoing crises faced by central banks after more than seven years of relentless monetary stimulation. It is this overprinting of money that has debased fiat currency and provided fuel for the current boom in gold and silver relative to the dollar. Under Ed, the TDV gold and silver portfolio has been performing very well and many TDV subscribers have sent word of their thanks via tweets and emails. You’ll find Ed’s latest report, below, a fascinating read and you ought to pay close attention. No one understands current markets much better than Ed, as many aspects of his current performance prove. You’ll find much else of note to read in this issue, so please explore for yourself. But one more observation: In “The Memory Hole”, Redmond Weissenberger makes some interesting points about Trump and his foreign policy positions. Redmond compares some of Trump’s positions to quasi­libertarian Rand Paul. He even suggests that Trump might want to pick Paul as his running mate. That certainly would shake things up ... To your liberty!

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The Memory Hole

Redmond Weissenberger

So, The Donald is weighing in on foreign policy. Oh boy. It's hard to figure out if Trump is a legitimate candidate, an exercise in ego, or the most perfect satire of American politics since Wag the Dog. What we do know is that he's not afraid to borrow/appropriate/steal ideas from those with more experience in foreign policy than two Eastern European wives and the Miss Universe pageant. Consider his speech on foreign policy given last week. Remind you of anyone?

Well, it reminded the Washington Post's Pulitzer Prize­winning columnist Charles Krauthammer of none other than Rand Paul, the one presidential candidate we would have respected, dismissed for his rationale and ambition, his attachment to ideas that confuse and frighten the establishment. Said Krauthammer: “So on one hand it was sort of semi­isolationist, like Rand Paul respectable but I don't think mainstream among conservatives. On the other hand, I don't think it was consistent.” Or Justin Raimondo, who noted:

A more perceptive summary of the post­Soviet post­9/11 policies that have led us to disaster would be hard to imagine: indeed, Trump’s critique parallels what we have been saying on this web site ever since its founding in 1995. To hear it coming from a Republican candidate for President who is not Ron Paul is astonishing: and that it is being said by the GOP frontrunner, who spoke these words after winning every county in five Northeastern states, is simply breathtaking.

We must admit, it reminded us of Paul as well, at least in the introductions and foreign policy criticisms. And, in an ironic twist, the very rules that the GOP­E put in to hamper the Ron Paul campaign are coming back to bite them in the ass with Trump. You know, Trump doesn't have a running mate yet. Trump­Paul 2016? Like this campaign could get any weirder.

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Vigilante’s View

Jeff Berwick

As this Jubilee year rolls along things are beginning to heat up. Our investments in gold, silver, mining stocks and bitcoins have already begun to pay big dividends. Gold began the year near its low last seen in 2009 at $1,060/oz. As you can see in the chart below, from day 1, on January 1st, it has gone nowhere but up.

It has risen 22% since the start of the year and has just broken out to new highs. Silver has almost the same pattern. It also hit near lows not seen since 2009 on the very last day of 2015 and entered into 2016 and has also gone nowhere but up. It has risen 29% since the start of the year.

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Gold stocks, as measured by the HUI Gold Bugs Index, has carved out a slightly different pattern. It didn’t bottom right at the end of 2015 but just a few weeks after, on January 19th at near $100. It has since more than doubled and also gone nowhere but straight up.

Bitcoin has had a different pattern. It has been in an upward trend since last September, near $200 and is up well over 100% and currently at $453.

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Considering that gold, silver, mining stocks and bitcoin are the majority of the TDV portfolio, it has, to say the least, been a good few months. The one area that we have had big gains on last summer and also in January of this year, was in shorting the US stock market. Those trades haven’t been doing well for the last few months. Our S&P put option trade (see here), which expires on June 17th is now less than 2 months from expiring. It was a “lottery ticket”, an all­or­nothing trade and right now it has turned out to be “nothing”. However, there is some hope. Last June we made the exact same trade, buying a similar option that was set to expire in October. Throughout June, July and half of August it continued to grind lower. And then, in the span of 3 days, in late August, when the markets began to collapse and the Dow was down over 1,000 points intraday, that option rose from $0.06 to over $2! Could that happen again? Yes. But every day that goes by now until it expires the chances of that happening get reduced. And the put options are so far outside of the money that if the S&P 500 began to collapse in late May or early June, it might be too late to get any real traction as no one would expect the S&P 500 to fall 50% in the span of less than 30 days ­ EVEN THOUGH that is totally possible! The good thing about these trades is that you only have to be right very rarely for it to pay off. So, we are getting close to swinging­and­missing on this one… but we’ll make another one soon. We aren’t alone in thinking we are VERY close to an extreme financial event. Last week, elite insider George Soros sounded the “Crash” alarm. He warned the world that the $30 trillion Chinese debt bubble is ready to burst. “Stimulus can buy you additional time but it makes the problem that much bigger. That’s where we are,” Soros said.

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Billionaire real­estate tycoon Sam Zell also predicted the United States will enter into a recession in the next year. “I’m not being pessimistic, I’m being a realist,” Zell said last Tuesday. “If somebody needs a bell ringing to figure out that the real­estate market is pretty frothy right now, then I’m in the business of selling hearing aids,” he said. I think both are underestimating how bad this will get… or, at least, in the case with Soros, not letting on about what is already planned to occur. And note that Soros has already laid the blame for this crisis on a Chinese debt bubble. That will not be the cause of this implosion. But they are already trying to lay the blame. In the last week two major retailers have gone bankrupt. Clothing retailer Aeropostale filed for Chapter 11 and the Sports Authority also filed for bankruptcy which may result in the closing of its 450 stores. It sure doesn’t feel like a “recovery”. At least one insurer is smart. German reinsurer Munich Re said it boosting its gold and cash reserves in the face of the punishing negative interest rates from the European Central Bank. Munich Re has held gold in its coffers for some time and recently added a cash sum in in the two­digit million euros, Chief Executive Nikolaus von Bomhard told a news conference. "We are just trying it out, but you can see how serious the situation is," von Bomhard said. Most people don’t see how serious the situation has become. They will soon enough. The stars appear to be aligning for the crash in the markets to either happen in May (this month) or else in August/September, in my opinion. JUBILEE WATCH A lot has been going, as we have been covering here. The rollout of a global police state, tax dragnet and cashless society has been shocking in its sheer speed. Jade Helm II (called UWEX 2016) was said to be more covert than Jade Helm I and so far it has been. It began in March and is slated to end in June and there has been very little information leaking out about it. Just this week, however, a rail­trail loaded with tons of military vehicles and equipment was spotted and filmed at the Cajon Pass, between So. Cal’s San Bernardino Mountains and the San Gabriel Mountains on Tuesday. The day before two train loads full with M1 Abrams battle tanks were spotted in Houston. While UWEX is currently ongoing in the US preparing for civil unrest, Europe is also rolling out its militarized police. The military police unit have carried out European Union­funded special training, ready to be deployed in the event of civil unrest or war. The training, which took place in the German North Rhine­Westphalia province was designed to prepare troops as part of the EU’s Lowlands Gendarmerie programme. Breitbart London reported that the exercise was attended by 600 members of various European police and military forces, in a bid to prepare the united troops of the European Gendarmerie Force.

