Newsletter by: Dan Tiffin

March 19, 2008

Over the last two weeks I have been sending out emails and talking to many of you on the phone about what I see happening on March 18th when Federal Reserve Chairman Ben Bernanke announces whether or not he is going to cut interest rates. In my seminars I have been saying that interest rates should be cut to offset the sub prime mess. I said that once the interest rates reach 2.5% the stock market will rally big time and it will be the start of the long awaited bull market. Now, before I get to the results, we should re-visit the sub prime upset one more time.

Thanks to Mr. Tom Lamb, when he sent us a description of what really went on with the sub prime upset. This information was forwarded to everyone in an email last week. In the 1930's, President FDR wanted to protect investors and regulate the banking system and in the 9/11 disaster, President Bush let his emotions get the best of him and DE-REGULATED THE BANKING INDUSTRY, leaving everyone unprotected. Hence, the Sub Prime upset was allowed to happen.

The sub-prime problems affected only 20% of home buyers and the other 80% of us are busy working and spending. Hence, the surprising retail sales in January and the increased sales at Wal -Mart in February . Tom Lamb’s email also showed that not every sub-prime loan went bad. It showed that there were 3 types of clients; the very good clients, the average clients and the very bad clients. It is the very bad clients that hold about 1/3 of all sub prime loans that went bad. This was caused by de-regulating the Banks. The banks could get an investment from a client and loan it out, not once or twice but sometimes over twenty times and when these loans go bad, it drains available funds from the banks. Banks with no cash flow go Bankrupt, unless they are purchased by JP MORGAN for $2 a share.

The only way out is to lower interest rates and this is something I have been saying all along. The worse it gets, the faster the cuts come, CREATING THE BIGGEST BUYING OPPORTUNITY IN A LIFE TIME IF YOU KNOW THE MARKET WILL GO BACK UP and we do know by using demographics.

The three waves of Baby Boomers are all in their spending waves and we have the proof above. I stated that the market will now start the Stock market boom and everything is falling into place and for all you new investors that are nervous and people who do not believe a market rally will last, you have to remember, like anything, it takes time. Therefore, the two cuts in January will have an effect on the economy in April. The cuts last month will affect the economy in May. The huge cut yesterday will affect the economy in June. You will see the earnings on corporations start to rebound and people will then start buying stocks. You can now see why I stated that if everything goes down quickly, the Feds will cut rates deeper and faster and this is exactly what they are doing.

So while every other Economist and Financial Planner has been joining the negative band-wagon, I stood like General Jackson, a stone wall at the Battle of Manasses [Bull Run] firm in our belief.

The rates dropped past my predicted rate of 2.5% for the stock market to begin its Boom and would create a sling shot on that day up to 5%.

I did miss by 3/4 % because Bernanke dropped it 75 basis points and not by 1% and furthermore, by another .5% coming next month and .25% cut in June. The writing is on the wall and the bottom has reached and we are going up.

The NASDAQ was up 91.25 points or 4.19%. The DOW up 420.41 points or 3.51% and the TSX only did 184.55 or 1.42% because Gold lost $11.00. Keep in mind, Gold will go down as interest rates drop and stock market goes up. Also, remember Richard when you asked me if you should  buy Gold and I said once they cut interest rates enough Gold will start going down. Well that's why it went down yesterday.

**The U.S. is the world’s number one consumer, once it looks like they are getting their act together the rest of the world that sells their products to the U.S. will rebound.** This is why I was also not worried about China. Yesterday, China rebounded despite what is going on in TIBET. 482.33 Or 2.26 % because their economy is still running on 8-10% growth per year. Even Japan was up 2.48% yesterday at 296.28 points.

Hopefully, by now due to the sub-prime, you now can see into the future using Demographics and see the only thing that kept us out of a DEPRESSION this time was that the Baby Boomers continued spending, combined with aggressive interest rate cuts by the Federal Government. Once the Baby Boomers start to retire and spend less, sometime after 2010. We will be back facing a terrible Depression and dropping interest rates will only have a temporary effect before the markets continue to go down .

Most of you have segregated funds which means after ten years your principal is protected no matter what markets do. Using reset options will boost the principal amount everytime it goes up. The projected Boom will  help secure your future in these tough times.

You now have an explanation with how this all works and you too could have made the prediction I made two weeks ago. Meanwhile, the news is negative. I suggest you protect your friends too. Remember we only have about three years of growth before it's all over.

The last piece of the puzzle; In 2003 Greenspan dropped the rates in a panic just as Bernanke is doing now to offset 9/11. The NASDAQ went up 100% from 1,00 to 2,000.and the Housing Boom started.. Now that everyone has a house, it will be refinancing homes and with all the growth from the boom to free up money to invest for retirement. We were simply too early. We will also compound our returns and that is what we get for being early.

Sincerely, Dan