And we’re back!
Thank you so much for your patience over the last 48 hours. We are still in the process of upgrading parts of the Gains Pains & Capital website, but for the most part, things are working again.
On to the markets.
The financial world is entering a massive process of transition though most folks have failed to see it. That process is that of Ben Bernanke being forced to resign and the US Federal Reserve being broken up.
I know many people believe the Fed is always going to be in power, but they are wrong. The US Federal Reserve is in fact the third central bank the US has had. And it, like the other two, will be dismantled in the next five years.
The reason for this is quite simple. The REAL Crisis (of which 2008 was the warm-up) is fast approaching. When I say REAL Crisis I mean full-scale systemic meltdown, a situation in which the market accomplishes what the Fed, regulators, and US Government at large have failed to do: clean house.
The plain facts are right in front of us. The US is broke on every level: Federal, State, Local, and individual/ consumer. We all know this, but we don’t want to admit it because doing so would likely mean wiping out at minimum 30% of what we have today.
Nobody wants this. Consumers don’t want to lose their retirement accounts or their savings. The Government doesn’t want to lose its unending virtual checkbook. Politicians don’t want to lose their financial backers (the oligarchs). And the Fed certainly doesn’t want to lose its massive Free Lunch.
However, it is clear to everyone that the system is broken. Consider that the very policies that Wall Street developed resulting in the 2008 meltdown (excessive debt, fraud, too much leverage, etc) are now being applied to the Federal balance sheet.
Indeed, the Fed’s response to the Financial Crisis was to do the exact same things Wall Street did.
The only reason it worked for a time was because investors continue to believe that the Fed is some kind of omnipotent financial authority that can take on all debts and back up all monetary transactions. The reason they’re willing to believe this is because not doing so would result in the collapse I referred to before.
To use a metaphor, if your house has a broken foundation (the financial system), you can prop it up using various structures (the Fed). However, eventually the foundation gives way regardless of the support.
We are already seeing this happen in Europe. The Euro is up but the entire European system is broken. No one wants to be a part of it any more. Only the politicians and bankers are trying to keep it together (largely because they don’t want to lose their influence).
However, elections in Germany are making it clear voters will obliterate anyone who is pro bailouts. As a result of this, the tide is turning. Large-scale reform and changes can take a while which is why the process seems to be occurring in slow motion.
But the process is occurring. And nothing can stop it. You can fight the tide tooth and nail, but it will turn regardless of your efforts.
The same situation will hit in the US in the future. I’ve already detailed why the US Dollar is holding up (it’s priced against other paper currencies) despite the fact an exodus from the greenback is occurring.
Indeed, prices of goods are EXPLODING higher. It’s being hidden because retailers like Wal-Mart are downsizing the size of their packages OR packing less goods in the same space (look inside any cereal box or other dry good and you’ll find that at best it’s 75% full).
This is why I’m already preparing investors for the inflationary disaster NOW rather than waiting for the US Dollar to collapse. It’s also why our hedges are all UP with gains of 17%, 18% 27%, 56%, and 111% though the US Dollar has fallen less than 10%.
How is this possible? Because I’m focusing on extraordinary inflation hedges that 99% of the investment world don’t know about. I’m talking about inflation hedges that will outperform even Gold and Silver because of their incredible value.
And I detail them (including their names, symbols, and how to buy them) in my recently published Special Report The Inflationary Storm Pt 2.
And I’m only making 250 copies of this second report available to the public. As I write this, there are less than 80 copies left and they’re going fast (for obvious reasons).
So if you want to pick up a copy of this report, you better move fast.
To reserve a copy…
Best Regards,
Graham Summers