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The military police group is made up of seven European nations, including Spain, Romania, Poland and Germany, and aims to quell post conflict scenarios within EU member states. The group’s website reported that: “The aim of the [2016, April 15th] Comprehensive Live Exercise will be capacity building of police and gendarmes who will participate in international stabilisation missions and projects with a police component.” Some people in the German government are greatly concerned about what this means. European affairs spokesman for the German Government Andrej Huko asked to attend, but was blocked from coming close to the site. He claimed that the military force was preparing to shut down “political meetings” and “protests”. He went on to argue that the, “militarisation of the police” is, “extremely worrying and contrary in Germany to the principle of separation of police and military”. Colonel Richard Kemp claimed Brussels' "ultimate plan" was to bring the national armies of the bloc's 28 member states under one umbrella. Europe and the US are preparing for something and that something will likely be either a financial or military event, or both, that causes widespread chaos and panic. MORE JUBILEE HINTS This Jubilee year ends on October 2nd, 2016. We already found the timing of the inclusion of the Chinese yuan into the global SDR currency basket on October 1st (a Saturday) to be very conspicuous. And note, too, that it takes place on a weekend. Major changes in the monetary system and bank holidays are always done on weekends. But, in the last week we discovered some more information that is even more conspicuous. On the evening of October 2nd, of all dates, the Jesuits are scheduled to elect a new superior general. It will begin with a Mass the evening of Oct. 2, 2016. Jesuit superior Father Adolfo Nicolas, 79, announced he intended to resign in late 2016. In May 2015, Father Nicolas wrote, “I have reached the personal conviction that I should take the needed steps toward submitting my resignation to a general congregation.” Pope Francis apparently made no objection. But then again, if conspiracy reports are true, it is Nicholas, the “black Pope” who actually runs the Church, not Francis. People have speculated that the Jesuits in the modern day are not so influential as they once were. But certainly the transition from one Jesuit superior to another the day after the end of the Jubilee year is a

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notable event. Just coincidence? We’ve stopped believing in coincidences when it comes to the New World Order/illuminati/financial­elites. What it portends isn’t entirely clear. Certainly, Pope Francis has been a good deal more active in world affairs than previous Popes. It may be that the Jesuits, under a new superior, begin to take a more active role as well. Given that the Jesuits actually created the model for modern concentration camps some 300 years ago in Paraguay when they incarcerated and tortured the native indians, I’m not eager to experience a more invigorated Jesuit order. They aren’t called “black” for nothing. SOLUTIONS If you are a new subscriber please read through at least the last 4 or 5 issues of TDV to get somewhat caught up to speed… and read through more if you can as in each issue we have some important solutions for how to prepare for what is coming. Last month we mentioned a number of bitcoin backed debit/ATM cards. I suggest everyone get at least one of these… as well as the gold/silver backed debit/ATM cards we have also suggested. I’d like to see all TDV subscribers with a wallet full of bitcoin and gold backed cards! This month, BitPay has come out with a bitcoin backed debit/ATM visa card. You can see more here. This card is for Americans only (but that is good because most other bitcoin cards we’ve mentioned don’t accept Americans or are limited to particular states). Bitpay is a very large and well financed company so this is a welcome addition to the growing number of bitcoin ATM/debit cards. COMING IN NEXT ISSUE I’ve been doing a lot of research on a new opportunity to buy producing/managed farmland in Panama as an excellent way to diversify outside the financial system and still earn income… and even during the collapse people will still need food AND it is located outside of the bankrupt Western countries… so it ticks many boxes at once. I’ll be featuring it in the May issue, coming out in just a few weeks. As well, we’ve had a lot of subscribers ask to know more about the Perpetual Traveler/Prior Taxpayer (PT) lifestyle. I’ve written numerous articles here since 2010 on it but it would take a lot of work and reading to go back through them all so we’ve been working on a book that is nearly done on the PT lifestyle and expatriation. It’ll be free to subscribers. And, as well, in the next issue I’ll write more on this topic. I’ve also personally began to prep more. I have put this off due to my nature… I never worry about the future… so therefore I don’t plan a lot in preparation for extreme events. However, things are getting so close now that I’ve decided to implement a number of prepper­related items into my life and it has been an interesting learning experience. I’ll be writing about that also soon.

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And, we are working on a write­up on the new DAO cryptocurrency funding. That should be coming out as a Special Alert in the next two weeks as it is an interesting opportunity to get in early on what could be another gamechanger. So, as you can see, lots more in store… and even lots more in this issue. Keep reading, and thank you for subscribing!

Vigilante’s View — Acapulco

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I’m Starting to Think the CIA Developed Bitcoin… But I Still Love It

Jeff Berwick

After being one of the biggest cheerleaders of bitcoin for the last five years what I am about to say may shock some people. In fact, as I began to connect the dots, I shocked myself. I have been a defender of bitcoin as being a product of the free market since nearly day one. My main line of reasoning was this: Bitcoin was just an innovation that there was no way that soulless robotic drones, of the like who often work for “intelligence” agencies, like the CIA, could have come up with it on their own.

I still lean towards that line of reasoning but evidence is beginning to come out that leads me to believe there may have been some involvement from “intelligence” agencies… or, at the very least, there certainly there is now. This epiphany came to me just this week when Gavin Andresen set the media world on fire after he posted an online message explaining that Craig Steven Wright was actually the founder of bitcoin, Satoshi Nakamoto. “Craig Wright?” I thought. The Aussie who sort­of said he was Satoshi Nakamoto late last year and then received a quick response: Within hours the Australian police were combing through his house looking for taxable evidence. In fact, I had been wondering whatever happened to him. Andresen emphatically endorsing the claim of Wright to be Satoshi was big news because no one has done much more to promote bitcoin than Andresen. Additionally, according to Andresen himself, Satoshi designated him as his heir, the man who was supposed to support bitcoin’s progress. Andresen has been intimately involved in bitcoin via the Bitcoin Foundation and has been a relentless promoter of the technology. Meanwhile, Nakamoto “retired” from the fray and basically vanished. Until now. Suddenly Nakamoto has made a return as Wright. Also, please note, Satoshi’s immense bitcoin wealth is supposedly tied up in a trust. If Wright is Satoshi, it’s perfectly possible he can leverage liquidity from a position of being asset­rich and cash poor.

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That’s a damn good reason to let people you’re Nakamoto, whether you are or not. That’s what has been pointed out in the past about Wright, because rumors have circulated around him for a while. He is supposedly prone to exaggeration and his personal claims about his background have not always seemed to be true. One thing does seem obvious... A peripatetic career has seemingly featured contacts with top level executives and technologists in the industry. It’s perfectly possible that Wright is familiar with intelligence types. In fact, so is Andresen who has admitted to meeting with the CIA in order to “give a talk.” It’s been speculated that Satoshi removed himself from bitcoin after Andresen informed of the meeting. But that’s only one interpretation. Another is that bitcoin was assembled by the CIA and other intel groups. Plenty of people have speculated that Satoshi Nakamoto was a group of people. Those who have analyzed Nakamoto’s online activities reportedly found they seemed to drop to little or nothing at night. He was sleeping when people in the United States sleep, in other words. If he was Japanese, as he claimed, then either he worked at night or had decided to live in the US. Some of his notes reportedly use word like “bloody” and this is congruent with intelligence agency cooperation. British intel often works closely with US intel. Keep in mind I wrote the foreword to The Book Of Satoshi: The Collected Writings of Bitcoin Creator Satoshi Nakamoto so I have some experience in analyzing his past writing. And, yes, the entire story about Nakamoto sounds like “Hollywood­ish.” Anonymous, brilliant Japanese technologist writes a white paper, dumps it online and others begin to utilize its information simply because of the compelling brilliance of the argument. I’m not saying it didn’t happen that way, but usually you’d find a group surrounding an individual… and this group would promote the work from the beginning along with the individual. The tale involving Nakamoto is certainly a dramatic one.

