Critical Warning Number Six
Today, the U.S. economy is treading on thin ice.
Some prefer to disagree, arguing that it is recovering slowly. But if that is the case, then why is the job growth so very infinitesimal? Why is the profit growth so very meager? After all, has not the U.S. government tried to breathe life into its comatose economy with trillions of reviving dollars?
A blanket of desolation looms over the U.S. housing sector. New home sales stare dismally at their deeply drenched lowest figures ever since 1963. They are not helped with a flood of foreclosed resale homes. It looks like the housing prices will continue to keep low for quite some time now.
Critical Warning Number Six
The rate of underemployment in the U.S. doggedly remains at 15%. On an average, banks are not showing promising results. The American banks have been affected by the debt crisis in Europe by an amount of $1 trillion. All these are indications of yet another recession befalling the United States. Many European countries are already experiencing the whiplashes of the same.
The budget deficit of U.S. this year will be $ 1.3 trillion. Its national debt is about $16 trillion and the permitted debt increase is up to $16.4 trillion. It is predicted that the official national debt will go beyond $20.0 trillion excluding off-balance-sheet items like old-age security, Medicare and promises made by the government to its citizens. It is said that the U.S. national debt is near about $100 trillion.
In 2008, the U.S. government censured Fannie Mae and Freddie Mac, who formerly owned or gave guarantee to a maximum number of residential mortgages in America. So now, the U.S. government either owns or guarantees about half the outstanding residential mortgages in the country. Last month, the number of home mortgages in the U.S. which were either in the process of foreclosure or defaulting on payments was near to five million. Now does that not mean more losses for the U.S. government?
Politicians have added to the government spending by trillions of dollars since 2008, with the belief that the economic problems will be fixed. However, the problems threaten to get even worse, as the national debt may well be 150% of the GDP and will resemble the state of affairs that were after World War II. Back then, America made great progress economically, with a strengthened manufacturing base and a well –transformed industrial sector. Effectively, gold, which was then the global reserve currency of central banks, was replaced by the American dollar, boosting the job sector and fortifying America as a superpower.
Today the scenario in the U.S. is that of utter despair. Its credit rating has been downgraded. Food stamps are being utilized by about 44 million people in America. Mexico, India and China are leading the world manufacturers’ chart. Jobs due to the internet are almost negligible.
In 2004, the U.S. lowered their rates of interest. Resultantly, there was ample borrowing and investing of the same in real estate. This lowering of interest rates, has in the long run, steered way for inflation to stay put in America for an extensive period of time. Another indicator is that of gold, whose price has escalated almost 500% and the decade is still to conclude! And then we might well be looking at a future of hyper-inflation and spiky high interest rates! This second recession warns of a situation that will be even worse than that during the 2007-2008 economic slumps and the 1929 Great Depression. During the latter, the Wall Street crashed and its echo was heard world-wide. There was a high unemployment rate; poverty struck many a home; many had had to face low profits and in short, the economic and individual growth suffered greatly. In effect, the economic future was looked at with pessimism; not many new industries were added to aid the country’s development; the consumer debt increased and here were many such factors that lent extra burden on the already sagging U.S. economy. The construction, agriculture, shipping, mining, automobile and appliance industries were badly hit; the condition deteriorated till 1933, when stock value dropped to one fifth of its peak value in 1929. Many businesses and factories shut down, banks fared miserably, while income from farms fell to half of that in 1929. Mass unemployment presented a deep sense of concern to the nation by the year 1933. Then there was speedy growth till 1937, when again, unemployment prevailed.
Does the U.S. government presently have any money that could see the nation through the next recession? Since the last three years, a situation of false hope has been created by the Federal Reserve with a healthy-looking economy; courtesy, the overtime working of the printing presses! If this option had not been exercised, technically, would not the U.S. be called bankrupt today? Already, the interest rates have been lowered to almost zero. Can they get any lower? There is so much risk associated with this money-printing by the Fed; it is going to pump up the already- filled inflation balloon; the higher long-term interest rates will sooner or later move; the atmosphere thus created will be so oppressive that it will render the economy very hapless!
It has been observed that the period of 2008-2012 is almost a mirror image of 1934-1937 as regards the stock market picture. For instance, the stock market crashed in 1929 and also in 2008. The year 1934 saw the beginning of the bear market rally, which continued till 1937. During this period, the Dow Jones Industrial Average registered a gain of 106% from a level of 90 to 185. Later it plunged down to recover only in 1944 after a gap of seven years! Similarly, March 2009 was the beginning of the present bear market rally. Since the last three years, the Dow Jones Industrial Average has risen by about 100%. If this rally follows the same trend as of 1934-1937, it is to be expected that the stock prices will fall below their March 2009 lows in a few months while the subsequent bear market phase is in progress. But the next leg of the bear market looks to be much worse than that after the Great Depression.
