Month: December 2011

We’ve reached the end game for Central Bank intervention.

When confronted with excessive debt, you can either “take the hit” or you can try to inflate the debt away.

In 2008, the Central Banks, lead by the US Federal Reserve, decided not to “take the hit.” They’ve since spent trillions of Dollars propping up the financial system. By doing this, they’ve essentially attempted to fight a debt problem by issuing more debt.

The end result is similar to what happens when you try to cure a heroine addict by giving him more heroine: each new “hit” has less and less effect.

Case in point, consider the Central Banks’ coordinated intervention to lower the cost of borrowing Dollars three weeks ago. Remember, this was a coordinated effort, not the Federal Reserve or European Central Bank acting alone.

And yet, here we are, less than one month later, and European banks have wiped out MOST if not ALL of the gains the intervention produced.

Here’s the Irish Bank Allied Irish Banks:

This is actually the best of the bunch I’m going to show you (by the way, this was a $4 stock at the beginning of the year).

Here’s the Spanish Bank Santander:

And lest you think it’s only the PIIGS banks that are in trouble, here’s French bank Credit Agricole:

And here’s Germany’s Commerzbank:

On that note, if you’re looking for investment ideas and risk strategies on how to profit from this, I strongly urge you to check out my Private Wealth Advisory newsletter.

Private Wealth Advisory is my bi-weekly investment advisory aimed at helping investors beat the market by anticipating major trends and avoiding the REAL risks to their portfolios.

Case in point, Private Wealth Advisory subscribers profited from the collapse in late July/ early August, having been warned weeks in advance that it was coming.

They’ve since locked in some 33 winning trades (and no losers)… at a time when 99% of investors (professional and otherwise) are getting whipsawed this way and that by the market’s volatility.

As a result of this, we’re crushing the market this year, which is why my clients (which include executives at Fortune 500 companies and some of the largest financial institutions in the world including UBS, Wells Fargo, Merrill Lynch, and others) are very, very happy.

But we’re not done by any stretch.

Indeed, we just opened seven new trades last week to profit from the next round of Deflation. All of these trades are positioned to explode higher in the coming weeks as the market comes unhinged.

To find out what they are… that the worry and uncertainty out of investing in today’s market… and start making serious returns from your investments (again, we’ve seen 33 STRAIGHT WINNERS in the second half of 2011)…

Click Here Now!!!

Graham Summers

 

 

 

 

 

 

… Unless we get a major bank going under or a 2008-type event.

I’ve been reading that several pundits believe QE 3 is just around the corner. I’m sorry to say that this view is both misguided and has proven to be extremely dangerous to investors’ portfolios over the six months.

Indeed, we’ve heard this argument virtually non-stop since last June. Every time the Fed had another FOMC coming up, the argument was made that QE 3 would be announced. Every single time the Fed disappointed and the markets cratered (only to then be ramped higher by the PPT).

The madness would then start all over again a few weeks later. Whether it was some Dovish Fed President hinting the Fed was ready to act… or some economic data point missing expectations… EVERY TIME the pundits spun this to argue that QE 3 was just around the corner.

However, for those who actually read what Bernanke was saying, it was clear as day that QE 3 was NOT coming… at least not without some kind of Crisis hitting first: such as a major bank collapsing or another 2008 episode.

Take a look at the following:

Q. Since both housing and unemployment have not recovered sufficiently, why are you not instantly embarking on QE3? — Michael A. Kamperman, Waco, Tex.

Mr. Bernanke: “Going forward, we’ll have to continue to make judgments about whether additional steps are warranted, but as we do so, we have to keep in mind that we do have a dual mandate, that we do have to worry about both the rate of growth but also the inflation rate…

“The trade-offs are getting — are getting less attractive at this point. Inflation has gotten higher. Inflation expectations are a bit higher. It’s not clear that we can get substantial improvements in payrolls without some additional inflation risk. And in my view, if we’re going to have success in creating a long-run, sustainable recovery with lots of job growth, we’ve got to keep inflation under control. So we’ve got to look at both of those — both parts of the mandate as we — as we choose policy”

http://economix.blogs.nytimes.com/2011/04/28/how-bernanke-answered-your-questions/