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Meanwhile, the CIA permeates the top levels of US technology, especially. The CIA even set up a technology fund to invest in startups. There is plenty of reason to believe that the CIA was instrumental in the success of both Google and Facebook. Thus there is no reason to pooh­pooh the idea that the CIA is involved behind the scenes in bitcoin. It is perfectly possible, or not impossible, that both Andresen and Wright have CIA contacts and are in a sense cooperative ­ or more. That would make sense given what’s occurring, as there is suddenly a huge push to create a digital technology that has a resemblance to bitcoin. This is how the powers­that­be like to work. They set up expectations in society for certain technologies. Usually they do so via movies. In this case, they may have created or at least allowed an electronic currency to survive and thrive with the knowledge that other “controlled” technologies would be unveiled to accompany or supersede it (such as the Bank of England’s RSCoin). Keep in mind too that Andresen’s post was only the second piece of noteworthy news about electronic currencies within a few days time. At around the same time, the alternative media was featuring the “unveiling” of a digital cash system at a secret bankers’ meeting in New York. As reported by Bloomberg, over 100 top bankers and Wall Street executives attended to observe how dollars could be converted to purely digital currency. The technology was provided by a company called “Chain” and didn’t involve a blockchain. If that’s the case, it makes sense that Andresen would insist that Wright is Nakamoto, just as he has been. He and Wright presumably will work to cooperate with whatever it is that the banks and Chain are creating. Andresen in the past has been emphatic about the need for bitcoin to reach out to regulatory authorities, so such cooperation would not be surprising. And this would explain why Wright came out when he did. The timing of his claim to be Nakamoto is congruent with the “secret” announcement of the new digital dollar currency. The above is all speculation but it could certainly explain why Andresen is emphatic about Wright’s claim to be Nakamoto. And it also explains why Wright decided to stake his claim now, just as a digital bank currency is emerging. We’ll know more as these trends unfold. But one thing is for certain: There are many currents below the surface when it comes to bitcoin, and many unnamed influences. Personally, I find these currents fascinating and do my best to follow them, thought I don’t always write about them. But now I have because it’s time. But let me be clear, even if the guys with black suits and sunglasses are involved at some level, none of this invalidates bitcoin. It is a game­changing technology. Bitcoin could be compared to the internet. The internet can credit part of its creation to the same intelligence agencies. DARPA helped create the internet for its own uses… but very quickly the free market got a hold of it and has turned it into one of the biggest threats to their elite world domination.

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The same could be said for bitcoin. IF, and that is still definitely an if, bitcoin was spawned from these agencies, it has very quickly been taken up by the free market for its own devices and now encompasses the biggest threat to central banks and government worldwide. What the CIA intends to happen and what DOES happen are often two entirely different things. They are not foolproof. They make mistakes all the time. 9/11 was a perfect example when they either made a mistake or forgot to give a reasonable reason why World Trade Center Building 7 collapsed at freefall speed for no physically­possible reason. I am on the fence as to bitcoin’s mysterious beginnings but here is the current reality: Bitcoin is an open source software sitting on thousands of computers worldwide that cannot be stopped without turning off the internet. That is powerful. And now, countless cryptocurrencies have been spawned that also have a life of their own and are uncontrollable. If there was, or currently is, some level of intelligence agency involvement in bitcoin it doesn’t change much at this point. Bitcoin on the other hand is changing the world. The genie is out of the bottle, much like the internet. I still hold and buy more bitcoin. So I put my money where my mouth is.

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TDV Portfolio: Review & Outlook

Ed Bugos, TDV Senior Analyst

We are closing (not shorting) the following swing and option “trades”, SELL: Take Profits on Daily Gold Miners ETF (NUGT) SELL: Currency Shares Japanese Yen ETF (FXY) SELL: Bitcoin Investment Trust (GBTC) SELL: FXY June $80 Calls. And we are replacing Golden Star Resources (GSS) in our long term portfolio with Friday’s new addition: Cascadero Copper (CCD:TSXV)

Update on General Investment Strategy We are lightening up on our TRADING positions in the highly leveraged gold miners’ ETF (NUGT) at a gain of about +240% in 7 months, the other half of our Yen call position ($80 strike) at a gain of +97% (or +325% for the entire trade including the gain on the original March calls), and the Currency Shares Yen ETF swing trade at a more humble 10% gain over 3 months (following a 10% gain in October 2015 ­also a short term trade). Certainly Friday would have been a better day to sell NUGT; hopefully some of you did! We are getting rid of the Bitcoin Investment Trust (GBTC) at a +75% gain (6 months) because it trades at too much of a premium and I don’t like the risk/reward ratio compared to the actual bitcoin investment. This is not a bearish call on Bitcoin, I just think that premium is going to come down a lot going forward and that GBTC will underperform the actual coins as a result. We bought when the premium was lower, and I don’t want to give the impression that I am still endorsing a trade that I really don’t like anymore. In terms of our trading program that leaves the following open swing trades... DATE OPEN NAME SYM BUY LAST SELL STOP % GAIN

Jan 23, 2015 Royal Bank of Canada (Common) RY.tsx $76.21 $75.42 $78.00 Short ­1.0% Jan 23, 2015 Toronto Dominion (Common) TD.tsx $55.90 $52.42 $55.00 Short ­6.6% Jul 27, 2015 Proshares Ultrashort QQQ (ETF) QID $32.89 $31.68 $28.00 Long ­3.7% Feb 3, 2016 Currency Shares Euro (ETF) FXE $108.68 $112.35 $105.00 Long 3.4%

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Just to be clear, I still think there is upside and I wouldn’t panic about selling your NUGT if it is soft when you read this. I am booking gains because, as you will see in today’s analysis, the kind of returns we’ve seen in the sector are extremely rare historically, and I decided that it would be wise to reduce our leverage a bit. That’s why we’re mainly taking profits in our trading strategy, and not our long term portfolio. Outside of the new addition to the long term portfolio (Cascadero ­ CCD:TSXV), intended to replace Golden Star Resources (GSS), we are not suggesting anyone sell their gold stocks here unless they are over my 35­40% overweight allocation. If you are all in it might be a good idea to build some cash, maybe 10­25 percent depending on how you like to trade. At least make sure your gold stocks don’t exceed our 40 percent threshold. If you have been trying to dollar cost average into your positions, as I have suggested on many occasions, then maybe it is reasonable to postpone further purchases until we see a good correction. In recent letters I’ve suggested several strategies aside from profit taking to lock in (or hedge) your gains. Even our big shorts against wall street are in effect a way we to hedge the potential declines that may arise in the long term portfolio if it truly is overbought and the Dow crashes. But I am mainly talking about option strategies involving the purchase of insurance (buying puts), or a buffer (writing covered calls), or as a way to earn an income while waiting to buy a dip of whatever magnitude it is possible to dial into. I am liquidating our remaining Yen bets because the currency has reached our target, and the warnings of an intervention to support the US dollar have been fast and furious in recent days as the USD index has fallen toward ­ and temporarily broke ­ support at 92.50 before the Canadians came to the rescue Tuesday.

The fall through the first support level at 93.50 was precipitous and included a failure of a falling wedge (triangle) in the chart. However, we are keeping our Euro calls. The USD’s temporary break through 92.50 was either a bear trap or it was premature enthusiasm. We’ll see this week. Look to add to your FXE euro ETF on any bounce in the USD but otherwise don’t chase it. I’m expecting the USD to bounce but to have trouble in the area of resistance denoted by the shaded range in the chart on the right hand side (above).

