Category Archives: Financial

Here Is What Will Happen When Real Panic Begins To Unfold In The Financial Markets

Greyerz – Here Is What Will Happen When Real Panic Begins To Unfold

As the world edges closer to the next crisis, today the man who has become legendary for his predictions on QE and historic moves in currencies spoke with King World News about what will happen when the real panic begins to unfold.

Unlimited Credit Creation At Work
July 14 (King World News) – 
Egon von Greyerz:  “Investors today have Hobson’s Choice. But they don’t understand the options open to them. Thomas Hobson had a livery stable of 40 horses in Cambridge in the 16th-17th centuries. But customers only had a choice of one horse. They could either take the one nearest the door or none at all.

Below is the choice of asset classes investors have today and where 99% or more of global liquidity is invested. The problem is that these assets are massive bubbles as a result of unlimited credit creation and money printing in the last few decades.  

So if we assume that the horses in the stable represent the asset classes below, they will all be a very poor choice: 

  • Stocks will decline by 75-95% in real terms as the stock market bubble implodes
  • Bonds will lose 90-100% of their value as sovereign and private borrowers default 
  • Property values will implode by 75-95% with rates at 15%+ and no credit available 
  • Private Equity investments will lose 70-100% slaughtered by high leverage and rates
  • Cash will either be bailed in or lost in bankruptcy of banks or totally debased by governments 

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The problem is that investors have been conditioned to put all their funds into one or several of the asset classes above and that is their Hobson’s choice. Very few will be overly concerned about the risks before them today and nobody can believe that all the horses can be lame or unfit.

Some investors might reallocate part of their assets to cash as market volatility increases. But they can’t earn any return on their cash with rates anywhere from negative to just positive. And then they have the bail-in risk as banks have major losses. Then, as all currencies finish their run to ZERO, the complete debasement of money will have completed its course. Remember that they all have already lost 97-99% since the Fed was founded in 1913. 

Decades of investment gains which are virtually all due to credit expansion have led investors to believe that markets always go up in the long run and also that they have magical money making skills. Little do they understand that virtually no skills have been required to make money in markets in the last 70 odd years. See my article about Alfred, a stock market winner with zero talent.

A Devastating Event For The World
What few realize is that we are now in the final innings of an investment game that will end badly. Major stock markets in many countries, including the Dow and S&P, are now finishing their bull market moves, both short term and long term. The fundamental position has been indicating high risk for a while and the technical picture is now confirming that we are ending a major secular bull market that will turn into a catastrophic secular bear market which will be devastating for the world. 

Markets are likely to top very soon. Whether the bear market will start with a crash or just an initial slow move down, we will soon see. In either case, the autumn of 2019 will be one that investors will not forget.That will be the time when sentiment will change course dramatically. Confidence and euphoria will turn to fear and despair. Once the market realizes that this time central banks have no weapons left in their armory and that money printing or lower rates have no effect, there will be real panic. When the last crisis started in 2006, US rates were above 5% and German rates over 3%. Today US rates are around 2% and German rates negative. In addition, 23% or $13 trillion of Sovereign debt now have negative rates. So there is virtually no margin to make meaningful interest rate cuts.

Yes, there will be massive money printing because that is the only thing central banks know. But we must remember that global debt has doubled since the last crisis. In 2006, global debt was $125 trillion and today it is $250 trillion. None of that money has benefitted the general economy. Instead, it has only inflated asset markets. When the next money printing round starts, no one will benefit. The world will realize that you cannot create wealth by printing worthless pieces of paper or adding zeros on a computer. And finally, this time central bankers will learn that they won’t be able to solve a debt problem by adding more debt. 

Here Is What Will Happen When Real Panic Begins To Unfold
We will most likely see central banks lowering short term rates as they do every time they panic. But the long end of the market will most probably go the other way and long term rates will go higher. As the panic in the bond markets, both sovereign and corporate, leads to major liquidations of bonds, long term rates will rise. The 10 Year US Treasury, which has gone from 3.25% to under 2% in the last 8 months, has most likely bottomed and will in the next 2-4 years be back in the teens where it was in the early 1980s.

So let’s go back to Hobson. Investors will go for Hobson’s lame horses, which in their case will be  bubble assets like stocks or bonds and maybe some increase in liquidity. Virtually nobody will think of alternatives. Very few are aware that there is an asset class that has outperformed stock markets since the beginning of this century. As the chart below shows, global equities have lost 70% vs gold since 2000 and are likely to lose another 95% in the next 3-6 years.

So instead of protecting against the total wealth destruction that the world will experience in the next few years as all the bubble assets implode, investors will take Hobson’s choice of lame assets that will be virtually worthless by 2025.  

Why not follow the Silk Road countries that continue to buy the annual mine production of gold. As the chart below shows, since the finical crisis started in 2006, these countries have bought almost 30,000 tonnes of gold.

Since gold broke the Maginot Line at $1,350 just under a month ago, it has consolidated around the $1,400 level. The next target is $1,600 to $1,750. Once gold breaks out of the current trading range, we will see a fast move up to that level. 

The Biggest Gold Bull Market In History
The $1,350 level is now extremely strong support, and as I have already stated, the price is unlikely to go below that level more than momentarily. The risk is now to be left behind in the coming biggest gold bull market in history. All the surprises will be on the upside. 

Gold will reach multiples of the current price, but we are not invested in gold for the coming major price move. Instead, gold is for protection against the massive risks in all financial markets and in the financial system. Gold is insurance and gold is wealth preservation. 

Silver
Finally, a word about silver. Silver is much more volatile than gold and therefore not the same degree of wealth preservation. Still, we are likely to see a most spectacular move in silver starting shortly. 
Silver is incredibly undervalued and depressed and once it breaks out, is likely to explode. Below is a chart of silver adjusted for real inflation.

Holders of physical gold and some silver will not only protect their assets but are also likely to see the price of both metals reach levels that are difficult to fathom today…For those who would like to read more of Egon von Greyerz’s fantastic articles CLICK HERE.

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The Rapid and Frightening Rise of… SOVIET AMERICA

The disturbing story of how a once small group of radicals tricked America into advancing their agenda. Now, the American Soviets are about to trigger a chain of events that will destroy the core of what it means to be American.

According to New York Times best-selling author Doug Casey, everything you’ve worked hard for—including your freedom—is at stake.

Dear Reader,

A major coup is about to unfold on U.S. soil…

And almost nothing can stop it.

Deeply connected and powerful cartels within Washington, New York, and Silicon Valley… who have major influence on financial and political policies…

… Have finally crafted a foolproof conspiracy to sabotage Donald Trump’s presidency…

And replace it with a new type of “socialist state.”

  • Where the incoming government will have full control of everything, including your money and your assets…
  • Where immigrants will rush into this country, at will, to take what you’ve worked hard for…
  • Where food and medication will be controlled by the state and rationed among citizens and immigrants alike…

It will be a new kind of America, with a new vision and new policies.

And first on the agenda to establish this new socialist America is…

To take Trump out…

For the first time in our history, we’re about to witness the most devious plot against our country and a sitting U.S. president…

Why?

It’s no secret…

The “establishment” hates Donald Trump and everything he stands for.

They did everything possible to stop Trump from taking office. None of it worked.

Right now, he’s got loads of enemies in Washington and—unfortunately—even within his own cabinet.

Trump is constantly fighting the media… established Democrats and Republicans… top intelligence personnel…

He’s also fighting China’s influence… the Iranians… the Russians… you name it.

To make it worse, Trump is unconventional (that’s how he gets things done).

  • He’s anti-BIG government.
  • He’s a populist
  • He’s a nationalist
  • He takes BS from no one.
  • He’s not a part of Washington’s circle.

And he stands in the way of the “elite establishment”… a connected group of powerful individuals who control the decisions of elected officials…

…Powerful men and women with the attitude of the old Soviet communists.

They dislike Trump and his policies, especially since he reversed several of Obama’s.

They’re pissed and they’ve had enough…

And they’re ready to take back their turf from Donald Trump, the outsider, by any means necessary…

The First Presidential Coup on U.S. Soil

That explains why these mysterious and powerful bureaucrats cooked up the most outrageous government takeover on U.S. soil.

But it won’t be the kind of coup you’re used to seeing in some third world country.

Not a single bullet will be fired. Not a single gun will go off. And no, the president will not get arrested…

Invoking the 25th Amendment or impeachment will not be the weapon of choice to remove President Trump from office either.

That’s way too civil and timid… especially for a powerful group of this kind.

But rather, it’s a coup that uses a much more powerful and destructive weapon, one that will affect every American in ways unimaginable.

And to the best of my knowledge, no one is talking about this specific plot—or even knows it’s about to unfold.

But once Trump is out, the incoming socialist government will emerge as the new messiah… with a “new hope” and “new deal” for the American people…

  • They’ll peddle free healthcare for all. (It’s already drafted on paper.)…
  • Cancel all student loan debt and implement free college tuition. (A blueprint is already archived in Washington.)…
  • Initiate Universal Basic Income (UBI) for lazy Americans and immigrants, which is already in motion in Chicago and California…
  • They will take from seniors and boomers to give to millennials who live in their parents’ basements. Part of the plan to fund all this spending could include cutting Social Security and Medicare.
  • To further fund their socialist agenda, a 70% wealth tax is proposed by junior congresswoman Alexandria Ocasio-Cortez, a card-carrying member of the group I call the American Soviets. Fellow socialists—and 2020 presidential candidates—Kamala Harris and Elizabeth Warren both support it… Just imagine giving back the vast majority of your income every year—just because you were successful.
  • They’ll cut military spending and make America vulnerable to enemy nations like North Korea and Iran.
  • They’ll completely abolish Immigration and Customs Enforcement (ICE) and leave our borders as wide open as a highway so anyone could flock in (even enemies too).

But perhaps what’s even more dangerous…

They will deceive and blind-side Americans at the same time with the fake prophet of socialism.

And they will use these handouts to bribe millennial and immigrant voters and hold onto power beyond 2020.

Just like Castro did in Cuba in 1959.

Just like Hugo Chavez did in Venezuela in 1992.

And just like the Soviets did in 1917.

But like every socialist state, there will be serious repercussions.

Expect to see widespread poverty and lawlessness… and a bankrupt government that will seize every penny from hard-working Americans…

…All in the name of spreading the wealth.

It’s my sincere hope this will not come to pass.

It’s through solid work ethics and patriotic values that America became the great nation that it is.

But, sorry to say… the economic progress we made over the last two centuries is now all in vain. It will be wiped out within months by a socialist uprising.

I can assure you I am not trying to scare you.

Only, it’s my duty to keep you informed… so you know how to protect yourself, your loved ones, and everything you’ve worked hard for…

In other words, this impending catastrophe doesn’t have to catch you by surprise… as it could for thousands of Americans.

How We Uncovered a Shocking Coup Against a Sitting U.S. President

I am Nick Giambruno, chief analyst at Casey Research, and Doug Casey’s right-hand man.

Doug Casey is a legendary economist, serial investor, multi-millionaire, and best-selling author who has dozens of political and financial connections with some of the most powerful people on every continent.

He’s met with 12 presidents, governors of central banks, and intelligence operatives… and boasts a cadre of resource and business insiders on speed-dial.

He’s even met with notorious scoundrels like Fidel Castro and the Governor of Zimbabwe’s Central Bank.

Our firm, Casey Research founded by Doug Casey, is one of the largest financial research firms in America.

And while our research firm has a track record of correctly forecasting major financial and political catastrophes based on research and hard intelligence…

We’ve NEVER been more confident of any stock market, political, or economic forecast than the one we’re making today…

And that’s saying something, because Doug was emphatic about a number of major predictions—most of which have come true.

Doug predicted the Savings & Loan collapse…

The fall of the Soviet Union…

The dot-com crash…

And 9/11 (two months before it happened).

“Doug Casey, one of the greatest prophets of all time.”

– Robert Ringer
#1 best selling
financial author

“Doug Casey has never been wrong on one of his major predictions.”

– Simon and Schuster
Publishing Corp

Doug even predicted which direction gold would move in during that period.

Anyone who followed Doug’s prediction could have pocketed a 407% profit.

Doug warned readers of a coming credit and housing bubble in October of 2006, long before the 2008 meltdown.

And during that meltdown of 2008, Doug and his team made several recommendations that would later soar 405%… 234%… and 102%.

Doug also forecasted Brexit long before it came to a vote… and he’s long written about the socialist direction of the European Union.

Now he sees the same beast – socialism – is about to explode, here in the U.S.

What I’ll reveal today is the most confident Doug Casey has ever been on a forecast.

And Doug has rarely been wrong about something this big.

Look, Doug actually predicted Donald Trump would win the presidency even before he became the Republican candidate.

I think unless Trump’s actively defrauded, he’s going to be the Republican candidate. And he’s going to win,” – Doug Casey, April 21, 2016

But I hate to tell you this…

Just as Doug predicted the rise of Donald Trump, Doug is now forecasting the fall…

The Secret Weapon to Take Trump Out

It’s so malicious, dangerous, and historic… I sincerely wish we were wrong about this devious plot against a sitting U.S. president…

But this powerful, shadowy group has an “ultimate weapon” that no one will see coming…

Part of that secret weapon is the stock market.

In short, our research points to a “doomsday conspiracy” by this mysterious group…

…To crash the U.S. stock market and the American economy down to “ground zero” before the end of 2019…

Then pin the blame on President Trump, to sabotage his presidency and re-election.

The market drops we saw last October and December when the Dow shed an average 500 points were just the warning sign.

Based on our intelligence… you can expect to see further drops in the Dow through 2019.

…And a major crash thereafter…

Once the market collapses, it will be blamed squarely on President Trump by the aggressive opposing media…

The socialist state will win the souls of Americans and establish their policies.

The average American will be looking to the government for a bailout or a handout…

Much of which is already in the works, thanks to the Democrat-controlled House of Representatives.

Once Trump is out, a major retirement crisis will emerge as well…

But socialist policies come with a huge price. Just ask Venezuela…

America will bleed to death with debt and chaos. Our way of life… our freedom and financial well being, will vanish before our eyes…

Soon, there’ll be nothing left for our children and grandchildren to live on.

Or, even worse, there’ll be a violent free-for-all with corrupt leaders ready to gun down citizens looking for food… just like in Venezuela.

Hopefully that never comes to pass. But with socialist states, it always ends up going in that direction.

Like you, I love this country dearly and appreciate the values that made it the greatest nation on earth.

Which explains why I can’t sit idly by and do nothing. Doug Casey and I felt an urgent need to get this message out to you as quickly as possible.

To help you make sense of it all…

I’ll expose what’s been happening since Donald Trump won the presidency…

You’ll get details on those rogue bureaucrats who hold major influence over policy and politicians…

 …And who have allies on both sides of the political aisle… within the intelligence community… the military… industry and the media.