Pessimistic Bernanke Fed Admits QE Has Failed In FOMC Statement

In its latest FOMC statement, the Bernanke Fed has admitted the economy continues to remain depressed, essentially admitting that both programs of long-term asset purchases, or quantitative easing, have failed to prop up output after what has been the worst recession since the Great Depression.

http://www.forbes.com/sites/afontevecchia/2011/08/09/pessimistic-bernanke-and-fomc-practically-admit-qe-has-failed/

“Monetary policy can do a lot, but monetary policy is not a panacea.” — Ben Bernanke 9/29/11

U.S. “close to faltering,” Fed ready to act: Bernanke

Asked whether another round of bond purchases, known as quantitative easing, was in store, Bernanke was noncommittal.

“We never take anything off the table because we don’t know where the economy is going to go. We have no immediate plans to do anything like that,” he said.

http://www.reuters.com/article/2011/10/04/us-usa-fed-bernanke-idUSTRE79337C20111004

Central banks may need to burst bubbles: Bernanke

Federal Reserve Chairman Ben Bernanke said on Tuesday that central banks may need to resort to monetary policy to combat asset bubbles, although regulation should be a first line of defense.

http://www.reuters.com/article/2011/10/18/us-usa-fed-bernanke-idUSTRE79H5IR20111018

 

Look at the progression there. As far back as May 2011, Bernanke admitted the benefits of QE were less attractive. He’s since not only admitted that asset bubbles exist (something Greenspan never admitted) but that Central Banks may even need to “burst” them!?!?

In what way do ANY of these indicate QE 3 is coming any time soon… if at all.

Which brings us to today. Once again the economy is weakening and once again the markets are under duress. And the pundits are out in full force saying QE 3 is coming in early 2012.

My question is: How exactly is the Fed going to sell that one?

The Fed can’t possibly claim it’s trying to lower interest rates with the short end of the curve essentially offering 0% and Operation Twist 2 focusing on getting the long-end even lower (at a time when the 30-year is already under 3% and the 10-year under 2%)?

Also how is Bernanke, who is now so politically toxic that he’s complaining to Congress that the media is treating him unfairly (and having his leaks at the Wall Street Journal write “Bernanke’s just like the rest of us… with a kindle and everything” articles) going to be able to unveil QE 3 without major consequences to his career?

Folks, this is the same man who used to lie openly to Congress about his intentions… who acted however he saw fit and was beholden to no one… NOW WRITING TO CONGRESS DEFENDING HIS ACTIONS AND COMPLAINING THAT HE’S BEING UNFAIRLY TREATED.

Do you really think Bernanke can launch another MAJOR monetary policy in this environment? Heck, EVERY GOP candidate is talking about firing him or calls his actions borderline treasonous. And with Obama’s rating at new lows… do you really think he’s going to be defending Bernanke when it’s already obvious that both the GOP and the general populace are outraged at the Fed?

Not. A. Chance.

The simple fact is that QE 3 is not coming… at least not without a 2008-type event or one of the TBTFs going under first. And even then, Bernanke may find that the political environment won’t tolerate it (after all, the simple argument to counter the need for QE 3 would be: “We’re in a Crisis again… so QE 1, QE Lite, QE 2, and Operation Twist 2 failed to solve the problem… so why should you launch QE 3?”).

On that note, if you’re looking for investment ideas and risk strategies on how to profit from this, I strongly urge you to check out my Private Wealth Advisory newsletter.

Private Wealth Advisory is my bi-weekly investment advisory aimed at helping investors beat the market by anticipating major trends and avoiding the REAL risks to their portfolios.

Case in point, Private Wealth Advisory subscribers profited from the collapse in late July/ early August, having been warned weeks in advance that it was coming.

They’ve since locked in some 33 winning trades (and no losers)… at a time when 99% of investors (professional and otherwise) are getting whipsawed this way and that by the market’s volatility.

As a result of this, we’re crushing the market this year, which is why my clients (which include executives at Fortune 500 companies and some of the largest financial institutions in the world including UBS, Wells Fargo, Merrill Lynch, and others) are very, very happy.