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I still like shorting our two Canadian banks for non US investors. US investors should focus on the tech stocks in the US markets, imo, covered by the QID trade above, plus the QID calls and SPY puts below. [The reason I don’t recommend shorting the Canadian banks for US investors is because they are likely to be fighting the Loonie’s gains as well in an environment where the US dollar’s exchange rate is weak.] But I like the big short here. The June puts are still worthwhile, although we are out to July on the bank stock puts and the QID calls. If you want to give the market more time then reach out to later expiry months, like September. I still think the June/July expiries hold value as the premium has shrunk considerably and we still have 7 long weeks. The following option trades are still open... DATE OPEN UNDERLYING NAME EXPIRY STRIKE TYPE BUY LAST UND SYM L/S % GAIN Dec 29, 2015 SPDR S&P 500 Jun 2016 $100.00 PUT $0.13 $0.01 SPY Long ­92% Feb 29, 2016 TD Bank (CAD) Jul 2016 $42.00 PUT $0.70 $0.24 TD.TO Long ­66% Mar 10, 2016 TD Bank (CAD) Jul 2016 $54.00 PUT $2.50 $1.13 TD.TO Long ­55% Mar 1, 2016 Proshares Ultrashort ETF Jul 2016 $40.00 CALL $2.00 $0.60 QID Long ­70% Feb 3, 2016 Currency Shares Euro Jun 2016 $108.00 CALL $2.80 $4.65 FXE Long 66% Mar 10, 2016 Currency Shares Euro Jun 2016 $115.00 CALL $0.51 $0.59 FXE Long 16% Mar 21, 2016 Ishares Silver Trust Jun 2016 $14.00 CALL $1.50 $2.67 SLV Long 78%

So basically our trading positions are focused on shorting the stock markets (and Canadian banks), and still include long bets on the Euro and SLV (silver ETF) options. In terms of fundamental value and a long term investment I still prefer silver over gold ­ i.e., since gold is expensive relative to silver historically. But in terms of the short term trade, i see some risk in silver because of the greater volatility of the recent move and its higher vulnerability (than gold) to declines in stock prices and the economic outlook. Nevertheless, I still think there is some upside in the short term and would add to the SLV calls on any dip, as euro. I also still see one more leg up in the miners and am probably taking profits there prematurely. 1/4 of Gold Stock Bear Market Wiped Clean in 3 Month Rally! In September, when we initiated the NUGT swing trade for premium subscribers a few months too early, I insisted that we would recover the January 2015 highs in gold stocks by year end or by January 2016.

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The AMEX Gold Bugs Index (HUI) is one of the more popular gold stock indexes in North American investment circles. They all more or less resemble each other but by any standard we’ve seen a powerful move in these shares over the past three months that has almost met my short term targets. In terms of the previous bear market in gold and silver, the charts say it is over. Are Gold Shares Overbought? The question now turns to: where will the first leg of our new bull market end. Nothing goes straight up or down. Millions of charts will attest to that. You can see it in the chart above. So just how rare is a move like the one we’ve just had? The (HUI) index above only goes back 20 or so years. The HUI is up about 120­130 percent from its January low. The Barron’s Gold Mining Index, which has more history, is up +110% in this 3 ½ month period (and we have outperformed both in our long term portfolio and our short term trades). So I ran a diagnostic on the BGMI going back to 1940 where I calculated the rolling 1 month returns, then quarterly, 4 month, 5, 6, and so on… up to 12 months. That is, we looked at every 1 month period, every 3 month period…...every 12 month period for gold share gains going back to 1940. Before we get to the meat of it, make a mental note to yourself that the AVERAGE return over this 75 year period for one month is 1% (growing to 9% per annum ­better than the Dow!), and that the standard deviation grows from 9% in one month to 40% yearly. The graph below reveals the MAXIMUM returns achieved in the given timeframes.

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The purple line is just the standard deviation of the entire population (right axis). It gives us an idea about the volatility in expected returns in those periods. For example, in one month, going back to 1940, one standard deviation is equal to about 9% and the average return is 1%. In a normal bell curve 95% of returns occur within two standard deviations from the mean, which means that something like 95% of one month returns in our sample tend to fall between ­17 and +19 percent. For 12 months the range is ­65 to +83%. The blue line in the above chart displays the MAXIMUM returns ever made in the trailing period, starting with 52% in one month, peaking out at 201% over 7 months, and rising to 250% over one year. The trend in this statistic would continue to rise as we extend the duration but this graph (and the other data mentioned ­i.e., average and standard deviation in all returns) gives us a rough idea of where we are relative to history. With gains of between 110% and 130% over the past 3.5 months in the BGMI and HUI respectively you can see that we have made gains that are not only well above average for 3­4 months, but as good as the best. The numbers along that blue line all basically come from two periods: 1974 and 1982. In the 1974 period, the gains of 113 and 132 percent (for the 3 and 4 month periods) saw the 12 month returns at between 200 and 250%. However, in this period that was the top of a three year bull market leg. Likewise, the gains in the early eighties were bear market rallies. There were several sharp ones in the eighties but the first was the sharpest. So that’s the bad news. In other words, not only are these gold stock returns as good as history has ever seen, within such a short time period, but also, the other examples of such gains occurred either at the end of a bull market leg or as a bear market rally… not at the beginning.

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Any way we slice it, based on a historical analysis, a seasonal analysis, and a technical analysis, it is unlikely the HUI average (in the first graph above) will be able to continue making gains at this pace or to break past the 250­275 range (i.e., the dark shaded region in the first graph above) before May/June. I am still bullish on the gold and silver price for another 50 and 2 points, respectively, putting them back at their July 2014 highs more or less. For the HUI that would imply another 30 to 50 points, or average gains of 10­20 percent from Friday’s close. I am rooting for it but why risk so much gain for so little more.

The gold and silver charts look good and I think there’s a good chance this leg extends into the high 1300’s for gold ­ approaching $20 for silver ­ depending on if the US dollar is ready to break down now or not. Now, given what is going on out there, and how much fall out we are all expecting, maybe I’m not bullish enough! But I can tell you this based on experience: the market likes to remind us that volatility exists in both directions. Now for the good news. The good news is that the one way volatility has not been much of a surprise

because of two facts that we harped on last year: (1) we are coming out of the worst bear market in gold shares EVER, and (2) the bear market in the metals and commodities is ending, and turning into a bull. The second point is still unconfirmed by the US dollar action. But usually the reversal move in a primary sequence is longer than everyone has been conditioned to expect; and because of how oversold the miners were, the coil was extremely wound up as well this time. Nonetheless, I’ve been writing recently about the seasonal high in the May­June time frame. I don’t usually pay attention to seasonal influences because they are quite small and not always reliable or even helpful. But with a move like we have had, I’m looking for vulnerabilities. One is the aforementioned volatility. Another is the seasonal factor ­could be the butterfly that flaps its wings in an overbought market. Yet another is fact that we are still very bearish on the stock market. I wrote in the last couple letters that because of the rally in the sector it has recoupled with the Dow! Don’t discount this. For conspiracy bugs, let me put this in your head: maybe one of the reasons they haven’t hammered the stock market yet is they wanted all the gold bugs in when they did it! Regardless, clearly given the historical data, the miners are as vulnerable as ever.

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An Old Axiom: Buy on Mystery, Sell on History (or Sell the News) Our investment strategy is based on the presumption that a new bull market in the precious metals and the miners is underway. Hindsight is the most certain way to evaluate these things. But money is not made on certain outcomes. In the early stages of a new trend it is not yet certain whether it is going to be a counter trend correction or a new trend indeed even if all the early technical parameters are met. At any rate, in February, I attached three corroborative conditions to the breakout in gold prices (through $1192) that had to be met before we could call it a new bull market in the precious metals.

1. Silver needs to reverse its 5 year bear market trend 2. US dollar index needs to fall through the neckline of a 1 year double top at 92.5, and 3. Dow Industrials need to fall through about 15500.

