No Passport For You?

by Dave Gonigam – April 25, 2011

  • Busybody Alert: State Department wants to know all your former addresses and employers before handing out a passport
  • "A ridiculous notion"… It's Doug Casey's turn to take a whack at the "gold is a bubble" blather
  • Abe Cofnas on the currency market's "balancing act" going into Fed-Wednesday… and how to play it
  • Termites destroy $220,000 in paper currency, police looking at bank officials for "negligence"
  • Readers chime in on taxing and spending… plus a "pie" chart that really puts things in perspective

We can't vouch for the verity of the following story, relayed to us by a reader. But in light of our item last week about Congress considering withholding passports from people who owe money to the IRS, it has the ring of truth:

"Was on a flight from Costa Rica last week. The plane was delayed for 30 minutes or so on tarmac. Pilot comes on and announces a delay concerning passports. Then a mild 70-year-old scuffling in first class. Which consisted of the stewardess coaxing a couple off the plane.

"Moments later the pilot comes on: 'Sorry for the delay. U.S. Customs officials had to remove two passengers that are in trouble with their taxes. We can push back now. Flight attendants please secure for takeoff…'"

Here's the thing: Even if you're current on your taxes, you might still have trouble securing a passport soon if you can't remember the names of all your previous employers. Or the addresses of all the homes you lived in.

The State Department is proposing a new "Biographical Questionnaire" for certain passport applicants. Exactly who, it's not specifying.

"The proposed new Form DS-5513," writes Edward Hasbrouck at the Consumer Traveler blog, "asks for all addresses since birth; lifetime employment history including employers' and supervisors names, addresses, and telephone numbers; personal details of all siblings; mother's address one year prior to your birth; any 'religious ceremony' around the time of birth; and a variety of other information."

The Federal Register notice is here. The questionnaire was not posted in the Federal Register, but State did give it up on request to the Identity Project, which posted it here.

Evidently, if you were born in the United States, your birth was "recorded within one year of the date your birth occurred" and you were "born in a medical facility," you don't have to answer the questions about where your mother lived a year before you were born, or what "religious ceremony" took place around the time of your birth.

But everyone given this form would have to provide all previous addresses, all schools attended and all previous employers, including names of supervisors and telephone numbers. (What if you're in your 50s now and you can't remember who hired you as a soda jerk when you were 16? Or you can remember, but the business is long gone and the guy who hired you died in 1993? No passport for you?)

"The State Department estimated," writes Mr. Hasbrouck, "that the average respondent would be able to compile all this information in just 45 minutes, which is obviously absurd given the amount of research that is likely to be required to even attempt to complete the form."

And of course, everything you put on the form you do "under penalty of perjury."

Note this: The public comment period for this proposal, in which you can tell the State Department what you think, runs out tonight at midnight. You can submit a comment here.

News like this puts even more urgency into the "fight or flight" debate that's the central theme for this year's Agora Financial Investment Symposium: Do you have to flee soon before the option of fighting is foreclosed? Come join us in Vancouver to hear a host of speakers hash out this question and others like it.

Discounted registration is still available, but only through this weekend. And with only 250 seats remaining, they could be gone even before the price of registration goes up. Dates and other essential info are right here.

After trading as high as $1,518 overnight, gold has pulled back to $1,508 — still higher than it was trading almost anytime last week.

Tomorrow could prove a roller-coaster ride. It's options expiration day… and trading resumes in London after a four-day Easter weekend.

"A meme is now circulating," writes Doug Casey, "that gold is in a bubble and that it's time for the wise investor to sell. To me, that's a ridiculous notion."

One of the suggestions that gets under his skin is the one that the smart money exited gold a long time ago. "Who really is the smart money? How do you really know that? And how do you know exactly what they own (except for, usually, many months after the fact) or what they plan on buying or selling?

"The fact is that very few billionaires (John Paulson perhaps best known of them) have declared a major position in the metal."

As supporting evidence, Doug points to a chart we shared back in January. "Gold and gold stocks, as the following chart shows, are only a tiny proportion of the financial world's assets, either absolutely or relative to where they've been in the past":

That's a compelling argument both for the metal and for mining shares.

If you haven't caught Chris Mayer's presentation on his two favorite junior gold plays right now — including the "Golden Staircase" that could turn a $1.73 share price into $27 before all's said and done — there's still time to catch it right here.

After an overnight run-up to $49.66, silver has pulled back to a slightly less-dizzying $46.99.

If you're on board with Jim Rogers' comments here last week about silver getting ahead of itself… this chart will do nothing to change your mind.

Crude prices have pulled back a bit as of this writing. But at $112.08, a barrel of West Texas Intermediate is less than $1 off its post-2008 high, set on April 8.

The dollar is showing relative strength this morning, with emphasis on the word "relative." The dollar index has inched its way back above 74, to 74.01.

The euro has climbed to $1.459.

"This week," says our currency trading specialist Abe Cofnas, "the market has to balance several fears — fear of increased inflation, fear of loose money, fear of very high gas prices and more.

"But on Wednesday, the Federal Open Market Committee of Chairman Ben Bernanke and the other Federal Reserve governors will reveal what they fear most.

"Will it be the continued slow growth of the U.S. economy with its sticky unemployment level, or will they fret an increase in core inflation? Do they fear a too-weak dollar? Will they leave asset purchases at current levels, effectively continuing quantitative easing (aka QE2)?"

