Is the $USD Warning That Inflation is About to Become BAD News For Stocks?

By Graham Summers, MBA

Yesterday, I outlined how the markets are likely at a very critical point regarding inflation.

By quick way of review:

1)    Stocks initially love inflation because it boosts results (companies don’t report inflation-adjusted returns, so any increase in product pricing due to inflation is instead reflected as “growth”).

2)    This love relationship eventually turns to hatred as inflation leads to higher operating costs, which squeeze profit margins.

In yesterday’s article, I illustrated how this played out during the last major bout of inflation in the 1970s. 

At that time, stocks initially roared higher as inflation initially boosted corporate results. However, by the time 1974 rolled around and inflation (as measured by the consumer price index or CPI) hit 11%, stocks began to crash, eventually losing ~50%.

I mention all of this because it is highly likely that something similar is about to manifest in the markets today.

Stocks have erupted higher on the back of inflation, courtesy of $11 trillion in Fed QE/ fiscal stimulus from the Federal Government between March 2020 and today.

However, inflation is now taking a turn for the worse. And, as usual, the signs are showing up in the currency markets first.

The Fed is in the process of ending its QE program. Fed officials have also signaled that they intend to raise rates three or four times this year. All of this should be highly U.S. dollar positive.

And yet… the $USD is breaking down.

The greenback has taken out key support (green line in the chart below). Even worse, it’s also broken its bull market trendline (blue line in the chart below).

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This is a MAJOR signal that the Fed’s actions are not enough. Put another way, the Fed is behind the curve on inflation! This is extremely negative for stocks as it means inflation is getting out of control (just like in 1974).

So, what would a similar, 1970s-style crisis look like today? The market is warning us, though few have noticed.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Posted in Inflation, stock collapse? | Comments Off on Is the $USD Warning That Inflation is About to Become BAD News For Stocks?

Are Stocks At a Major Turning Point When It Comes to Inflation?

By Graham Summers, MBA

We’ve now reached the point at which inflation will become a major problem.

Inflation is not inherently bad for stocks. The reason for this is that companies report growth in nominal terms, not in “real” or inflation-based terms.

Think of it this way: XYZ company sells widgets for $1.00. Then inflation hits and the company raises widget prices to $1.10. Even if the company sells the EXACT same number of widgets, revenues “grow” by 10%. After all, they don’t have to report that the 10% in growth was 100% due to inflation!

This is why stocks often spike higher when inflation initially hits. We saw this during the last major bout of inflation in the early 1970s. At that time, stocks roared higher, rising 50% while CPI, which measures inflation, gradually rose to 6.3%.

However, the relationship between stocks and inflation quickly goes from love to hate once costs rise fast enough that profit margins are squeezed. To return to the 1970s, this started in 1973 as CPI hit 11%. From that point onward, stocks crashed losing almost 50%.

I bring all of this up because we are likely about to witness something similar today. Stocks have erupted higher on the back of inflation, courtesy of $11 trillion in Fed QE/ fiscal stimulus from the Federal Government between March 2020 and today.

This is the good part of inflation. And by the look of things, it’s about to go sour. Indeed, we are getting clear signs that costs are about to explode higher for corporations. 

Profit margins are at all-time highs (there’s nowhere to go but down), while real wages (incomes adjusted for inflation) are DEEPLY negative.

Workers are now demanding higher wages. This means higher operating costs for corporations, which in turns means lower profit margins.

In simple terms, the clock is ticking for stocks. Sure, they might not crash this week, but another bloodbath is coming. The markets will soon be a sea of red. And the losses will be staggering.

The markets are warning us, but few have noticed.

The coming bust is going to be life-changing for many people. Most will lose much if not everything. But a small number of investors will generate LITERAL FORTUNES.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,

Posted in Inflation | Comments Off on Are Stocks At a Major Turning Point When It Comes to Inflation?

The Fed Just “Rang the Bell”… Are You Ready For What’s Coming?

By Graham Summers, MBA

The Fed just “rang the bell.”

One of the oldest adages in investing is that “they don’t ring a bell at the top.”

This is quite misleading.

While it’s true it’s impossible to predict the exact day of a market top, what is totally false is that there are not clear signals that a top is being made.

The clearest one of all, is the Fed aggressively tightening monetary policy. Indeed, the last two major bear markets (2000-2003 and 2007-2009) were both triggered by the Fed.

Why?

Because the markets move in similar cycles. And for over 20 years, the most important cycle has been the following:

1) The Fed ignores clear and obvious signs of a bubble for far too long.

2) The Fed is finally forced to act to attempt to deflate the bubble waaaaay past the point at which a soft landing is possible.

3) The bubble bursts in spectacular fashion triggering a crisis.

This was the case in 2000, 2007, 2018, and it’s the case today.

Yesterday Fed Chair Jerome Powell confirmed this with the following statement made to the U.S. Senate.

“If we see inflation persisting at higher levels, longer than expected, if we have to raise interest rates more over time, then we will.”

