Dear Friend,
Wow! Folks are fired up about government spending and what it means for our economy and our investments.
More than 370 readers logged in to express their outrage and say “No! The government can’t have its cake and eat it too. If we print money like there’s no tomorrow we’re headed for inflation.”
And here’s more proof that you were right.
Look at this graph published in The Wall Street Journal yesterday showing the more than TENFOLD increase of our money supply.
According to the article written by noted economist Arthur Laffer (who was an influential member of President Reagan’s Economic Policy Advisory Board), “To date what’s happened is potentially far more inflationary than were the monetary policies of the 1970s, when the prime interest rate peaked at 21.5% and inflation peaked in the low double digits. Gold prices went from $35 per ounce to $850 per ounce, and the dollar collapsed on the foreign exchanges.”
Scary stuff indeed.
Bill G. wrote, “I am very mad and afraid about the amount that the government is squandering, and I fear that my grand children and my great grand children will not have a good life. I see massive poverty.”
Chuck wrote, “I believe inflation will zoom upward and the dollar will drop downward as a result of spending so much money that we do not have. I am trying to revamp my investments to counter these twin evils.”
TL said, “I used to wonder how those 3rd world countries that experienced hyper-inflation allowed it to happen to themselves…. Now, I get to experience it first-hand… This is incredibly depressing… I know what’s happening and what the end result will be, but I still don’t know what to do to lessen the effects on my family.”
Just remember: There’s a way to get rich in every market
Including this one – we saw it in the late 70s and early 80’s when some investors made a killing because they knew exactly how best to invest.
And we know simply buying some gold or a few commodities is NOT enough to protect your wealth, let alone grow it!
That’s why my team and I are working double time to put together a special presentation detailing the most profitable investing strategies for you in the face of inflation.
We’re NOT going to sit back and let stupid decisions in
Washington destroy your wealth
We’re going to get through this together and come out on the other side far richer than we are now. Starting with the presentation on wealth building strategies you can use to profit wildly in an inflationary environment.
But to make sure we give you the most useful information that fits your investing style and your investment needs I need to ask you a few more questions:
1. First of all, are you interested in getting a free presentation detailing investing strategies for protecting and growing your wealth in the face of rising inflation?
2. What, if anything, are you doing right now to hedge your wealth against inflation?
3. Would you like a system that gives you specific “buy”, “sell” and “hold” signals proven to substantially grow your wealth even in the worst inflationary environments? Or even in deflationary times?
Just post your comments below.
I can’t wait to hear your thoughts and like I said, we’ll get through this together.
Best wishes,
Charles Mizrahi
Editor, Hidden Values Alert
That’s just terrifying to see.
My biggest worry is that the money I’ve saved pretty soon won’t be worth the paper it’s printed on.
So yes, Charles, I’d love to see strategies that can increase wealth in this environment
Investors should be aware that there are MANY pretenders giving financial advise. We must very carefully research these pretenders, including some of our BIGGEST BANKS, to make certain they are not just making money on our investments, without any care of whether or now we make any…..
“Would you like a system that gives you specific “buy”, “sell” and “hold” signals proven to substantially grow your wealth even in the worst inflationary environments? Or even in deflationary times?”
YES
Should I arrange to invest some of my retirement into TIPS government securities ?
Inflation is going to happen but what do we do to save our nest egg.
Not sure how to position the fixed income portion of portfolio. The only thing I can think of is to buy short securities and roll up the yield curve.
Bob Heinlein said it best,”TANSTAAFL — There ain’t no such thing as a free lunch”! Unfortunately, Bernanke and Geithner never read Heinlein, just some idiot academic who says inflation is good, because if people see money is losing value, they will spend instead of save, and that will create prosperity. Yeah, just like in Zimbabwe.
Bail Out! GM, Ford, Chrysler, United Air Lines etc; all have something in common: Employee’s that depend on their job’s, health benefits and retirement plans. They have all worked for the company store and probably their parents & grand parents did too.
Read the book Corporate Fleecing of America! Watch the 80’s Movie Rollover starring Mike Douglas, get the picture? This aint no Fairy Tale.
How can our Government let the individuals suffer the consequence of the people the American Workers trusted for the last 100 years be shoved off on us to pay for their misdeeds. The liberal garbage our college students are being taught only perpetuates more corporate & political stinch. It’s time to take Arms!