Abe aims to make the most of this uncertainty with his trade recommendations this week. Most of the trades in the market he follows are "in on Monday, out by Friday." This week the action will be even faster: "Market reaction to Wednesday's announcements may be decisive in one direction or the other."

Last week, Abe's readers had the chance to collect gains of up to 108% in three days. The market he follows is covered by no other North American trading advisory… and we're making it as easy as possible for you to be a pioneer. Check out this special offer from publisher Joe Schriefer right here.

Stocks have begun the new week moving into the red. The Dow and the S&P are both off about one-third of a percent.

New home sales picked up a bit in March, after three straight months of decline. The Commerce Department reports an 11% increase, to an annualized 300,000. That's about what the Street expected… but coming off one of the worst months on record, it amounts to statistical noise.

Tomorrow, we get a fresh reading on the Case-Shiller home price index. We doubt it will give comfort to anyone who hopes the housing sector will avoid a double dip.

Here's a parable about the perils of paper money: Central bankers aren't the only ones who can destroy its value. From India, we learn of the danger posed by… termites.

Police in Barabanki, India, say a phalanx of termites invaded a steel box full of currency at a bank. Before anyone noticed, the insects had feasted on 10 million rupees in notes — about $222,000.


Termites channeling Homer Simpson: "Mmmm…. Rupees."

Detectives say the notes were stashed away in January, and the bank manager discovered the damage last Wednesday. Now police have registered a case of negligence against bank officials — a preliminary step taken in India before opening an investigation.

Makes you wonder what would happen if Indian police had jurisdiction over the Federal Reserve…

"Surprise!" writes a reader, weighing in on the interminable debate over taxing and spending. "If the giveaway programs were stopped, it would not even slow down the plutocrats' spending sprees.

"You see how they are worried now with deadlines weeks away: They are out on their Easter vacation/junkets on the taxpayer's dollar while [Obama] flies around the nation on Air Force One, which costs taxpayers $85,000 just in jet fuel.

"We are so screwed."

"I remember the day I learned that the United States was in real trouble," adds another. "It was in April 1985. I was in my shop on my family farm in northwest Montana, working on my tractor.

"I heard on the radio that America was becoming a consumer society. I've been a producer all of my life. Somehow, the idea that the majority of my countrymen had decided to become net consumers chilled me. History shows that when people consume more than they produce, the endgame is under way.

"I've been a hard money investor since 1998. I want only three things from my government: Honest money, secure borders and a simple tax system that even I can understand. If we had those things we could accomplish almost everything else."

The 5: Addison quips: "More than a few people have suggested eliminating Congress."

Meanwhile, after we reran the Wikipedia pie chart of federal spending on Thursday, a reader of Chris Mayer's passed along this pie chart from Michael Ramirez of Investors Business Daily. Same total amount of spending, but broken down in… um, a slightly different way, and one we daresay gets to the heart of the issue:

"I find it interesting that people (like the Ph.D. economist who wrote in last week) think that it is the government's job to collect money from those who labor hard and distribute the money to those in need — and even those who sit and wait for the check in the mail year after year.

"Where is their compassion for the needy by giving from their own pockets? If every employed citizen were to reach out and help those in their communities to the tune of 3% (I'm guessing, but probably not too far off) of their take-home pay we could virtually eliminate the need for many of the entitlements administered by a very inefficient and ineffective government bureaucracy.

"Last year, as an S-Corp, I gave in excess of $30,000 to 501(c) organizations that did help the needy in our community — and that is above and beyond the taxes we paid. Whatever happened to the help your neighbor in time of need? If the government is the answer to our problems, we are in deep doo-doo!"

The 5: True, but is it knee-high or waist-high?

Cheers,

Dave Gonigam
The 5 Min. Forecast

P.S. Campaign spending for the presidential and congressional elections amounted to a $5.3 billion business in 2008. The watchdog group Public Citizen estimates that number will swell to $8 billion in 2012.

"Yes, it is correct that the amount of money being spent on elections is obscene," writes Rep. Ron Paul in his new book Liberty Defined: 50 Essential Issues That Affect Our Freedom. "But it's understandable to me, since much is to be gained by financially participating in the process.

"Government is a growth industry, and tragically so. The real obscenity is the size of government and its intrusion into every aspect of our economic and personal lives, which generates the financial interest and involvement in the elections."

In other words, if government weren't so damn big and powerful, there wouldn't be the incentive to pour $8 billion into buying influence… because there wouldn't be as much influence to buy.

There are all sorts of juicy nuggets like these in Dr. Paul's new book. It consists of 50 bite-size essays, alphabetically arranged, setting out his position on everything from abortion to Zionism. "I certainly do not expect every reader to agree with my beliefs," he says in the introduction, "but I do hope that I can inspire serious, fundamental and independent-minded thinking and debate on them."

Indeed, he does. Liberty Defined shakes up the kaleidoscope of conventional wisdom and is sure to give you something new to think about. Grab your copy at a 20% discount at Laissez Faire Books.

P.P.S. "Our next pick," Ray Blanco wrote on Friday to readers of Technology Profits Confidential, "operates in the wireless space, has a superior technology for increasing the speed of your wireless broadband connection and will see strong growth in the months and years ahead."

Technology Profits Confidential is our entry-level tech and biotech letter. We launched it less than nine months ago, but already it's delivered gains as big as 84%. The average of all recommendations is up 20% — winners and the one loser combined.

If you've ever thought about dipping your toe into the tech space, there's no better time or place than right here.

rspertzel

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