This is coming from the same Fed Chair who told the markets for the last year that inflation was “transitory” and didn’t require the Fed to act.

So what changed?

Inflation is now a politically toxic issue for voters. 2022 is an election year. And a CNN poll from December shows that the the #1 issue for voters is higher prices.

In this context, the Fed is receiving tremendous pressure from the Biden administration to stop inflation NOW. We know this because Fed Chair Jerome Powell only changed his tune on inflation AFTER he was nominated for a second term by President Biden.

That’s the bell.

Both the White House and the Fed want inflation killed. This means the Fed must now act aggressively to try to stop it by hiking rates faster and more frequently than most investors believe.

Given the Fed’s success with deflating the last two bubbles (both instances lead to crises), what are the odds it is able to succeed this time without a crash?

Put another way… what are the odds this time it’s any different?

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,

Posted in stock collapse? | Comments Off on The Fed Just “Rang the Bell”… Are You Ready For What’s Coming?

What Does the Market Look Like Without Fed Interventions?

By Graham Summers, MBA

The markets are about to lose their “training wheels.”

And by the look of things, it won’t be pretty.

On March 23, 2020, during the depths of the market crash triggered by the economic shutdowns, the Fed moved to backstop everything.

And I do mean EVERYTHING.

The Fed On Monday March 23nd, 2020, the Fed staged an Emergency Meeting during which it announced that it would be expanding its $700 billion QE program to “unlimited”… meaning it would print as much money as was needed.

It also announced that it would be using this unlimited QE to fund various credit facilities that would buy: 

·      Mortgage-Backed Securities (MBS)

·      U.S. Treasuries

·      Corporate debt or debt issued by corporations.

·      Corporate debt-related ETFs (stock funds linked to corporate debt).

·      Municipal debt (debt issued by states, counties, and cities).

·      Certificates of Deposit (CDs)

·      Student Loans

·      Auto Loans 

Since that time, stocks have ripped higher in a near straight line… 

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The Fed, nearly two years later, finally decided to its time to end the interventions. Within eight weeks its current QE program will be over. And the Fed intends to start raising rates soon after.

So, what will the market look like once the Fed stops its nearly weekly interventions?

High yield credit is already offering a preview. The Fed stopped intervening in this market weeks ago.

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The signs are clear… another bloodbath is just around the corner.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,

Posted in stock collapse? | Comments Off on What Does the Market Look Like Without Fed Interventions?

Three Charts That Warn Another Bloodbath is Just Around the Corner!

The technical damage of the last week has been severe.

The S&P 500 broke below critical support at 4,705 with heavy selling this week. That’s bad news.  Even worse, the market has failed to reclaim that level during yesterday’s bounce.

This means that what used to be support is now resistance. The fact the bulls couldn’t reclaim this level means we are going lower.

How much lower?

Breadth is telling us to expect 4,600.

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High yield credit says it will be even lower at 4,500.

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The signs are clear… another bloodbath is just around the corner.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Posted in stock collapse? | Comments Off on Three Charts That Warn Another Bloodbath is Just Around the Corner!

Don’t Worry, the Truly Life Changing Gains Haven’t Arrived Yet!

By Graham Summers, MBA

Ignore the goldilocks crowd, the inflationary tidal wave is only just getting started.

Everyone likes to talk about inflation, but very few people actually understand it. This goes for central bankers as well as the talking heads in the financial media.

Wait a minute… aren’t central bankers supposed to be EXPERTS on inflation?

Nope. And they’ve admitted as much publicly.

Janet Yellen, the former Fed Chair who now serves as Treasury Secretary to the Biden Administration admitted back in September 2017 that the Fed really has no idea how inflation works. 

Speaking to the National Association for Business Economics in Cleveland on Setpmerb 26th 2017, then Fed Chair Yellen stated the following whopper:

My colleagues and I may have misjudged the strength of the labor market, the degree to which longer-run inflation expectations are consistent with our inflation objective, or even the fundamental forces driving inflation.

This is central banker speak for “we really don’t know what we’re talking about when it comes to inflation and what causes it.” 

Bear in mind… this was YEARS before the real inflationary tidal wave hit in 2021. Unfortunately, it appears the Fed hasn’t figured much out concerning inflation during that time.

To wit, in October of this year, after claiming that inflation was “transitory” for months and months, current Fed Chair Jerome Powell finally admitted that inflation is “well above target” and that This is a different situation from what the new Fed framework is designed to address.”

At the end of the day, the current inflationary tidal wave is quite simple.

Regular Demand + Fewer Goods and Services =HOT INFLATION

Americans are returning to normal life as the economy reopens. And in some areas of the economy, demand is exploding higher as people have decided to stop putting off their dream purchases due to the “You Only Live Once (YOLO)” mentality the shutdowns helped foster.

This demand is not being met by supply.

Why?

Because shutting down the economy disrupted the supply chain and caused a major labor shortage. Having been paid to not work for the better part of 18 months, many Americans have decided not to go back to work… or to change careers from their previous work entirely.

