Still Clouded. Here’s What to Do … China, Again! · China surged past the U.S. to become the world’s largest automobile market since 2009, with annual vehicle sales at 21.1

… formerly Silver & Gold Report since 1979June 2016 Issue #146

Wall Street Goes Brain Dead On China, Again!Inside this issue ...

è How China’s cash cow economy is raking inthe dough ...è Five reasons its economy will continue toboom until at least 2020 ...è PLUS, two new recommendations tocapitalize on China’s ongoing explosive growth... and an important update on precious metalsand miners!

You might think it’s surprising that I’m devoting this issue to China. After all, there’s so much going on in the world right now. Gold and silver rallying but getting ready to stage their first major pullback. Miners too.

Another Fed rate hike. The possibility Britain will exit the European Union (EU) later this month … many markets coiling up like tightly wound springs, and more.

But in my opinion, China is still the driving force in the global economy and will be for many years to come.

And how Wall Street can continue to get China wrong is simply beyond me. No one with any brains on Wall Street ever steps foot in China, or, when they do, they have blindfolds on.

Not me. I head to China at least twice a year, with an open mind, and my list of contacts in tow.

Based on what I’ve recently seen, there’s no doubt in my mind

Inside … Page 11Materials, Energy & Ags Oil and Gas Picture Still Clouded. Here’s What to Do …

Page 11The Speculator June/July to Be Full of Fireworks! Short the Euro Now!

Page 13Income Investments Hold Your Three Nice Income Positions Generating Annual Yields of as Much as 12.8 Percent.

Page 14Asia Investments Hold FXI and VEOEY.

Page 16Your Positions At A Glance

Larry Edelson, Editor

www.WeissResearchIssues.com June 2016 2

that China’s economic growth is not only for real, but set to accelerate higher later this year, and continue for the foreseeable future.

Before I get started, have no fear: I will cover the usual markets — gold, silver, miners, etc. — in the Basic Survival Strategies section.

Let’s start by taking a detailed look at some of the recent economic figures from China ...

è Gross domestic product (GDP) expanded 6.7 percent in the first quarter of 2016. Yes, that’sway down from the heydays of 2004/2005, but still the envy of the world and almost eight times the GDP growth of the U.S.

Moreover, it now makes China ...

èThe world’s biggest exporter of manufactured goods, surpassing the United States.

And it puts China on track ...

èTo maintain its second place position just behind the U.S. economy.

Multiple detailed economic stats support the big-picture growth figures ...

èConsumption remains steady, with 2016 retail sales averaging 10 percent.

And it’s not just in the urban, eastern seaboard cities where China’s economic growth is cooking.It’s also in the rural countryside, where year-end 2015 consumption jumped an estimated 11.8 percent over 2014.

It’s critical to understand the importance of the consumption figures in China. Because for years now, every pundit under the sun claimed that China is merely a savings nation.

Ergo, they’ve said over and over again, the Chinese are not big consumers, and therefore, China’s economy will never make it into the big leagues.

But the above figures prove the pundits dead wrong. Indeed, the proportion of China’s economy now driven by consumption has increased dramatically from January-April 2016 — to a full 84.7 percent of GDP, up from 66.4 percent for all of 2015, a giant gain by any measure.

Moreover, China’s share of global consumption is also dramatically increasing. The World Economic Forum has forecasted that Chinese consumption will explode an estimated 50 percent higher over the next four years, soaring to $6.5 trillion from the $4.2 trillion it spent in 2015.

Is it any surprise then that China surged past the U.S. to become the world’s largest automobile market since 2009, with annual vehicle sales at 21.1 million units (all time high), up 7.3 percent over 2014? Hardly!

Or that China’s nationwide housing starts rose 26.9 percent year-over-year in March 2016? Or that new home prices jumped 9.1 percent in December compared to the same month last year? Again, hardly!


Why Is Chinese Consumption Exploding Higher? Here Are the Five Most Important Reasons ...

First, several years ago, the authorities in Beijing saw the handwriting on the wall: If they didn’t bring economic growth to the rural areas of China, where more than 1 billion people reside, the economy would not continue to grow, and instead, there would be rising social unrest.

Therefore, they started pumping money into the rural areas. Into construction projects ... schools ... hospitals ... a slew of infrastructure improvements ... and on the supply side, tax breaks ... new laws improving private property rights ... and more.

The result: In 2015, rural incomes have exploded higher, rising 8.9 percent, and quickly gaining traction on urban income levels.

We’re talking over 600 billion people in the countryside, all of whom are just now leaping from the 19th century to the 21st century, like their brethren in China’s eastern mega-cities.