Critical Warning Number Six
What does the future have in store for the U.S. Economy?
President Obama took office four years ago. Since then, the U.S. national debt has increased by about $5 trillion dollars. During this time, the Federal Reserve increased the size of its balance sheet by about $2 trillion. Since 2009, the U.S. dollar has started devaluating and as the U.S. economy worsens, the rate of this devaluation will accelerate. Presently, the U.S. dollar is the official reserve currency of seventy percent of the world central banks. Europe’s financial calamity has caused the investors to shy away from the Euro and they still believe that the U.S. dollar is secure enough. But there is all likelihood that its value will further lower against the huge mound of debt and the imminent inflation; all due to the Federal Reserve’s repeated money-printing tactics. And when this happens, it will not be too soon when foreigners forgo the U.S. dollar and look another way; to safe havens, where they feel more secure; away from a system of hyperinflation and sovereign debt issues!
Gold prices look to be rising continuously. The gold mining stocks in particular, will be in great demand. In spite of a few slumps in the year, the price of gold bullion continues to recover and move higher towards the year-end than with what price it started each year. This has been the trend seen in the past eleven years. Some weaknesses in the gold bullion prices are most likely corrections in an ongoing bull market and present a remarkable opening for intelligent investors. Gold prices will move higher when the inflation rises; when the U.S. dollar price drops down; the government spending is beyond control and when the Federal Reserve continually prints money.
The Eurozone crisis continues. The euro has weakened substantially against the U.S. dollar.
With Greece having defaulted technically on its debt; Italy trying to push its luck; Spain asking for a bailout despite the billions of euros having been pumped into its banks, the austerity measure has been met with severe hostility in Europe. Bailing out Greece is proving to be quite difficult. Can not Germany pull out of the Euro?
Short term interest rates, having fallen for 30 years, look to be bottoming out. A sixty year low of 1.5% is what the long-term 10-year U.S. Treasury is yielding at present. It seems like the end of a long-term down- cycle in interest rates is not far away.
To drive away inflation, interest rates may be raised by the U.S. government. With that, the fate of the U.S. housing market will be sealed. Can you envisage a more harrowing situation?
…Like the U.S. government, the economic situation in the U.S., the housing prices and the stock market -all breaking apart simultaneously?
As regards the stock market scene, the bear market rally in stocks will lose its set- direction and hurtle down to test its March 2009 lows. This is bound to bring the Dow Jones down (Almost 52% from where it sits today). During the Phase I of the bear market, the stock prices fall down sharply. From October 2007 to 9th of March, 2009 the Dow Jones Industrial Average plummeted by 54% from 14,164 to 6,440. In the Phase II of the bear market, the bear ensnares the investors back into stocks; giving them and analysts a sense of false security of the improving economy and that the market looks good enough to invest/ trade in stocks again. We are in this position today. The bear did just what was expected of it and the Dow Jones scrambled up above 12,000. They say that the bear market is getting old and long in the tooth. Comparing this bear market rally to that of 1934 to 1937, Phase III will get ongoing in a few months and will finally bring the stock prices below their March 2009 lows.
This is where we stand today. These observations are based on the views of Michael Lombardi, who writes for Profit Confidential. In fact, he has, in the past, predicted five major economic events. And they have all come TRUE.
They are as follows:
He told his readers to get into gold in 2002;
He told them to get out of the housing market in 2006;
He predicted the recession of late 2007;
He told his readers to get out of stocks in the fall of 2008; and
He told his readers to get back into stocks in the March of 2009.
His readers have greatly benefited from his words of advice and caution, time and again.
Now he has predicted his sixth major economic event that bears the title:
Considering the present situation, what should the investor and consumer do to protect him / her from the economic upheaval that is fast approaching? What type of portfolio should be positioned so that he /she can actually make income out of the same?
It is Michael Lombardi’s secret stock that goes up when the market goes down!
Look right through the declining value of the U.S. dollar;
Pay little heed to the collapse of the euro;
Disregard the fluctuating rise in gold prices;
Smile right through the speculative stock market;
Brave it out throughout the inflated economy;
Make money in adverse conditions!
What is this secret stock?