Sit tight. I’ll name names… and take you “inside” their conspiracy to topple a sitting president.

You’ll see how a stock market collapse is virtually locked-in, and what mechanism they’ll use to trigger sudden drops in the DOW as we saw last December…

And how they’ll set up a socialist agenda as America’s new deal.

And best of all, I’ll show you what I am personally doing to protect myself and my family, and even grow my wealth quietly.

I can’t promise you’ll emerge from this crisis completely unharmed…

But I can just about guarantee you’ll be a lot better off than those who don’t follow these simple steps.

Because once the market crashes and socialism is implemented… a whole new wave of Americans in their 50s and 60s will be unable to retire.

Retirement accounts and 401(k) plans will be wiped out instantly or seized. Social Security and Medicare payouts will be halved…

The value of your home will be slashed too…

Foods like milk, butter, eggs, sugar, and medications will be rationed and controlled by operatives of the incoming socialist government…

Of course, the question is, can a stock market crash really take down president Trump and what are the implications for folks nearing retirement?

At first I had doubts…

Until Doug and I began putting together the pieces of our research, like a giant puzzle.

And the plan to take out President Trump through a stock market crash is as fool-proof as anything I’ve seen.

And respected economist and investor Peter Schiff agrees with Doug’s forecast…

“What we’re about to experience will be a bigger bust than what we had in 2008 and, unfortunately, Trump is going to get blamed for that as will all of the Republicans.”

– Economist Peter Schiff

After all, this powerful group we call the American Soviets knows what it’s doing.

To understand the magnitude of it all, I have to reveal something here that you may have NEVER heard anywhere else…

See, while various stock market crashes in the past have never been intentional (not until this one we’re expecting).

History has proven that no political party, or president, regained power after a market crash.

For example, Jimmy Carter was the little-known Democratic Governor of Georgia. But in 1976 he won the presidency as a Washington outsider and reformer…

Within two years the Dow lost 20%, thanks to rising interest rates. A recession hit. And 1.3 million Americans were out of a job.

Carter lost re-election while Americans found new leadership in Republican Ronald Reagan.

The same scenario played out during the reign of George H.W. Bush.

The Dow dropped 18% in three months. That recession lasted nearly a year.

President Bush paid the price when Bill Clinton, a Democrat, won the presidency.

Then look what happened late in Clinton’s second term.

The dot-com bubble exploded and stocks lost $5 trillion in total market value.

No surprise Americans elected a Republican, George W. Bush, to the helm at the height of the crash.

But no one can forget the financial crisis of 2008. It was the bloodiest modern-day financial disaster to hit the U.S. under a Republican president.

John McCain, a beloved war hero—respected on both sides of the aisle—wasn’t enough to keep a Republican government in the White House.

Instead, America voted for liberal newcomer Barack Obama (who—though out of office—is aiding the new socialist movement in America).

Trump himself knows how closely presidential fortunes are tied to the stock market.

He’s routinely claimed credit for the roaring market of his first two years in office—as he should.

But he’s also a student of American history.

And he knows the most alarming example is that of President Herbert Hoover.

Like Trump, Hoover was a successful businessman, and a Washington outsider who became president in 1929.

Just after Hoover took office, the Roaring 20s bubble began to pop. Banks were running low on cash.

By October 8, 1929, panic set in. The stock market completely crashed… which ushered in the Great Depression of 1929-1933.

Americans who saved their entire lives for retirement discovered they had no money left.

Now while Hoover didn’t cause the Great Depression… he took the fall for it…

Franklin D. Roosevelt became president as the new “messiah.” He had an aggressive socialist agenda that led the Democrats to a stunning four presidential victories.

A twelve-year reign.

When history is rewritten, there are two presidents who will be remembered for the worst reigns… due to stock market crashes and recessions…

  1. Herbert Hoover, the scapegoat of the 1929 great depression.
  2. Donald Trump, the victim of the plotted 2019 stock market crash and recession.

But there’s One Major Difference Between Trump and Hoover…

The Great Depression of 1929 was not orchestrated…

But Trump’s fall from grace—triggered by a stock market crash—will be the FIRST planned political coup on U.S. soil.

Some Washington politicians know something big is about to go down…

Some folks believe the Justice Department is the origin of this deeply connected group that will fully take down President Trump.

Sen. Lindsey Graham is on record saying he believes “a bureaucratic coup” led by enemies of President Trump is taking place at the Justice Department…

And Lindsey even asked that a new special counsel be appointed to investigate.

I doubt very much this will happen…

Others like former Trump advisor Steve Bannon recently told Reuters, “There is a cabal of Republican establishment figures who believe Donald Trump is not fit to be president of the United States. This is a crisis.”

By all means, there’s hush-hush speculation as to where this plotted coup will originate, and who’s behind it.

Again, most of this speculation is really just… speculation.

But Doug Casey and I have done more research on this secret group than anyone I know of…

While some may call this group the “American Soviets” because they’ve got the attitude of the old Soviet mafias…

Doug, and renowned author and economist Bill Bonner, calls this group the “Deep State” or “The Shadow Government.”

And this group operates according to its own compass regardless of who is formally elected to office.

Let’s get down to the meat of this planned coup… plus details of this next stock market crash… and the retirement crisis that will follow…

Including what you can do to protect yourself.

White House Take-Over

You see, the “Deep State” has a life of its own, like the government itself.

It’s a “state within a state” that’s hiding in plain sight, and made up of top personnel…

…Including directors of important regulatory agencies… Silicon Valley… the media… high-level bankers, presidents, and professors at top universities (which act as Deep State recruiting centers)…

Not forgetting long-term congressmen and senators… the NSA, military and intelligence operatives, according to Doug Casey.

The Institute for Policy Studies cited names like…

Former CIA head Michael Hayden…

Former FBI chief James Comey…

Former National Security Advisor Susan Rice…

And, Justice Department official Bruce Ohr…

Other sources have indicated H.R. McMaster was another high-ranking Obama operative who tried to destroy Trump’s “America First” policies, by approving the continuation of security clearances for Obama-era personnel.

Also I am not surprised billionaire George Soros—a colleague of H.R. McMaster—declared the Trump phenomenon will “disappear” in 2020, calling Trump’s presidency a “danger to the world.”

According to Soros, “My personal goal in the United States is to help re-establish a functioning two-party system.”

Think of it: That’s Soros’ personal goal?

Which begs the question: Who is George Soros… what’s his role… and is he the “Godfather” of the United States of America?

You see, all the anti-Trump operatives are held together by power, money, propaganda, and their secret agenda to implement anti-American and socialist policies…

Policies that are embraced by politicians you already know.

Like Alexandria Ocasio-Cortez… and Democrats running in 2020 like Bernie Sanders, Elizabeth Warren, and Kamala Harris.

In fact, these politicians seem like they’re “marked” to carry out the socialists’ policies of the Deep State, once Trump is out.

And a stock market crash and recession seems to be the strategy to take down Trump once and for all.

Question is: What will trigger this market crash? How will it happen? And when?

Take a look at this chart below.

Look carefully at the red circles at the various peaks.

These red circles are utter bad news.

Every time a red circle appears, a precipitous drop and market crash follows.

As an esteemed businessman, I expect Trump is aware this is the weapon that will be used against him.

And while Trump seems like a fearless warrior who’s energetic and tough… these red circles represent his worst nightmare.

He recently complained about the peaks marked by these red circles. I believe it’s key to the fate of President Trump and America.

As you may have guessed, these red circles are initiated by powerful members of an established group that President Trump says is his “biggest threat.”

I’m referring to the most powerful bankers in America and possibly the world: The Federal Reserve…

In short, based on our research, Doug Casey forecasts that the Deep State will use the Federal Reserve to take down President Trump.

Let me explain…

I hate to tell you this, but the Federal Reserve (The Fed) is NOT part of the U.S. government. The Fed is independent. 

The word “Federal” in the name is nothing but a smokescreen to throw you off from knowing their real goal…

Which is to manipulate the American economy and stock market at will.

The Fed is nothing but 12 mere mortals playing God with an economy of 326 million Americans.

And if they take the actions I expect they will, hard-working middle-class Americans will become poor when the stock market crashes… and Trump is out.

How?

Through this orchestrated financial coup I’ve been telling you about.

I have no doubt, intelligence and military personnel of the “Deep State” would love to take down President Trump by force…

But that would make them look bad in the eyes of Americans.

Instead, they’ll settle for a more subtle, yet powerful and extremely dangerous financial coup to achieve both objectives…

  1. Take down Trump
  2. Win the hearts of Americans.

The weapon: Interest rates.

“…All modern rate hike cycles have resulted in a recession, financial, or banking crisis”

– Forbes

You see, interest rates, set by the Feds, can make or break the economy…

Take a closer look at the chart I showed you earlier…

Every circle represents interest rates hike from 1921. And after every interest rate hike, see what follows…?

A market crash or recession… many of them you’ve lived through…

And many of them Doug Casey forecasted long before they wiped out the fortunes of hard-working Americans.

…The stock market crash of 1987… the Savings and Loan crisis of 1990… the 2000 tech bubble… the financial crisis of 2008…

How is it possible for the Fed to derail the economy using interest rates?

When interest rates are low, borrowing money gets easier.

It’s cheaper to buy a house, a car, or take a loan. Consumers have more money to spend too. Businesses expand. Profits rise. The economy is happy.

But the opposite is dangerous.

When the Fed raises interest rates, your mortgage becomes more expensive. You have to pay more for your car loan.

Consumers have less money to buy bread, milk, eggs, electronics, or go out to dinner…

Businesses can’t expand. Profits fall. Stock prices tank and the economy comes to a screeching halt.

“[If the] interest rate goes up 2, 3, 4 points […] We don’t have a country”

– President Donald Trump

Remember how everyone said the economy looked good under President Obama?

Well, Obama had help from the Fed. Throughout Obama’s two terms, the Fed kept interest rates super low at near 0%.

But look below at what happened once Trump won the presidency.

The Fed began an aggressive interest rate hike cycle which sent the markets into a tailspin… causing Trump to say, “I’m very unhappy with the Fed because Obama had zero interest rates.”

The first rate hike for 2018 was announced on March 21…

Then the second hike was on June 13…

And on September 26, the Fed raised the rate to 2.25%.

Shortly after the hike, the Dow slipped 800 points. And President Trump remarked, “The fed has gone crazy.”

By October the stock market lost nearly $2 trillion.

But that didn’t stop the Fed from hiking interest rates to 2.50% in December 2018.

The market went nuts.

The Ghost of the 2008 Recession is BACK to Haunt Americans…

December—which is usually the best month of the year for stocks—saw the Dow losing a staggering 1,863 points within a month…

…Making it the worst December for the market since the great depression of 1931.

$2.3 trillion vanished.

$155 billion in 401(k) and IRA savings EVAPORATED within days.

Across the country, American families were getting panic attacks…

According to Daniel Milan, a managing partner and investment adviser at Cornerstone Financial Services in Birmingham, Michigan…

“Two clients called and said they wanted to get out of the market completely

“Both investors said they couldn’t ‘stand the pain’ of seeing the Dow fall more than 500 points in a single day and watching their account balances shrink. They said they would rather ‘cut their losses.’” 

Across the world, the markets in Hong Kong, South Korea, Turkey, Italy, Germany, India, Mexico, and London were headed for the pits.

Even the White House was in turmoil.

Trump’s treasury secretary, Steven Mnuchin, frantically called Bank of America, Citigroup, Goldman Sachs, JPMorgan, Morgan Stanley, and Wells Fargo…

Just to see whether they had enough cash on hand to finance normal operations.

It was as if the “recession ghost” of the 2008 financial crisis came back to haunt us…

…Similar to when then-Treasury Secretary Hank Paulson called these same banks ahead of Lehman’s collapse.

Not the kind of nostalgic feeling you want…

But, mark my words, all this is happening simply because the “Deep State” and the socialists want to get rid of Donald Trump and reclaim the running of the United States.

This isn’t over.

If the Federal Reserve takes interest rates to 3% over the next few months, the stock market could lose more than 50% of its value.

The Trump Administration will owe over $1 trillion in interest on the country’s $21 trillion debt…

…Which will cause serious strains on the economy and take it to recession mode.

And the folks who’ll feel it the most?

Retirees

In fact, Americans, 50 years and over, won’t have peace of mind.

And here’s why…

Baby Boomers and Seniors Won’t be Able to Retire When Everything Crashes

Boomers are expecting to claim their Social Security and Medicare over the next few years… after decades of contributions.

I’m sure you’ve paid into this system since your first job as a teenager. You deserve to get your money back.

But there’s one BIG problem that no one has ever mentioned to you.

You see, around 2008, the country’s overall debt consumed 65% of the government’s yearly income… which economists call the GDP.

…While the remaining 35% of the country’s income was reserved to make Social Security and Medicare payouts.

Now, for the first time since World War II, the U.S. debt level is at 100% of its income.

That means the debt will consume all of the country’s income. So where will the payments for Social Security and Medicare come from?

When American retirees will be looking for their rightfully earned payouts over the next 5 years, all hell will break loose.

Can you imagine what will happen when the market collapses and Trump is out of office?

Can you imagine what would happen when the socialist government begins to expand welfare programs with every cent it has on the books?

Can you imagine when the socialist government says they will need your money to help “spread the wealth” equally?

Month after month, Social Security payouts will decrease until you can no longer feed yourself because of vastly inflated food prices.

In fact, as we speak, retail prices are headed one way. And that’s UP…

Kellogg’s, who own cereal brands that are a staple for American families, has increased prices by 12% for certain foods.

Major food giants like Mondelez, The Hershey Company, Nestlé, Unilever, and Coca-Cola are reportedly hiking prices this year.

That’s exactly how it began in socialist Venezuela.

Next thing you know… people have to wait in line to buy even the smallest amount of food.

But it’s not just higher food prices you need to watch to see the cracks in the economy…

Real estate in the U.S. is down by as much as 10%.

In Seattle for example, home prices are down as much as $80,000. Same story in Chicago, Denver, Austin, Washington, Nashville, San Francisco…

Insiders are literally bracing for the worst!

Real estate website Zillow and research firm Pulsenomics surveyed more than 100 real estate experts and economists…

Nearly 50% of the experts surveyed expect the next recession to begin by 2020. That’s next year.

In other words, as economist Peter Schiff puts it, “the market will collapse as a result of interest rate hikes.

Expect a long, drawn-out bear market with the cost of living rising to dramatic levels. This bear market is not going to end quickly”.

It will be the most ferocious, most unforgiving, and most destructive economic calamity this country has ever seen…

Like 2008, over 9 million Americans will be on the breadline… looking for work. Even retirees will petition Walmart for jobs.