But we’re not done by any stretch.

Indeed, we just opened seven new trades last week to profit from the next round of Deflation. All of these trades are positioned to explode higher in the coming weeks as the market comes unhinged.

To find out what they are… that the worry and uncertainty out of investing in today’s market… and start making serious returns from your investments (again, we’ve seen 33 STRAIGHT WINNERS in the second half of 2011)…

Click Here Now!!!

Graham Summers

 

 

 

 

The markets have entered a new round of deflation. The only asset class that has yet to realize this is stocks.

Here’s the 30-Year Treasury Bond:

As you can see, we’ve already surpassed the former all-time established during the nadir of the 2008-2009 Crisis. To say this is deflationary would be an understatement. Indeed, on the shorter end of the bond curve Treasuries are yielding 0% (the 3-month), 0.02% (the six month) and 0.2% (the two year).

Put another way, investors are essentially willing to lend to the US for almost NOTHING in return for up to two years… based solely on the notion that by doing so they’re at least “guaranteed” a return OF capital.

DE-flation.

Here’s Gold:

Considering that Gold is a leading indicator for stocks… and that the precious metal only breaks below its long-term uptrend in times of systemic risk, the above breakdown is a MAJOR red flag that something BAD is brewing in the financial system. That something is another round of DE-flation.

How about Agricultural commodities… which anticipated QE Lite and QE 2 before every other asset class?

As you can see, we’ve wiped out ALL of the QE 2 gains and are now on the verge of breaking back into a trading range that goes back to 2009. Again, DE-flation.

 

And then there’s stocks… the most clueless of asset classes, which simply don’t “get it”… yet.

As you can see, while Europe’s banking system is imploding, Gold has broken its long-term uptrend, and US Treasuries are signaling a Crisis even worse than 2008, stocks are bouncing off of support as though there’s no real danger.

This can be attributed to three factors:

1)   Light volume (fewer and fewer folks are investing in stocks which allows Wall Street to move the market more easily).

2)   End of the year performance gaming by hedge funds and institutions (most of which have had horrible years)

3)   Misguided hope and delusions… just like the ones we had in 2008 when stocks didn’t “get it” until the whole system was ready to collapse

In simple terms, the best analysis of today’s markets is that we are getting MAJOR red flags across the board that another round of DE-flation is here.

Against this backdrop, stocks are as clueless as they were in 2008. And given that most traders will be taking off early this week, those remaining will be able to move the market any way they please as volume will be even lower than the abysmal levels we’ve seen for most of 2011.

So my advice is to avoid trading this week if you can help it. There is simply too much uncertainty in the market: stocks could rally based on end of the year shenanigans… or they could just as easily collapse due to Europe or any number of other issues in the system today.

However, the larger picture indicates that deflation is back and it’s back with a vengeance. It would be wise to prepare in advance for this as stocks are ALWAYS the last to “get it.” And by the looks of the recent action in Gold and Treasuries, “It” is going to be something VERY unpleasant.

On that note, if you’re looking for investment ideas and risk strategies on how to profit from this, I strongly urge you to check out my Private Wealth Advisory newsletter.

Private Wealth Advisory is my bi-weekly investment advisory aimed at helping investors beat the market by anticipating major trends and avoiding the REAL risks to their portfolios.

Case in point, Private Wealth Advisory subscribers profited from the collapse in late July/ early August, having been warned weeks in advance that it was coming.

They’ve since locked in some 33 winning trades (and no losers)… at a time when 99% of investors (professional and otherwise) are getting whipsawed this way and that by the market’s volatility.

As a result of this, we’re crushing the market this year, which is why my clients (which include executives at Fortune 500 companies and some of the largest financial institutions in the world including UBS, Wells Fargo, Merrill Lynch, and others) are very, very happy.

But we’re not done by any stretch.

Indeed, we just opened seven new trades last week to profit from the next round of Deflation. All of these trades are positioned to explode higher in the coming weeks as the market comes unhinged.