Critical Warning Number Six
Today, the U.S. economy is treading on thin ice.
Some prefer to disagree, arguing that it is recovering slowly. But if that is the case, then why is the job growth so very infinitesimal? Why is the profit growth so very meager? After all, has not the U.S. government tried to breathe life into its comatose economy with trillions of reviving dollars?
A blanket of desolation looms over the U.S. housing sector. New home sales stare dismally at their deeply drenched lowest figures ever since 1963. They are not helped with a flood of foreclosed resale homes. It looks like the housing prices will continue to keep low for quite some time now.
Critical Warning Number Six
The rate of underemployment in the U.S. doggedly remains at 15%. On an average, banks are not showing promising results. The American banks have been affected by the debt crisis in Europe by an amount of $1 trillion. All these are indications of yet another recession befalling the United States. Many European countries are already experiencing the whiplashes of the same.
The budget deficit of U.S. this year will be $ 1.3 trillion. Its national debt is about $16 trillion and the permitted debt increase is up to $16.4 trillion. It is predicted that the official national debt will go beyond $20.0 trillion excluding off-balance-sheet items like old-age security, Medicare and promises made by the government to its citizens. It is said that the U.S. national debt is near about $100 trillion.
In 2008, the U.S. government censured Fannie Mae and Freddie Mac, who formerly owned or gave guarantee to a maximum number of residential mortgages in America. So now, the U.S. government either owns or guarantees about half the outstanding residential mortgages in the country. Last month, the number of home mortgages in the U.S. which were either in the process of foreclosure or defaulting on payments was near to five million. Now does that not mean more losses for the U.S. government?
Politicians have added to the government spending by trillions of dollars since 2008, with the belief that the economic problems will be fixed. However, the problems threaten to get even worse, as the national debt may well be 150% of the GDP and will resemble the state of affairs that were after World War II. Back then, America made great progress economically, with a strengthened manufacturing base and a well –transformed industrial sector. Effectively, gold, which was then the global reserve currency of central banks, was replaced by the American dollar, boosting the job sector and fortifying America as a superpower.
Today the scenario in the U.S. is that of utter despair. Its credit rating has been downgraded. Food stamps are being utilized by about 44 million people in America. Mexico, India and China are leading the world manufacturers’ chart. Jobs due to the internet are almost negligible.
In 2004, the U.S. lowered their rates of interest. Resultantly, there was ample borrowing and investing of the same in real estate. This lowering of interest rates, has in the long run, steered way for inflation to stay put in America for an extensive period of time. Another indicator is that of gold, whose price has escalated almost 500% and the decade is still to conclude! And then we might well be looking at a future of hyper-inflation and spiky high interest rates! This second recession warns of a situation that will be even worse than that during the 2007-2008 economic slumps and the 1929 Great Depression. During the latter, the Wall Street crashed and its echo was heard world-wide. There was a high unemployment rate; poverty struck many a home; many had had to face low profits and in short, the economic and individual growth suffered greatly. In effect, the economic future was looked at with pessimism; not many new industries were added to aid the country’s development; the consumer debt increased and here were many such factors that lent extra burden on the already sagging U.S. economy. The construction, agriculture, shipping, mining, automobile and appliance industries were badly hit; the condition deteriorated till 1933, when stock value dropped to one fifth of its peak value in 1929. Many businesses and factories shut down, banks fared miserably, while income from farms fell to half of that in 1929. Mass unemployment presented a deep sense of concern to the nation by the year 1933. Then there was speedy growth till 1937, when again, unemployment prevailed.
Does the U.S. government presently have any money that could see the nation through the next recession? Since the last three years, a situation of false hope has been created by the Federal Reserve with a healthy-looking economy; courtesy, the overtime working of the printing presses! If this option had not been exercised, technically, would not the U.S. be called bankrupt today? Already, the interest rates have been lowered to almost zero. Can they get any lower? There is so much risk associated with this money-printing by the Fed; it is going to pump up the already- filled inflation balloon; the higher long-term interest rates will sooner or later move; the atmosphere thus created will be so oppressive that it will render the economy very hapless!
It has been observed that the period of 2008-2012 is almost a mirror image of 1934-1937 as regards the stock market picture. For instance, the stock market crashed in 1929 and also in 2008. The year 1934 saw the beginning of the bear market rally, which continued till 1937. During this period, the Dow Jones Industrial Average registered a gain of 106% from a level of 90 to 185. Later it plunged down to recover only in 1944 after a gap of seven years! Similarly, March 2009 was the beginning of the present bear market rally. Since the last three years, the Dow Jones Industrial Average has risen by about 100%. If this rally follows the same trend as of 1934-1937, it is to be expected that the stock prices will fall below their March 2009 lows in a few months while the subsequent bear market phase is in progress. But the next leg of the bear market looks to be much worse than that after the Great Depression.