This is happening in numerous sectors of the economy. 

There are 8.6% fewer coal miners working today than there were BEFORE the pandemic. The oil industry is experiencing an even worse situation: only 1/3rd of the 100,000 employees let got by the industry in 2020 have returned to work.

Oil is a SYSTEMIC item for the economy. Oil or oil derivatives are present in lipstick, Vaseline, solar panels, polyester (stain resistant clothes), chewing gum, crayons, Aspirin, pantyhose, sneakers, detergent, CDs, concrete/cement, plastics of any kind, food additives, fertilizers, pesticides, candles, milk cartons, pen ink, and more.

So you can imagine the impact that fewer oil employees will have on things.

Dock workers aren’t returning to the workforce either. As I write this there are dozens of cargo ships sitting off the coast of the U.S. waiting to be unloaded. And many of those containers that are unloaded don’t go anywhere because the trucking industry is also experiencing a labor shortage. 

Again, Regular Demand + Fewer Goods and Services =HOT INFLATION

And the craziest thing about this whole mess is that the same policymakers who created it, can’t do a thing to fix it.

The Fed, which has printed over $4 TRILLION to prop up the financial system can’t print new workers keen to return to work, keeping interest rates at zero doesn’t make oil prices come down, and spending hundreds of billions of dollars on QE per month doesn’t result in cargo ships being unloaded and life returning to normal.

Similarly, the DC crowd has no idea how to fix the mess they made.

The Department of Energy Secretary, the highest official for the energy industry in the U.S. doesn’t even know how many barrels of oil the U.S. consumes per day. The Secretary of Transportation is on paternity leave during the single greatest supply chain crisis in decades. The President thinks releasing 50 million barrels of oil from the Strategic Petroleum Reserve (SPR) over several months will lower gas prices… when the U.S. consumes 22 million barrels of oil per day.

It would be hilarious if it wasn’t so tragic. And the reality is that it has unleashed an inflationary storm that is giving investors a ONCE IN A LIFETIME opportunity to get filthy rich from government incompetence.

During the last major bout of inflation in the 1970s, smart investors locked in gains in the QUADRUPLE digits (1,000% or higher). And THAT version of inflation was the kind the Fed could stop!

So you can imagine the profit potential of this crisis today.

I outline five investments that could explode higher as inflation rips through the financial system in a Special Investment Report titled Survive the Inflationary Storm.

To pick up a free copy, swing by

https://phoenixcapitalmarketing.com/inflationstorm.html

Best Regards,

Posted in Inflation | Comments Off on Don’t Worry, the Truly Life Changing Gains Haven’t Arrived Yet!

Inflation Has Created a Once In a Lifetime Opportunity

By Graham Summers, MBA

Yesterday, I outlined the dark truth about the economic shutdowns of 2020.

That truth?

That the shutdowns have unleashed an inflationary tidal wave.

Central bankers have been trying to create inflation for years. They’ve printed over $20 trillion in new money. And they’ve cut interest rates over 800 times. But inflation never fully showed up.

Then we shut down the economy and BOOM! inflation appeared.

Why?

Because shutting down the economy damaged/broke supply chains. And forcing people to stay home while scaring the heck out of them with a virus made them decide to not go back work even when the “all clear” was signaled. In any parts of the economy (coal mining, oil and gas, shipping/ trucking, etc.) people have decided to change career paths entirely.   

As a result of this, today we are facing both a supply chain crisis and a labor shortage.

BOTH are inflationary.

Why?

Because both mean fewer goods and services are available.

Meanwhile, demand is returning to normal as the economy reopens. In some areas, demand is exploding higher as people have decided to stop putting off their dream purchases due to the “You Only Live Once (YOLO)” mentality the shutdowns helped foster.

Regular Demand + Fewer Goods and Services =HOT INFLATION

The craziest thing about this whole mess is that the same policymakers who created it, can’t do a thing to fix it.

The Fed, which has printed over $4 TRILLION to prop up the financial system can’t print new workers keen to return to work, keeping interest rates at zero doesn’t make oil prices come down, and spending hundreds of billions of dollars on QE per month doesn’t result in cargo ships being unloaded and life returning to normal. 

Similarly, the DC crowd has no idea how to fix the mess they made.

The Department of Energy Secretary, the highest official for the energy industry in the U.S. doesn’t even know how many barrels of oil the U.S. consumes per day. The Secretary of Transportation is on paternity leave during the single greatest supply chain crisis in decades. The President thinks releasing 50 million barrels of oil from the Strategic Petroleum Reserve (SPR) over several months will lower gas prices… when the U.S. consumes 22 million barrels of oil per day.

It would be hilarious if it wasn’t so tragic. And the reality is that it has unleashed an inflationary storm that is giving investors a ONCE IN A LIFETIME opportunity to get filthy rich from government incompetence.

