1. By: Steve Sjuggerud

2. My friend, you are in luck… Before The End of America comes to bite you… Conditions are in place for the greatest asset bubble in all of history. Stocks and real estate are arguably the best values they’ve ever been, as I’ll show.

3.  A U.S. crisis is certain… The only question is: “When?” My best guess is after 2015.  The greatest asset bubble in American history is possible between now and 2015.  Stocks and real estate could absolutely soar in the next couple years.

4. I left the Oxford Club in January of 2000. Simply put… there was nothing to buy. "We are at the peak of most likely the greatest financial mania that will ever be seen in our lifetimes and quite possibly the greatest ever witnessed.“ -From my Jan. 2000 Oxford Club cover story

5.  Deals of a lifetime are possible now in real estate… Like this one...  Under contract for $10 million in May 2006  Under contract for $14.4 million in July 2008  Appraised at $10.4 million effective January 2011  I recently bought it for less than $1 million.

6. We offered $750,000, The bank countered at $900,000.

7.  House prices need to rise by $82,000 to get to “fair value” as I’ll show.  Adjusted for inflation home prices are now at 1979 levels…  That doesn’t take mortgage rates or home sizes into account

11.  Mortgage rates are at all-time lows.  And house prices have crashed.  Therefore housing affordability is at all- time highs (that’s monthly payment relative to income)  The median home needs to rise by $82,000 to reach fair value…

13.  Stocks are roughly 75% undervalued by one important measure  For this measure to correct itself, the Dow would have to rise to 50,000

19.  In short, when inflation hits 5%...  The Bernanke Asset Bubble will be free to grow to an incomprehensible size… until inflation hits 5%.  Then panic will arrive in the stock market, and at the Fed.

21. My friend, you are in luck… Before The End of America comes to bite you… Conditions are in place for the greatest asset bubble in all of history. Stocks, real estate, and other assets are arguably the best values they’ve ever been. Take advantage of it.

22. And what to trade right now

23.  It’s a currency system made up of three simple things that:  Has had only one losing year in the last 30+ years (as far as the data goes)  Has delivered stock-like returns, with less volatility  Has zero correlation to the stock market

24. Currency IdeaS&P 500 20009%-10% 20019%-13% 20029%-23% 200314%26% 20043%9% 200512%3% 20064%14% 20075%4% 20083%-38% 20096%28% 20100.2%13% 2011-4%0% 20122%13%

25.  “Investing” not “trading”  I did my Ph.D. dissertation on currencies  I tested everything to see what “works” in currencies  Three strategies work:  Value  Interest rate differentials  Momentum

26.  Deutsche Bank developed simple indexes for our three strategies  These invest in the G10 currencies  U.S., Canada, Australia, New Zealand, England, the euro, Switzerland, Sweden, Norway, and Japan

27.  The concept of Purchasing Power Parity (PPP)  The Big Mac Index is a simple way to get it… ▪The price of Big Mac in in the U.S. should be roughly the same as it is in Japan in dollar terms. ▪This is rarely the case. ▪Currencies can reach extremes of expensive or cheap based on PPP. A Big Mac in Japan became 100% more expensive than one in the States in 1995

28.  Deutsche Bank uses the OECD’s PPP values  DB uses a simple system to invest  Each quarter it buys the 3 cheapest G10 currencies and sells the 3 most expensive  At the beginning of the next quarter they do it again

30.  Known as the “carry trade”  Borrow in low interest rate currencies to invest in high-yielding currencies  DB ranks the G10 currencies based on 3- mo. interest rates  Go long the top 3 yields  Go short the bottom 3 yields  Rebalance quarterly

33.  Currency traders have used the trend for decades  DB calculates momentum in the easiest way possible  Rank G10 currencies based on 12-month change in spot rate  Buy the top 3 performers  Short the bottom 3 performers

35. Carry Strategy Using A Single Strategy Can Be Dangerous…

38.  Deutsche Bank combines these three systems to form the DB Currency Returns Index (DBCR)  DB uses a 1/3 weighting for each strategy  This system has similar returns to stocks with significantly less risk  DB X-Trackers Currency Returns ETF  Symbol XCRD.L on Yahoo!Finance

41.  Traders love the dollar… Sentiment is near all-time highs  When bullish sentiment is this high, the dollar typically falls

42. U.S. Dollar Public Opinion

43. Surprisingly many, including:  The Canadian dollar  The British pound  The euro  The Japanese yen  When currencies get this hated, they often have a solid rally.

44. Canadian Dollar Commitment of Traders

45. British Pound Commitment of Traders

46. EURO Public Opinion

47. Japanese Yen Public Opinion

48.  We want to be long stocks.  We want to be short U.S. dollars.  We believe in the trade, so we’re willing to invest with a 2x-leveraged ETF.  The ideal trade: Double-long the S&P 500, double-short the dollar. This exists!!! It is: The FactorShares 2X S&P500 Bull/USD Bear ETF Symbol: FSU

49.  The Best Currency “Investment”:  DB Currency Returns ETF (XCRD.L)  The Best Steve “Trade” Now:  The FactorShares 2X: S&P500 Bull/USD Bear ETF, symbol: FSU

50.  A U.S. crisis is certain… The only question is: “When?” My best guess is after 2015.  The greatest asset bubble in American history is possible between now and 2015.  Stocks and real estate could absolutely soar in the next couple years.