I have been in the Financial Services Industry for 30 years. I am seasoned in Employee Retirement and health benefits not to mention Investments. I would personally like to start legal action against some of the individuals who have ruined my potential to earn an income because of their misdeeds including some self regulatory agency for turning their heads from the obvious criminal activity’s of these people. Insurance companys get sued by their policy holders, why can’t we as a nation do the same? All we need is someone to lead the way.
I lived through this scenario several times in the Uk and each time inflation took off and sterling was devalued. The iresponsibility being practiced by our unknowing and unspired leaders will lead us to unimaginable degradation as a nation. Any thing you can suggest will be welcome. We need help which will not come from government sources - they will only exacerbate what is fast becoming a hopeless situation
Charles: The money being created is electronic money. People here and abroad are saving folding money and buying gold and guns. Even though the printing presses are running 24 hours there are only 850 Billion + of greenbacks compared to multi trillions of electronic. Consumers are not going to borrow even if they could get a loan. Need to live items are going up in price everything else is going down. Bubbles Ben wants to cause inflation but he can’t,that his dilemma. The Greenspan Put no longer works. People are now saving because of too much debt. The real unemployment rate is at 20% and heading up as are interest rates. Real Estate isn’t even close to bottom yet. Obama knows this and is planning a complete Socialist takeover of the USA. Democrats in Congress and a lot of moderate Republicans are either brain dead or they are closet Socilists who are only interstes in retaing their lush lifestyle. Every one of the with few Conserivative exceptions shoud be voted out of offic next year. Look for a Giant Deflationary Depression and The Gulf States, China and Russia to back their currency with gold and destroy the dollar and Euro and USA. You will need your guns.
i have enough clothing to last a while. i may be able to aford milk coffe and eggs. maybe some one can teach me how to spell. find enough cardboard to sheild me from the weather. how about my family?
I am very afraid for our country, its controled by international cartels and those who are out to enrich them selves and destroy us, our finest and best are fighting in endless wars for foreign entities and being turned away by the VA, the collusion in the crimex to keep metals down so they can print more money,the out sourcing of jobs causing massive unemployment,illegal immigration, weve got to get control back over our fates and fortunes no matter what it takes its worth it, nothing could be worse than to lose this war against the beast. if we do, ourselves and the coming generations and our nation are destroyed.
The country asked for it and received it, CHANGE! It is ironic that we have 535 reps in Washington calling the shots, and they’re unable to see just how rapidly they are destroying the dollar and wrecking our economy. November, 2010 can’t get here soon enough. BO unchecked is like a runaway train, and the media are letting him get away with his total destruction of our country without telling the people the truth.
I’d welcome the help saving what I have. Interested in viewing you stratigies.
im interested in hearing more about your thoughts and strategies to build and maintain wealth.
We have nothing to worry about. The Chinese, Japanese and Arabs are caught in a deadly embrace with us, and it won’t stop. If they don’t buy our treasuries, their own economies will plummet along with ours. Diversifying out of the dollar treasuries into IMF securities won’t help them, because the IMF will only absorb a limited number of dollars/treasuries onto its balance sheet.
Monetary stimulus can work, if done correctly. Our stimulus has so far been done absolutely wrong, because it should have been spent on infrastructure, not financial services. This would have stimulated employment. Instead, banks are simply profiteering by borrowing government money at negligible interest while simultaneously charging high rates for loans and credit card debt. The big banks are hoarding capital in order to make predatory acquisitions. None of this helps increase credit or consumption to any significant degree.
The Chinese plan of issuing free vouchers for appliances to stimulate productivity would work. What would have worked even better would have been for the government to simply buy an equity share in the home of anyone who couldn’t afford a larger payment during a recast/reset of the mortgage. If someone is paying $1,500/mo. and the recast is to $3,000/mo., the government would pay half, in return for a half interest ownership of the property, including a nominal rent.
Voila. No mortgages default. Hence no housing inventory increase. Therefore, demand from new household creation causes modest price increases in housing. Employment does not decline. All the CDOs, MBS, CDS and other alphabet soup are worth 100% of face value.
The homeowner still gets to sell the property anytime (although he only gets half the money). Or else at the end of the mortgage, he can refinance to buy the other half (or whatever proportion was involved) from the government, over another 30 years.
We wouldn’t have even had a hiccup on the Dow, had this been done. If we have five million homes at risk, at an average cost of $300,000, then to save them all using this government equity partnership approach would have taken $1.5 trillion, which is a small fraction of what has been wasted so far.