In my opinion, the growth in the hinterlands of China alone is enough to keep the Chinese economy barreling ahead for years to come.

Second, Chinese banks, unlike those in the West, are doing everything they can to support growth by just issuing a record $358 billion in new loans in January 2016.

As a result, money supply growth in China is on track to be 13 percent in 2016, in line with the money supply growth rate last year. And the new money is, again, unlike the West, flowing into virtually every sector of the economy.

Third, fixed asset investment is soaring, giving jobs to millions of people temporarily sidelined by the financial crisis. Indeed, China’s urban fixed asset investments grew by 10.2 percent year-over-year to 3.8 trillion yuan in the first two months of 2016, virtually guaranteeing investment — and jobs — will grow considerably in 2016.

Fourth, the manufacturing sector is also firing away on eight-cylinders.

Thanks to massive government stimulus ... record bank lending ... and the industrious nature of the Chinese people, China’s manufacturing sector continues to hold steady at 50.1. Any number above 50 signals expansion.

Moreover, industrial profits in China rose by 7.4 percent in the first quarter of 2016 compared with a year earlier, putting to shame the Wall Street forecasts of a crash in the Chinese manufacturing sector.

Fifth, Beijing is raking in the dough. In the West, especially the U.S., the private sector is largely broke, and so is the government. So no matter how much Washington throws at the economy, private consumption is falling sharply.

Not so in China. As noted previously, private consumption is soaring. And one of the reasons has to do with Beijing. Because not only is Beijing putting more money into China’s economy than the West is putting into its own, in terms of the percentage of GDP, but psychologically important, Chinese consumers are not worried their government is going broke.


Quite to the contrary, Beijing’s May 2016 fiscal revenue (tax receipts) hit 1.55 trillion yuan, an increase of 7.3 percent over a year earlier.

And that’s just tax receipts. Beijing’s ongoing trade surplus with the world is also filling up the country’s coffers. The country’s piggy bank now has $3.2 TRILLION in reserves!

So Why All the Skepticism from Wall Street and the Media On China’s Blistering Economic Growth?

The answer is simple: They don’t understand the country, either because they don’t travel there and put their boots on the ground ... or because they don’t pay attention to important details that make a huge difference on how other cultures not only conduct business, but also how they see the world.

For instance, I see five important reasons why China’s economy is NOT headed for a hard-landing, as many on Wall Street and in the media claim ...

Reason #1: China’s economy is evolving.

One of the major reasons many analysts believe China’s economy — and markets — is in trouble is because of the country’s heavy reliance on exports for growth.

And to be sure, any economy that’s too dependent upon exports can be too fragile. But these same analysts are overlooking the progress China has made in boosting domestic demand.

As noted previously, both urban and rural incomes in China are soaring. As are retail sales of consumer goods. Chinese consumers are buying up goods like there’s no tomorrow, in virtually every form — from mobile phones, flat screen TVs, computers, refrigerators, air conditioners ... to homes, cars and more.

As a result, consumer spending in China is increasing at a faster rate than it is in Europe and the U.S. — and will likely be a major story for the global economy for years to come. Especially as the new Silk Road ushers hundreds of millions of Chinese into the 21st century.

What’s more, according to CSLA Asia-Pacific Markets, one of Asia’s leading brokerage and research firms ...

èAs a percentage of the country’s GDP, primary and secondary industries, organizations that are involved in the development and production of raw materials and the manufacturing sector, have shrunk from being responsible for 72.5 percent of the country’s GDP in the year 2000, to 58 percent at the end of 2015.

èWhile the retail and service sector has grown from 27.5 percent in 2000 to more than 44 percent today.

While that may not sound like a big jump, note that it excludes the impact of the cash, or underground economy in the service and retail sectors, which could be responsible for as much as another 5 percent of economic activity.


Bottom line: While still heavily dependent upon exports, China’s economy is truly evolving. And far more than most analysts would like to believe, mitigating the risks of a manufacturing-dependent bubble.

And the proof is none other than the performance of the Chinese economy itself. Despite weathering the worst financial crisis since the Great Depression, the worst downturn in manufacturing and trade since the early 1930s — China’s economy grew at nearly 7 percent in 2015.

Reason #2: There’s no property bubble in China.

Another myth about China’s economy: Pundits claim that the country’s strong property markets are a bubble about to burst, and like the busted real estate sector in the West, China is about to implode as a result.

But in my opinion, nothing could be further from the truth. While China’s property market is indeed hot, with property prices leaping by as much as 62 percent over the last year ...