All this means is that I am looking for these markets to corroborate the new yo trend in gold ­ i.e., to essentially confirm our fundamental and technical outlook. Silver just confirmed last week on the break out through 16.35, and the US dollar index is on the cliff’s edge ­ready to get utterly pounded. The missing piece is that the US stock and bond markets have continued to hold up better than most others. In our thesis, a break down in expectations about these assets will weigh on the currency. This could be the next shoe to drop, and lift our SPY and QQQ shorts out of the gutter. But here’s the thing that adds to the vulnerability of our precious metals longs: so much gain has occurred before the break down in the US dollar and US financial assets. On the one hand it makes the trade vulnerable to a general stock market panic as mentioned above, and on the other hand the anticipation of a breakdown in the US dollar reflected in the trade may be too much. So when the break down finally comes it will herald the end of the first leg in the precious metals bull as investors sell the news and book profits. However, a good bounce in the US dollar this week may deflate some of that froth too. The monthly employment report may be pivotal in that respect. I don’t see intervention being that effective. Cascadero Copper (CCD:TSXV) Update: Our new pick traded over 12 million shares in its two and a half day debut, as subscribers drove it up from 5 cents to a high of almost 12 cents (Canadian). For most Americans your best bet is to buy the stock through a firm like Schwab or Interactive brokers and hope for some liquidity on the US bulletin board. There is some good advice in this article. Access to Canadian exchanges should not be a problem for brokers anywhere else on the planet but if you live in Australia and deal with a small boutique firm it is likely going to have trouble executing the trades.

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If you do then let us know. If you are not a US citizen I can refer you to a Canadian broker. Email me at: ebugos@dollarvigilante.com. Cascadero’s story is a good one. I am expecting them to estimate a resource for their Cesium deposit and complete an economic study by this time next year, which could deliver returns of 500­900 percent, and more if it is a home run. The shares are just waking up from the dead and as cheap as borscht but I still would not chase them too rapidly. The value has to be realized through development, which still requires capital and time: i.e., work. It won’t occur overnight. However, as the market understands the story better, its prospects will likely be re­rated, and at each stage of development, a partial valuation also realized. There should continue to be lots of liquidity under 10 cents owing to the 18.7 million 2 year options outstanding exercisable at 5 cents (Canadian) and the 12.7 million 5 cent warrants expiring next February. Most of that is held by the inside group so if you see insiders selling shares it’ll probably to exercise the options or warrants in order to put the money into the treasury. If all the 5 cent options and warrants were exercised the company would be fully funded for its development for the next year. Cascadero’s story is a bit of a David versus Goliath deal. The market’s ignorance about Cesium and the coming supply crunch (as well as pessimism about exploration in general) has created an opportunity for big oil to come in and scoop assets like this for next to nothing. We see the value here and think that a little bit of money will go a long way in proving it up. But keep Cascadero in perspective. It is not a going concern. It is not mining its own cash flow, yet. So don’t mortgage your house. However, it is not an exploration stock like Merrex Gold (MXI:TSXV), Goldquest (GQC:TSXV), or Eurasian Minerals (EMX:TSXV). It is ready to develop its asset. Still, it has a lot of very interesting early stage exploration assets that it will farm out and/or sell, some of which can be sold to fund Taron. I will keep you posted on developments pertaining to this company as we go along but unlike all the other stocks in our long term portfolio, which are up a lot, this one is still near the ground floor and definitely worth buying ­just make sure you do it within the context of the overall portfolio and allocation. Keep your exposure to less than 5% of the long term gold stock portfolio.

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TDV Q&A

Dear TDV, I just completed the TDV April issue. Now the only convenient place I was able to find that combine all the asset classes to help me execute TDV recommendations as well as proper analysis was SAXO Bank in Denmark, and I opened a trading account with them. But with the TDV April issue, [you said] even Saxo bank may not be safe and probably confiscate their clients' trading accounts. Then where to go and what to do?? I do not think it would be proper to put everything into physical gold and silver. I mean you know, when crisis comes such as stock market crash, you want to get advantage by buying for example the SPY Call option that you recommended, or buying QQQ ETF, but then if the bank will confiscate the funds whatever you buy or profit you make will be useless. And even if the bank does not confiscate, and you decided to withdraw some of the profits, who knows whether you will receive it into your own bank account. Seriously what to do? Kindly advise. Ken A Dear Ken, We have stated our reasoning behind our portfolio allocations in the past but it has been a long time since we have done so… so your question allows us to once again explain our line of thinking. We believe that we are nearing the end of the entire financial and monetary system. By “near” we mean it really could happen anytime now, may happen by

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this fall or could still take a number of years to drag out… but we are not talking decades… we are talking months or years. With that in mind we recommend a very large percentage of your assets be in hard assets, like gold & silver bullion, real estate and bitcoin (which isn’t hard in real terms but IS outside the current financial system). If you do that then you will be far, far ahead of the crowd in surviving the collapse. So, that is your safety… your insurance policy. For those willing to speculate and invest to try to make a small fortune BEFORE the system collapses and get it out before it all comes crumbling down, we suggest playing in things like mining stocks, ETFs and options. If you are incredibly risk averse you should put a very small part of your net worth into these things. If you are less risk averse then you can put a much larger amount in these speculations/investments/trades hoping to hit a homerun. We leave that up to you of course, only you can decide what level of risk you want to take. If the whole system comes crumbling down this year then it is quite likely you will lose everything in these speculations… but you will have your secure back­up in gold and other hard assets. If the system crumbles but does not collapse this year, and manages to keep going for a few more years, then some of these speculations could pay off fantastic returns. We’ve already begun to see what kind of returns… we’ve had numerous 1,000% gainers in the last six months. We are in a period of history that has never been experienced before. The system is worldwide and untenable. That has never happened before. So we are in unchartered territory. There simply is no historic reference of a time when a worldwide financial and monetary system failed by which to learn from. We’re learning on the fly and we will make mistakes. It’s inevitable. I’ve been quoted many times as saying this is the most dangerous time in human history for capital… and I stand by it. Richard Russell of the Dow Theory Letters, said just prior to his recent passing (RIP) that in this collapse those who lose the least win. We think he is generally right on that… but we are going to do everything we can to make sure our subscribers and ourselves have the best chance to actually profit through it all. It’s going to be a wild ride. And you are in the right place, here at TDV, to get the best information to do so. Just doing that alone already puts you miles ahead of almost everyone else in the world who have no clue that a collapse is possible, much less imminent. Best, Jeff Berwick

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TDV Groups: Rio de Janeiro

Luis Fernando Mises

Today we’re talking to Adil in Rio de Janeiro, and I am going to be practicing my Portuguese with him. Rio is an amazing place, one Adil is excited to be sharing with us. Luis: Brazil is extremely diverse, and it is huge. It is probably one of the three South American countries – or Central and South American countries – that actually do not speak Spanish. I don’t know if all of the readers know about this, but they speak Portuguese. So with that said, you are not originally from Rio. Where did you come from? How did you end up in Rio? Adil: No, I am not. And most people that you interview probably would tell you the same thing, that after traveling a lot and deciding between a lot of different countries. So I left Spain in 2008. I lived in Sweden for almost a year. It was the third time I lived in Sweden, and then after that New Zealand, Australia, Singapore, and then I arrived in Brazil in 2011. I was looking for the best place to expatriate, and of course there is no such thing because a place is only what is best for you. So I visited most of the countries in Latin America, except for Paraguay and Venezuela, and the small ones like Surinam, and I came back to Brazil in 2012. That is how I arrived here.