And that’s exactly what the incoming Democratic socialist government wants…

To have Americans in bondage… and to offer sympathy in the form of socialism.

It’s a brilliant plan, dangerous and new—at least in America.

Get Ready for Full Blown American Socialism

But the coming recession isn’t the only thing that will take down President Trump…

There’s something else that ensures socialist politicians will get elected to office, anointed as the country’s new “messiahs” ASAP.

Millennials.

They’re a dangerous group of young Americans who seem clueless and don’t have the faintest idea what the first 5 Amendments are…

…And who spend needless days on Facebook and Instagram.

Yet want free healthcare… free college… free housing… free guaranteed income… free EVERYTHING.

And you can bet millennials will get all the “free stuff” they want…

Why?

Because in the 2020 presidential election… millennials will call the shots. And you and I know they will NEVER vote for Donald Trump.

Let me explain…

Over the last 40 years, baby boomers (ages 52 to 70) have been the largest voting group in the U.S.

In the 2016 elections, baby boomers were still the largest voting group at 74 million strong, according to the Pew Research Center.

They were critical of President Trump’s rise, and kept FOX News afloat.

But by next year’s presidential election, boomers will slide down to 72 million…

At the same time, millennials will take over and become the largest voting group topping 73 million, based on projections from the U.S. Census Bureau.

In a nutshell…

Donald Trump Will Be Your Last President

By that I mean, he will be the last “culturally American” president for the remainder of your lifetime.

Because America is about to witness a 40-year millennial voting rule that will keep the Democrats and socialism in America for a very, very long time…

Beginning as early as this year.

It will be an unprecedented and disastrous time for America. A period you’ll be forced to live in…

Because millennials are a generation that aren’t used to being responsible…

And now?

They’re about to inherit the United States.

And they’re as anti-Trump as you can get. Anti-American even…

It’s such hypocrisy, because…

The very same capitalist and “culturally American” system that Democrats hate so much is what made America such a great nation, with vast resources and wealth.

All of which millennials now want for free.

If this country was a socialist nation from the signing of our Constitution… today we wouldn’t exist.

But these days socialism is chic and hip.

And it’s made its way to Congress with the likes of Rashida Tlaib and Ilhan Omar…

…Ayanna Pressley and radical “superstar” Alexandria Ocasio-Cortez who—a millennial herself—seems clueless about foreign policy, taxes, and the economy…

But don’t be surprised if Alexandria Ocasio-Cortez becomes the president of the United States… soon.

She’s got the support and “Robin Hood” image that young Democrats love, after all.

But the established Democrats running in 2020—Elizabeth Warren, Cory Booker, Kirsten Gillibrand, and Kamala Harris—are equally dangerous.

There’s a 90% chance one of those socialist politicians will be the next president of the United States come November next year.

And once Trump is gone… here are some socialist policies your retirement money is expected to pay for.

Here’s What the Socialist Government Plans to Do With Your Money by Next Year

Socialist Scheme #1:
Universal Basic Income (UBI)

Once the socialist government comes in, it will dole out free money to everyone, including immigrants. They call it Universal Basic Income (UBI).

I call it madness.

But you bet UBI is supported by Silicon Valley billionaires like Elon Musk and Mark Zuckerberg.

Facebook co-founder and billionaire Chris Hughes is on record telling CNBC that America should implement UBI immediately.

In Chicago, for example, lawmakers recently proposed legislation to provide 1,000 families with a $500 monthly stipend—no questions asked.

And just recently, the 27-year-old mayor of Stockton, California, Michael Tubbs, introduced a local UBI pilot program.

How much will UBI cost, and where will the money come from?

It would cost taxpayers $3.8 trillion a year, according to a new study done by investment management firm Bridgewater Associates.

That’s already 78% of all the taxes collected for social programs.

Any increase in taxes would require you to pay a level of taxation that would exceed anything in U.S. history, according to the Center on Budget and Policy Priorities

The only thing standing in the way of making UBI law is—as you guessed—Donald Trump…

Which is why Trump’s days are numbered.

But it gets worse…

Socialist Scheme #2:
Free-for-all Health Care:

It’s no secret that Bernie Sanders is the godfather of American socialism.

He received more millennial votes than Trump and Clinton combined.

And his ambitious free-for-all health plan is a disaster.

The Urban Institute and The Mercatus Center, both social and economic policy think tanks…

…Recently revealed that Bernie’s plan will cost the government $32 trillion over the decade.

The Tax Policy Center also ran the numbers. Bernie’s health care plan would, if unfunded, add a further $3 trillion a decade, in interest costs alone.

These are big numbers that make your head spin, I know. But the Democrats are embracing this plan as is.

But that’s not all…

Socialist Scheme #3:
Free College for
All and Forgive All Student Loans:

How about we magically pull out $1.4 trillion from somewhere to clear all college loan debt?

If you’re thinking, other people’s money will pay for it…

Then you’re right. It’s your money that will pay for it.

It will cost another $807 billion for Democrats’ free college scheme over the next decade.

Sad thing is… all the socialist presidential hopefuls for 2020 support free college for all.

This next one is a direct copy-cat from former Venezuelan president Hugo Chavez’s book.

Socialist Scheme #4:
The Largest Takeover of Private Wealth in Human History

Have you heard of the proposed Accountable Capitalism Act?

Here’s the long and short of it.

It’s a plan that’s been called a “federal takeover of the U.S. economy.”

And it gives the federal government the right to dictate how U.S. companies should manage their money…

And how to distribute profits too…

Just imagine… businesses that traditionally pay dividends to retirees… like Coca-Cola, Walmart, and Johnson & Johnson…

And retirement-friendly assets like Real Estate Investment Trusts (REITs) and employee stock repurchase plans…

Including 401(k) plans, IRAs, and other retirement accounts that are invested in stocks… all subject to a socialist government’s meddling.

Basically the government can “count your money” before you yourself touch a cent.

If successful, it would constitute the largest redistribution of private funds in American history.

Isn’t it funny how politicians can’t seem to balance a budget, or avoid a government shutdown…

Yet want a big say in running corporations.

In case you didn’t know, the Accountable Capitalism Act is Elizabeth Warren’s baby…

She is the same woman who’s running to become a socialist president in 2020. I hate to tell you this, but she could win.

Once Donald Trump is Booted Out of Office Next Year, These Major Threats Will Displace Families and Create Poverty

Add it all up and socialist policies will cost us a solid $40 trillion.

That’s more than the GDP of China, Russia, Germany, Canada, France, Brazil and Japan, combined.

Question is: How are they planning to fund these socialist programs..?

We all know how: More debt. More taxes. Cutting military funding. Abolishing the Immigration and Customs Enforcement department. Stealing from Social Security and Medicare…

Just take your pick….

No one said it better than former British Prime Minister Margaret Thatcher: “Socialist governments traditionally do make a financial mess. They always run out of other people’s money.”

In this case it will be YOUR money they’re coming after…

Prepare for…

Higher taxes on working-class Americans:

According to the Congressional Budget Office, one option for raising $34 trillion would require seizing over 70% of all corporate profits… including over 60% of all family income.

That could mean higher taxes on your 401(k)… even if you withdraw after 70 years.

With nearly 50 million Americans holding 401(k) plans, that’s a nice money pool for the socialist government.

But don’t think a 60% tax bracket is far-fetched or impossible…

Unless you’re living under a rock, I am sure you’ve heard of the Green New Deal…

It’s a set of expensive new policies for the “New Socialist America”…

…Pushed by Alexandria Ocasio-Cortez who is now on the finance committee of the House.

And a proposed 70% tax threshold for top earners is the only way to pay for it.

An opinion piece in the Washington Examiner reports this Green New Deal “is one of the most dangerous and extreme proposals offered in modern U.S. history. It’s the sort of thing you’d see in the Soviet Union, not the United States.

In short: Your money will be confiscated and disguised as a “tax.”

Your assets will be confiscated:

Don’t for a second think that asset confiscation is impossible.

It happened in 1933 when socialist president FDR forced everyone to turn in their gold at $20 an ounce…

Then they turned around and set the price at $30 an ounce. That’s 10 bucks on every ounce.

But let’s talk about today…

Do you know there’s a rule called Civil Asset Forfeit?

Under this rule, the state of Wyoming confiscated $91,800 from a musician named Phil Parhamovich… but never charged him with any crime.

Similar situations arose in Texas and elsewhere causing a federal judge to remark, “It’s victimizing innocent citizens who’ve done nothing wrong.”

Just imagine what will happen under a socialist government who’s looking to take from seniors to give to millennials…

Without warning, you could be locked out of your bank account, locked out of your brokerage account, locked out of your business, and even locked out of your own home.

And that comes with another burden…

Greedy lawsuits:

Any socialist government no doubt creates an environment where everyone thinks they’re entitled to your money.

With over 70% of the world’s lawyers operating in the U.S., expect lawsuits to be on steroids.

Imagine being sued for saying anything “politically incorrect” to someone, or just because you speak the truth.

Or because someone slipped in front of your house, even if they trespassed.

Or because you’ve held on to what’s rightfully yours and that, my friend, can be seen as an “injustice against the poor.”

Believe me, the socialists will find multiple ways to get your money.

Think of it.

There’ll be two major “devils” you’ll have to deal with.

The coming recession that could wipe out your savings… and socialism that will ensure hard-working Americans give up their own money… for a very long time.

Your payouts from Social Security and Medicare will also be slashed to fund other welfare projects for young voters.

Medication, food, everything will be controlled by government hacks… such as a socialist Democrat like Elizabeth Warren or Kamala Harris…

Who, by all accounts, could win the presidency as early as next year.

It’s time for you to prepare.

What You Can Do to Protect Yourself and Actually Make Money

So what can you do… to protect and possibly even grow your wealth through this crisis?

As I said earlier, my name is Nick Giambruno. I am Doug Casey’s chief analyst.

Doug Casey and I are constantly working to provide the very best market insights and asset protection practices to our followers.

In fact, we’ve outlined several simple steps you can take right now to protect yourself and your family.

These are steps Doug has already taken to safeguard his family’s well-being over the next few months and years as well…

First off…

You’ll need to make sure there’s a “safe” location you can go to when socialist riots hit your neighborhood.

Make sure you’ve got enough food, water, and medication. Also keep all important documents in a sealed bag.

The next step is to grow your wealth to sustain your survival over the long haul.

It’s important to get exposure to some of the most valuable assets on Earth, especially during a crisis.

Modern economies can’t run without huge amounts of oil, coal, copper, platinum, uranium, corn, rice, lumber, and iron ore.

These natural resources are so important, they’re often a matter of national security.

In fact, I’ve seen Doug and our readers pull gains like 656%… 800%… and 4,329% from some of these assets.

And while investments do carry risk and nothing in the market is guaranteed, you’re looking at the chance to stash away convenient extra cash for rainy days.

The next thing you’ll need is a perpetual income stream. That means setting yourself up to collect predictable income from specific businesses, according to law.

But not just any business… there are a handful of businesses that actually increase payouts during a recession or crisis…

Not forgetting…

You’ll also need to protect the purchasing power of your money from currency devaluation…

That would mean getting specific assurance with physical gold and silver.

Gold is a must-own asset through any financial crisis. Its value doesn’t depend on the health of the U.S. or any other economy.

For example, right after the financial crisis of 2008, gold soared from $732 to nearly $1,837 an ounce making some people rich.

The great thing is even if you store your gold locally, you can still participate in the global economy regardless of economic conditions at home.

Again these are simple steps you can take to safeguard your livelihood and grow your wealth at the same time.

Your best defense is to be prepared when everything comes crashing down…

Which is why Doug Casey and I wrote a comprehensive survival blueprint for concerned Americans.

It’s aptly called Casey Research’s Survival Handbook: Sidestep and Profit from America’s Socialist Financial Crisis.

And I’d like to send you a copy absolutely free.

Armed with this blueprint, you’ll have the resources to help you not only survive this coming crisis…

But also to prosper—under the radar—so your assets and wealth are safe and untouched.

Inside you’ll find details on…

  • How to legally open a foreign investment account that gives you exposure to some of the best assets abroad. (You don’t ever have to leave your house to open this account.)
  • The easiest and legal way to open a foreign bank account that protects your wealth from confiscation and out-of-control government hacks. You’ll be shocked to know which specific foreign banks to avoid, and which ones to use.
  • A specific U.S. account loophole that can be used to store investments away from prying eyes… in case the government makes a grab for retirement savings.
  • How to buy and store gold so that you can use it to survive, regardless of the economic condition at home. And how you can also use that gold as money when the dollar drops mercilessly.
  • How to participate in healthy overseas markets, without leaving your home, and much more.

Some Americans are still recovering from the perils of the 2008 financial crisis… yet we’re on the brink of another one…

Throw in socialism which will suck the lifeblood out of the country… and you have what could possibly be the end of working-class Americans.

The urgency to protect and find a clear path to long term survival is as important as breathing air…

Again this survival guide is yours absolutely free.

But that’s not all I will send you today. You’ll need…

Your Perpetual Income Stream, Even During a Crisis

If you believe in financial independence…

If you believe in expanding your wealth quietly, without flaunting it…

If you believe that a man has a right to his wealth, then by all means you need extra income in times of uncertainty…

How’s that possible?

One of the key ways to build your “empire of wealth” has been the same for centuries: owning enduring, high-quality assets that can pay out steady income over and over…

We’ve identified a “safe” way for you to quietly collect regular payments from $500 to $1,500 or more depending on the size of your position.

It’s an income source that’s been making payouts for—and get this—over one hundred years…

And this source even increased its payouts by 20% during the 2008-2009 recession.

Another of these iconic income sources has increased its payouts every year for over 40 years… regardless of what happens in the economy.

Just last year it set aside $14 billion to return to investors.

That’s the type of income source you want to own… so when the markets turn south, you’ll have a steady stream income coming in.

Think of it as your personal “goose” that lays an ever-increasing number of golden eggs.

Doug and I have established a “Proprietary Radar” to locate these income opportunities on your behalf.

And we’ve found two of the best payout streams you can tap into.

You’ll know how to begin collecting within weeks through a second survival report called: Casey Research’s Perpetual Income Streams.

Just like your first research guide, this second guide is yours free when you claim your survival package.

In fact these are the same survival guides I’m sending to members of our premium research service, The Casey Report.

It’s our flagship research service here at Casey Research.

Legendary Research Service Designed to Build and Protect Wealth

In the world of finance, stock picking, and asset protection, The Casey Report is as legendary as Doug Casey himself.

Let me explain…

Over 30 years ago Doug Casey wrote a book called Crisis Investing.