China’s property boom is being financed mainly by savings, not bank lending. According to BCA Research, a Canadian firm, loans to homebuyers and property developers account for only 28 percent of Chinese banks’ total loans, against 67 percent for American banks.

Moreover, residential property buyers in China have to put down a minimum of 20 percent before taking out a mortgage. For second homes, the minimum is 30 percent, regardless of an individual’s net worth.

As a result, the average mortgage in China covers a little over half of a property’s value, as opposed to the U.S., where the average mortgage, before the real estate crisis, leveraged properties to the tune of more than 95 percent of their value.

And mortgages in China are not sliced and diced up like they were during the mortgage crisis in the West. Mortgages are made directly between the buyer and the local bank.

This may not seem to be a big point of contention, but it is: When times are tough, having a local banker you can work with can make all the difference in the world when it comes to hammering out payments.

Bottom line: I see no evidence that any dip in the property markets in China that does occur will take down its economy. None whatsoever.

Reason #3: Bank lending is not excessive.

One of the popular and biggest causes for worry about China is the country’s bank lending. Or so say those who haven’t taken the time to truly look at China’s lending machines.

While it’s true that Chinese bank lending is soaring, Chinese banks can handle it, even if some of the loans go bad.

First, China’s banks on average, hold 17 percent of their capital in reserves, compared to 10 percent in the U.S. Put another way, China’s bank balance sheets are far stronger than banks in the West.


Second, bad loans in China currently amount to only 1.75 percent of all loans. Even if China’s bad loans were to double, that would not be cause for major concern.

Third, loan-making in China is backed by both the country’s huge pool of savings, amounting to 49 percent of the country’s income, AND Beijing’s massive cash, now standing at nearly $3.2 trillion. In other words, it’s lending backed with cash, not bankrupt private and public sectors.

Bottom line: I see no reason to be concerned about high loan growth in China. Indeed, it’s exactly what the Chinese economy needs.

Reason #4: China is not Japan, nor is it the Soviet Union.

Pundits claiming China is going to implode often cite either Japan or the former Soviet Union as examples of countries that have collapsed, the result of high loan growth, rapid property appreciation, a soaring stock market, and more.

But predictions that China is heading for a Japanese-style slump — or a Soviet Union-style political collapse — ignore big differences between China today and Japan in the late 1980s, or the Soviet Union in 1989.

First, when Japan’s economy peaked in 1989, Japan was already a mature, developed economy, with a GDP per person close to that of America. In contrast, China is still a poor, developing country, whose GDP per person is less than one-tenth of America’s or Japan’s.

In other words, China has lots of room to play catch-up with the rich world economies.

Second, the Soviet Union has vast natural resources, which were largely squandered in a free-for-all grab when the country imploded in 1989.

China, on the other hand, is in desperate need of key natural resources. So instead of the self-interest of politicians and business people leading China down the path of massive corruption in every industry in a free-for-all grab, like what occurred in the former Soviet Union, the need for natural resources is multiplying the country’s high rates of nationalism, pulling the country together, rather than pulling it apart.

This may appear to be a subtle difference, and to be sure, there is a lot of corruption in China and certainly, human rights abuses. But nationalism is very high in China, and a force that will help keep it growing for years.

Bottom line: China is not Japan, nor is it the former Soviet Union.

Reason #5: The government is not broke.

This is a simple one: China’s balance sheet is far healthier than almost any country on the planet. Government debt is less than 50 percent of GDP, well below the average ratio of around 90 percent in developed countries.

Bottom line: Wall Street is brain dead on China, again. China’s economy — and its markets — are set to continue to boom until at least 2020.


Before I wrap this up, let me answer some common questions I get about China …

Q: China has so much debt, almost every pundit out there says there’s no way it can survive. Yet you disagree. Why?

A: In addition to the figures I gave you above, Beijing’s debt is less than many other countries. So based on that alone, those pundits are off base.

But perhaps more important is the nature of the debt. Keep in mind China is still a communist country. That means the state largely still owns everything. In big industry, where you find a lot of the big debt other pundits refer to, that also means it’s the state owing the state money. That is very different than a totally free market economy where a business has non-state actors as creditors. Completely different.

Q: Why is China devaluing its yuan? To inflate away its debt?

A: There are not enough yuan circulating in the world, especially in the form of external debt, for that to do anything to spark inflation or reduce the burden of external debt, of which China has hardly any.

Instead, the chief reason Beijing is devaluing the yuan is that a too strong currency isn’t good for any country, especially one that still largely depends on exports, and secondly, Beijing wants the yuan to become an international currency. In order to do that, it must print and circulate more yuan in the global economy.