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Luis: What took you to all of these places? What inspired you? Adil: The thing is there was a crisis in Europe. I don’t know if you heard, but around 2008 a lot of people were complaining, and I discovered that I am kind of allergic to that. Like at some point, you have to do something about it. But just being around that negative energy, I wanted to see something new. And also, Europe was changing. Many places that before, like Italy, and Spain, and Greece, were so relaxed and laid­back, after the European center started imposing regulation governments, imposing more regulations and more laws, I wanted to travel somewhere else. So I ended up in Singapore by accident actually. It was just a transit flight. I had 15 hours, so I loved it, and I went back. But New Zealand, for example, I lived there for a year and 4 months. It was a constant decision that was based on the quality of life, weather, I speak English, a lot of different arguments. However, for me, I prefer more laid­back countries. Every country has its positives and negatives. For example, in Brazil, it is not like Germany where everyone arrives on time and stuff like that, but the opposite. There are people in the streets sharing food between them. People are not worried. These things have a good effect on you if you see it or don’t see it. So I don’t know how I can explain it. Luis: I think I can relate and I can really understand what you’re talking about. For instance, here in the States, there is always this pressure of time and going places and arriving on time. I guess the idea of infrastructure, everything is so perfect, but at the same time, there is not a lot of happiness. So me being from Mexico, it is a second world country, and it is probably not the best infrastructure and all that. Neighbors know each other. When it is Christmas, everybody goes outside, and they share food. Basically you know everybody in your block and maybe 2 blocks away from you. You still know them. So I can understand that idea of being more relaxed, more aware and connected with the community around you. So I guess basically that is what you are saying, how you ended up in Rio. Adil: Yeah. Also, just like what I said, I don’t arrive late or anything like that. I’m very responsible. I just hope for things to be that everything works and at the same time to have the same vibe, the same community that I’m talking about. Lately I’m thinking there is not which place you should live in. It is who is your company, I think. That is more important – not where you are, but who you are with. That being said, a lot of people like it for economic reasons, and laws for expatriates are a lot easier. I think that is better than anyone, having the expatriation department. Luis: Yeah. Absolutely. It’s pretty busy, and a lot of people are trying to escape because it is just turning into a form of a police state. I was reading that somebody recently just got jailed because of the whole bathroom situation that is happening here in the States. So with that said, you are in Rio, and you have been there for about 5 years or 6 years? Adil: 2011. Yeah. But I was there for only one month, and then I traveled for a year and 4 or 5 months – the world continents, everything, like Chile and Uruguay, Costa Rica, Panama – everything. But yeah. I don’t know the exact calculation. Luis: Yeah. I can understand that. So now, you are there. Did you have any contacts, or did you just say, “Hey, I’m spontaneous and I am adventurous. Let’s go to Rio and see what happens.

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Adil: Yes, actually. I didn’t have any contacts. It was more or less like that. So after New Zealand, I thought I’m going to see South America and Latin America in general, so my thoughts were between Mexico, Costa Rica, and Brazil. So I land in Rio, and I fall in love with this city, but I had only one month there because I had bought my tickets in advance. So I loved it. I was walking outside, and you see people where some places, it is total poverty, but everybody keeps smiling. They keep playing football. They don’t worry. It made me remember the book Outliers by Malcolm Gladwell. It is a really good book. It talks about geniuses and very smart people that didn’t make it in the reasons why, which is drawn from the story of a small city in New Jersey that didn’t have any single case of cancer or heart disease. So they sent a group of doctors in there, and they found that two thirds were obese, and most of them from Italian descent and eating pizza, wine, sleeping late, and they didn’t understand why everybody was healthy. So they sent him back, and they sent a group of therapists and his psychoanalysts––behavioral analysis, basically. They found out since it was a really tight knit community and everyone knew everyone, nobody had fears that they would run out of money or that they would have a problem. Everybody knew that the whole community was going to surround them, so they were mentally and emotionally very strong. There were not lots of worries. So when I arrived in Rio, I had that feeling. Luis: That is pretty cool. Adil: Now it is different. There have been protests – well it is over now. Tonight, as we speak. There have been protests for many months lately, since August or something like that. So many times you see that. But we will see what happens next about the president.

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Luis: Yes, we’ll see. You are pretty close to the water, right? Adil: Yeah. Because most of the neighborhoods, there is a South area and a North area, zona sud and zona norte, like Copacabana and Ipanema, those neighborhoods are long strips. So wherever you’re going to rent an apartment, you’ve got 3 or 4 blocks to the beach max. So you can be one block to the beach, 2 blocks, or 3 or 4 walking distance. And there are mountains surrounding you and the beach in front of you. It is long strips. It is a beautiful city. Luis: That sounds amazing. So tell me a little bit – because we are talking about housing over there. What is a normal price for a 2­ or 3­bedroom apartment? Adil: That is actually highly overpriced, but the dollar is much stronger now. For example, in Rio, it is more or less $1,500 per room, so if it is $3000, it would be $4500, divide by 4, which is around $1200 for a 4­bedroom, US. Luis: That’s not too bad. Adil: It’s bad for Brazil. Luis: It’s bad for Brazil, but it is nice for somebody that is moving from the States or Europe. Adil: Yeah. I’m sorry. I have to explain myself. It’s that compared to Brazilian cities. It is much more expensive than the rest of the Brazilian cities. But yes, that’s what I was saying, because it is divided by 4. Before the dollar was 2. It was 1.82 to 20. Now it’s between 3.50 and 4, so the last year it has been really good for all Americans or Europeans. For Euro, it is 4.5. So there are houses even that you can buy in some places that are like half price now because the currency is impacted. Luis: What would a house run on average? Adil: In Rio, it is not a good idea to buy a house. Luis: Why not?

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Adil: For example, in Ipanema, an apartment is around 20 million reals, which is like $5 million. If you compare it to other cities – there are a lot of cities in Brazil – it would be much, much, much lower. We are talking prices like 20 times cheaper or something like that. It is really overpriced compared to the rest of this country because everybody wants to live there. If you buy it outside of the city, it could be a little bit dangerous. Think about New York, but you have the option to buy, for example, upper Manhattan or in the Hamptons or buy in the Bronx. So this is like the situation in Rio. It is much better to rent and not buy. In some places in the world, it is like that. For example, in Hong Kong, I think half a million is a small apartment. So it is worth it for you to rent an apartment instead of buy it. Luis: That works also for a lot of people. That is also awesome for a lot of people to rent instead of having to purchase. You don’t have the commitment and you can just rent 6 months to a year or as much as you want. Adil: Yeah. Of course. It is much better. And also the laws, in Brazil, you can rent a house and have an ironclad contract to not raise the price for 5 years or something like that. It is much better to buy a house outside of the city and then drive because water laws in Brazil are also very, very good. For example, in Chile, you need to pay the government some money for water­­in most countries in South America. In Brazil, any water that runs underneath you, it is yours. So farming, it is very lucrative in Brazil because of these things. The land is cheap. Farming land is cheap, and the water rights are hundred percent for you. And there is a lot of sun for solar energy and all of these things. I would suggest a more rural life, but for people who love cities, it is much better renting for sure, unless they have the money and don’t mind and want to buy an apartment. Luis: So the options are there for whomever wants whatever at that point. I understand. I think a lot of people prefer – well, not a lot of people, but there’ve been a lot of readers who just want to have an apartment and be able to rent, and have some great amenities and near the beach, so I think what you are talking about sounds exciting. Adil: And especially, for example, if you’re going to expatriate, first you need to live in the city for a few months before – and not choosing beforehand and buying a house. A lot of expats make the same mistake. They read about a city on the Internet, and they contact a real estate agent and buy the house, arrive there, and they see it is not for them. You know? Maybe the city or the neighborhoods, which have better schools for your kids and all these things. So you know, renting is not that bad of an idea, especially in the beginning. But yes, I noticed a lot of people think about buying first. To each their own, but I wouldn’t recommend that. Especially now that the country has weak currency. It could get weaker after the Olympics. So that is a plus for foreigners. Luis: That is a good point that you are making. So let’s talk about more amenities. This is a huge city, and surely you have everything that anybody could desire. What is the nightlife there? Adil: There are a lot of different types. There is a neighborhood in Rio called the Santa Theresa. It is a bohemian neighborhood, with restaurants from all parts of Brazil, different cuisines. The tables are artist designed and things like that. So at night, there is samba and music in the streets. There are city fairs. I don’t know how you call them, like festivals. They are every Friday and Saturday night. And then right next to it is the nightlife area with all the clubs and the bars. So on one street is clubs and next to it are bars. There are a lot of choices within the little distance, and there are different neighborhoods, like the main neighborhoods, Copacabana and Ipanema, where there are only clubs because it is high scale, so you can experience the