Doug’s book spent 10 straight weeks on the New York Times best-seller list. Doug also appeared on David Letterman, Larry King, Charlie Rose, and Regis Philbin…

Not surprisingly… Doug’s work was also featured in TimeForbesThe New York TimesBarron’s, and The Washington Post. Doug also made appearances on every major network you can think of… from CNN to C-SPAN to NBC.

And Doug’s been called “America’s most controversial millionaire” many times through his life… because he’s never afraid of speaking his mind. For instance…

  • Doug called the Democratic Party a “cesspool”…
  • He once refused to shake Dick Cheney’s hand and then went on explaining why he despised the former vice president right to his face…
  • He believes that America’s “civil war” wasn’t really about slavery and that there’d be far less racism today had the South been allowed to leave…
  • And he thinks that political correctness is ruining America…

“A wave of political correctness has washed over the world like a tsunami of raw sewage… it’s dangerous, dishonest, and destructive” – Doug Casey

But it’s Doug’s uncanny knack for forecasting and turning any crisis into a way to profit, that’s made him so popular with investors and hard working Americans.

In other words, Doug always makes the “big money calls” with near financial precision.

For example, in February 2001, during the dot-com bust, Doug told Casey Report subscribers that silver would enter another bull market.

At the time it was trading for $5 to $6 an ounce. By April 2011, it hit $51 an ounce—a near tenfold increase!

Doug even predicted which direction gold would move after the dot-com crash…

Those who followed Doug’s prediction could have pocketed a 407% profit.

And during that meltdown of 2008, Doug and his team made several recommendations that would later soar 405%… 234%… 102%.

How We Recommended Multiple Triple-Digit Gains from One Trip

Another example…

It was 2013. Cyprus was on life support with a banking crisis. Its stock market was down 98%.

I hopped on a plane, along with Doug Casey, to check out the situation and found opportunities most investors couldn’t see…

The result? Our readers saw two triple-digit winners and three double-digit gains from ONE TRIP to a crisis zone: A total 533% gain.

Of course it’s not from crises or recessions alone that we look for opportunities…

Doug and I help our readers understand how to make money whether the market is up or down… through boom times and down times.

It’s easy to see why some readers have sent us notes like these:

One of Doug’s readers named Carl L. recently told us, “I bought and just cashed out with a 3,100% profit. My mortgage is now paid off. Thanks, Doug.”

Linda C., who made 3,420% on one of Doug’s recommendations, wrote in to say: “I thought that your publication was for the rich. I was right, for it turned an ordinary dependent divorced woman into a financially independent woman.”

And Russell says, “The Casey newsletters are hands-down the most valuable of many newsletters I’ve sampled or subscribed to” and that they “provide an invaluable insight that cuts through the noise of so much other information I sift through on a daily basis.”

Like you, these readers value their freedom, and the right to build their wealth. But this right is about to be taken away, bit by bit…

Today, you’re a target because of your core values as a hard-working and cultural American.

It will only get worse once Trump is out.

Millions of Americans will lose their retirement and will barely get by in a socialist state…

You need Doug’s guidance more than ever.

That’s why I am ready to send you our survival report Casey Research’s Survival Handbook: Sidestep and Profit from America’s Socialist Financial Crisis and Casey Research’s Perpetual Income Report.

And they’re yours free of charge when you take a 60-day trial to The Casey Report.

In fact, I’d like to do better and add another report to your survival kit.

Here’s why…

Mount Your Defense and Profit at the Same Time

You need to get defensive right now because we’re also forecasting another financial storm that will wipe out millions of pension plans across the country.

It has to do with corporate bonds, which are about to burst wide open as the Fed raises interest rates.

The way a corporate bond works is simple: You loan money to a company; the company pays you back your original amount, plus interest.

So here’s what happened…

When interest rates were low, U.S. companies offered endless bonds to pension funds and investors…

Thinking they’d be able to pay back those bonds and the interest easily.

Soon it will be payback time…

And nearly $4.9 trillion of corporate bonds must be paid in due time.

But with interest rates rising towards 3%, and an economy heading towards a recession, it means one thing:

These “broke” companies won’t be able to pay back those pension funds, investors, and retirees who loaned them the money…

In other words, these bonds are now “high-risk.”

It’s only a matter of time before the bond market explodes, which will make this next recession even more catastrophic.

Let’s get defensive… AND also try to make some profits along the way.

There’s a simple and convenient way to do this in 10 minutes with the click of a mouse.

Doug and I will reveal the full profit details to you.

It’s all laid out in a third survival guide called: Decisive Profits from the Collapse of Bonds.

It can be yours free of charge just like your first two guides: Casey Research’s Survival Handbook: Sidestep and Profit from America’s Socialist Financial Crisis and Casey Research’s Perpetual Income Report.

You may have noticed by now, that one report compliments the other. That’s by design.

After your assets and savings are protected from prying eyes during the coming financial turmoil…

You’ll need a steady income stream to secure your financial peace of mind. Plus you need to get defensive when everything goes to hell.

Again, these reports are part of your “survival kit” that comes to you free of charge, when you try a subscription to The Casey Report, risk-free for the next 60 days.

Question is…

Why is The Casey Report Your Most Important Resource?

You see, these reports tell you exactly what protective steps to take now, plus the specific recommendations that could maximize your profits.

But you’ll also need to know when Doug and I recommend you exit those investments.

And you also need to know what defensive and survival measures to take on a timely basis because America is rapidly evolving into socialism… something we never thought we’d see…

You need to be constantly assessing the situation with forever evolving markets.

To survive peacefully, you must stay ahead of the curve. That’s where The Casey Report comes in.

Every day Doug Casey and I monitor the market… the economy… and the political landscape in and out of the U.S.

We do all the work on your behalf. And report directly to you through The Casey Report.

Each monthly issue gives a quick market overview and recommends exactly what and when you should buy, and when to sell for profits. And it includes any other intelligence you need immediately.

Should there be a move you need to make before the monthly issue comes out, you’ll get a quick email alert.

It’s all written in simple plain English, easy for anyone to understand regardless of investing experience or net worth.

You see, at Casey Research, we believe in personal independence and intellectual freedom.

We believe everyone deserves the right to come to their own conclusions about their personal finances and livelihood…

And that’s exactly what we want to help you achieve by doing all the work on your behalf.

It’s all reflected in what our readers have to say. Check this out…

Admiration for Doug:
“Made 500%. I admire what Doug’s done with his life, and what a guide he’s been to me.”-J. Bordner

Doug Helped Me Retire:
Doug’s picks have made me tons of money over the years, enough so that I have been “retired” since 1992… I “work” at home sitting in a recliner… My life consists of enjoying myself to the max. It may sound strange to some, but I have found my calling in life because Doug Casey showed me the way to do it.” Robert O.

5,800% Retirement Security:
“I owe much of my retirement security to taking a small [stock] at $0.27 per share and watching it climb to about $16.” —Will M.

By the way, Will’s gain was more than 5,800%! That’s enough to turn $25,000 into $1,475,000!

At this point you are probably thinking The Casey Report is expensive.

And it should be…

After all, had you followed Doug’s call before the 2008 financial recession, not only would you have watched the financial bloodbath from the sidelines…

But you could have banked gains like 405%… 234%… and 102% months later.

Something else that’s worth mentioning…

Many other newsletters out there just provide stock picks. But they won’t alert you to a financial catastrophe that could wipe out your retirement account or 401(k) within minutes…

Or give you hard intelligence that will protect and grow your wealth during a crisis.

The Casey Report does all that and more.

In short, The Casey Report is a valuable survival guide to you and your family.

Based on the timely research we provide, we could easily charge upward of $5,000 for a full year of The Casey Report.

I’ve seen many financial newsletters go for much more.

Yet, you won’t pay anywhere near $5,000 for The Casey Report.

That would be against our mission of showing as many people as we can how to gain financial freedom and protect their savings especially when they need it most.

Which is why we charge a lot less for The Casey Report.

In fact you may be surprised at this deal. And I’ll get to that in a bit…

But before I tell you about it, there’s something else you need right away.

It has to do with a fourth survival guide I’d like to send you.

The 500% Gold Investment

You see, socialism by itself is just one problem. With it comes with an even bigger headache: inflation.

Just ask Venezuela. It costs $150 for a dozen eggs over there. And $703 for a carton of milk as reported by the Business Insider.

It’s worse in Venezuela’s own currency.

Basic medication that normally costs 16 bolivares is now 1,500 bolivares.

Why such high prices?

It happens when a country expands its money supply to pay for social programs and welfare…

In the U.S., inflation has been on the rise for a very long time. Today $1 buys less than 20 cents did back in 1962.

Do you know the dollar has lost 97% of its value through your lifetime?

It will only get worse. And when that happens, just imagine the effect inflated prices will have on seniors and retirees in America.

Remember: Kellogg’s, Nestlé, and other food companies are hiking food prices already…

The cost of rent, medical insurance, and basic cost of living expenses are rising faster than wages…

Just imagine what will happen when the next recession hits… when Trump’s gone… and the socialist government takes over.

That’s where an “inflation-proof” investment comes in. And it has to do with gold.

Gold is the ultimate form of wealth insurance. It has preserved wealth through every kind of crisis imaginable.

It will preserve wealth during the next crisis, because gold prices historically soar as the dollar loses value.

Over the last 3 months alone we’ve seen gold prices jump from $1,206 an ounce to $1,319.

Today we’re letting you in on one of Doug’s “safe” gold secrets that returned over 500% within a 3 year span.

It’s one of those under-the-radar gold investments.

But the great thing is you can participate in this gold secret with the click of a mouse.

Everything is laid out in your fourth survival guide: The 500% Gold Investment.

And it’s yours free when you sign up for a 100% risk-free trial to The Casey Report today.

Now of course your four survival guides are hardly all you’ll get.

Designed for your added protection and convenience, you’ll also receive…

  • 12 Monthly Issues: The Casey Report arrives in your inbox every second Thursday of every month. Each issue includes a stock pick, market analysis, and portfolio updates.
  • The Casey Report Members-Only Portal: Instant access to all past issues and research reports in one convenient location. Get all the info you need at the click of a mouse.
  • Unrestricted Access to The Casey Report Model Portfolio: No need to keep track of all our recommended stocks yourself. With this model portfolio, you can see each of our picks, how well they are doing, and their buy-up to price.
  • Buy and Sell Alerts: Quick dispatches on all our recommendations so you can make the most profit possible.
  • Email Alerts: These are rapid response updates between issues. Should an unforeseen development affect our recommendations, we’ll recommend the next step immediately.
  • Your Own Customer Support System: You can call your concierge service for any help you may need concerning your subscription.
  • The Casey Report Investor Manual: This compendium breaks down Doug Casey’s strategy in simple words and helps you get started in no time.

And I’m not forgetting your full survival suite, compliments of yours truly and Doug Casey.

Bonus Report#1: Casey Research’s Survival Handbook: Sidestep and Profit from America’s Socialist Financial Crisis
A complete guide that gives you financial secrets to not only protect your money and assets during the coming crisis, but also how to make sound investments that grow your money under the radar.

Bonus Report #2: Casey Research Perpetual Income Report
Over the last 100 years, this investment source has paid steady income throughout recessions and boom times. It’s your “golden egg” retirement supplement through the next crisis.

Bonus Report #3: Decisive Profits from the Collapse of Bonds
With rising interest rates, the bond market is in a bubble. You’ll get full details on how to profit from the impending collapse of the bond markets within the next few months.

Bonus Report #4: The 500% Gold Investment
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That would be against our mission of showing as many people as we can how to gain financial freedom and protect what they’ve rightfully earned.

That’s why a yearly membership to The Casey Report is only $199.

But the socialist threats facing Americans today are real. I am sure you’ve seen the effects.

It will only get worse when the next recession kicks in and American families are displaced, creating sheer poverty.

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Major changes are taking place in America right now.

We expect a major market crash and recession that’s designed to expel President Trump from office… with a new socialist government coming in by next year.

Everything you’ve worked hard for will soon be controlled by democratic socialists.

Your 401(k)… your retirement savings… your house… Medicare and Social Security, could all be taken away.

Bread, milk, sugar, and even medication will be controlled by BIG government.

But these events don’t have to take you by surprise. And you shouldn’t be unprepared either.

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Sincerely,


Nick Giambruno
Chief Analyst, The Casey Report
April 2019

P.S. Just the other day Democratic presidential candidate Elizabeth Warren was asked, about her new tax plan on the wealthy.

She said with a straight face: “If you’re successful, part of the deal is you pay back.”

That’s clear confiscation in disguise.

A socialist government is coming in this country folks. You must act quickly to protect your wealth.

Take a look at your free reports for help—you have nothing to lose.Click Here to Claim Your Free Reports   

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Everything You Are Being Told About Saving & Investing Is Wrong

Let me start out by saying that I am all for any piece of advice which suggest individuals should save more. Saving money is a huge problem for the bulk of American’s as noted by numerous statistics. To wit:

“American have an average of $6,506 in credit card debt, according to a new Experian report out pthis week. But which expenses are adding to that balance the most? A full 23% of Americans say that paying for basic necessities such as rent, utilities and food contributes the most to their credit card debt. Another 12% say medical bills are the biggest portion of their debt.”

That $6500 credit card balance is something we have addressed previously as it relates to the ability of an average family of four in the U.S. to just cover basic living expenses.

“The ‘gap’ between the ‘standard of living’ and real disposable incomes is more clearly shown below. Beginning in 1990, incomes alone were no longer able to meet the standard of living so consumers turned to debt to fill the ‘gap.’ However, following the ‘financial crisis,’ even the combined levels of income and debt no longer fill the gap. Currently, there is a $3200 annual deficit that cannot be filled.”

This is why we continue to see consumer credit hitting all-time records despite an economic boom, rising wage growth, historically low unemployment rates.

Flawed Advice

The media loves to put out “feel good” information like the following:

“If you start at age 23, for instance, you only have to save about $14 a day to be a millionaire by age 67. That’s assuming a 6% average annual investment return.”

Or this one from IBD:

“If you’re earning $75,000, by age 40 you need 2.4 times your income, or $180,000, in retirement savings. Simple as that.” (Assumes 10% annual savings rate and a 6% annual rate of return)

See, it’s easy.

Unfortunately, it doesn’t work that way.

Let’s start with return assumptions.

Markets Don’t Compound

I have written numerous times about this in the past.

Let’s assume an investor wants to compound their investments by 10% a year over a 5-year period.

The ‘power of compounding’ ONLY WORKS when you do not lose money. As shown, after three straight years of 10% returns, a drawdown of just 10% cuts the average annual compound growth rate by 50%. Furthermore, it then requires a 30% return to regain the average rate of return required. In reality, chasing returns is much less important to your long-term investment success than most believe.”