During the last major bout of inflation in the 1970s, smart investors locked in gains in the QUADRUPLE digits (1,000% or higher). And THAT version of inflation was the kind the Fed could stop!

So you can imagine the profit potential of this crisis today.

I outline five investments that could explode higher as inflation rips through the financial system in a Special Investment Report titled Survive the Inflationary Storm.

To pick up a free copy, swing by

https://phoenixcapitalmarketing.com/inflationstorm.html

Best Regards,

Posted in Inflation | Comments Off on Inflation Has Created a Once In a Lifetime Opportunity

The Countdown to the Next Crisis Starts in Just One Week

The Santa rally has finally hit.

It is highly likely fund managers/ the few remaining traders on Wall Street will gun the markets higher to end 2021 on the highest possible note.

But by all looks, 2022 will be the year of the next major crisis.

The Fed is beginning to tighten monetary policy. Sure, it’s highly unlikely the Fed will even be able to normalize monetary conditions completely, but the markets will no longer be receiving $1.4 TRILLION in liquidity from the Fed in 2022.

Additionally, the days of massive fiscal spending are over. It’s possible the Biden administration will be able to pass a watered-down Build Back Better bill of $1.8 trillion in 2022… but the days of $3-$5+ trillion in stimulus spending we experienced in 2020 and 2021 are over.

So that’s another $3+ trillion in free money the system won’t be receiving.

Add it all up, and you’re talking about the market no longer receiving $5 trillion or so in free money/ liquidity in 2022.

If you think this won’t have an impact, you’re mistaken. It is not coincidence that stocks went into BUBBLE MODE when the Fed and Uncle Sam started throwing around trillions of dollars in response to the C-O-V-I-D 19 pandemic.

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Every time the Fed or Uncle Sam have withdrawn easy money conditions, stocks have visited their 50-month moving average. Every. Single. Time.

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As I write this, the 50-MMA is at 3,200. That’s a full 30% lower than where stocks are trading today.

Moreover, it’s quite possible the markets will be entering a prolonged BEAR MARKET in 2022… a time in which stocks lose 50% or more over the course of months.

The coming bust is going to be life-changing for many people. Most will lose much if not everything. But a small number of investors will generate LITERAL FORTUNES.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,

Posted in It's a Bull Market | Comments Off on The Countdown to the Next Crisis Starts in Just One Week

No, the Bottom is NOT In, New Lows Are Coming

By Graham Summers, MBA

Stocks are bouncing from yesterday’s lows, but the technical damage from yesterday’s bloodbath is severe.

The S&P 500 was stopped by its 50-day moving average (DMA) at 4,607 (see red line in the chart below). Unless the S&P 500 can break above this line, we’re in for MORE downside.

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What’s REALLY concerning is the fact that unlike stocks, high yield credit (red line in the chart below) NEVER even revisited its former highs. Instead it’s already turning back down.

Remember, this is THE market leader that signaled the first leg down on this plunge.

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This strongly suggests stocks will be revisiting the lows. And unfortunately, that’s the BEST outcome based on what I’m seeing.

Consider that breadth, which typically leads the broader market, barely bounced at all! And it’s already at NEW lows. Based on this alone, we should see the S&P 500 down in the 4,300s in the near future.

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Put another way, another bloodbath is coming. And when it hits, smart investors will cash in while everyone else gets taken to the cleaners.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,

Posted in It's a Bull Market | Comments Off on No, the Bottom is NOT In, New Lows Are Coming

What’s Coming Will Make 2008 Look Like a Picnic

By Graham Summers, MBA

Make no mistake, a crisis is coming.

It might not be tomorrow, next week or even next month, but it will be truly life changing for most investors.

How do we know this?

Because the current bubble is so insane, so out of control, that when it bursts it will make 2008 look like a picnic.

Consider that:

  1. Options trading volume (a sign of speculation) is exponentially higher than it was during the Tech Bubble.
  2. Crypto currencies that were invented as jokes trade at tens of billions of dollars.
  3. Tesla (TSLA) a $1 trillion company, trades like a penny stock rising or falling 10+% in a single day.
  4. People are selling Non-Fungible Tokes (NFTs) of farts, and other garbage… and making significant money.
  5. “Meme stocks” or stocks that are traded for ironic/ humorous purposes rise triple digits in a single day.
  6. Former President Trump’s Special Purpose Acquisition Company (SPAC) rose to a value of $5 billion despite having no business or operations.

And what is the Fed’s answer to all of this?

The Fed is going to keep rates at ZERO until at least the middle of 2022. And between now and then, it’s going to print another $90 billion in QE ($60 billion in QE in January, then another $30 billion in February and finally no QE in March).

Put another way the Fed believes that because it is printing less money, somehow this is going to make investors become rational/ deflate the bubble without inducing a crash. There was a time, before 2008, in which the Fed didn’t do ANY QE at all, but those days are long gone.

So where does this us?

Official inflation metrics show it clocking it at 6.8%, while REAL inflation is somewhere in the ballpark of 9%. The Fed has rates at zero and won’t raise them until the middle of 2022.