Q: What do you see happening in the South China Sea? Will China go to war over it?

A: Beijing will continue to occupy the region and be very aggressive towards the region’s huge oil and gas reserves, not to mention its strategic shipping lanes.

And yes, war is possible, unfortunately. The most likely time period for a South China Sea war is between 2018 and 2020 and yes, the U.S. would get dragged into it.

Q: Will Beijing back its currency fully with gold?

A: No, absolutely not. If it were to, it would destroy the Chinese economy through deflation that would persist for decades. Beijing wants to build its gold reserves, but merely to diversify its $3.2 trillion savings. Nothing more, nothing less.

My Recommendations:

I see no reason to be anything but long-term bullish on China and would increase exposure to China, immediately.

Specifically, I would add positions that offer broad-based exposure to China ...

Recommendation #1: A core position in a well-diversified mutual fund with managers who understand China ...

U.S. Global Investors China Region Fund (USCOX), a fund managed by Frank Holmes and Ralph Aldis and the experts at San Antonio-based U.S. Global Investors Inc.


The fund invests at least 80 percent of its assets in equity securities and depository receipts of companies located in the China region and traded directly on the Hong Kong, Shenzhen, and Shanghai stock exchanges.

Using 5 percent of your funds allocated to Asia Investments, buy U.S. Global Investors China Region Fund, symbol USCOX, at the market. Exit the fund if it closes below $6.20 on any trading day.

Recommendation #2: Take a position in China’s oil and gas giant, China National Offshore Oil Corp. (CEO) — CNOOC, Ltd — to capitalize on China’s still growing energy needs.

Using 5 percent of your funds allocated to Asia Investments, buy China National Offshore Oil Corp., symbol CEO, at the market and place a protective sell-stop good till canceled at $95.92.

Now, To the Markets ...

I’ll put it very succinctly right now: This month — June — is the month that all hell should break loose in the markets.

It’s clear: There are two very important fundamental events coming up and both of them should cause major swings in the markets, at the least, and far more likely, trigger explosive trending moves.

The first is the next Fed rate hike. By the time you receive this issue, we’ll know whether or not the Fed has raised rates in June. If the Fed does, it will have shocked the heck out of the majority. If it has not, then look for a July Fed rate hike, or September at the latest.

But does it really matter? Not in the long term. Interest rates are headed up all over the globe. The sovereign debt market’s low interest rate bubble — the biggest in centuries — is bursting. And when it pops, there will be all kinds of implications for ALL markets and for investors who want to survive.

The second event I’ll be watching closely is the June 23 vote on whether or not Britain will leave the EU. Britain is not part of the euro currency, but it is part of the EU system of archaic, burdensome bureaucratic regulations that are crushing every economy that has joined the EU.

Far and away the best thing for Britain to do is to leave the EU and take back its sovereignty. Latest polls show them doing just that, with some 55 percent of British citizens wanting to leave the EU.

However, I am doubtful that come June 23, Britain will actually leave. The pressure to stay, especially the pressure being exerted by the International Monetary Fund, the European Commission (EC) and the European Central Bank itself is intense, and I wouldn’t be surprised to see the election becoming rigged in the EU’s favor.

If that happens, it will only make matters worse down the road.

So ok, we have two major events coming up this month. What about their impacts on the markets?

All I can tell you is that at this time, all of my models remain virtually unchanged, showing …


A. That despite gold’s rally, it should crash into the end of June, early July. Ditto for silverand miners.

B. The U.S dollar should explode higher later this month, perhaps on sheer nervousness overthe Brexit vote, or on a successful Brexit from the EU. And that …

C. The global stock markets are largely headed for another sharp, swift decline (but one thatwill merely serve the purpose of setting up the next big bull leg higher).

Either way, there could be many flash alerts this month. So stay tuned to your inbox!

Basic Survival Strategies

Per my standing recommendations ...

1. Steer completely clear of this riskiest market of all, sovereign debt. This includes municipalbonds and corporate debt rated less than AAA.

2. Stay away from most stocks. Until the Dow Industrials closes above 18,500 on a month-endbasis, the risk of a decline occurring vastly outweighs any potential gain. Worst case downside for the Dow Industrials remains 13,900.

3. Hold any emergency gold holdings you may have, which are light, and nothing more thandisaster insurance. That includes ...

èCore Gold Bullion (GOLDS), up 230.5 percent since originally recommended.

èSPDR Gold Shares (GLD), up 187.3 percent since my initial recommendation.