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culture and the modern music, house music, electronic music, hip­hop clubs – everything. Because it is a big city. Luis: Absolutely. So you have all sorts of restaurants, and you have all sorts of fun amenities and nightlife. Anything that anybody could desire. Adil: For some reason, all foreigners love the music in the streets because there are shows every weekend, and there is food in the streets and cocktails. They just invent small tables and make them. It is different. It is good to have the choice between the two. Luis: The music in the streets is something that a lot of people are not used to, especially in Western countries, because there are regulations on having a license. Adil: Exactly. A license, the hygiene. I don’t know if you heard that joke from Doug Stanhope: Teach a man, give a man a fish? Luis: Tell us. Adil: So he says, “Give a man a fish, he eats for one day. Teach a man how to fish, and he’s got to get a fishing license, so he has to get Social Security because there aren't any jobs, and so he has to register with the IRS, so finally, the guy, he gets a fish because all the state approved licenses, and then he cooks the fish, and then they audit him because he didn’t have permits for the open flame.” So basically he jokes about all these licenses that you need nowadays. It is a good piece by Doug Stanhope.

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Luis: Absolutely. And very true. Adil: Yeah. That in Spain would not happen. Every city has its own fair, which is like a week a year, and that is it. You can’t have every weekend music in the streets and people that are selling cocktails. What I like about that is there are bananas, and you can take them from the tree, and you can buy them very cheap. It is very healthy. Not only bananas––lots of fruits, lots of nuts, cashews, and all of that stuff from the streets. You are walking in a modern city, and you can buy them with no need to go to the supermarket and deal with angry people and stuff like that, wait in a line. No. It is fresh. It is in front of you. This is one of the things that I like about it. Luis: So what do you mean, they are in the street? They’re people with little stands there or what? Adil: Yeah. There are several. Luis: That is pretty awesome, because in a lot of Latin American countries, there is the little person with their stand on wheels, because they can roam around and they can make you fresh juices and whatever––all sorts of foods that they sell as well. Adil: Yeah. Exactly. One of the things that shocked me the most was in Ecuador, I walked by the school, and I had not seen that in a lot of cities. I saw people sitting down eating not their lunch, but in between morning and lunch, like 10 AM. None of them had chips or Doritos or things like that. They have these plastic cups of

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fruits. So all kids were just eating fruits. It was really cool. I was really paying attention to that. And a lot of countries in Latin America, that’s a good thing about it. There are fresh fruits. Luis: Yeah. You mentioned that, and after school, I remember in Mexico, outside the school, there were people that had their little carts, and they had cups with cucumbers and then they would add salt and lime or maybe pepper if you wanted that and jicamas or carrots or whatever sorts of vegetables, like watermelons, and all of that. So the snacks tend to be healthier there. Adil: Yeah. Much healthier. But the problem is however that in US or Europe, from raw milk farms to lemonade stands, you name it, they regulate it. You go over there and sell some lemonade, and they go in and raid them. “Hey, do you have a permit for that?” It’s just lemonade. We don’t need a paper for that. So it just discourages people from doing that, so they do the easy thing, which is buying Coca­Cola, which is I don’t know how many spoons of sugar, and that’s not good. It’s because of the present legislation, because given the choice, they would choose a different one. Like the children in Ecuador, at school they also have chips and Doritos and whatever, but they eat differently because they have the choice. That being said, for licenses in Brazil, Brazil is one of the hardest countries to get licensed. There is a lot of red tape. It is not the hardest, but it takes you more time. Luis: Tell us a little bit more about that, please.

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Adil: In Chile, you can open a business in half a day. In Brazil, it is 184 days, which translates to – I’m going to speak in code here – your ability to speed up the process. I don’t know if you understood what I mean. So it depends on that ability. You need a minimum of that. For example, it you have a real estate project development, so you want to start building. There is no way you can do it in less than one year. You could buy the same process, but then later, they will say, “Hey, in accordance with Brazilian law, you cannot – because you need 180 days for this license and you need 90 days for the other license after it, and permits turned in.” There is a lot of bureaucracy, but also for important things, because it is the highest value in the world, the value added tax, which is 70% plus 2 small taxes, it adds up to 110%. So it is the highest in all South America for electronics. However, in Paraguay, there is no income tax, and it is 18% lower than the US, so a lot of people just bring products from Paraguay anyway. Luis: Wow. That is pretty impressive. That is the secret. In Latin American countries, if you want something done, you have to make corruption your friend. That is basically how it works, so it is no secret that it wouldn’t be any different in Brazil. It happens, and that is just normal. That’s what you deal with, and that is one of the things I really like to talk about, and not necessarily in code. It just has to be really in plain sight. So anybody that needs to visit there or move there, they are there, and they know that it happens, and it is normal. Adil: And the best thing always in the world is, as honestly as possible, instead of painting an image of rainbows and things like that. It’s not going to help people, except to say how it is. Just like you said. The pluses and minuses and how to go around stuff, because each country has a plus and minus. For instance, in this case, there is a way to go around the licenses. In Chile, for example, corruption is very, very low, but there are a lot of laws, and you walk in the streets and find bars and restaurants and clubs that found some – I don’t know – infraction or something like that, so they close them. The downside, for example, of Chile is the TPB. We don’t know what it is going to look like afterwards. So for example, anybody traveling to Latin America has to know the country a little bit. So how many years are you staying there, and make all of these things in perspective. Luis: Yeah. Absolutely. That’s great information to have. So maybe it could be a great place to go and retire or have some fun and go there for a few months, but not necessarily so much to create a business. Is that kind of what you would say? Adil: What I would say is if you are not ingenious and always solving problems and stuff like that, it might not be for you. If you have income coming from outside, it could be perfect for you. If you want to have your own Brazilian company and one income, then you need to be used to finding ingenious ways to solve the problem, because the country is great for living, but especially the bureaucracy doesn’t work, so you always have to find a way to motivate people and get this guy to talk to the other guy. Bureaucrats are not interested in working. More the opposite. So that is the thing. And that is the only complaint I always find about Brazil is that people come and want to open a company and it takes them 5 years to get a license and all these kinds of things. But they try to do it the European way or something like that where you go and get the permit. It just doesn’t work like this here. Luis: No, it doesn’t. It is quite different. With that said, it is a really beautiful place. It has a lot of amenities. It is not expensive for somebody that is not from Brazil, like if you are moving from somewhere else or with mobile income. So there are a lot of pluses. What is crime like? I have heard that it is so so, but I don’t want to just make things up. I want to ask you because you lived there.