When imputing volatility into returns, the differential between what investors were promised (and this is a huge flaw in financial planning) and what actually happened to their money is substantial over long-term time frames.

Here is another way to look at it.

If you could simply just stick money in the market and it grew by 6% every year, then how is it possible to have 10 and 20-year periods of near ZERO to negative returns?

The level of valuations when you start your investing journey is all you need to know about where you are going to wind up.

$1 Million Sounds Like A Lot – It’s Not

I get it.

$1 million sounds like a whole lot of money. It’s a nice, big, round number with lot’s of zeros.

In 1980, $1 million would generate between $100,000 and $120,000 per year while the cost of living for a family of four in the U.S. was approximately $20,000/year.

Today, there is about a $40,000 shortfall between the income $1 million will generate and the cost of living.

This is just a rough calculation based on historical averages. However, the amount of money you need in retirement is based on what you think your income needs will be when you get there and how long you have to reach that goal.

If you are part of the F.I.R.E. movement and want to live in a tiny house, sacrifice luxuries, and eat lots of rice and beans, like this couple, that is certainly an option.

For most there is a desire to live a similar, or better, lifestyle in retirement. However, over time our standard of living will increase with respect to our life-cycle stages. Children, bigger houses to accommodate those children, education, travel, etc. all require higher incomes. (Which is the reason the U.S. has the largest retirement savings gap in the world.)

If you are in the latter camp, like me, a “million dollars ain’t gonna cut it.”

Don’t Forget The Inflation

The problem with all of these “It’s so simple a cave man could do it” articles about “save and invest your way to wealth” is not only the variable rates of returns discussed above, but impact of inflation on future living standards.

Let’s set up an example.

  • John is 23 years old and earns $40,000 a year.
  • He saves $14 a day 
  • At 67 he will have $1 million saved up (assuming he actually gets that 6% annual rate of return)
  • He then withdraws 4% of the balance to live on matching his $40,000 annual income.

That pretty straightforward math.

IT’S ENTIRELY WRONG.

The living requirement in 44 years is based on today’s income level, not the future income level required to maintain the current living standard. 

Look at the chart below and select your current level of income. The number on the left is your income level today and the number on the right is the amount of income you will need in 30-years to live the same lifestyle you are living today.

This is based on the average inflation rate over the last two decades of 2.1%. However, if inflation runs hotter in the future, these numbers become materially larger.

Here is the same chart lined out.

The chart above exposes two problems with the entire premise:

  1. The required income is not adjusted for inflation over the savings time-frame, and;
  2. The shortfall between the levels of current income and what is actually required at 4% to generate the income level needed.

The chart below takes the inflation-adjusted level of income for each brackets and calculates the asset level necessary to generate that income assuming a 4% withdrawal rate. This is compared to common recommendations of 25x current income.

If you need to fund a lifestyle of $100,000 or more today. You are going to need $5 million at retirement in 30-years.

Not accounting for the future cost of living is going to leave most individuals living in tiny houses and eating lots of rice and beans.

Things You Can Do To Succeed

The analysis reveals the important points young investors should consider given current valuation levels and the reality of investing over the long-term:

  • Pay yourself first, aggressively. Saving money is how you pay yourself for working. 30% is the real magic number. 
  • It’s all about “cash flow.” – you can’t save if you spend more than you make and rack up debt. #Logic
  • Budget – it’s a four-letter word for most Americans, but you can’t have positive cash flow without it.
  • Get off social media – one of the biggest impacts to over-spending is “social media” and “keeping up with the friends.” If advertisers were not getting your money from social media ads they wouldn’t advertise there. (Side benefit is that you will be mentally healthier and more productive by doing so.)
  • Pick up a side hustle, or two, or threeOnce you drop social media it will free up 4-6 hours a week, or more, with which you can increase your income. There are tons of apps today to let you earn extra money and “No” it’s not beneath you to do so. 
  • Get out of debt and stay that way. No, you do not need a credit card to build credit.
  • If you can’t pay cash for it, you can’t afford it. Do I really need to explain that?
  • Future inflation expectations must be carefully considered.
  • Expectations for compounded annual rates of returns should be dismissed 

Don’t misunderstand me….I love ANY program that encourages individuals to get out of debt, save money, and invest. 

Period. No caveats.

There is one sure-fire way to go from “being broke” to being “rich” – write a book on how to do it and sell it to broke people. (See “Broke Millennial” and “Millennial Money.”– but hey that’s capitalism and you can do it too.)

But, if investing were as easy as just sticking your money in the market, wouldn’t “everyone” be rich?

It is always interesting reading article comments as they are generally full of excuses why saving money and building wealth can’t be done. The general thesis is that as long as you have social security (which is threatening payout cuts over the next decade) and/or a pension (which only applies to 15% of the country currently,) then you don’t need to save as much. 

Personally,  I don’t want my retirement based on things which are a) underfunded 2) subject to government-mandated changes, and 3) out of my control. In other words, when planning for an uncertain future, it is always optimal to hope for the best but plan for the worst.

However, the premise of the article was to clear up the disconnect between the cost of living today and 30-years into the future, as well as the amount of money needed to be financially independent for the entire lifespan after retirement.

Yes, we can all get by on less, in theory. But an examination of retirement savings statistics and the cost of healthcare in retirement (primarily due to poor healthcare habits earlier in life) doesn’t necessarily support those comments that saving less and being primarily dependent on Social Security is optimal. 

The Investing Problem

While “Part One”  focused on the amount savings required to sustain whatever level of lifestyle you choose in the future, we also need to discuss the issue of the investing side of the equation. 

Let’s start with a comment made on Part-One of this series:

“If you want to play it safe just buy a no-load, low fee, index fund and index into it regularly. Pay yourself first. Let the power of compounding do its magic.”

See, it’s so easy. Just buy and index fund, dollar cost average into it, and “bingo,” you have got it made. 

Okay, I’ll bite. 

If that is the case, then why this?

“More than half of Americans who were adults amid the Great Recession said they endured some type of negative financial impact, Bankrate found. And half of those people say they’re doing worse now than before the crisis.”

Or this:

“According to a brand new survey from Bankrate.com, just 37% of Americans have enough savings to pay for a $500 or $1,000 emergency. The other 63% would have to resort to measures like cutting back spending in other areas (23%), charging to a credit card (15%) or borrowing funds from friends and family (15%) in order to meet the cost of the unexpected event.”

As I stated in the previous article, I am all for any program and process which encourages people to save and invest for their retirement. My hope is that we can clear up some of the “misconceptions” to improve the chances that retirement years are not spent collecting food stamps and shopping at the local “Goodwill” store, 

Let’s start by clearing up the numerous erroneous comments on the previous article with respect to returns and investing.

Compound & Average Are Not The Same Thing

” Markets have returned roughly 10% per year of compounded growth, INCLUDING the down years.”

What the commenter is confused about is, as stated previously, is that markets have variable rates of returns. Historically, over the last 120 years, the market has AVERAGED roughly 10% annually. (6% from capital appreciation which is equivalent to the long-term economic growth rate, and 4% from dividends. Today, economic growth is averaging 2%ish since 2000 and dividends are 2% so do the math for future return expectations. 2+2=4%. (Since 2000, average growth has been just a bit more than 5% and the next bear market will roll that average back to 4%)

The chart below shows the difference in nominal values of $1000 invested on an actual basis versus a compounded rate of return of 6% (For the example we are using capital appreciation only.)

Mathematically, both of those lines equate to a 6% return.

The top line is what investors THINK they will get (compound returns.) The bottom line is what they ACTUALLY get 

The difference is when losses applied to invested dollars. The periods of time spent making up previous losses is not the same as growing money. (Bonds, which mature at face value and have a fixed coupon, have had the same return as stocks since the turn of the century.)

This “math problem” is the reason there is a pension fund crisis in the U.S. The massively underfunded pension system was caused by depending on 7%-annual returns in order to reduce saving rates.

Variable Rates Of Return Change The Game

In Part 1, we laid out a simple example of various current incomes adjusted for inflation 30-years into the future. I am presenting the chart again so the subsequent charts have context.

Now, let’s look at the impact of variable rates of returns on outcomes.

Let’s assume someone starts a super aggressive program of saving 50% of their income annually in 1988. (This was at the beginning of one of the greatest bull market booms in history giving them every advantage of front loaded returns and they get the benefit of the last 10-year long bull market.)  Since our young saver has to have a job from which to earn income to save and invest, we assume he begins his journey at the age of 25.

The chart below starts with an initial investment of 50% of the various income levels shown above with 50% annual savings into the S&P 500 index. The entire portfolio is on a total return basis and adjusted for inflation. 

Wow, they certainly saved a lot of money, and they met the amount need to completely replace their inflation-adjusted living standards for the rest of their lives.

Unfortunately, our young saver didn’t actually retire all that early.

Despite the idea that by saving 50% of one’s income and dollar-cost averaging into index funds, it still took until April of 2017 to reach the retirement goal. Yes, our your saver did retire early at the age of 54, and it only took 29-years of saving and investing 50% of their salary to get there.

Given the realities of simply maintaining a rising standard of living, the ability for many to save 50% of their income is likely unrealistic. If it wasn’t then we would not have statistics like this:

Instead, the next chart shows the same data but starting with 10% of our young saver’s income and adding 10% annually. (Which is the “Magic Number” for success)

Okay, it’s not so “Magic.” 

There are two important things to note in the charts above. 

The first is that saving 10% annually leaves individuals far short of their retirement needs. The second is that despite two massive bull market advances, it was the lost 13-year period from 2000 to 2013 which left individuals far short of their retirement goals. 

What the majority of investors misunderstand when throwing around numbers like 6% average returns, 10% compound returns, etc., is that losses matter, and they matter a lot.

Here are the TWO most important lessons:

  1. Getting back to even is not the same as making money.
  2. The time lost in reaching your financial goals can not be recovered.

It should be relatively obvious the last decade of a massive, liquidity driven advance will eventually suffer much the same fate as every other massive bull market advance in history. This isn’t a message of “doom,” but rather the simple reality that every bull market advance must be followed by a reversion to remove the excesses built up during the previous cycle.

The chart below tells a simple story. When valuations are elevated (red), forward returns have been low and market corrections have been exceptionally deep. When valuations are cheap (green), investors have been handsomely rewarded for taking on investment risk.

With valuations currently on par with those on the eve of the Great Depression and only bettered by the late 1990’s tech boom, it should not be surprising that many are ringing alarm bells about potentially low rates of return in the future. It is not just CAPE, but a host of other measures including price/sales, Tobin’s Q, and Equity-Q are sending the same message.

The problem with fundamental measures, as shown with CAPE, is that they can remain elevated for years before a correction, or a “mean reverting” event, occurs. It is during these long periods where valuation indicators “appear” to be “wrong” that investors dismiss them and chase market returns instead.

Such has always, without exception, had an unhappy ending. 

Things You Can Do To Succeed

There are many ways to approach managing portfolio risk and avoiding more major “mean reverting”events. While we don’t recommend or suggest that you try to “time the market” by being “all in” or “all out,”  it is critical to avoid major market losses during the accumulation phase. As an example, the chart below shows how using a simple 12-month moving average to avoid major drawdowns can impact long-term returns. We used the same 10% savings rate as above, dollar cost averaged into an S&P 500 index on a monthly basis, and moved to cash when the 12-month moving average is breached.

By avoiding the drawdowns, our young saver not only succeeded in reaching their goals but did so 31-months sooner than our example of saving 50% annually. It doesn’t matter what methodology you use to minimize risk, the end result will be same if you can successfully navigate the full-cycles of the market.  

You Can Do This

Last week, we laid out some suggestions on what you can do to build savings. This week will add the suggestions for the investing side of the equation.

  • It’s all about “cash flow.” – you can’t save if you don’t have positive cash flow.
  • Budget – it’s a four-letter word for most Americans, but you can’t have positive cash flow without it.
  • Get off social media – one of the biggest impacts to over spending is “social media” and “keeping up with the Jones’.” If advertisers were getting your money from social media they wouldn’t advertise there.
  • Get out of debt and stay that way. No, you do not need a credit card to build credit.
  • If you can’t pay cash for it, you can’t afford it. Do I really need to explain that?
  • Expectations for future returns should be downwardly adjusted. (You aren’t going to make 6% annually)
  • The potential for front-loaded returns going forward is unlikely.
  • Control investment behaviors and emotions that detract from portfolio returns is critical.
  • Future inflation expectations must be carefully considered.
  • Account for “variable rates of returns” in your plan rather than “average” or “compound.” 
  • Understand risk and control drawdowns in portfolios during market declines.
  • Save money regularly, invest when reward outweighs the risk. Cash is always an alternative.

Lastly, remember that “time” is your most valuable commodity and is the only thing we can’t get more of. 

Just recently, CNBC ran a story discussing the “Magic Number” needed to retire:

“For many people who adhere to the mission, there’s a savings target they want to hit, at which point they will have reached financial independence, as they define it. It’s called their FIRE number, and typically, it’s equal to 25 times a household’s annual spending, invested in low-cost, passive stock funds. Many wannabe-early retirees aim to save between $1 million and $2 million.”

This was the savings level we addressed in part one, which is erroneous because it is based on today’s income-replacement level and not the future inflation-adjusted replacement level, as it requires substantially higher savings levels. To wit:

“The chart below takes the inflation-adjusted level of income for each bracket and calculates the asset level necessary to generate that income assuming a 4% withdrawal rate. This is compared to common recommendations of 25x current income.”

“If you need to fund a lifestyle of $100,000 or more today. You are going to need $5 million at retirement in 30-years.

Not accounting for the future cost of living is going to leave most individuals living in tiny houses and eating lots of rice and beans.”

The Cost Of Miscalculation

As noted in the CNBC article above, it is recommended that you invest your savings into low-cost index funds. The assumption, of course, is that these funds will average 8% annually. As discussed in Part One, markets don’t operate that way. 

“When imputing volatility into returns, the differential between what investors were promised (and this is a huge flaw in financial planning) and what actually happened to their money is substantial over long-term time frames.”

During strongly trending bull markets, investors tend to forget that devastating events happen. Major events such as the “Crash of 1929,” “The Great Depression,” the “1974 Bear Market,” the “Crash of ’87”, the “Dot.com” bust, and the “Financial Crisis,” etc. often written off as “once in a generation” or “1-in-100-year events.” However, these financial shocks have come along much more often than suggested. Importantly, all of these events had a significant negative impact on an individual’s “plan for retirement.”

It doesn’t have to be a “financial crisis” which derails the best laid of financial plans either. An investment gone wrong, an unexpected illness, loss of job, etc. can all have devastating impacts to future retirement plans. 

Then there is just “life,” which tends to screw up things without a tragedy occurring. 

Making the correct assumptions in your planning is critical to your eventual success.