Critical Warning Number Six
What does the future have in store for the U.S. Economy?
President Obama took office four years ago. Since then, the U.S. national debt has increased by about $5 trillion dollars. During this time, the Federal Reserve increased the size of its balance sheet by about $2 trillion. Since 2009, the U.S. dollar has started devaluating and as the U.S. economy worsens, the rate of this devaluation will accelerate. Presently, the U.S. dollar is the official reserve currency of seventy percent of the world central banks. Europe’s financial calamity has caused the investors to shy away from the Euro and they still believe that the U.S. dollar is secure enough. But there is all likelihood that its value will further lower against the huge mound of debt and the imminent inflation; all due to the Federal Reserve’s repeated money-printing tactics. And when this happens, it will not be too soon when foreigners forgo the U.S. dollar and look another way; to safe havens, where they feel more secure; away from a system of hyperinflation and sovereign debt issues!
Gold prices look to be rising continuously. The gold mining stocks in particular, will be in great demand. In spite of a few slumps in the year, the price of gold bullion continues to recover and move higher towards the year-end than with what price it started each year. This has been the trend seen in the past eleven years. Some weaknesses in the gold bullion prices are most likely corrections in an ongoing bull market and present a remarkable opening for intelligent investors. Gold prices will move higher when the inflation rises; when the U.S. dollar price drops down; the government spending is beyond control and when the Federal Reserve continually prints money.
The Eurozone crisis continues. The euro has weakened substantially against the U.S. dollar.
With Greece having defaulted technically on its debt; Italy trying to push its luck; Spain asking for a bailout despite the billions of euros having been pumped into its banks, the austerity measure has been met with severe hostility in Europe. Bailing out Greece is proving to be quite difficult. Can not Germany pull out of the Euro?
Short term interest rates, having fallen for 30 years, look to be bottoming out. A sixty year low of 1.5% is what the long-term 10-year U.S. Treasury is yielding at present. It seems like the end of a long-term down- cycle in interest rates is not far away.
To drive away inflation, interest rates may be raised by the U.S. government. With that, the fate of the U.S. housing market will be sealed. Can you envisage a more harrowing situation?
…Like the U.S. government, the economic situation in the U.S., the housing prices and the stock market -all breaking apart simultaneously?
As regards the stock market scene, the bear market rally in stocks will lose its set- direction and hurtle down to test its March 2009 lows. This is bound to bring the Dow Jones down (Almost 52% from where it sits today). During the Phase I of the bear market, the stock prices fall down sharply. From October 2007 to 9th of March, 2009 the Dow Jones Industrial Average plummeted by 54% from 14,164 to 6,440. In the Phase II of the bear market, the bear ensnares the investors back into stocks; giving them and analysts a sense of false security of the improving economy and that the market looks good enough to invest/ trade in stocks again. We are in this position today. The bear did just what was expected of it and the Dow Jones scrambled up above 12,000. They say that the bear market is getting old and long in the tooth. Comparing this bear market rally to that of 1934 to 1937, Phase III will get ongoing in a few months and will finally bring the stock prices below their March 2009 lows.
This is where we stand today. These observations are based on the views of Michael Lombardi, who writes for Profit Confidential. In fact, he has, in the past, predicted five major economic events. And they have all come TRUE.
They are as follows:
He told his readers to get into gold in 2002;
He told them to get out of the housing market in 2006;
He predicted the recession of late 2007;
He told his readers to get out of stocks in the fall of 2008; and
He told his readers to get back into stocks in the March of 2009.
His readers have greatly benefited from his words of advice and caution, time and again.
Now he has predicted his sixth major economic event that bears the title:
Considering the present situation, what should the investor and consumer do to protect him / her from the economic upheaval that is fast approaching? What type of portfolio should be positioned so that he /she can actually make income out of the same?
It is Michael Lombardi’s secret stock that goes up when the market goes down!
Look right through the declining value of the U.S. dollar;
Pay little heed to the collapse of the euro;
Disregard the fluctuating rise in gold prices;
Smile right through the speculative stock market;
Brave it out throughout the inflated economy;
Make money in adverse conditions!
What is this secret stock?
Critical Warning Number Six