Without credit disruption, there would have been no economic downturn, no problems with the auto industry, and no stock market crash. We could actually have increased interest rates to deter speculation, strengthen the dollar and slow the economy gradually into a stable range.
All this could have been done with “printed money,” and at the end of the day, when the smoke and mirrors vanish and the music stops, everybody ends up ahead. Stimulus can do the trick, but it depends on how it is applied. As it stands now, we have “saved” the banking system the wrong way: by injecting money that will languish instead of circulating quickly, rather than injecting money that has an immediate stabilizing influence on the entire economy.
Many point fingers about the blame for this crisis. The laws which loosened credit for minorities are not to blame. When there is a “money machine” called increasing real estate prices, everybody should get to play. The blame might go, some allege, to Fannie and Freddie, who turned mortgages into a veritable Ponzi scheme through vast securitization of questionable assets, rated by agencies whose “optimism” derived from alleged conflicts of interest, bought by the unwary who thought Fannie and Freddie securities were fully backed by the government (which they actually weren’t; but now they are — bailout city), and insured by companies whose leverage rivals the hurricane insurance garage shops of the southland.
So what do we do? First, we watch oil prices increase. They must increase, because OPEC needs the money in order to keep their economies stable, and the government needs OPEC to buy our treasuries. It’s a vicious circle. Same with China. We watch the yuan remain in lockstep with the dollar to subsidize our purchases of Chinese goods (which are most of what we buy, anyway), so we’ll keep spending, and that way the Chinese can buy our treasuries.
We need to do this until 2011, when the Alt-A and Option ARM mortgages will recast/reset. If we can survive that long, things will get better. If we can’t, then the world may go over the cliff and into the abyss of economic and social disintegration.
There is still time to implement the equity sharing plan, as described above, for the rest of the at-risk mortgages. That would turn the economy around instantly, and the cost would be no greater than what we will end up giving the banks in any case. The difference would be that the government would actually end up owning something of value for the money, and therefore the stimulus isn’t wasted. Much of the money we loaned to the automakers late in the previous administration is “poof” gone for good, due to the bankruptcies. That isn’t the case with equity ownership in real estate, and I include here commercial real estate as well, because we end up with occupied homes, not the empty ones we would get if the government bought at-risk asset backed securities.
To those of you who think Obama is at fault in any of this, I say that I beg to differ with you. Obama has chosen very smart people and delegated responsibility to them. I don’t agree with some of his choices — people who are closely allied with the causes of the problem — but so far our country is still afloat financially, which is a monumental achievement, given the scope of our financial woes.
However, congress is not playing ball with the president. If you look carefully, you will see bills in congress which dilute Obama’s clearly stated policies, the most recent of which is reported to be a watered down energy conservation policy. Congress should consider whether caving in to the vested interests (business as usual) is a sound campaign policy at this stage, regardless of the size of their contributions, because the American people are tired of this game, and it is quite possible that there will be very few incumbents reelected unless they change their ways.
The stock market, and indeed most asset classes, are by their nature inflationary, to the extent that they are based on borrowing in a fractional reserve banking system. Markets are like used car lots. The prices are whatever people will pay for the productive value, or aesthetic appeal, of the item. As the government tries to reflate the economy, the market will tend to go up, leading to greater wealth and creditworthiness created out of thin air. In such a system, where fiat money is backed by nothing but the promises of the Fed — a for-profit, privately owned bank that is not subject to audit — all we can do is hope that the smart people in government who are rolling the dice end up making their point and don’t come up boxcars.
There was a time when wise people were concerned how to spend the leisure we were all supposed to have because of all those technological advances. We were all supposed to be entitled to do what we liked because we were supposed to have the right to it. What happened?!!!It seems that too many people took it too seriously. Now we have leisure without the pleasure.
Hello Charles:
In response to your queries:
1.) Yes
2.) In hopes of obtaining some protection against the ravages of inflation I have purchased gold and silver etf’s (GLD),(SLV; shares in large dividend paying companies such as British Petroleum, and shares in energy distribution organizations like Energy Transfer Partners (ETP). I purchased these with U.S. funds that I acquired when the Canadian dollar was higher last year (I live in Canada).
3.) Yes
I would like to get some comments on the action I have taken and would welcome any further suggestions.
1.) Yes
2.) I have bought physical gold and silver, I’ve also purchased some gold stocks (RGLD for instance) and stored some food and water.
3.) Comments are always welcome.