Your Personal Returns Will Be Less Than An “Index”

One of the biggest mistakes made is assuming markets will grow at a consistent rate over the given time frame to retirement. As noted, there is a massive difference between compounded returns and real returns as shown above. Furthermore, the shortfall is compounded further when you begin to add in the impact of fees, taxes, and inflation over the given time frame.

The chart below shows what happens to a $1000 investment from 1871 to present, including the effects of inflation, taxes, and fees. (Assumptions: I have used a 15% tax rate on years the portfolio advanced in value, CPI as the benchmark for inflation and a 1% annual expense ratio.)

There are other problems with chasing an “index” also:

  • The index contains no cash
  • An index has no life expectancy requirements – but you do.
  • It doesn’t have to compensate for distributions to meet living requirements – but you do.
  • It requires you to take on excess risk (potential for loss) in order to obtain equivalent performance – this is fine on the way up, but not on the way down.
  • It has no taxes, costs or other expenses associated with it – but you do.
  • It has the ability to substitute at no penalty – but you don’t.
  • It benefits from share buybacks (market capitaliziaton) – but you don’t.

As an individual you have very little in common with a “benchmark index.” Investing is not a “competition” and treating it as such has had disastrous consequences over time. 

Financial Planning Gone Wrong

I know, you still don’t believe me.  Let’s use CNBC’s example and then break it down.

For instance, imagine a retiree who has a $1,000,000 balanced portfolio, and wants to plan for a 30-year retirement, where inflation averages 3% and the balanced portfolio averages 8% in the long run. To make the money last for the entire time horizon, the retiree would start out by spending $61,000 initially, and then adjust each subsequent year for inflation, spending down the retirement account balance by the end of the 30th year.”

Kitces Spending Drawdown 071116

This assumption on expanding inflationary pressures later in retirement is correct, however, it doesn’t take into account the issue of taxation. So, let’s adjust the chart and include not only the impact of inflation-adjusted returns but also taxation. The chart below adjusts the 8% return structure for inflation at 3% and also adjusts the withdrawal rate up for taxation at 25%.

By adjusting the annualized rate of return for the impact of inflation and taxes, the life expectancy of a portfolio grows considerably shorter. 

However, we must also consider the impact of variable rates of returns in retirement as well.

The Impact Of Variability

Over the last 120-years, the market has indeed averaged 8-10% annually. Unfortunately, you do NOT have 90, 100, or more years to invest. All that you have is the time between today and when you want to retire to reach your goals. If that stretch of time happens to include a 12-15 year period in which returns are flat, which happens with some regularity, the odds of achieving goals are massively diminished.

But what drives those 12-15 year periods of flat to little return? Valuations.

Understanding this, we can use valuations, such as CAPE, to form expectations around risk and return. The graph below shows the actual 30-year annualized returns that accompanied given levels of CAPE.

As evidenced by the graph, as valuations rise future rates of annualized returns fall. This should not be a surprise as simple logic states that if you overpay today for an asset, future returns must, and will, be lower.

Math also proves the same. Capital gains from markets are primarily a function of market capitalization, nominal economic growth plus the dividend yield. Using the Dr. John Hussman’s formula we can mathematically calculate returns over the next 10-year period as follows:

(1+nominal GDP growth)*(normal market cap to GDP ratio / actual market cap to GDP ratio)^(1/10)-1

Therefore, IF we assume that

  • GDP maintains, 4% annualized growth indefinitely
  • Which means recessions have been eliminated, AND
  • Current market cap/GDP stays flat at 1.25, AND
  • The current dividend yield remains at 2%:

We would get forward returns of:

(1.04)*(.8/1.25)^(1/30)-1+.02 = 4.5%

These are some “big” assumptions. If we assume inflation remains stagnant at 2%, as the Fed hopes, such would mean a real rate of return of just 2.5%. This is far less than the 8-10% rates of return currently being counted on in many of the financial plans I see regularly. 

Let’s take this a step further. For the purpose of this article, we went back through history and pulled the 4-periods where trailing 10-year average valuations (Shiller’s CAPE) were either above 20x earnings or below 10x earnings. We then averaged those periods and ran a $1000 investment going forward for 30-years on a total-return, inflation-adjusted, basis.

Not surprisingly, the starting level of valuations has the greatest impact on your future results.

If we apply the math of valuations to our example, a much different, and far less favorable, financial outcome emerges – the retiree runs out of money not in year 30, but in year 18.

With current valuations elevated, and total returns in excess of 300% over the last decade, planning on using the stock market to make up for a savings short-fall may be misguided. This is the same trap that pension funds all across this country have fallen into and are now paying the price for.

What Your Financial Planning Should Consider

The analysis above reveals the important points individuals should consider in their financial planning process:

  • Expectations for future returns and withdrawal rates should be downwardly adjusted.
  • The potential for front-loaded returns going forward is unlikely.
  • The impact of taxation must be considered in the planned withdrawal rate.
  • Future inflation expectations must be carefully considered.
  • Drawdowns from portfolios during declining market environments accelerates the principal bleed. Plans should be made during up years to harbor capital for reduced portfolio withdrawals during adverse market conditions.
  • The yield chase over the last 8-years, and low interest rate environment, has created an extremely risky environment for retirement income planning. Caution is advised.
  • Expectations for compounded annual rates of returns should be dismissed in lieu of plans for variable rates of future returns.

Investing for retirement, no matter what age you are, should be done conservatively and cautiously with the goal of outpacing inflation over time. This doesn’t mean you should never invest in the stock market, it just means that your portfolio should be constructed to deliver a rate of return sufficient to meet your long-term goals with as little risk as possible.

  1. Save More And Spend Less: This is the only way to ensure you will be adequately prepared for retirement. It ain’t sexy, or fun, but it will absolutely work.
  2. You Will Be WRONG. The markets go through cycles, just like the economy. Despite hopes for a never-ending bull market, the reality is “what goes up will eventually come down.”
  3. RISK does NOT equal return. The further the markets rise, the bigger the correction will be. RISK = How much you will lose when you are wrong, and you will be wrong more often than you think.
  4. Don’t Be House Rich. A paid off house is great, but if you are going into retirement house rich and cash poor, you will be in trouble. You don’t pay off your house UNTIL your retirement savings are fully in place and secure.
  5. Have A Huge Wad. Going into retirement have a large cash cushion. You do not want to be forced to draw OUT of a pool of investments during years where the market is declining. This compounds the losses in the portfolio and destroys principal which cannot be replaced.
  6. Plan for the worst. You should want a happy and secure retirement – so plan for the worst. If you are banking solely on Social Security and a pension plans, what would happen if the pension was cut? Corporate bankruptcies happen all the time and to companies that most never expected. By planning for the worst, anything other outcome means you are in great shape.

Most likely what ever retirement planning you have done is most likely overly optimistic.

Change your assumptions, ask questions, and plan for the worst. 

The best thing about “planning for the worst” is that all other outcomes are a “win.”

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Video: First Reset Has Begun, USD To Lose 50%: Bill Holter & Jim Sinclair – Gold To $87,000 per ounce

Legendary investor Jim Sinclair and his business partner Bill Holter say Gold is going much higher. It’s a mathematical certainty. Sinclair says, “You need to look at gold, not a speculation, but as a savings account. If the dollar gets sliced in half, you basically double the value (of your gold) if not more. I think much more. . . .

In the second reset, that will take gold to a price where it will balance the ability to pay global debt. That’s the major move coming forward. Right now, we are definitely going back to the $1,850 and $1,925 area per ounce for gold. The second reset, you can pick any price you want for gold. Pick a high price.”

With the national debt officially at $22 trillion, and the additional “missing” $21 trillion discovered by Economics Professor Mark Skidmore at Michigan State University in 2017, you have a huge amount of debt and dollars floating around. This fact makes Sinclair’s prediction of $50,000 per ounce gold a few years ago look conservative.

Bill Holter has done the math and says it simply must go much higher. Holter explains, “If you take the 8,300 tons the U.S. supposedly has, and I did this math last year when the official national debt was approaching $21 trillion, gold would need to be $87,000 per ounce to cover just the on books debt. I am not talking about the “missing” money, not future guarantees, pensions, Social Security and things like that. . . . So, the number is $87,000 per ounce for gold or multiples of that. Open the Video

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Video: WARNING: The Coming Food Crisis | Be Ready 2019

Are you ready for the collapse of the agricultural system? In this video I go over all of the factors which threaten the global food supply.

Consumerism, overpopulation, urbanization, pollution, biodiversity, monoculture, farming practices, water shortages, herbicides, pesticides, fungicides, overfishing, geopolitics, bee extinction, monopoly (big agri), genetically modified food, global warming, soil erosion, land loss. drought.

These are just some of the many challenges to our way of life. GET READY. Open the Video

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Do We Face A Global Food Disaster?

No, this is not at all an endorsement of the apocalyptic scenarios of AOC or that famous young Swedish climate expert, Greta. It is, however, a look at unusual weather disasters in several key growing regions from the USA to Australia, the Philippines and beyond that could dramatically affect food availability and prices in the coming year. That in turn could have major political implications depending on how the rest of the growing season develops.

USA Midwest Waterlogged

According to the latest May 20 report of the National Agricultural Statistics Service (NASS) of the US Department of Agriculture, corn and soybean crops are well behind the planting growth levels normal this time of the planting season. They report that only 49% of all planned corn acreage in the US has been planted compared with 78% at this time a year ago. Of that only 19% has yet emerged from the ground compared to 47% in May 2018. In terms of soybeans, barely 19% of crops have yet been planted compared with 53% a year before. Rice acreage planted is down to 73% compared to 92% a year ago in the six US rice-growing states. Of course, should weather dramatically improve the final harvest numbers could improve. It is simply too early to predict.

The USA is by a wide margin the world largest soybean producer with 34 percent of the world’s soybean production and 42% of world exports prior to the China trade battles. The US is also the world largest corn or maize producer, almost double China, the number two. A serious harvest failure in these two crops could significantly affect world food prices, leaving aside the unfortunate fact that almost all US soybeans and corn are GMO crops. They are mainly used in animal feed.

A major factor in the disruption of the US Midwest growing season is the fact that the past 12 months have seen the greatest precipitation levels since the US Government began keeping statistics in 1895, according to the US NOAA National Centers for Environmental Information. Record snowfall followed by abnormally heavy rains are the reason.

Noteworthy is the fact that a strong Pacific El Niño was in play during 2015-16 and a new El Niño has been confirmed this past winter, somewhat earlier than normal. Precisely how that affected the current weather is not yet clear. El Niño is the periodic warming of the equatorial eastern and central Pacific Ocean.

Connected with solar activity, not manmade factors, it can shift global weather patterns over a period of months, bringing the possibility of more warm, cold, wet or dry weather in parts of the world. They occur in cycles every several years, usually every two to seven years, and it is notable that there is a confirmed, if relatively weak El Nino which is expected to reach peak this month of May. The NOAA in April estimated that the current El Niño conditions are likely to continue through the Northern Hemisphere for spring 2019 (~80% chance) and summer (~60% chance).

Australia and Philippines Severe Drought

While the Midwest USA farm-belt is waterlogged, other regions of the globe suffer drought, most notably, Australia, a major grain producer. For the first time since 2007 Australia is being forced to import wheat, mainly from Canada. Last year drought caused a 20% crop harvest reduction. The Government has issued a bulk import permit to deal with the situation. Current wheat harvest estimates are for only 16 million metric tons, half of what it was two seasons ago. Australia is in recent years the number five world wheat export nation.

Adding to the shortfall of grains, The Philippines is experiencing a major drought since February 2018, which is devastating the current rice crop. Although the country is not one of the world top rice producers—India, Thailand, Vietnam and Pakistan comprise a total of some 70% all rice export—it has significant political impact on the troubled country.

Another country being hit by severe drought is North Korea. There rainfall so far this year is lowest since 1982. State media reports that a “severe drought has been lingering in all parts” of the country. The average precipitation since January is only 42.3% of the average annual precipitation of 5 inches. This comes as the country experiences significant food shortages. While data is likely politicized, effect of international sanctions do not help.

While these significant shortfalls are still not grounds for declaring global emergency, notably they take place at the same time the Peoples’ Republic of China is in the midst of the worst infestation of deadly African Swine Fever across the entire China pig population. USDA estimates that as many as 200 million pigs must be slaughtered this year if the contagion is to be at all contained. China is the world’s largest pig producer by far with some 700 million. As if this were not bad enough, the country is being hit by a plague of Fall Armyworms which could devastate crops such as corn or soybeans across China.

This all does not take into account the various warzones around the world from Yemen to Syria to the Congo where agriculture production has been devastated as a casualty of war.

Russia as New Grain Power?

These current crop difficulties or possible major harvest shortfalls could be a major advantage to Russia, the country which, since imposition of US and EU sanctions in 2014, has emerged in the past three years to become the world’s largest wheat exporter, far surpassing both Canada and the United States. This current 2019/2020 harvest year, Russia is estimated to export a record 49.4 million tons of wheat, some 10% above a year ago. Last year Russia accounted for 21% of total world wheat exports compared with around 14% for the USA and about the same for Canada.

Western sanctions on Russia have had the interesting effect of forcing the government to take measures to become self-sufficient in food production. The Government banned GMO plantings or imports in 2016, and enjoys some of the most productive black earth soils on the planet. At least in the short term, Russia stands well suited to step in to address the various harvest shortfalls in the world grain markets.

While it is unlikely that it will be asked to sell grain to the US, were that to happen, it would be a major historic irony. During the Soviet harvest failures of the early 1970’s it was Secretary of State Henry Kissinger who orchestrated, with the complicity of Cargill and the grain cartel, sale of tons of grain to the USSR at enormously inflated prices in what came to be called the Great Grain Robbery, sending grain prices in the Chicago commodity exchanges to 125 year highs. Combined with the 1973-74 OPEC 400% oil price shock, one in which the sneaky diplomacy of the same Kissinger played a central role, food and oil were responsible for the great inflation of the 1970’s, not the wage demands of American or European workers as we were told.

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America Will Lose The Trade War Because That Is What Globalists Want To Happen

Times of great political and social crisis can almost always be linked back to a common root cause – false paradigms. There are many people out there who have no clue what this phrase means, just as they have no clue what the phrase “controlled opposition” means. Some of these people are new activists to the liberty movement who recently joined because of the fervor of the Trump presidential campaign. They think the world of sovereignty and nationalism revolves around Trump, because frankly, they have been duped by a false paradigm themselves.

