Day: June 15, 2011

We’ve Yet to Witness the Fed’s Greatest Failure

With the economic numbers getting worse and worse in the US, it’s clear that the Fed’s policies thus far have ended in abysmal failure. Indeed, I really can’t see how anyone could have argued the US had experienced a recovery to begin with.

  • 15 million jobs have been lost since 2007.
  • Food stamp usage is up 57% since 2007.
  • Over one in five US mortgages is underwater.

Seeing as the Fed’s policies were supposed to help US consumers (we all know their real purpose: Wall Street bonuses), I cannot see how the above numbers indicate success of any kind.

Indeed, the other effects of the Fed’s moves have made an already difficult economic situation far, far worse by pushing the price of food and energy through the roof. Thus most in the US now find themselves facing stagflation in a big way.

However, the Fed is far too myopic in its belief system to possibly consider not printing more money. After all, from the end of QE 1 (April 2010) until the unveiling of QE lite (August 2010), the Fed continued to juice the market every month, particularly during options expiration weeks.

So the Fed will be juicing the system again at some point in the future. It’s all the Fed knows how to do. And it’s all the Fed has done since the Crisis began in 2007. Indeed, the Fed has completely and utterly failed to address ANY of the causes of the Financial Crisis.

Yet, for the Fed the failure to address any of the underlying causes of the Financial Crisis has been a great success story. After all, all it had to do was pump the financial system full of more money (increasing the amount of leverage) and push for the suspension of accounting standards (so the crap debt is still there, but no longer is visible).

So what do we have? A financial system where the underlying problems still exist and the Fed’s simply pumped TRILLIONS into the banks, resulting in commodities soaring, the US Dollar tanking, and investors taking on even more leverage.

Since 2009, I’ve been warning that the Financial Crisis is not over and that the next round will be even worse than the first. THIS is the REAL problem every one should be preparing for… not just a minor correction in stocks or the end of QE 2. Because at some point, the Fed WILL lose control of the system again. And this time it will be COMPLETELY powerless to re-instill confidence (the Fed’s already spent all of its bullets during Round One).

On that note, I’m already preparing subscribers of my Private Wealth Advisory newsletter for what’s coming. While most investors lost money last week, our two deflation trades took off. And we are close to getting “buys” on our other three deflation trades.

So if you’re looking for specific investment ideas (including buy and sell alerts) in this rocky market, few analysts on the planet have my ability to turn a profit during dangerous times.

To whit, I called the 2008 Crash months ahead of time and had my subscribers 100% in cash three weeks before the October-November 2008 nightmare hit. And the Private Wealth Advisory portfolio outperformed the S&P 500 by 15% during the Euro Crisis of May-July 2010.

So if you’re looking for someone to guide you through the coming dangerous times in the markets… you can take out a subscription to Private Wealth Advisory today and immediately begin receiving my hard-hitting analysis of the markets as well as specific investments to buy and sell to insure you stay protected… and turn a profit in the months ahead.

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Good Investing!

Graham Summers





Posted by Phoenix Capital Research in It's a Bull Market