Ask Lee Now: Answering Reader’s Questions Feburary 2015

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Please email your question or comment to Independent Living editors Lee Bellinger or Seth Van Brocklin. ([email protected]).

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Major Power Grid Failure

Nancy T. writes: If the major grid is suddenly hit and we lose our electricity, gas, etc., how would we heat the food in the Emergency Food Reserve? My understanding is that we will be without all of our creature comforts — everything comes to a standstill, if the grids are out of commission. What good would your food reserve be?

Lee responds: A comprehensive at-home emergency food reserve will contain some readymade foods that can be eaten right out of the package. For example, our 30 Day Maximum Shelf Life Food Reserve includes canned spiced ham, sunflower seeds, and energy bars. It also includes rice, macaroni and cheese, cornbread mix, and other staples that require some preparation.

The idea is that you will be able to sustain yourself and your family comfortably for a few days in the event that you have no access to electricity or other utilities. But you need not depend entirely on pre-ready foods, even if you are without a working kitchen.

As part of your emergency preparations, consider adding a charcoal grill and a propanepowered stove range of the sort used by campers. That gives you two ways to cook foods and boil water without needing to be hooked up to a gas line or source of electricity. Of course, you may be able to power small electric kitchen appliances with backup power generators, which should also be part of your “prepping” kit.

By the way, you can obtain your own 30 Day Maximum Shelf Life Food Reserve for just $299. Call (877 -371-1807) or order online (

Another Way to Invest in Foreign Companies and Currencies

Dan R. writes: Are foreign companies that are traded on US exchanges as ADRs a good way to diversify out of the dollar?

Lee responds: They can be. Even though ADRs (American Depository Receipts) trade on U.S. exchanges just like regular U.S. stocks, they represent shares in foreign companies. So you get exposure to the underlying foreign currencies. If you aren’t working with a broker who can buy shares directly on foreign exchanges or you are prevented from doing so within your retirement accounts, ADRs are a suitable alternative.

Keep in mind that most small to medium-sized foreign companies do not have ADRs. Despite this limitation, most investors will find the wide array of ADRs representing industries and countries around the world to be adequate for building a portfolio of foreign stocks.

Which Gold Fund is Right for Me?

Dick H. writes: I’m readjusting my portfolio. So I have some questions.

  1. What are your thoughts on gold fund ETFs such as Euro Pacific’s EPGFX?
  2. Can one have too much physical gold and silver in a portfolio? Yes there is volatility but in the end won’t PMs be worth much more than any stock one can own?

Seth Van Brocklin responds: The EuroPac Gold fund is an actively managed mutual fund, not an exchange-traded fund. It carries an expense ratio of 1.50%, plus an up-front sales load of up to 4.50%. That’s enough to dissuade me from investing in it.

You can invest in this sector more efficiently with ETFs. The largest of these, Market Vectors Gold Miners (GDX), charges just 0.53% in expenses. One of its main competitors, Sprott Gold Miners (SGDM), charges a comparable 0.57%.

Take your pick. The GDX passively follows an index, while the Sprott ETF is more strategically focused based on fundamental screens.

To answer your second question, yes, you can be overexposed to precious metals! We’ve never suggested that people go all-in on gold, silver, or hard assets in general to the complete exclusion of financial assets.

Rather, precious metals help mitigate risk in a broadly diversified portfolio. If the dollar crashes or interest rates spike or banks go under, a 20%-25% allocation to physical precious metals will help you weather the storm. Even though gold is considered a safe-haven asset, a 100% allocation to precious metals is risky because there are extended periods (such as 1980- 2000) when gold loses value, while stocks and bonds gain.

Over time, yes, gold does keep pace with inflation. So does the stock market. But there are cycles wherein stocks crash while gold surges. And vice versa. U.S. stocks at present look overvalued compared to gold, making gold appear to be the better bargain. But we don’t know when the cycles will turn back in favor of precious metals and against stocks. Perhaps they already have. Perhaps they won’t until the infamous Dow 36,000 prediction from the 1990s finally comes true!

Regardless, there are plenty of individual stocks and sectors along with entire foreign stock markets that are attractively priced. If you are allocating more than half of your portfolio to metals and mining stocks, you might want to think about diversifying into other types of assets.

About Storing Cash at Home

John L. writes: I wish to make sure that our resources are not visible to any and all potential creditors. I am storing cash at home to avoid keeping it in any bank or trading account… Would it not be better to change my dollars into another currency?

Lee responds: Once you’ve built up enough dollar reserves to get you by in an emergencypinch, it would be a good idea to add a mix of foreign currencies to your cash stash. Now may be a good time to take advantage of recent dollar strength on the international currency markets to obtain foreign cash on the cheap. Widely recognized, easily exchanged currencies suitable for hoarding include the Canadian dollar, Swiss franc, and British pound. You might even consider adding some Chinese, Hong Kong, or Australian currency to your stash for appreciation potential.

However, since you won’t be earning any interest on your paper, you stand to lose out to inflation as all these currencies depreciate at varying rates over time. So definitely supplement currency holdings with hard assets such as precious metals, colored diamonds, gems, and other
valuables that can be held privately and can’t be devalued by governments.

New Obamacare Insurance Fines

Robert G. writes: Regarding your medical advocate article, Dec. 2014 issue. A medical advocate makes sense for those who can afford it. However, I thought “everyone” is required by Obamacare to have insurance. If you do NOT have insurance you will be fined a percentage of your income. If your income can afford an advocate and you “bypass” insurance aren’t you on the hook for an additional tax penalty bill?

Lee responds: Having a medical advocate or concierge doctor isn’t a substitute for having insurance. If you require hospitalization (average cost per day in the U.S. is $4,300), you’ll definitely be glad you have insurance. The penalty for failing to obtain health insurance triples in 2015 to $325 or 2% of income, depending on which is higher.

You’re right that not everyone will be able to afford both health insurance (whose everescalating costs are artificially inflated by government) and a full-service medical advocate of the sort I described in my December 2014 lead story. For those people, getting insured (or joining a health-sharing arrangement that satisfies the insurance mandate) should be the first priority.

Website Attacks Are Just One Trick in the Left’s Arsenal

Brian L. writes: Just so you are aware, I have a Firefox add-on called WOT – Web Of Trust. It is used by the community to rate web sites.

It is and has been used to flag sites like yours and the NRA among others that the establishment & other a**holes don’t like with unfavorable ratings. People who don’t know better, (unfortunately, a great majority of Americans), will see this red dot and not go to your site.

Lee responds: Many of these Internet rating and filtering programs have been hijacked by political activists of the left. People run these Internet pre-screeners because they want to avoid spoof sites, phishing scams, and malicious downloads. And they may want to protect their kids from pornography or other age-inappropriate content. Unfortunately, completely innocuous sites can get flagged or blocked for “hate” – a category that can refer to any content that isn’t politically correct in the eyes of the hypersensitive.

Let me assure you that our web site,, is safe and secure. Though we sometimes present controversial perspectives, we never cross the line into unlawful or even uncivil territory. I guess our increasing popularity and influence on the Internet and Facebook has some people feeling threatened politically. Oh, well!