And this is happening: 

Again, a crisis is coming. And it’s going to make 2008 look like a picnic.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Posted in stock collapse? | Comments Off on What’s Coming Will Make 2008 Look Like a Picnic

Real Inflation is 9%… and the Fed Thinks It Can Stop By Raising Rates to 2%… GOOD LUCK WITH THAT!

By Graham Summers, MBA

And there it is: REAL inflation of 9%!

I’ve noted many times in the past that the official inflation measure, the Consumer Price Index, or CPI, is gimmicked to the point of fiction.

The reason for this is simple: this is the number everyone looks at. And if it reflected reality, Americans would realize that “quality of life” in this country has been in decline for the last 40 years as real costs of living have dramatically outpaced the rise in incomes.

Remember, if incomes do not rise at the same pace as inflation, your real cost of living is rising. Ever wonder why back in the 1950s most families got by on one income, while today both parents work and most families have massive mortgages, over $10K in credit card debt, and $50K in student loans?

Wonder no more!

What does this have to do with today?

Well, the official inflation data point, the CPI, claims inflation is at 6.8%. This is a 40 year high. But because CPI is gimmicked to UNDER-state inflation, the REAL rate of inflation is much, much worse.

If you don’t believe me, take a look at the Producer Prices Index (PPI), the CPI’s less known, less watched, but more accurate cousin.

Unlike CPI, which is crafted by bean counters at the government, PPI is based on actual information from actual producers of goods and services who must adjust their costs based on inflation or lose profits in the real economy…

Which is why the latest PPI data point is catastrophically bad, clocking in at 9.6% year over year (YoY) for the month of November.

Yes, 9.6% as in almost double digits.

Suffice to say, the Fed is WAAAAAAAAAYYYY behind the curve on inflation.

How high will the Fed need to raise rates to stop this? 2%? 4%? More? 

More importantly for the financial system, how will the mountain of debt that was issued based on interest rates of ZERO, going to react to the Fed tightening monetary conditions.

Some $2 trillion in corporate debt was issued in the U.S. last year alone. The U.S. Government issued another $5+ trillion. So right off the bat, you’ve got $7+ trillion in debt that was issued while rates were effectively at zero.

How is this going to adjust to rates at 1%? 2%? Higher?

For bonds with yields this low, every time the Fed raises rates, there is a dramatic impact. Remember, the yield on U.S. Treasuries represent the “risk free” rate of return against which the entire financial system is valued.

So, when the Fed raises rates, that $7+ trillion must adjust accordingly. This means those bond prices FALL and their yields RISE. And if they rise enough, the investors begin to default.

And we’re just getting started here.

As Lawrence McDonald recently noted, globally there is $30+ TRILLION MORE debt with sub-2% yields than there was the last time the Fed attempted to raise rates.

How is all that debt going to handle higher rates? What if the Fed has to raise rates way over 2% to stop inflation? What happens to the mountain of debt that was created BASED on yields being at 0%?

If you think the Fed can navigate this successfully, I would like to point out that the Fed wasn’t able to deflate the Tech Bubble nor the Housing Bubble without creating full-scale crises.

What are the odds the Fed can successfully deflate this current Everything Bubble… which is exponentially larger than the first two?

Look at the below chart and you tell me.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,

Posted in Inflation | Comments Off on Real Inflation is 9%… and the Fed Thinks It Can Stop By Raising Rates to 2%… GOOD LUCK WITH THAT!

The Fed Finally Created Inflation… And Now It’s Going To Blow Up the Financial System

The Fed Finally Created Inflation… And Now It’s Going To Blow Up the Financial System


By Graham Summers, MBA

The Fed finally succeeded in creating its much-desired inflation… and the great irony is that it will likely blow up the financial system.

For decades now the Fed argued that it should keep interest rates at zero… and continue printing hundreds of billions of dollars, because it wanted inflation to hit “2%.”

This is why the Fed did what it did after the Tech Crash, the Housing Crash, and the          C-O-V-I-D-19 Crash. Anytime someone pointed out that the Fed’s monetary policies were creating another, even larger bubble, the Fed told us, “We need to keep doing what we’re doing until inflation hits 2%!” 

The whole thing was a joke. After all, how can you create inflation of 2%, and make sure it stays at 2%? Inflation isn’t like a car where you can hit the desired speed and then press “cruise control.” 

Regardless, the Fed has spent well over $7 trillion pursuing this goal. And now that inflation has arrived, it’s clear the Fed has no idea what it’s doing.

The official inflation numbers claim inflation is at 6.8%.  However, everyone, including the Fed, knows this is fiction.

The real inflation number is well over 9%. The Bureau of Labor Statistics get away with stating that inflation is just 6% by claiming housing/ shelter prices are only up a mere 3% over the last 12 months. The reality, using actual data shows housing prices are up 19% and apartment rents are up over 8%.

Put simply, real inflation is much higher than 6%. But even the 6% inflation number is systemically problematic.