@Richard
China has recently, May 2009, about doubled (2X) its gold reserve, and all gold produced in China is bought by the government, at least it’s not being exported at current prices.
I have to agree that we are mere pawns in a cruel and unneccessary game, the Great Game of the 18th century, empire and colonial expansion, now continued by evermore evil planners and players.
Yes, I am extremely concerned about what money I have left after 2008 and how to keep what is left. I have gold coins but what else should I do?
I too am concerned with what will happen to the stock market and feel that the current bull market increase since March is going to be short-lived. I’m convinced silver is the way to go, but fear government confiscation soon like what happened in 1933 to bail out the banks. What can I do as an alternative?
Steve Forbes is at Geleneagles today for CEO conference and he was on BBC this morning saying that money supply is too toght and has stopped growing since january 2009. Its hard to see the date on your wsj graph, but spike may refer to money supply before 2009. Or Forbes is using a different measure of money supply.
Hello,
This current inflation situation can lead to something unbelievable. I am absolutely, interested in your offer to cushion this effect. And would like a system that gives me specific “buy”, “sell” and “hold” signals proven to substantially grow wealth even in the worst inflationary environments? Or even in deflationary times?
Most people are innocent and honest. That makes them very vulnurable to any promise of a better day to come. Therefore, I urge you to consider your offer in a most innocent and honest manner, as more people may be hurt by following advice they don’t understand. The people of this country, and the world for that matter, have suffered enough from the lack of consideration from those who take the lead, be it politicians or financial gurus.
Just remember that with any advice comes a great responsibility that is most of the time forgotten when the train has left the station.
I live in Canada. I own a few precious metal funds and a number of stocks. I am avoiding U.S. dollar denominated investments at this time. The 2 U.S. stock I own are Berkshire and Microsoft. Inflation is inevetible. How can your service help a Canadian investor?
I am investing in gold and silver, the gold fund (GLD), layering in short term CD’s and exchanging some cash into foreign currencies and depositing it in foreign banks.
Thia is a good time to put everything into equities which will retain their value in terms of potatos and land but at vastly increased (new) dollar value, whereas bonds retain their value in terms of the surviving dollar and become, eventually, useless scraps of paper.
Regard the DJI at 40 and now at 8,500.
what about land , seems to me in flation will raise all boats. bare land seems best suited due to renters&maintance. land is reletively cheap in the west due to the downturn.land can be leased out to cover costs in most cases.
What is your advise/opinion to canandian investors that want to invest in the Canadian stocks?
Yes, I am definitely interested in investment strategies to counteract inflation. I got out of college and faced the “real” world for the first time in the 1970s, and if I never have to deal with that sort of rampant inflation again, it will be too soon!
Yes I am enterested of your email.Remember If it wosnt for the presedent Obama We are in a deeper depression of the century.Atleast he is outreaching to the world and stabilizing the economy and hopefully slowing the unemployed and giving hope and convidence to people of the World.Send me a Personal email about my thought and I shall unser you back.
Regards and Namaste
Michael Borg
WHERE DO I SIGN UP FOR THE REVOLT? I AM MAD ABOUT WHAT IS HAPPENING TO THIS GREAT COUNTRY AND DO NOT WANT TO TAKE IT ANY MORE. THE REPUBLICANS ARE NOT TRYING TO DO ANYTHING ABOUT IT. WE THE PEOPLE NEED TO STEP IN AND TAKE CARE OF THE PROBLEM, WHERE IS THE RECRUTING OFFICE.
W. BOWLES
Don’t waste time, inflation is on the way and it will be devastating. I’m ready to get started and followw your plan.
1) Yes
2) Buying physical gold and silver, guns and ammo, canned foods and water.
3) Yes
1) Yes
2) Buying physical gold and silver, guns and ammo, canned foods and water.
3) Yes
Taxpayer Revolt is one solution that would bring US govt
to its senses- Like a spoiled teenager, only way to teach
value of money to the Fed is don’t give ‘em any. Heres how
For over 30yrs I have refused to file a tax RETURN until
the end of the 3 year time frame you have within which to
file for a REFUND. This year I filed my 2005 tax return
which was due 15Apr06, exactly 3 years later only I made
sure it was for a REFUND so the penalty was 10% of taxes
I owed. Since there was NO TAX OWED, penalty was ZERO
Use the ancient tactic of fighting fire with fire.
They want to “Float the Bloat” with electronic cash,
then don’t give them any to do anything with.
No incoming taxes makes it more difficult for bailouts.