Escape from D.C.’s Latest Trap

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On one end, we have Congress instituting a rash of regulations every year – many of which you and I rarely hear about – that drive our cost of living higher because of the financial effects they have on business. On the other end, we have the Federal Reserve, which has no option but to keep interest rates low because federal lawmakers are so inept with the basic rules of budgeting that they simply can't fathom the damage they're doing to the nation with their profligate and misguided priorities. Advertisement The Safest Way to Benefit from Emerging Market Growth As the U.S. economy sags and the dollar faces a grim future, emerging markets around the world are booming. New consumers with money to spend are driving incredible growth. For a simple, safe way to take your money out of the U.S. dollar and take advantage of these stronger markets, we've secured exclusive access for our Sovereign Investor readers to EverBank's MarketSafe Emerging Market CD. To be one of the first to take advantage of this incredible opportunity, click here to join the priority access list. The combined impact is the quintessential finger trap: While our hands are stuck, federal policies rob us of our personal wealth and rob the country of its national treasure. But there are ways to at least mitigate the pain… The Rising Price of Putt-Putt and Pizza No set of federal regulations may so eloquently define the breadth of government stupidity and national economic waste than the rules that mandate the slope of the putting greens at a mini-golf course or the length of the plastic grass your golf balls roll across. I am not making this up; Google it. This is exactly the kind of governmental intrusion into business that is not only laughably ignorant in its purported need, but which imposes huge costs on businesses that trickle down to covertly swipe the wealth from our wallets. The most obvious and recent piece of lawmaking that promises to abduct more of our money is Obamacare. I won't debate the merits – or lack thereof – of Obamacare. I will only note that the Congressional Budget Office estimates the healthcare plan will cost me and you an estimated $1.2 trillion through 2022. I know big numbers like that can be mind-numbingly meaningless because there's nothing we can compare it to in our own lives to give it any context. But we all understand $0.14. That's what John Schnatter, the "John" of Papa John's Pizza, says you and I will be forking over additionally for our pizzas in the not-too-distant future. Mr. Schnatter says Papa John's is raising prices an average of $0.14 per pizza to cover his company's added costs for complying with Obamacare. Fourteen cents on a per-pizza basis doesn't impact any of our lives dramatically. But, if a value-priced pizza chain sees the need to raise costs, you can be quite certain that many other companies will do the same. They might not be as honest as the good Papa, but they will nevertheless tack on pennies and dollars here and there to pay the expense of yet another government regulation. As always, those extra costs end up biting me and you – the consumer. They are a form of stealth taxation, a way for politicians to buy votes from constituents by throwing the cost of their rules and their give-aways onto someone else's income statement … ours. Unfortunately, government-mandated price increases are but half of the battlefront. Hitting Us on Both Ends Around the backside, we have America's necessarily low-rate policies. So while the federal government is raising our costs, the Federal Reserve is tamping down our income. It's a lose/lose proposition. And it shows no signs of abating anytime soon. Earlier this year, I told subscribers to The Sovereign Individual about a Fed meeting in which several members of the board of governors for the first time expressed their privately held views that the Fed's low-rate policies were destined to stick around far-longer than expected. At the time, the Federal Reserve was outwardly saying rates would remain low into 2014. But behind closed doors, these particular Fed governors were saying the policies would actually extend until 2016. As I told readers at the time, my bet is that America won't see meaningfully higher interest rates until late decade, at the earliest. The Fed simply can't risk the knock-on effects that rising rates would have on America's mountain of debt – escalating interest payments would destroy Washington's ability to spend, spend, spend. So, low rates are a clear and present danger for investors, savers and retirees. They face an extended era of almost-meaningless amounts of income from traditional sources like bank CDs and bonds. And there you have it … politicians legislating higher costs with unnecessary rules and regulations that simply expand