è Tocqueville Gold Fund (TGLDX), down 48.8 percent.

4. Hold any light position you may have in Silver Bullion (XAG), Platinum Bullion (XPT),and Palladium Bullion (XPD).

5. For physical gold: You should have purchased a 10 percent allocation in physical gold whenit fell below $1,207 on May 27 in overnight trade. If you did not — for whatever reason — then stand aside and await my next recommendation.

6. For silver: Spot silver fell as low as $15.83 on June 1 in overnight trade, so you should nothave been filled on your order to buy physical silver. Maintain the order, as is:

RECOMMENDATION: Buy physical silver bars or ingots — using 5 percent of your Basic Survival Strategies funds — any time spot silver falls below $15.75 an ounce.

7. Hold your shares in PowerShares DB US Dollar Index Bullish Fund (UUP), with yourprotective sell-stop, good-till-canceled, at $22.53.

If you don’t own UUP, you may purchase it now using 5 percent of the funds you have allocated to Basic Survival Strategies, placing the same protective sell-stop, good-till-canceled, at $22.53.


8. For mining companies …

è Buy Harmony Gold (HMY)

OPEN ORDER: Buy Harmony Gold, symbol HMY, on a pullback to $2.78 or better using3 percent of your Basic Survival Strategies funds. When filled, place a good-till-canceled sell-stop at $2.29.

èBuy Hecla Mining (HL)

OPEN ORDER: Buy Hecla Mining, symbol HL, on a pullback to $3.17 or better using 3percent of your Basic Survival Strategies funds. When filled, place a good-till-canceled sell-stop at $2.43.

è Buy Goldcorp Inc. (GG)

OPEN ORDER: Using 4 percent of your funds allocated to Basic Survival Strategies, buyGoldcorp Inc., symbol GG, on a pullback to $15.55. When filled, place a good-till-canceled protective sell-stop at $11.49.

è Yamana Gold Inc. (AUY)

Using 4 percent of your funds allocated to Basic Survival Strategies, buy Yamana Gold,symbol AUY, on a pullback to $3.21. When filled, place a good-till-canceled protective sell-stop at $2.09.

è Kinross Gold Corp. (KGC)

You should have been able to purchase your Kinross Gold Corp. shares at $4.41 on May 24,using 4 percent of your funds allocated to Basic Survival Strategies. Maintain a good-till-canceled protective sell-stop at $2.25.

There is no change overall in my strategy and tactics toward the precious metals and miners. My artificial-intelligence (AI) models show a sharp decline imminent for the end of this month/early July, so I do not want you chasing the market right now.

Also, even if my AI models are wrong on the short term and the precious metals and miners move higher, it will only mean that the decline will be that much more severe and nasty come the fall.

So do not — I repeat, DO NOT — be fooled by the current strength in metals and miners. Before all is said and done, at least 70 to 80 percent of their moves will be fully retraced back down — and that is when I will want you to be aggressive buyers.

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Oil and Gas Picture Still Clouded. Here’s What to Do …

As I noted last month, my models on oil and gas have turned bearish again, showing the potential for a late summer decline back to the low $30 level in oil, and back below $2 in natural gas.

However, they still also show the potential for one more strong rally, with even more upside potential than before, going as high as $56 in oil and $2.65 in natural gas.

So for now, I recommend you hold the two open positions:

1. United States Oil Fund LP (USO), and maintain a good-till-canceled protective sell-stopat $8.87. You have an open gain of 12 percent.

2. United States Natural Gas Fund LP (UNG), and maintain a good-till-canceled protectivesell-stop at $5.32.

If not on board USO or UNG, using 5 percent of your Materials, Energy & Ags funds for each of the following …

Buy United States Oil Fund, symbol USO, at the market. Place a good-till-canceled protective sell-stop at $8.87.

Buy United States Natural Gas Fund, symbol UNG, at the market. Place a good-till-canceled protective sell-stop at $5.32.

Materials, Energy & Ags

June/July to Be Full of Fireworks! Short the Euro Now!

I can smell it. I can even taste it. This summer — June and July — is going to be chock full of profit opportunities.

First, there’s the Fed rate hike, which may come by the time you receive this issue; if not, certainly by July, September at the latest.

But far more important is the British vote on June 23 on whether or not the U.K. will stay in the European Union. Mind you, Britain does not use the euro currency. Former Prime Minister Margaret Thatcher was wise enough not to have Britain adopt that flawed currency.

But, the heavy arm of bureaucratic regulations imposed by the European Union (EU) on member

The Speculator


states is also a disaster, and it’s been slowly but surely dragging Britain’s economy into the mud.