The Fed now claims it needs to tighten monetary conditions to stop the very inflation it has been trying to create. Stopping inflation means the Fed needs to raise rates. But the world is awash in debt and quite a bit of it was issued based on rates being at EXTRAORDINARY lows.

Some $2 trillion in corporate debt was issued in the U.S. last year alone. The U.S. Government issued another $5+ trillion. So right off the bat, you’ve got $7+ trillion in debt that was issued while rates were effectively at zero.

How is this going to adjust to rates at 1%? 2%? Higher?

For bonds with yields this low, every time the Fed raises rates, there is a dramatic impact. Remember, the yield on U.S. Treasuries represent the “risk free” rate of return against which the entire financial system is valued.

So, when the Fed raises rates, that $7+ trillion must adjust accordingly. This means those bond prices FALL and their yields RISE. And if they rise enough, the investors begin to default. 

And we’re just getting started here.

As Lawrence McDonald recently noted, globally there is $30+ TRILLION MORE debt with sub-2% yields than there was the last time the Fed attempted to raise rates.

How is all that debt going to handle higher rates? What if the Fed has to raise rates way over 2% to stop inflation? What happens to the mountain of debt that was created BASED on yields being at 0%?

If you think the Fed can navigate this successfully, I would like to point out that the Fed wasn’t able to deflate the Tech Bubble nor the Housing Bubble without creating full-scale crises.

What are the odds the Fed can successfully deflate this current Everything Bubble… which is exponentially larger than the first two?

Look at the below chart and you tell me.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Posted in It's a Bull Market | Comments Off on The Fed Finally Created Inflation… And Now It’s Going To Blow Up the Financial System

The Fed Is About to Start Playing with Matches Next to a $30 TRILLION Debt Bomb

By Graham Summers, MBA

Let’s cut through the narratives and media “BS.”

The Fed is trapped.

Inflation is soaring. And the Fed has signaled that it is shifting its focus from growth (employment) to inflation. Specifically, after 20 months of claiming inflation is “transitory” and not a problem, Fed Chair Jerome Powell has publicly stated that he no longer believes inflation is “transitory” and that the Fed can consider wrapping up its taper “a few months sooner.”

This means the Fed will be tapering QE and hiking interest rates sooner than expected.

There’s just one small problem.

As Lawrence McDonald recently noted, there is over $30 TRILLION more in debt trading at yields lower than 2% than there was the last time the Fed attempted to raise rates.

For bonds with yields this low, every time the Fed raises rates, there is a dramatic impact. Remember, the yield on U.S. Treasuries are the “risk free” rate of return against which the entire financial system is valued.

So, when the Fed raises rates, all debt, including that $30+ trillion must adjust accordingly. This means those bond prices FALL and their yields RISE. And if they rise enough, the investors begin to default.

Put another way, this time around, there is a $30 TRILLION+ ticking bomb sitting there. And the Fed is going to start playing with matches right next to it… hoping the fuse doesn’t light by mistake.

Given that Fed’s attempt in dealing with the Tech Bubble and the Housing Bubble resulted in full-scale crises…what are the odds the Fed can successfully deflate this current Everything Bubble… which is exponentially larger than the first two?

Look at the below chart and you tell me.

It is HIGHLY likely another bloodbath is coming to the markets.

It’s quite possible the markets will be entering a prolonged BEAR MARKET… a time in which stocks lose 50% or more over the course of months.

The coming bust is going to be life-changing for many people. Most will lose much if not everything. But a small number of investors will generate LITERAL FORTUNES.

Let me be blunt here, if you’re not taking steps to prepare for what’s coming, NOW is the time to do so.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,

Posted in stock collapse? | Comments Off on The Fed Is About to Start Playing with Matches Next to a $30 TRILLION Debt Bomb

If You’re Betting Big on an Explosive Rally You Definitely Do Not Want to Miss These Charts!

You’ve got to hand it to the manipulators, they managed to get stocks almost to their former highs in a matter of days.

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However, underneath the surface, internals are calling, “BS.”

High yield credit, which bottomed first and lead stocks higher has actually peaked and begun rolling over two days ago.

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Breadth is also no supporting this move at all. If we were going by that metric, stocks would be still be down near the 4,400 on the S&P 500.

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So, what happened here?

What happened is “someone” manipulated the markets higher, and this forced hedge funds to panic and cover their shorts. When you short a stock, you must buy it back at some point. And hedge funds have been doing this by the truck load over the last 48 hours

Did it work?

The markets are red again this morning. This is always the problem with manipulations… they only work for a time.

It is HIGHLY likely another bloodbath is coming to the markets.

The losses will be staggering.

And it’s just the beginning. It’s quite possible the markets are entering a prolonged BEAR MARKET… a time in which stocks lose 50% or more over the course of months.

The coming bust is going to be life-changing for many people. Most will lose much if not everything. But a small number of investors will generate LITERAL FORTUNES.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Posted in Head Fake | Comments Off on If You’re Betting Big on an Explosive Rally You Definitely Do Not Want to Miss These Charts!

