Acceleration!

In just the last few weeks, we have crossed an invisible threshold from a pattern of continuation to a phase of acceleration.

We see a more rapid staccato of world events.

We see hastier reactions by decision-makers.

Plus, weâ€™re looking at larger profit opportunities and … bigger financial dangers for investors.

The change is almost palpable. Like a northern wind that replaces a southern breeze … as if time itself were marching to a faster beat.

Whereâ€™s the Evidence?
In the Financial Markets …

Gold, for example, is not only a commodity for consumption, but also a barometer of worldwide confidence.

And right now, gold is not just rising at a steady pace. Itâ€™s accelerating upward at the fastest pace in a quarter-century.

This reflects a sea change in politics and finance.

Itâ€™s telling us that many global investors, especially in Europe and Asia, are worried about inflation … shell-shocked by the brewing revolutions in the Middle East and the Persian Gulf … frightened by the spread of the avian flu … and deeply worried about possible wars fought over ever-scarcer resources.

So theyâ€™re running to gold, and gold is skyrocketing.

Copper is also no ordinary commodity.

It reflects the construction and growth frenzy that has swept through Asia and emerging economies.

Its accelerated rise tells us how powerful that transformation has been … and should continue to be.

And, as with gold, itâ€™s warning anyone smart enough to listen that the inflationary virus is spreading swiftly.

Crude oil could be the next market to accelerate sharply higher.

Itâ€™s already rising within the parameters of an upwardly sloping zigzag.

And even without an acceleration, it could easily reach $75 per barrel in the weeks ahead.

So if that rise accelerates, it could go higher sooner.

These three markets â€”gold, copper and oil â€” are throwing off three inflation alarms … in unison and with no ambiguities.

Most investors are ignoring these signals. But …

U. S. Treasury note investors do not like what they see. So theyâ€™re starting to sell, and the price of Treasury notes is falling.

Yes, the return of your principal on Treasuries is guaranteed by the full faith and credit of the U.S. government … but only when they mature!

In the intervening years, they can fall in value, sometimes as deeply and sharply as many stocks.

And like gold, U.S. Treasury notes are also a barometer of worldwide trust.

If they are rising in value, it implies growing trust in the U.S., its ability to sustain its financial health and its skill in controlling inflation.

But if they are falling in value, it reflects a loss of trust … or concerns about dangers that the U.S. government cannot control.

And right now, despite whatever the Federal Reserve has done or failed to do, the value of U.S. Treasury notes has been falling, with more declines likely to come.

In fact, just this week, despite all the happy talk about the Fedâ€™s â€œlast round of rate hikes,â€ the market price of medium-term Treasury notes has fallen to nearly the lowest level in four years. This is a bad omen for bonds of all shapes and colors … for financial stocks … and for the housing industry.

Donâ€™t ignore it.

Enerplus (ERF), one of the investments most frequently highlighted here in Money and Markets, is also one of the investments that has been the most ideal for capitalizing on the acceleration weâ€™re now witnessing.

It has continued to make new, all-time highs, week after week. It has continually distributed a dividend yield approaching double digits. And, despite inevitable corrections, it should continue to do both in the months ahead.

The same is true for …

Peabody Energy (BTU). The stock has been moving up like an accelerated rocket, opening up the real possibility of a sharp correction.

But unless there is a fundamental change in the surging demand for its products, any correction is likely to be a buying opportunity.

We see a similar pattern in silver and gold stocks. Case in point:

Alnico Eagle Mines (AEM). This gold mining company, one of our long-term favorites, is also in an accelerated blast-off phase.

But as with any investment thatâ€™s rocketing higher, investors should wait for a pullback before buying â€” whether that happens now or from higher prices.

These are not rocket ships you want to chase from behind.

This week, for example, weâ€™re already seeing healthy pullbacks in some energy stocks. Weâ€™re bound to see more of the same in other natural resources as well. If so, seriously consider it a window for getting in.

A few words of warning:

1. No single sector or asset class should be for ALL your available funds.

2. Continue to avoid the sectors weâ€™ve warned you about. Just this week, youâ€™ve seen Google crash despite good earnings. And despite rally attempts, youâ€™ve seen how Ford, General Motors, Dell and other major stocks have moved sharply lower in recent months. Be careful. There are many more such time bombs in the market in the market ready to explode.

3. You should always keep a good chunk of your money in guaranteed investments such as U.S. Treasury bills or equivalent. Their yield (now approaching 5%) will not give you a windfall. But it will grow your money with a degree of certainty thatâ€™s unachievable anywhere else.

Three Methods to Buy
U.S. Treasury Bills

Method #1. Through your broker. This makes sense if youâ€™re using the Treasury bills as collateral in your account or you want to buy and sell them on the secondary market.

Method #2. Directly from the Treasury Department (http://www.treasurydirect.gov, 800-722-2678).

A good approach if youâ€™re not planning on using the money for any other purpose before maturity. You save on fees but sacrifice some liquidity.

Method #3. Through a Treasury-only mutual fund. This is ideal for most purposes. You can use it as your savings and checking account rolled into one. And itâ€™s good for both personal or business money. Since the average maturity of the Treasury bills in the funds is usually shorter than three months, you have the opportunity to take advantage of rising yields more promptly than you would with 3-month T-bills.

Plus, although mutual funds donâ€™t enjoy FDIC insurance, the Treasuries they own on your behalf are entitled to the same government guarantee as the Treasuries you buy directly, with no $100,000 limit on that guarantee.

Here are our favorites (including one managed by an affiliate Weiss Group company):

American Century Capital Preservation Fund (CPFXX; 800-345-2021)
Dreyfus 100% U.S. Treasury Fund (DUSXX; 800-645-6561)
Fidelity Spartan U.S. Treasury Fund (FDLXX; 800-544-8888)
USGI U.S. Treasury Securities Cash Fund (USTXX; 800-873-8637)
Vanguard Treasury MMF (VMPXX; 800-662-7447)
Weiss Treasury Only Money Fund (WEOXX; 800-430-9617)

Plus, there are quite a few others that are equally good. Stash your cash with them and sleep nights, whether the market is accelerating in your favor … or in your disfavor.

Good luck and God bless!

Martin

About MONEY AND MARKETS

MONEY AND MARKETS (MAM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Larry Edelson, Tony Sagami and other contributors. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MAM. Nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MAM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical inasmuch as we do not track the actual prices investors pay or receive. Contributors include Marie Albin, John Burke, Beth Cain, Amber Dakar, Michael Larson, Monica Lewman-Garcia, Julie Trudeau and others.

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