My view: Britain should vote to leave the EU on June 23. But I’m a skeptic when it comes to politicians. My guess is that the powers that be in the EU — by hook or by crook — will rig the elections so that Britain stays in the EU, at least for now.

But in the end, it won’t matter, for the EU and euro currency are DOOMED.

As for the pound, it’s a little bit too difficult to say right now on how it will react, so I don’t want to speculate in Britain’s currency. However, the euro has now failed to get above major resistance at the 1.16 level on more than three occasions, a sign of weakness, especially with the long-term trend for the euro seriously negative.

Therefore, my recommendation is:

Using 5 percent of the funds you have allocated to The Speculator section, purchase shares in ProShares UltraShort Euro, symbol EUO, at the market. Place a good-till-canceled protective sell-stop at $20.86.

Also hold your shares in iPath Bloomberg Copper Subindex Total Return ETN (JJC) and maintain a good-till-canceled protective sell-stop at $22.26.

This ETN seeks to replicate the performance of the copper futures contract traded on the COMEX. Copper appears ready to break out to the upside as Beijing seeks to continue to build out its economy.

If not on board, you may purchase JJC at the market using 5 percent of the funds you have allocated to The Speculator section, with a good-till-canceled protective sell-stop at $22.26.

Stay tuned to your inbox, though. As the markets start to heat up this summer, you can count on new opportunities flashing straight from me to your email inbox.

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Income InvestmentsHold Your Three Nice Income Positions Generating

Annual Yields of as Much as 12.8 Percent. You own three, very nice, natural resource-related income positions. And they’re looking good.

You should be long shares in Westlake Chemical Partners LP (WLKP) from roughly $19.75 … hold WLKP, and maintain a good-till-canceled protective sell-stop at $18.07. Your open gains are 8.8 percent, including an annualized dividend yield of roughly 5.8 percent.

According to my valuation of the company, Westlake should soon head to the $26 level. That’s conservative. I believe Westlake can hit the $29 level by the end of the year.

You should also own shares in Western Refining Logistics LP (WNRL), a terrific refining company with a 7 percent annual yield. As I mentioned last month, Western Refining has been the subject of very heavy insider buying, a good sign when Q1 earnings fell short of expectations.

Timing-wise and chart-wise Western Refining looks ready to power up a move to above the $30 level, which would give you a handsome gain.

Hold Western Refining Logistics LP, symbol WNRL, and maintain a good-till-canceled protective sell-stop at $20.57

If not on board either WLKP or WNRL — use 5 percent of the funds you have allocated to Income Investments for each and buy shares in both at the market. Be sure to place a good-till-canceled protective sell-stop for WLKP at $18.07, and for WNRL at $20.57.

You should be long shares in GAMCO Global Gold, Natural Resources & Income Trust (GGN) from about the $6.27 level. GGN pays out a healthy $0.07 per share per month, amounting to an annual yield of better than 12.8 percent.

Hold GGN, and maintain a good-till-canceled protective sell-stop at $4.21. Reinvest the dividends to compound your return.

If not on board, you may purchase GGN at the market, using 5 percent of your Income Investments funds. Place a good-till-canceled protective sell-stop at $4.21.

Let me clarify: Some subscribers have written in to tell me GGN can only meet its cash payouts by selling off assets. That’s simply not the case. GGN meets its distributions through earnings. If and when there are not enough earnings to meet a distribution, for whatever reason, then the balance typically is paid out of shareholder basis, meaning its non-taxable to you.

The Board of Trustees has already declared cash distributions of $0.07 per share for each of July 15, August 17, and September 16, 2016 …

Payable July 22 … August 24 … and September 23, respectively.


AsiaHold FXI and VEOEY.

As my main article points out, I remain staunchly bullish on China. I’m probably one of the only analysts in the world to take that position, but that’s okay. I was practically alone in 2004 when I was bullish on China, just before its Shanghai Stock Exchange A Share Index soared 514 percent to 6,124 in two short years.

All the major reasons I’m bullish are spelled out in this month’s main article.

So don’t pay attention to all the pundits out there knocking China, or Asia for that matter. 90 percent of them have probably never stepped foot on Asian soil. And there is simply no way you can understand the Chinese or Asian mentality towards work, savings, family, nation and culture without having spent time there.

Also, as I pointed out last month, most pundits have the Asian debt situation all wrong. At about 240 percent debt-to-GDP, China’s debt is only a few points higher than the 233 percent in the U.S. …

And far lower than Japan’s 400 percent and even the U.K.’s 252 percent levels.