False paradigms are a base tactic of what is known as “4th Generation Warfare”. The purpose of 4th Gen warfare is described in the document ‘From Psyop To Mindwar’. A document circulated within the DoD by the 7th Psychological Operations Group and written by now former General Paul Vallely (spelled “Valley” in the document) and now former Lt. Colonel Michael Aquino (a self professed satanist, believe it or not). I recommend it as a means to understand how globalists tend to think, how they use division to conquer populations, and to come to terms with the fact that these people are not held in check by empathy, morality or reason.

As far as 4th Gen warfare is concerned, Mindwar describes a method of psychological manipulation and propaganda used by governments and militaries as a means to turn a target population against itself. The goal is to win a war against a group of people by causing them to destroy each other so that the government does not have to combat them directly.

False paradigms are a premier tool for pursuing this outcome. They are achieved by dividing a population through false leadership, fake and sometimes real outside threats, as well as manufactured crisis events. Globalist institutions and the political puppets they control use false paradigms as a means to distract the public away from their criminal endeavors. While we are focused on the political Left, or the political Right, or the Russians, or the Iranians, or the Chinese, they are exploiting our fear and doubt to gain more centralization and more power.

For globalists, the great prize is, of course, OPEN global economic management (rather than covert management), a one world currency and cashless society, as well global government. They want a veritable worldwide feudal plantation state – and they want the masses to embrace it willingly, or perhaps even beg for it. To obtain this prize, they will need a considerable economic disaster. The US economy and the dollar would have to be undermined, for Americans would not consent to global governance as long as our society remains relatively affluent and comfortable.

But how is this being accomplished by the elites…? And, what does the trade war have to do with their plans?

Global Banking Elites And The Controlled Demolition Of The US

I have been writing extensively on the controlled demolition of the US economy for some time now. In January of 2018 I predicted in my article ‘Party While You Can – Central Bank Ready To Pop The Everything Bubble’ that Jerome Powell and the Federal Reserve would pursue policy tightening and would continue until the bubble in fundamentals, corporate debt, consumer debt, housing, retail, stock markets, etc. collapsed. So far I have been proven correct; the fundamentals are plunging, and only stock markets remain. In the 2nd quarter of 2019 the Fed is still cutting assets exponentially from its balance sheet and still refuses to pull interest rates back from their neutral rate of inflation, despite the predictions of many in the mainstream and alternative media.

The Fed has used the tactic of addictive stimulus measures and artificially low interest rates to create massive financial bubbles in the past. And, they almost always use tightening policies in times of economic weakness to deliberately pop those bubbles. For example, this is exactly what happened at the onset of the Great Depression. As former Fed Chairman Ben Bernanke openly admitted in 2002 in an address in honor of Milton Friedman:

“In short, according to Friedman and Schwartz, because of institutional changes and misguided doctrines, the banking panics of the Great Contraction were much more severe and widespread than would have normally occurred during a downturn.

Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”

And yet, it IS happening again today. As the economy nosedives, banking institutions buy up more hard assets and consolidate more power, and each time global economic management is suggested as a possible solution to the very crisis they created.

My question has never been “Will there be a crash?” A crash of the US is mathematically inevitable, it is happening now in accelerated fashion, and has been progressing in various ways since 2008. Instead my question has always been “How do the globalists plan to get away with it?”

In my article ‘Trump Trade Wars A Perfect Smokescreen For A Market Crash’, published in March 2018, I outlined exactly how they plan to get away with it. In that article I examined the strange number of similarities in policy and politics between Donald Trump and Herbert Hoover, including the use of large scale tariffs right before the collapse of the US financial system. While it was the Federal Reserve’s interest rate increases into weakness that exacerbated and prolonged the Great Depression for many years, it was Herbert Hoover’s policies (and sometimes the gold standard) that were blamed for the crash.

In other words, Donald Trump is following almost the exact same path as Herbert Hoover, and Trump’s trade war with China is being used by the banking elites as cover for their sabotage of the US economy. In the end, it will be Trump and all of his “populist” followers that will get the blame for the destabilization of our financial structure. The central bankers have a perfect scapegoat.

Trump And The False Left/Right Paradigm

But how could the banking elites and globalists possibly predict Trump’s behavior in order to take advantage of it? Well, if you look at Trump’s background as well as the number of elites he has placed within his own cabinet, the reality if the situation becomes clear: Trump is a puppet, and always has been.

In my article ‘Trump Is A Pied Piper For The New World Order’ I outlined Trump’s history with the banking elites, including his relationship with Rothschild banking agent Wilber Ross, who bailed Trump out of his debts and saved him from the effects of bankruptcy in the 1990’s. Trump’s biggest campaign promise in 2016 was to “drain the swamp” in Washington D.C. of the financial elitists and globalists that Hillary Clinton was so closely tied to. But, when he entered the White House, he made Wilber Ross his Secretary of Commerce, hired on Goldman Sachs goons like Steven Mnuchin and Gary Cohn, and he has brought warmongering psychopathic think tank members like John Bolton and Mike Pompeo into his cabinet.

The globalists don’t have to predict Trump’s behavior, they dictate Trump’s behavior. Thus, the false left/right paradigm reigns supreme once again; the same paradigm many Trump followers thought they were escaping by rallying against a Clinton presidency.

Current Trump cheerleaders completely ignore this fact, however. I have not seen a single one of them confront the issue of Trump’s cabinet or his associations with the Rothschilds. They either ignore it outright, or they claim Trump is “keeping his enemies close” or “using their expertise to free America”. This is insanity, but it showcases the power that false paradigms have. Conservatives were so afraid of Clinton that they jumped on the bandwagon of Trump’s controlled opposition administration, and they refuse to admit they have been conned.

How have globalists benefited from Trump being in the White House, though?

Trump has gone on to attach his presidency so closely to the performance of the economy and primarily stock markets, that any crash now will undoubtedly be blamed on him. This is strange behavior if you consider his statements during his campaign, including his assertion that the Fed was deliberately keeping interest rates low to protect Obama, and that the stock market was a giant fraudulent bubble. Today, Trump is demanding that the Fed funds rate be lowered and that stimulus be renewed, and, he has been Tweeting incessantly about how the economy under his watch is the “greatest ever”.

To those who actually track the health of the US economy, Trump’s statements might seem delusional. If you understand that Trump is controlled opposition and that he is playing the scripted role of a bumbling villain, his statements make perfect sense. The US economy is NOT the greatest it has ever been, in fact, it is the worst it has been since the crash of 2008, as I evidenced in detail in my article ‘The Crash In US Economic Fundamentals Is Accelerating’. Trump is wrapping himself around the implosion of the Everything Bubble as a mascot of fiscal destruction, and he’s trying to drag all conservatives with him.

China And The False East/West Paradigm

The other side of the control mechanism for a crash of this magnitude is on the other side of the world – China. It is not only Trump that has to act a certain way in order to cover for the crash of the Everything Bubble, China must also play its role. The false East/West paradigm is perhaps the most pervasive of all false paradigms, for even many in the liberty movement think that governments in China or Russia are opposed to the elites in the US and Europe. This is simply not true.

China in particular has a long time relationship with Western globalists. In fact, modern China was essentially built by them.

The Rockefeller family and the Rockefeller Foundation have been influencing Chinese social and political developments since the late 1800’s. This started as seemingly innocuous, with the foundation initiating social and health related programs in rural areas, but as noted by historians with access to the Rockefeller Archives, the Rockefellers were not seeking to display their capacity for philanthropic charity, but pursuing wide reaching influence in Chinese society and politics. For more information, I highly recommend reading Frank Ninkovich’s study of the Rockefeller’s dominance in China for the past century in the Journal Of American History.

China’s central bank is currently linked to the Bank For international Settlements, which is often referred to as the “central bank of central banks” and as admitted in an article for Harpers in 1983, the BIS essentially writes policy for all member banks – this means the Chinese central bank AND the Federal Reserve are both controlled by the globalists at the BIS. This is even more evident in recent years as all major central banks have operated with an odd level of coordination to prop up the stock markets of other nations, including stock markets of nations that are supposedly in conflict.

China also now works closely with the IMF – the Yuan has been inducted into the SDR basket system, and China has called on multiple occasions for the SDR basket to replace the US dollar as the world reserve structure. The IMF is openly discussing the introduction of a cashless digital currency system based on blockchain technology, which I believe will be the likely replacement for ALL currencies when the time comes.

This means the trade war is a farce. When it comes to the elites of China and the US, there is no division and no conflict. They all want the same thing – global centralization.

The Trade War Smokescreen

For many years I have warned that the next World War would be an economic world war between the East and West, and that this war would be engineered by globalists as a mass distraction while they introduced their one world economic system. The crux of that economic war would be the eventual dumping of US treasuries by foreign central banks as well as the dollar as the world reserve currency.

What many pro-trade war people don’t seem to realize is that the dollar’s world reserve status was part of the original deal with China. China gained a trade surplus and access to US markets, the US gained a cheap labor pool, access to cheap goods and our currency was accepted by the Chinese as the foundation of international trade. But this dynamic no longer serves globalist interests in the new system they hope to create.

As described in an article published in the Rothschild run magazine The Economist in 1988, the US economy has to be brought down to pave the way for the new global currency system. Globalist Mohamed El-Erian confirmed this plan in a 2017 op-ed for The Guardian. And, as globalist George Soros stated in 2009, China is intended to take a larger role in the IMF and become the economic engine for the “new world order”, while the US is set to take a back seat in global affairs as the rest of the world moves away from the dollar.

This might be why US 10 year treasury auctions are seeing dismal results, and why the Chinese are now willing to threaten the dumping of US T-bonds through their state run media. China has NOT folded to US tariffs as so many people have been predicting for the past year. In fact, China has dug in even further.

China is the number one exporter/importer in the world. They now set the standard for international trade, not the US. If China follows through on threats to dump US treasuries, or if they dump the dollar as the world reserve, then most if not all of their trading partners will do the same. The consequences would be devastating for the US economy, which has a minimal manufacturing base and is utterly reliant on the international acceptance of the dollar to keep prices low and to prop up what’s left of our financial structure.

While proponents of the trade war keep insisting that manufacturing will come back to the US, this still has not materialized. Why would corporations spend all the money to rebuild factories in the US when they can simply stay in Asia and use the existing factories and cheap labor? There is no incentive for them to come back. If tariffs go higher, they can easily raise prices on consumers to support their bottom line.

The US is being set up for a spectacular fall. Those that claim China would never make such a move don’t understand the Chinese economy. The US market is only 18% of Chinese exports, and US consumption has been declining. The vast majority of China’s GDP comes from domestic consumption, and the claim that China is dependent on US markets to survive is one of the most widely perpetuated lies of the past decade. The Chinese will take a hit to their economy, certainly, but nowhere near the hit the US economy will take if they cut off the dollar as the primary trade mechanism.

The trade war only makes sense if you look at it from the globalist perspective. China will get hurt to an extent, the US will suffer an economic disaster it will never recover from, and only the globalists truly benefit. With tensions increasing, probably through the end of 2019, I suspect the Federal Reserve will increase cuts to their balance sheet under cover of the trade war. I also suspect that China’s central bank will finally cut off stimulus measures which have been keeping global stocks afloat for the past four months. This will eventually trigger the crash of markets on top of already plunging fundamentals.

The US will lose the trade war, Trump and conservatives will be blamed for the collapse, China will already be pre-positioned as the next economic engine for the world, and the IMF and BIS will introduce their one world currency system as the solution to the problem they created. Whether or not they succeed in this plan will greatly depend on whether or not enough people set aside their biases and accept that the whole thing was a farce from the very beginning.

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Midwest Flooding Will Cause Shortages Of These Foods

Floods are dangerous natural disasters. People and animals can be swept away and easily drown. Floods can carry bacteria and pollutants great distances. Floods can bust through levees and tear down bridges. Floods can also lead to food shortages when they destroy farms, like the recent floods in the Midwest have. Smart preppers will take measures to beef up their food storage now.

By now, most US-based preppers have either heard about (or experienced) the massive, damaging floods in the Midwest since this past March. To make matters worse, the potential for more floods in key agricultural states looms in front of us as more rain is predicted for the rest of this spring.

So far, heavy flooding has impacted important agricultural states, including Nebraska, Iowa, Illinois, and Missouri. From NOAA:

“Additional spring rain and melting snow will prolong and expand flooding, especially in the central and southern U.S. As this excess water flows downstream through the river basins, the flood threat will become worse and geographically more widespread.”

Let’s take a look at why this is happening, what are the real risks involved, and what steps you can take to keep you and your loved ones fed and safe during a food shortage.

What Caused the Floods

Last fall brought heavy rains which soaked the ground heading into winter. The frozen winter earth was covered in heavier than normal snowfall. As warmer temperatures arrived in early spring, the snow began to melt, but the ground remained frozen underneath.

This would have resulted in minor flooding, except that heavy rains followed. According to The New York Times,

“The flat, frozen land, unable to soak in much of the water, spread it fast and furious, the way liquid would spread across a tiled floor. And the runoff quickly filled many rivers and streams to overflowing.”

The Problems Farmers Now Face

Home gardeners may be familiar with the saying, “The garden waits for no one.” When it’s time to start seeds, time to plant, time to weed, etc, that’s it. It is time. We don’t get the luxury of starting any time we feel like. For example, you can’t start cucumbers and tomatoes outdoors in September in New England and expect to eat them.

Each plant has its own needs for ground temperature, moisture, and sunlight. If you wait too long, your plants just won’t grow well or at all. You snooze, you lose.

Commercial farmers are in the same boat. Many were waiting for the massive rains to stop so their fields could dry out enough to plant their crops. But, that break in the rain never came. For many farmers, the time has simply run out to plant staple crops like wheat and corn.

According to Bloomberg:

“There has never been weather like this, either. The 12 months that ended with April were the wettest ever for the contiguous U.S. That spurred other firsts: Corn plantings are further behind schedule for this time of year than they have been in records dating to 1980 and analysts are predicting an unheard-of 6 million acres intended for the grain may simply go unsown this year.”

Some farmers may get a chance at a later crop, depending upon how fast their fields dry up some and what crop and variety they are growing. Many will not. This could be a disastrous, monstrous loss of income for American family farmers. (source)

In Nebraska and Iowa, cattle and hogs were killed by the floodwaters and their feed lost.

The water rose so quickly that farmers in many areas had no time to get animals out, said Chad Hart, an agricultural economist at Iowa State University.

“Places that haven’t seen animal loss have seen a lot of animal stress. That means they’re not gaining weight and won’t be marketed in as timely a manner, which results in additional cost,” he said. (source)

Which Foods are Going to Be Scarce

When we look at the currently impacted states, here’s which crops and livestock will be impacted:

Wheat
Corn
Soybeans
Hay
Alfalfa
Oats
Beef
Dairy
Pork
Chicken
Eggs

Take a good look at that list. Grains are not just used for baking bread. They are used extensively in CAFOs for livestock feed. Grain prices go up, so does the cost of meat. Hay and alfalfa are also key crops for feeding cattle and horses. Check out the price increase for hay due to fires, drought, and now, flooding:

RAYMORE, Mo. — The price of hay has tripled for a lot of horse and livestock owners. Hay bales that usually cost $40 are now $150.