Why Are the Manipulators So Desperate? These Charts Tell Us!

As I’ve been outlining over the last few days, “someone” is aggressively manipulating stocks higher.

Large financial institutions do NOT attempt to move markets. In fact, the traders charged with executing these institutions’ trades are graded based on their ability to buy and sell large chunks of stocks without moving the tape.

So, we can be certain that the “investor” who is doing this…

…isn’t a large financial institution looking to open a legitimate position. No, the kind of ramp in a matter of minutes on no news is the work of “someone” looking to manipulate the markets higher. 

Why are they doing this?

Because the market is forward-looking… and next year, the Fed will be ending its $120 billion QE program, and the U.S. government will be ending its stimulus programs.

This means a total of $4-$5 TRILLION in free money/ liquidity will no longer be funneled into the financial system.

Why do you think copper, the commodity with so many industrial uses, it’s called “Dr. Copper, the commodity with a PhD in economics,” has broken down?

Or how about stocks that are closely tied to the REAL ECONOMY like 3M?

Or how about FedEx (FDX), which is even MORE sensitive to economic developments?

In simple terms, the signs are clear: the economy will be collapsing in 2022. And a bloodbath is coming to the markets. 

The losses will be staggering.

And it’s just the beginning. It’s quite possible the markets are entering a prolonged BEAR MARKET… a time in which stocks lose 50% or more over the course of months.

The coming bust is going to be life-changing for many people. Most will lose much if not everything. But a small number of investors will generate LITERAL FORTUNES.

Let me be blunt here, if you’re not taking steps to prepare for what’s coming, NOW is the time to do so.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Posted in stock collapse? | Comments Off on Why Are the Manipulators So Desperate? These Charts Tell Us!

Ignore the Manipulations… Another Bloodbath is Coming

The stock market manipulations are getting even more desperate.

On Friday I noted that the only thing holding up the stock market was abject manipulation. As I noted then, financial institutions do NOT attempt to move markets. In fact, the traders charged with executing these institutions’ trades are graded based on their ability to buy and sell large chunks of stocks without moving the tape.

Which is why we knew that no real investor was responsible for the move that occurred Thursday morning. I’m talking about the move that pushed stocks up from 4,506 to 4,566 Thursday morning in the span of a few minutes on no news.

That was Thursday. But on Friday, the manipulation became even more extreme. This time around, the manipulators desperately forced stocks higher during the final 15 minutes of trading to end the week at a better level. You can see it here:

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No real investor waits until 3:45PM to suddenly panic buy stocks. This is egregious manipulation. And it shows us that the manipulators are becoming increasingly desperate.

Why?

Breadth, which leads the broader market, is telling us the S&P 500 should be down at 4,300 (stocks are at 4,500 right now). Also note that whereas stocks bounced nicely last week, breadth was already revisiting the lows.

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In simple terms, the signs are clear: another bloodbath is coming. The markets will soon be a sea of red again. And the losses will be staggering.

And it’s just the beginning. It’s quite possible the markets are entering a prolonged BEAR MARKET… a time in which stocks lose 50% or more over the course of months.

The coming bust is going to be life-changing for many people. Most will lose much if not everything. But a small number of investors will generate LITERAL FORTUNES.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,

Posted in Head Fake | Comments Off on Ignore the Manipulations… Another Bloodbath is Coming

Guess Who’s Getting Taken to the Cleaners This Time Around?

The only thing holding the stock market up is blatant manipulation.

Financial institutions do NOT attempt to move markets. In fact, the traders charged with executing these institutions’ trades are graded based on their ability to buy and sell large chunks of stocks without moving the tape.

Which is why we know that no real investor is responsible for a move like this:

“Someone” or “someones” pushed stocks up from 4,506 to 4,566 yesterday morning in the span of a few minutes. No major news item or development hit the tape during this time. This was abject manipulation by someone trying to force stocks higher.

It makes you wonder what they’re afraid of…

Perhaps they’re afraid of the fact that stocks are in the single largest bubble in history… a bubble so frenzied with insane speculation that it makes the Tech Bubble look tame by comparison?

Perhaps this “someone” is concerned that the Fed is ending its monetary easing… the same monetary easing that has provided over $4 trillion in liquidity to the system since March 2020?

Perhaps this “someone” is also worried that the federal government is no longer able to provide $5 trillion in fiscal stimulus to prop up the system.

Or perhaps the “someone” is worried that a stock market crash would make the Biden administration look even worse when its polling is already in the toilet.

Whatever the reason, “someone” is intent on stopping the markets from imploding. Meanwhile, hedge funds, corporate insiders, and smart money are all selling the farm.

And they’re selling the farm to individual investors… who have borrowed more money to buy stocks than at any point in history.

So let’s review.

1) The Fed is ending its liquidity schemes.

2) Uncle Sam is ending his fiscal stimulus schemes.