Second — and more importantly — is the that the makeup of the debt is distinctly different. Of China’s 240 percent debt-to-GDP ratio — government, households, and non-financial corporations respectively contribute 56 percent, 40 percent, and 144 percent.

Government debt of 56 percent is not a big threat. And household debt at 40 percent is even less of a threat to the economy. The 144 percent non-financial corporate debt is high — but put it into context.

It indicates that non-financial corporations are relying more on indirect rather than direct financing — such as from family — rather than via access to the country’s vastly under-developed stock and bond markets.

There’s more: China remains the country with the world’s highest savings rate — an incredible 50 percent, compared to 16 percent in the U.S. Total household savings are estimated at 120 trillion renminbi.

That’s $18.21 TRILLION in cold, hard cash household savings. Way more than U.S personal savings.

My view: China and Asia are doing fine. Short term: Bottoming. Long term: Quintuple your wealth potential.

In April, I recommended you get back into iShares China Large-Cap ETF, symbol FXI. Hold, and maintain a good-till-canceled sell-stop at $27.44.

If not on board FXI, buy it now at the market using 5 percent of the funds you have allocated to


the Asia Investments section. Place a good-till-canceled protective sell-stop at $27.44.

Also hold your shares in Veolia Environnement SA (VEOEY), with a good-till-canceled protective sell-stop at $17.37. This position is up 9.5 percent.

If you don’t own VEOEY, you may purchase it now at the market using 2.5 percent of the funds you have allocated to the Asia Investments section. Place a good-till-canceled protective sell-stop at $17.37.

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Copyright © 2016 by Weiss Research, Inc. 4400 Northcorp Parkway, Palm Beach Gardens, FL 33410. Sales: 800-604-3649. Subscription rate: $189 for 12 monthly issues. Single Issue Price: $15.75. Editor: Larry Edelson. Product Manager: Amber Dakar. Contributors: Cathleen Siegel, Richard Suwanprakorn, Daniel Talancha. POSTMASTER: Send address changes to Real Wealth Report, 4400 Northcorp Parkway, Palm Beach Gardens, FL 33410.

Copyright © 2016 by Weiss Research, Inc. 4400 Northcorp Parkway, Palm Beach Gardens, FL 33410. Sales: 800-604-3649. Subscription rate: $189 for 12 monthly issues. Single Issue Price: $15.75. Editor: Larry Edelson. Product Manager: Amber Dakar. Contributors: Cathleen Siegel, Richard Suwanprakorn Daniel Talancha. POSTMASTER: Send address changes to Real Wealth Report, 4400 Northcorp Parkway, Palm Beach Gardens, FL 33410.

Real Wealth Positions At A GlanceCompany Name (Ticker)

Initial Purchase

Date# of

Shares

Avg. Cost Basis Per Share ($)

Current Value ($) as of 6/13/16

($) Gain/ Loss

Total Return

(%)Current

Reco

Current Quote ($) as of 6/13/16

What to do if you don’t own it( )Most

Recent Trade Date

POSITION PERFORMANCEINITIAL OPEN POSITIONS COST ...................................$47,196.78OPEN POSITIONS VALUE ............................................$68,026.67OPEN POSITIONS TOTAL RETURN SINCE INITIAL PURCHASE DATE (%)*1 .............................................44.13

Disclaimer: Real Wealth Report is strictly an informational publication and does not provide individual, customized investment or trading advice to its subscribers. The money you allocate to speculative trading should be strictly the money you can afford to risk. While every effort is made to simulate the actual experience of subscribers, all performance figures must be considered hypothetical. References to examples of past performance are not intended to provide a total picture of position results, and past results are no guarantee of future performance. The table includes all open positions recommended in the monthly Real Wealth Report newsletter or flash alerts. If your portfolio is larger or smaller, you should adjust the specific recommendations accordingly. As of 1/12/16 entry and exit prices are are filled using open market prices of the next trading day following the release of the monthly issue. As of 07/20/12 flash alert trades are filled using open market prices following the release of the trading issue.. Source: Bloomberg. Data Date: 6/13/16

*Initial dividends. 1Assumes reinvestment of all distributions; initial purchase and combines any subsequent purchases as an average of all shares. ** For tracking purposes only. ***Entry price adjusted for splits. 2Revised after audit.