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Adil: For example, for me, it is not the most dangerous country I have seen in Latin America. The hype is very hyped. Brazil and Colombia and Mexico for me, it is blown out of proportion. That being said, Rio has been dangerous more in the last year because of the crisis, but it is not that dangerous. You can walk during the night and nothing happens. There are cop cars almost everywhere, but cities, like Florianopolis, you’re never going to find any cop car, and you’re not going to find crime. There is crime, but they steal from you. That is it. It is not very common. Luis: That is kind of what I was thinking, because we get a Mexico, and nothing ever happens, and there are other places that are the same deal. So most of that is some sort of fear tactic from the media just to keep selling news because most people just live okay there, and there is always crying everywhere, even here in the States, even here in Texas, that is one of the lowest crime places. It happens everywhere. Adil: Yeah. It happens everywhere. The thing in Brazil, when it happens, it goes all over. It is always on the news. In Spain, for example, the dangerous country to fear is Colombia, so somebody dies in Colombia, it is in the news. I don’t know why it is like that, but if somebody dies in Colombia, it is in the news for a week in Spain. So the first time I went to Colombia I was expecting nothing short of people kidnapping people as they walked. Of course, it was not like that. The Colombian people are lovely people. It was blown out of proportion. There is crime, but it is not like every city. And specifically, it is lower than Chicago. Chicago or Detroit. Luis: I could see that, and I believe it. Adil: It is not dangerous. Luis: I don’t see it as dangerous. Adil: Sure. There are a lot of tourists they go to Brazil, and there is not a lot of crime. Luis: So one thing that I want to ask you – the festival, the big annual one, Rio de Janeiro – Adil: Yeah. The Carnival. Luis: Tell us about that. When is it, and what does that look like? Adil: So if you come to the Carnival, you have to drink a lot of Red Bull. I’m joking. It is 5 to 7 days, 2 weekdays, and 5 days of

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parties everywhere. There is what they call bloco, which is a huge dance. You know those buses that have the parts on top of them? Luis: Parade floats? Adil: Yeah. So those parade floats, they go from neighborhood to neighborhood all day long from 10 in the morning until 6 in the morning. And people follow them mostly by subway because it is harder to drive, so it finishes after 4 hours here and it goes to the next neighborhood, and there are a lot of them. Some go to sleep. Other people wake up. But the party doesn’t stop. It is like for a week, and some people go where the whole parade ends, but during 5 days, it is nonstop. That’s where people from the poor neighborhoods gets rich because they take beach coolers and they pack them with beers and they make cocktails also in the street and some of them even make food and sandwiches, so they go in the streets following the parade, and you can buy whatever you want, water or beer, wine if you wanted, nonstop. And the day after, the city is a totally different city. You go to the supermarket and you can see that everybody is super hung over. Nobody talks for the whole day of the year, because it has been a week of partying. It is really something. And it’s always in February or March. It depends, but mostly in February. So it is summer in the southern hemisphere. Luis: That is a lot of fun. So just to finish, there is another big thing that happened, and that is usually New Year’s Eve. Is that right? In the Copacabana beach? Adil: Yeah. At the Copacabana beach, everybody goes to see the fireworks, and there is a party in the street. So there is music and everything. The only difference is you bring your own drinks with you. There are people that sell ice all the time, so you find maybe 1 million or 2, maybe hundreds of thousands of people, in both Copacabana Beach and Ipanema Beach because they are connected. So you find tourists from all over the world in Brazil as well – Brazilian tourists. Everybody comes to celebrate New Year’s at the beach and wears white. So if you lose somebody at the beach, everybody is wearing white anyway. Luis: That’s funny. Here in my notes I have that it’s about 2.5 million people going to the New Year’s Eve thing, so that is a massive event. Adil: Yeah. I’ve never seen so many people at the beach. Everybody goes to swim. I love our beach, because the beach is quite big, and there are 2 beaches, but still packed always on New Year’s Eve. It has a French name. It is called Reveillon in French. I never knew why, because it is not Portuguese. It is the French name for New Year’s Eve. But also that is one of the most busiest days in Rio during the year. Luis: How interesting. But it’s pretty interesting. Thank you so much. Is there anything else you want to add before we close this up today? Adil: No. Do you have any other questions?

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Luis: Well, we have tons of questions, but we can probably do part 2 sometime soon because this is pretty interesting, and actually we can just say that if any of our readers have any questions, they can ask directly to you on the group. Adil: Yes, of course. Luis: So dear readers, if you have any other questions, if you want to follow up with any and expand anything that we talked about, just look in our group, and the link is here for you. And thank you so much, dear readers, for reading. Peace, love, and anarchy. Adil: Thank you, Luis. Have a good night. Luis: You, too.

If you are interested to join the conversation at the TDV Group in Rio click HERE. If you want to join the main TDV subscribers’ only Facebook group click HERE.

To see a list of all worldwide TDV Groups click HERE. If you have any questions about the groups or if you’d like to start one in your area contact Luis Fernando

Mises at lfernando@dollarvigilante.com.

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In Closing… Sharon Harris

I envision a tolerant society — where those seeking refuge are welcomed with open arms. Better still, I envision a world in which people won't need to risk their lives to get to a place where they can be free. Once America is free, the benefits of freedom will overflow our borders. We will be a shining beacon to the whole world. More and more people will demand the same from their own societies and will begin to emulate us. I envision a free world. That's my vision of a free society. What is yours? Whatever it is, don't hide it under a bushel basket. Transmit it to your neighbors and friends. Tell them of the invisible hand and the way it works. Contrast a free society with one in which violence is the norm. Show them they have a choice between these two worlds. And ask them — gently — which will they choose? We should all want to play a vital role in this wonderful revolution, because someday people will talk about us. Granddads will say to their grandchildren, "Once upon a time, there was an income tax. And did you know that the government once told people what they could eat and drink? Or that children were forced to go to government schools? Sharon Harris is a libertarian political activist and president of the Advocates for Self­Government.

Disclaimer: The Dollar Vigilante needs no disclaimer. Everything we say here is what we believe. Furthermore we need no disclaimer because we believe that all nation states, governments, securities agencies or other legislative bodies are illegitimate and we do not recognize them nor believe we need their permission to say what we feel about any topic and frankly think it is hilarious that people think a government body should be there to protect them. However, because we know that all manner of Government agencies will come after us just for showing such disdain for them we are going to include a standard, cookie­cutter disclaimer below just to keep them off our backs. Enjoy reading it, bureaucrats at the SEC. Information contained in The Dollar Vigilante Emails or on The Dollar Vigilante website (www.dollarvigilante.com) is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. The information contained in such publications is not intended to constitute individual investment advice and is not designed to meet your personal financial situation. The opinions expressed in such publications are those of the publisher and are subject to change without notice. The information in such publications may become outdated and there is no obligation to update any such information. Jeff Berwick, Ed Bugos and other analysts or employees of The Dollar Vigilante may from time to time have positions in the securities or commodities covered in these publications or web site. Any Dollar Vigilante publication or web site and its content and images, as well as all copyright, trademark and other rights therein, are owned by The Dollar Vigilante (TDV). No portion of any TDV publication or web site may be extracted or reproduced without permission of The Dollar Vigilante. Unauthorized use, reproduction or rebroadcast of any content of any TDV publication or web site, including communicating investment recommendations in such publication or web site to non­subscribers in any manner, is prohibited and shall be considered an infringement and/or misappropriation of the proprietary rights of TDV. TDV reserves the right to cancel any subscription at any time, and if it does so it will promptly refund to the subscriber the amount of the subscription payment previously received relating to the remaining subscription period. Cancellation of a subscription may result from any unauthorized use or reproduction or rebroadcast of any TDV publication or website, any infringement or misappropriation of TDV proprietary rights, or any other reason determined in the sole discretion of TDV.

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