That’s because there’s a shortage in the region. The Midwest hay shortage is said to be the result of 2018 wildfires in Kansas, drought in Missouri and wet weather in Iowa. (source)

Also, take a look at nearly any food label on ready-made foods at your local grocery store. You will typically find wheat, corn, dairy, eggs, or soy in nearly every single convenience food out there.

Corn is used for corn syrup and high fructose corn syrup (HFCS). HFCS is added to everything from granola bars to breakfast cereals to deli meats. Corn is added as ethanol to our fuel. Wheat, corn starch, and modified corn starch are added as thickening agents to nearly every sauce. Good luck finding anything that comes packaged that doesn’t contain soy or soy lecithin.

Bottom line: our modern food supply is largely dependent upon grains and soy. With major producers losing at least one harvest this year, the cost of manufactured food and livestock feed will skyrocket. Meat and dairy will be doubly impacted. While many farms lost animals to floodwaters, and farmers lost money due to both lost animals and damage to property, the cost to feed those remaining animals is going to go through the roof.

Add to this livestock disease and tariffs and trade war with both Mexico and China, the two countries from whom we import the most food, both consumers and farmers are in deep financial trouble.

What a Food Shortage Means on Main Street

If that was a lot to take in, here are the four key takeaways about the flooding that you need to know:

Flooding has caused massive losses of grain and livestock.
Remaining livestock will be much more expensive to raise.
Nearly all manufactured and processed foods relies upon abundant, cheap inputs of wheat, corn, and soy.
Corn is used to make ethanol, which is added to our fuel at the pump

In a nutshell, expect everything to get more scarce and more expensive from food to fuel. The ever-shrinking middle class and the working poor will be hit the hardest. These groups receive no government assistance to offset the cost of food and do not have the financial resources to absorb the rising costs. This will lead to more and more families tightening their belt buckles, and potential slowdowns in other areas of the economy.

Those who do receive government assistance will also suffer as their benefits will not go up to meet the increased cost of food. And, if you think these folks will be placid, calm, and take this on the chin, think again. (See EBT riots below.)

If you want a great example of what a real food shortage looks like, Venezuela has given us ample evidence. While Venezuela has seen food shortages for entirely different reasons, the result is the same- bare shelves and hungry people. Hungry people are dangerous people. Check out Daisy Luther’s article, Venezuela Is Out of Food, for the stark reality.

A little closer to home, we can look back to 2013 and the EBT riots. As a quick recap, the EBT system suffered an outage for two hours, and people lost their minds. Walmarts closed as people began rioting and looting. Just two hours!

Springhill Police Chief Will Lynd said they were called in to help the employees at Walmart because there were so many people clearing the shelves. The Walmart Supercenter Mansfield shelves were cleared in two hours.

“It was worse than anything we had ever seen in this town,” Lynd said. “There was no food left on any of the shelves, and no meat left. The grocery part of Walmart was totally decimated.” (source)

Take These Steps Now

Mainstream media hasn’t touched this topic with a ten-foot pole. If they did, it would instill panic and a run on grocery stores immediately. The talking heads on TV are pretending there isn’t a potential crisis around the corner.

Don’t fall for it.

The best course of action is to stock up on food. Everyone’s situation is different. Some people have to stockpile in a city apartment, and others have acres to grow their own veggies and raise/hunt their own meat. Whatever your situation is, start thinking about what you eat and how to store those items.

Here are some ideas to get you started.

Buy a storage freezer. Check out Facebook and local sales apps if buying a new one is too costly.
Buy a cow or pig from a local farm for that freezer. This is the least expensive way to buy meat that I have found. It’s a lot up front, but the best price per pound.
Join a wholesale club and buy your meats there. You may need to cut up and portion your meat into freezer bags prior to freezing. This is the second least expensive way to buy meat that I know of, and it has a lower upfront cost.
Use a website, like Local Harvest, to find farms near you. Make good use of local CSA farms, farm stands, and farmers markets. You can find everything from meats to dairy, to produce without ever stepping foot into a grocery store. Local food is the hedge against the failures of centralized, modern agriculture.
Buy a pressure canner. I started out with a less pricey Mirro pressure canner, but now use the All American 921, which I love. Whenever you find a deal, or if you buy in bulk from a wholesale club, can up that extra food for a rainy day.
Buy cheap cuts and stock up. Check out my article on Homesteading Mom on pressure canning beef stew. Stew meat is inexpensive and lasts a long time in the pantry. Pressure canning ensures it is nice and tender.
Can’t afford to buy in bulk? Use this opportunity to talk with friends about prepping and make a group purchase.
If you have a yard, use some of it to grow some of your own food. Food is expensive. Seeds are cheap. It may be too late today to get certain summer vegetables in the ground depending upon where you live. But, most people still have time to plant a fall garden. If you don’t have much space, look into container gardening.
Stock up on grains in bulk
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The Real Reason Why The Fed Isn’t Cutting Interest Rates

In an article published in September 2015 titled ‘The Real Reason Why The Fed Will Raise Interest Rates’ I outlined a kind of economic war game, a predictive theory in which the Federal Reserve would hike rates into clear economic weakness in order to deliberately cause the implosion of the vast financial bubble they had created through several years of quantitative easing. At that time this theory received a lot of opposition. Nearly everyone in the mainstream and in the alternative media argued that the Fed was going to shift to NIRP (negative interest rates), in order to continue propping up the system. The idea that the Fed would actually raise rates and cause an engineered crash after propping up the system for so long was treated as outlandish.

Of course, this is exactly what happened. Within a year the Fed had started to tighten policy instead of extending stimulus measures. The denial that this was happening was so strong that many analysts claimed the Fed was simply “pretending” to tighten when they were actually still stimulating. Yet, this claim turned out to be incorrect; nearly every sector of the economy began an immediate and steep decline the moment the Fed launched interest rate hikes and cut its balance sheet. The evidence was mounting that yes, the central bank was not just pretending to tighten – it was actually strangling liquidity and the mirage of economic recovery was quickly fading.

To this day and despite all the evidence to the contrary some people still argue that the fed is either not tightening, or will reverse on tightening measures very soon. In fact, every month since last November there has been a chorus of voices saying that “this is the month” that the Fed will return to easing and possibly QE4. And, every month they have been wrong. This includes this past month of June, when so many people were so certain that a Fed interest rate cut was baked into the cake.

In my article ‘The Federal Reserve’s Controlled Demolition Of The Economy Is Almost Complete’, published in March, I predicted that the Fed would continue to hold interest rates steady for many months to come and that Fed language of “accommodation” and “patience” was a head-fake to keep the investment world tied up in stock markets as every other major indicator showed a recession was upon us. Again, this is exactly what has happened.

Once the Fed raised rates to their neutral rate of inflation (something they had not done for decades) the fate of the US economy was sealed. To be fair, the real rate of inflation is much higher than the Fed admits, but the point remains that the US economy as it stands today cannot handle even moderately higher rates. With corporate and consumer debt at historic highs not seen since 2007 just before the credit crash, any interest pressure above zero is going to destroy the fragile economic bubble.

Some people claim that the Fed is completely unaware of this situation and is fumbling in the dark. But this is not true. In 2012 Jerome Powell outlined exactly what would happen if the Fed began tightening policy in the October minutes of the Fed meeting. Powell KNEW that higher rates and balance sheet cuts would cause the kind of crash which is now happening; but as soon as he became the Fed chair in 2018 he launched tightening measures anyway.

Whether you are for or against Fed tightening measures is truly meaningless. The point remains that the Fed created the Everything Bubble, and now they are crashing the Everything Bubble and they know they are doing it.

So, where do we go from here? Has the Fed done all the damage it needs to do to ensure a crash? Is all this talk of accommodation actually real this time? Will they cut interest rates soon in order to prop up the system longer. I continue to predict the Fed will not be cutting interest rates or ending balance sheet cuts until there is a blatant breakdown, or a major distraction event. And by “breakdown” I am referring to public perception of the economy waking up to the reality of the crash.

It is important to remember that the US economy has been in negative territory for the past 10 years. It has been hanging by three thin threads – the first being Fed stimulus (which has now been taken away – sorry skeptics but this is a fact), the second being the dollar’s world reserve status, and the third being public perception of recovery. The central bankers are now relying heavily on the manipulation of public perception in order to keep certain sectors (like stock markets) afloat for a little while longer. What is the specific goal in this? It’s hard to say. However, the move to trick the investment community into making far reaching assumptions has some advantages.

Stock markets are absolutely useless as an economic indicator because they lag far behind real financial conditions. Stocks fall after every other fundamental indicator has already turned negative and the crash is already at the public’s doorstep. However, they do serve one purpose; stock prices can be exploited to give the population a false sense of economic health, leaving them unprepared and vulnerable to the consequences of a downturn. Most Americans do not track economic data beyond stocks and employment, which are both highly manipulated points of reference.

Stocks remain levitated on two factors: Massive stimulus from China since December, and blind hope from the investment world that the Fed is going to bring back the punch bowl and pump out stimulus again. Minor language changes to Fed statements are now hyped as dominant indicators that the Fed is about to flood the markets with liquidity; yet other language indicators showing the opposite are ignored. With so much capital lured into stocks on the “certainty” of Fed rate cuts or stimulus – I ask, what would happen if the Fed DOES NOT fulfill growing market expectations?

On June 19th just after the Fed meeting I noted that there was little chance of of a rate cut in July, and recent statements from Powell and St. Louis Fed President James Bullard support this argument.

After the June meeting, many in the investment world priced in a 100% chance of an interest rate cut in July. Why did they do this after being wrong every month for the past several months? I still can’t figure out what the source of this assumption is. Nowhere in the Fed’s minutes or in post meeting statements has the Fed indicated a cut in July. The reality is that the last Fed meeting showed NO CUTS until the end of 2020. This does not necessarily mean the Fed will hold rates until that time, but there is no evidence to support the notion that they will cut in July.

Perhaps I am wrong and the Fed will follow assumptions this time instead of assumptions following the Fed. I haven’t been wrong on Fed policy changes yet, but my point is, there is no evidence that they will cut next month, only expectation based on hearsay.

The Fed continues to lie about economic expansion, claiming a strong recovery or improving fundamentals when all the data shows economic decline; from bond yields to housing sales to housing prices to auto markets to manufacturing to shipping and freight to retail closures to weakening job prints, etc. At the same time we are witnessing inflationary pressures in necessities like food, fuel and rental housing. It’s a stagflationary mess.

Incessant reporting of strong economic health and the defiant dismissal of declines is not the behavior of a Fed that is about to capitulate on tightening. Yet, the investment community has been all-in on a rate cut for months. When the rate cuts don’t come, they then assume that the past month was close, and that the next month is a sure thing. It’s truly bizarre.

As long as the Fed holds rates near the neutral rate of inflation and continues to cut assets from its balance sheet, flooding the economy with treasuries, mortgage backed securities and toxic assets, the decline of multiple sectors is assured. There may come a point in which the Fed has done all the damage it needs to do to accelerate the crash, allowing them to then pull back on tightening, but we have not reached that point yet. As I have noted in past articles, the Fed has done all this before.

Creating enormous financial bubbles and then deliberately popping them is a classic central bank maneuver. Each time, they claim they were “unaware” of what was happening, then years later admit outright that they knew what was happening; from Alan Greenspan admitting that the Fed was well aware of the bubble that led to the crash of 2008, to Ben Bernanke openly admitting that the Fed had caused the Great Depression by tightening into economic weakness in the 1930′s.

Tightening liquidity and policy conditions into economic weakness is what central banks do to trigger chaos. But why would the Fed deliberately initiate a controlled demolition of the US economy? The bottom line is central banks are tools of the globalist elite. They are not as autonomous as they seem. No, the Fed does not answer to the US president, but it does answer to the Bank for International Settlements, as do all other major central banks in the world.

The economic disasters they create are then used as leverage to consolidate financial wealth as well as control of hard assets into the hands of these elitists. Crisis events are also used to consolidate power over the people and to centralize governance on a global scale. The Fed is nothing more than a mechanism used to help achieve this agenda.

Alternative economists should abandon any notion that Donald Trump will interfere with this plan. Trump has been under the thumb of the globalists ever since Rothschild banking agent Wilber Ross bailed him out of his debt obligations in the Taj Mahal casino in the 1990′s. Wilber Ross is now Trump’s Commerce Secretary, standing over his shoulder along with a large crew of other elites in Trump’s cabinet. This would explain why Trump vehemently criticized the Fed for inflating the Everything Bubble under the Obama administration through artificially low interest rates during his campaign, and then suddenly pulled a full reversal once he was in the White House and claimed his administration was the reason for all time highs in stock markets.

Trump has also stated time and time again he has no intention of trying to unseat Jerome Powell (he did it again just this week), and frankly he has no power to do so anyway. His “battle” with Powell is a farce.

The Fed is a private entity, and as Alan Greenspan once openly admitted, it answers to no one. Trump has attached his administration so completely to the economic bubble that when it completely collapses he and his conservative followers will inevitable be blamed and it is my belief that he is doing exactly as he has been told to do by the banking cabal.

This leaves one final question – What is the Fed waiting for? Why not crash everything including stocks right now? Why continue to head fake investors on rate cuts and accommodation? As I noted in my recent articleGlobalists Only Need One More Major Event To Finish Sabotaging The Economy’, the elites need a distraction that would satisfy the public’s search for a rationale after the consequences of the crash finally hit them. The accelerating trade war is very useful for this, but it is not enough. The globalists need something else.

This may come in the form of a shooting war, possibly with Iran. It may come in the form of a “No Deal Brexit” in October (and I continue to predict this is an intended event). It may also come in the form of a surprise retaliation from US trading partners, such as a dump of US treasuries or the dollar as the world reserve currency. This is what the globalists are waiting for.

Once such an event takes place, or perhaps just before the event, the Fed may finally cut rates again, or stop its balance sheet dumps. It may not. Trump’s trade war is leading towards price inflation, which could be used by the Fed as an excuse to keep interest rates steady or even hike them again. Nothing is written in stone except the primary agenda, which is: Inflate financial bubble through stimulus, implode financial bubble through tightening. Afterwards, the Fed has options. It can stimulate again as a non-solution, or do nothing. Either way, the crash is already a given and the Fed has no intention of stopping it.

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You can contact Brandon Smith at:

brandon@alt-market.com

http://alt-market.com/articles/3821-the-real-reason-why-the-fed-isnt-cutting-interest-rates

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