Real Wealth Report (%)

Market Vectors RVE Hard Assets Producers ETF (%)

YTD TOTAL RETURN (%) 12.45 (((( 13.78

BASIC SURVIVAL STRATEGIES

Gold Bullion (GOLDS) $1,284.40 5/25/2004 5/27/2016 17.82 $627.81 $22,888.01 $11,700.39 230.48 Hold (No action at this time) SPDR Gold Shares (GLD) $122.64 4/18/2005 6/20/2013 109 $49.50 $13,367.76 $7,971.78 187.28 Hold (No action at this time) Tocqueville Gold $40.06 9/16/2008 9/16/2008 55 $30.65 $2,203.30 $14.95 48.79 Hold (No action at this time) Fund (TGLDX) PowerShares DB US Dollar $24.44 12/19/2011 12/19/2011 200 $22.57 $4,888.00 $1.87 8.29 Hold; (Buy at market using 5% of Index Bullish Fund (UUP) stop $22.53 Survival funds; stop $22.53) Silver Bullion (XAG) $17.43 4/21/2014 4/21/2014 64 $19.45 $1,115.39 ($2.02) -10.40 Buy silver bullion at $15.75 or better using 5% of Survival funds Platinum Bullion (XPT) $994.90 5/19/2014 5/19/2014 0.85 $1,468.69 $845.67 ($473.79) -32.26 Hold (No action at this time) Palladium Bullion (XPD) $546.65 5/19/2014 5/19/2014 1.53 $815.92 $836.37 ($269.27) -33.00 Hold (No action at this time) Kinross Gold Corp. (KGC) $5.16 5/24/2016 5/24/2016 453 $4.41 $2,337.48 $0.75 17.01 Hold; (No action at this time) stop $2.25 Hecla Mining (HL) $4.50 - - - - - - - Buy at $3.17 or better using 3% of Survival funds; stop $2.43 Harmony Gold (HMY) $3.51 - - - - - - - Buy at $2.78 or better using 3% of Survival funds; stop $2.29 Goldcorp Inc. (GG) $18.05 - - - - - - - Buy at $15.55 or better using 4% of Survival funds; stop $11.49 Yamana Gold Inc. (AUY) $4.88 - - - - - - - Buy at $3.21 or better using 4% of Survival funds; stop $2.09

MATERIALS, ENERGY & AGS

United States Natural Gas $7.83 3/21/2016 3/21/2016 375 $6.66 $2,936.25 $1.17 17.57 Hold; (Buy at market using 5% of Materials, Fund (UNG) stop $5.32 Energy & Ags funds; stop $5.32)United States Oil Fund LP $11.76 3/21/2016 3/21/2016 238 $10.50 $2,798.88 $1.26 12.00 Hold; (Buy at market using 5% of Materials, (USO) stop $8.87 Energy & Ags funds; stop $8.87)

THE SPECULATOR

iPath Bloomberg Copper $23.39 4/18/2016 4/18/2016 100 $24.88 $2,339.00 ($1.49) -5.99 Hold; (Buy at market using 5% of Spec. Subindex Total Return ETN (JJC) stop $22.26 funds; stop $22.26) ProShares UltraShort Euro $23.51 - - - - - - - Buy at market using 5% of Spec. funds; (EUO) stop $20.86

INCOME INVESTMENTS

Westlake Chemical $20.86 12/21/2015 12/21/2015 126 $19.75 $2,628.36 $1.73 8.78 Hold; (Buy at market using 5% of Partners LP (WLKP) stop $18.07 Income funds; stop $18.07) Western Refining $22.82 3/21/2016 3/21/2016 113 $22.02 $2,578.66 $1.20 5.46 Hold; (Buy at market using 5% of Logistics LP (WNRL) stop $20.57 Income funds; stop $20.57) GAMCO Global Gold, Natural $6.50 4/18/2016 4/18/2016 398 $6.27 $2,587.00 $0.30 4.78 Hold; (Buy at market using 5% of Resources & Income Trust (GGN) stop $4.21 Income funds; stop $4.21)

ASIA INVESTMENTS

Veolia Environnement $22.17 5/26/2015 5/26/2015 59 $21.00 $1,307.74 $2.00 9.53 Hold; (Buy at market using 2.5% of SA (VEOEY) stop $17.37 Asia fund; stop $17.37) iShares China $32.90 4/18/2016 4/18/2016 72 $34.43 $2,368.80 ($1.53) -4.44 Hold; (Buy at market using 5% of Large-Cap ETF (FXI) stop $27.44 Asia fund; stop $27.44) U.S. Global Investors $6.82 - - - - - - - Buy at market using 5% of Asia funds; China Region Fund (USCOX) exit at $6.20 or below China National Offshore $120.26 - - - - - - - Buy at market using 5% of Asia funds; Oil Corp. (CEO) stop $95.92

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