the size of government, coupled with Federal Reserve policies that aim to keep government from destroying the country. More money going out … less money coming in. The D.C. finger trap. Fortunately, we have a way to protect ourselves... Using Yield to Beat the Squeeze To escape the trap, you need to supplement your income with dividend-paying stocks – an investment philosophy I've been referring to since January as the Year of Yield. On one level, that means U.S. stocks, like the Farm Belt beneficiary I put Sovereign Individual subscribers into over the summer. We're talking very high-yield – think: double-digits – in a stable company with clearly visible sales and revenue growth. On another level, it means seeking high-yield outside of the temporarily strong U.S. dollar. Right now, you can find strong yields across the globe, in places like Germany, New Zealand, Singapore and Norway. In each of those locales, you'll find companies dishing up dividend payments of 5% to 12%. A perfect example is StarHub, a company I first mentioned in January. StarHub runs Singapore's most-popular mobile phone service, and it operates the island- nation's cable television system. It also has a national broadband network, as well as fixed-phone lines. Basically, it's Singapore's leading telecom and cable giant. When I first recommended StarHub, the shares were trading at S$2.90. It opened trading this morning at S$3.60 – a 24% gain in just seven months – putting it on track to reach the original S$3.75 price target I mentioned in January. But StarHub is just as good a buy today as it was earlier in the year. And one of the primary reasons to own this stock is the yield – a plump 5.6%. While the company isn't well known on this side of the Pacific, it's one of Singapore's blue-chip bellwethers. Its businesses spit out cash that StarHub uses to pay and grow its big dividends – and the dividends have been growing over the last five years at a compound rate of around 14%. Better yet, that steady income stream is in Singapore dollars, one of the two or three strongest currencies in the world and one that I have plenty of my personal wealth exposed to for the long-term. Finding steady income in stocks like StarHub is the best way to insure that you escape the D.C. finger trap. You can trade StarHub through any brokerage firm that provides access to Singapore. Until next time, stay Sovereign… Jeff D. Opdyke P.S. Even as Washington continues to spew forth policies that put the squeeze on us, they are, at the same time, dooming the future of the dollar. While the dollar is enjoying some temporary strength from the troubles in Europe, the reckless fiscal policies of our politicians guarantee it will soon resume its 30-year slide downward. This spring at our Global Currency Expo, we'll show you everything you need to know to build a secure financial future outside of the U.S. dollar, so that you can prosper no matter what happens to the greenback. To learn how you can reserve your spot today, click here. Related Reading: Don't Fear the Stock Market…Fear Not Meeting Your Real Goals How to Profit from China's Commodity Strategy How to Get More Income from Your Investments The "Timing Indicator" You Need to Know RECENT ARTICLES 8/22/2012 As Swiss Banks Close Their Doors, Look to Uruguay Since the Patriot Act has destroyed our financial privacy, it's time to keep your wealth safe in banks in Uruguay, like Lloyds TSB. 8/21/2012 Don't Fear the Stock Market…Fear Not Meeting Your Real Goals When thinking about retirement, it's important to invest your money in stocks with safe, stable yields. Don't risk not having enough income. 8/20/2012 Why Mid-West Drought Will Drive Up Gasoline Prices With a dismal corn crop, less ethanol will be added into gasoline, meaning more crude oil will be needed. So gas prices will skyrocket. 8/17/2012 Now is the Time to Buy Oil Stocks As demand for oil increases in many countries, oil prices will soar higher as marginal cost increases. Invest in companies like Dragon Oil. 8/16/2012 Value, Growth and Income in One Single Play China has a massive and growing consumer class. And for a safe way to play emerging markets, invest in companies like China Mobile. STATE OF OUR WORLD National Debt Clock: $15,981,046,452,808 BECOME A MEMBER For more valuable information from The Sovereign Society on how to protect and grow your wealth, become a member today. JOIN NOW SPECIAL REPORTS Jeff Opdyke 2012: The Year of Yield Andy Hecht Metals More Precious and Profitable than Gold Bob Bauman How to Escape America, and Where to Go STAY INFORMED Whitelist Us Follow Us on Twitter Like Us on Facebook   Privacy Policy The Sovereign Investor 98 S.E. 6th Ave, Suite 2 Delray Beach, FL 33483 The mailbox associated with this email address is not monitored, so please do not reply. 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