3) Hedge Funds and corporate insiders are selling the farm.

4) Individual investors have borrowed a RECORD amount of money to buy stocks.

Guess who’s going to get taken to the cleaners on this?

Let me be blunt here, if you’re not taking steps to prepare for what’s coming, NOW is the time to do so.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,

Posted in Head Fake | Comments Off on Guess Who’s Getting Taken to the Cleaners This Time Around?

The only thing holding the stock market up is blatant manipulation.

Financial institutions do NOT attempt to move markets. In fact, the traders charged with executing these institutions’ trades are graded based on their ability to buy and sell large chunks of stocks without moving the tape.

Which is why we know that no real investor is responsible for a move like this:

“Someone” or “someones” pushed stocks up from 4,506 to 4,566 yesterday morning in the span of a few minutes. No major news item or development hit the tape during this time. This was abject manipulation by someone trying to force stocks higher.

It makes you wonder what they’re afraid of…

Perhaps they’re afraid of the fact that stocks are in the single largest bubble in history… a bubble so frenzied with insane speculation that it makes the Tech Bubble look tame by comparison?

Perhaps this “someone” is concerned that the Fed is ending its monetary easing… the same monetary easing that has provided over $4 trillion in liquidity to the system since March 2020?

Perhaps this “someone” is also worried that the federal government is no longer able to provide $5 trillion in fiscal stimulus to prop up the system.

Or perhaps the “someone” is worried that a stock market crash would make the Biden administration look even worse when its polling is already in the toilet.

Whatever the reason, “someone” is intent on stopping the markets from imploding. Meanwhile, hedge funds, corporate insiders, and smart money are all selling the farm.

And they’re selling the farm to individual investors… who have borrowed more money to buy stocks than at any point in history.

So let’s review.

1) The Fed is ending its liquidity schemes.

2) Uncle Sam is ending his fiscal stimulus schemes.

3) Hedge Funds and corporate insiders are selling the farm.

4) Individual investors have borrowed a RECORD amount of money to buy stocks.

Guess who’s going to get taken to the cleaners on this?

Let me be blunt here, if you’re not taking steps to prepare for what’s coming, NOW is the time to do so.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,



Posted in Head Fake | Comments Off on

The Fed is NOT Coming to the Rescue This Time… Are You Paying Attention?

The dip buyers got annihilated yesterday.

Stocks started the day up as traders “bought the dip” expecting that once again the Fed would intervene to prop the markets up.

They were wrong, and stocks rolled over a dropped hard into the close.

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What is going on here?

What is going on is that the Fed is no longer in the business of propping the markets up with more easing. As I noted yesterday, the Fed has completely shifted its focus from growth to inflation.

This means the Fed will be TIGHTENING, not easing going forward.

If you don’t believe me, maybe you’ll believe Fed Chair Powell who told a Senate panel yesterday: “The risk of persistently higher inflation has clearly risen, and I think our policy has adapted.”

“Policy has adapted” = we are tightening to crush inflation.

So, if you think the Fed is coming to the rescue anytime soon, you are mistaken. Stocks have NOT bottomed. If anything, this mess has just gotten started.

High yield credit (red line) has already figured this out. Stocks are only just starting to “get it.”

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For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,

Posted in Head Fake, stock collapse? | Comments Off on The Fed is NOT Coming to the Rescue This Time… Are You Paying Attention?

The Fed Just Shared a Disturbing Fact… Are You Listening?

By Graham Summers, MBA

Stocks are bouncing again because investors have been trained by the Fed to “buy the dip” since the March 2020 lows.

So, traders are buying this one.

However, there is a big difference between this recent drop in stocks and the others.

This time around, the Fed has indicated it is NOT going to start easing again. In fact, Fed Chair Jerome Powell made it clear the Fed might very well accelerate its monetary tightening.

Yesterday Fed Chair Jerome Powell told a Senate panel that he no longer believes inflation is “transitory” and that the Fed can consider wrapping up its taper “a few months sooner.”

This means the Fed has shifted gears.

For the last 20 months, the Fed has told the world that its focus was on growth in terms of jobs and employment. Throughout this period, Fed Chair Powell and his Fed colleagues stated that inflation was “transitory’ and didn’t warrant action.

This meant the Fed was willing to risk inflation while trying to create growth.

Not anymore.

The Fed is now focused on inflation, not growth. Which means it will be tightening not easing monetary conditions, most likely faster than most expect.

The credit markets have figured this out… take note where high yield credit (red line) is relative to stocks (black line) in the chart below. High yield credit leads stocks. It did so from the March lows. And now it’s doing the same to the downside.

Look, the message here is simple: the correction in stocks is NOT over. It’s NOT time to buy yet. If anything, we can expect stocks to drop to the red box sometime in the coming days.

Put another way, another bloodbath is coming. And when it hits, smart investors will cash in while everyone else gets taken to the cleaners.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,

Posted in Head Fake | Comments Off on The Fed Just Shared a Disturbing Fact… Are You Listening?