From: Outsider Club <ww-eletter@angelnexus.com>
Date: Fri, Dec 12, 2014 at 6:17 PM
Subject: A 21st Century Depression
To: pascal.alter@gmail.com
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| Biggest "blockbuster" discovery since penicillin 72 years ago, the invention of penicillin changed the world... It changed the way we get sick... increased human life expectancy... and even won World War II. And it changed investors' fortunes like nothing on record with earth-shattering gains like 1,640,000%. Right now, I'm excited to inform you that history is repeating itself. A new breakthrough drug — as revolutionary as penicillin — is hitting the market. And it could once again spark the greatest profit run in history. A 21st Century Depression By Jason Simpkins | Friday, December 12th, 2014 For the past few weeks, I've hypothesized that the Fed won't be able to follow through with tighter monetary policy. At best, I see the Fed delaying a rate hike, and at worst, I see a return to some form of QE. Of course, not everyone agrees. Bank of America, for instance, thinks the Fed will stand fast, raising rates, perhaps even at a rapid pace. "The threshold for the Fed to return to QE will be high," the bank said in its year-end report. "This is why we believe we are entering a phase in which bad news will be bad news and volatility will likely rise." I don't have any problem with what Bank of America is saying. I'll allow for a difference of opinion. It may be right. So for the sake of argument let's say it is, and ask this question: How will the economy fare if monetary policy tightens? To answer that question in a word: badly. Make no mistake; if the Fed is true to its word, and monetary policy gets tighter, we're going to see some bubbles bursting. And it's not going to be pretty. In fact, it could get so bad that we may not escape the depression we narrowly avoided in 2008. Advertisement The Most Hated Stocks on Wall Street Brokers, bankers, big-firm executives, and other Wall Street types hate these little-known stocks. They'll never tell you about them. And you'll never hear about them from the mainstream media, either. Yet they've been quietly making millionaires out of savvy folks just like you... Best of all, you can start with as little as $5,000 and turn it into millions. So why is Wall Street keeping these from you? Click here for the full story... Bursting Bubbles The first bubbles to pop are going to be right here at home. In its report, Bank of America made some rather poignant observations. Among other things, BofA said 56% of global GDP and 83% of global stocks are directly dependent on zero interest rates. Well, U.S. GDP growth, which is expected to register a modest 2.2% this year, is already less than robust. Without low rates as a crutch, growth will likely be flat, maybe even negative. That will undo much of the "progress" we've seen these past few years. Stocks are in even worse shape. With Treasuries and savings accounts yielding virtually nothing, investors looking for a decent return on their money have stampeded into the stock market. Furthermore, investment banks and hedge funds have been able to borrow money from the Fed for pretty much nothing. That money, too, has found its way into the stock market, where it's been generating outsized returns. Well, those days are over. Higher interest rates and better bond yields will suck money out of stocks just as the economy hits its GDP speed bump. A stronger dollar will hurt exports. And we may even see deflation, spurred by plunging commodities prices (oil chief among them). That will crush corporate earnings, and cause the stock market to truly implode. What next? We'll likely see a similar implosion in the housing market, where higher borrowing rates and a sluggish economy will wound housing demand. Are we having fun yet? No? Well, maybe when things look a bit rosier in the global economy. After all, the European Central Bank, Bank of Japan, and Bank of China are all cutting rates. That has to be good right? Nope. In fact, a global contagion could be in the works, and that seems to be what worries BofA most. Advertisement Did You Hear About This Crash-Proof Investment? I've discovered a way for you to make money every time the market drops. In fact, there's even a way you can multiply your gains every time the market ticks down. And it doesn't involve buying a single share of risky stock or complicated options. A Global Depression? Barnaby Martin, BofA's European credit chief, says world asset markets may face huge outflows as the U.S. Federal Reserve tightens up. "Our biggest worry is the end of the liquidity cycle," he said. "The Fed is done and it is preparing to raise rates. The reach for yield that we have seen since 2009 is going into reverse." That's the key, right there. You see, with U.S. interest rates so low, investors have had to deploy their money overseas for a higher return. Well, now that trend is reversing. That's been plainly evidenced by the rise of the dollar.
Pictured above is the Dollar Index, which measures the greenback against the euro, yen, pound sterling, Canadian dollar, Swedish krona, and Swiss franc. It's at its highest level since 2009. See, the dollar is rising because everyone else is fleeing foreign bonds and currencies. Just a quick overview:
This is an advantage for these countries' export markets, but terrible for their bond markets. Indeed, as U.S. debt becomes more attractive, foreign debt loses its appeal. Advertisement The Netflix Profit Loophole Netflix stock is pretty pricey... sitting around $480 right now. However, if you know about the profit loophole known as "Internet Royalties," you could actually collect $48,000 over the next year. You don't have to own Netflix stock, either. And you don't have to sign up for any programs or fill out any forms. The best part is it only takes around $35 to get started. Check out how to get started collecting these "royalties" today. That's good for us, because it's helped fill the void left by the Fed, which has stopped buying U.S. bonds en masse. But it's not good for other countries, as soaked up investment dollars makes it more costly to borrow. We're seeing similar trends in foreign stocks and overall investment, as well. Much of the money that fled the United States during the financial crisis is suddenly coming back. And it couldn't happen at a worse time for many foreign countries. Growth in Europe has stalled morbidly, and many resource-dependent exports are being pinched by lower commodities prices. It will be tough for our overseas partners to shake those headwinds. All of this is why I personally don't think the Fed will act too hastily to tighten up policy. Remember, Ben Bernanke was a scholar on the Great Depression. And he was determined to do everything in his power to prevent things from getting that bad. He succeeded, but maybe only temporarily. The worst may still be yet to come. That's clearly what BofA thinks. In any case, that's why I'm buying gold and shorting the market. If the Fed bails out on its interest plan, gold will shoot higher. If it follows through, the market will tank. Either way, I win. Get paid,
Jason Simpkins Jason Simpkins is a seven-year veteran of the financial publishing industry, where he's served as a reporter, analyst, investment strategist and prognosticator. He's written more than 1,000 articles pertaining to personal finance and macroeconomics. Simpkins also served as the chief investment analyst for a trading service that focused exclusively on high-flying energy stocks. For more on Jason, check out his editor's page. *Follow Outsider Club on Facebook and Twitter. Advertisement See Brian Hicks' Personal Brokerage Account In the next few minutes, you'll see a real-time trade — straight from the personal brokerage account of Angel Publishing's President, Brian Hicks. It's called the "R-4 Trigger," and it's a single indicator you can use to play the stock market for easy 88% gains as often as twice per month. That's a gain of $880 for every $1,000 you put in. So without further delay, I urge you to take a peek at this video of the "R-4 Trigger" in action. |
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