To find out what they are… that the worry and uncertainty out of investing in today’s market… and start making serious returns from your investments (again, we’ve seen 33 STRAIGHT WINNERS in the second half of 2011)…

Click Here Now!!!

Graham Summers

 

 

One of the biggest problems facing the world today is the fact that most world leaders have little if any business experience. Those who do are inevitably investment bankers/ financiers who, while technically businessmen, have expertise primarily in financial engineering, NOT manufacturing goods or services that create actual job growth.

With that in mind, when analyzing what’s happening in Europe, it’s wise to consider what ACTUAL businesspeople are doing today with their corporations’ cash rather than what leaders are claiming is true about the financial system.

Case in point, every other week we are told that Europe’s problems will soon be solved and that the EU will be stronger then ever. If this is indeed the case, I wonder about the following story:

European CEOs Move Cash to Germany In Case of Euro Breakup

Grupo Gowex, a Spanish provider of Wi-Fi wireless services, is moving funds to Germany because it expects Spain to exit the euro. German machinery maker GEA Group AG is setting maximum amounts held at any one bank…

“A couple of weeks ago I would never have thought about having conversations on the probability of the euro disappearing, but now there is more speculation on such a scenario,” Wolters Kluwer NV (WKL) CEO Nancy McKinstry said in a Nov. 29 interview at the company’s headquarters outside Amsterdam…

Kingfisher Plc (KGF), Europe’s largest home-improvement retailer, has considered plans for the possibility of a collapse of the euro region and will focus on cash generation to account for that possibility, Chief Executive Officer Ian Cheshire said.

http://www.bloomberg.com/news/2011-12-09/wary-european-ceos-move-cash-to-germany-to-protect-against-breakup-risk.html

These are REAL businesspeople who RUN corporations, preparing for the breakup of the Euro by moving their cash to Germany. Read the above article: it features executives from companies throughout Europe all of whom state they are preparing for a Crisis and the potential of a Euro breakup.

And if you think that politicians have somehow solved the banking crisis… read the following:

Eurozone banking system on the edge of collapse

If anyone thinks things are getting better then they simply don’t understand how severe the problems are. I think a major bank could fail within weeks,” said one London-based executive at a major global bank.

Many banks, including some French, Italian and Spanish lenders, have already run out of many of the acceptable forms of collateral such as US Treasuries and other liquid securities used to finance short-term loans and have been forced to resort to lending out their gold reserves to maintain access to dollar funding.

http://www.telegraph.co.uk/finance/financialcrisis/8947470/Eurozone-banking-system-on-the-edge-of-collapse.html

If a bank has to resort to lending out GOLD reserves in order to get DOLLAR funding so it can maintain liquidity… then it’s on its deathbed. And this is happening in France, Italy and Spain RIGHT NOW.

It’s time we admit the truth, the EU and its banking system are literally on the edge of collapse. Think 2008… for an entire region. And politicians are going to solve this mess with a March 2012 meeting!?!

The impact of what’s coming will be TREMENDOUS. Europe’s banking system is over $40 trillion in size. The EU, taken as a whole, is:

1)   The single largest economy in the world ($16.28 trillion)

2)   Is China’s largest trade partner

3)   Accounts for 21% of US exports

4)   Accounts for $121 billion worth of exports for South America

So if the EU banking system/ economy collapses, the global economy could enter a recession just based on that one issue alone (ignoring the other issues in China, Japan, and the US).

Make no mistake, we’re heading into a Crisis that will make 2008 look like a picnic. If you’ve yet to prepare for this, I suggest you do so now.

On that note, if you’re an individual investor (not a day trader) looking for the means of profiting from all of this, then you NEED to check out my Private Wealth Advisory newsletter.

Private Wealth Advisory is a bi-weekly investment advisory that uses stocks and ETFs to profit from the dominant market trends.

Every two weeks I outline what’s REALLY going on behind the scenes in the markets, as well as which investments will profit best from these developments.

Case in point, Private Wealth Advisory subscribers caught the initial market Collapse in August. They’ve also profited beautifully from the collapse in European banks, the US Dollar’s rally, and the breakdown in the emerging markets.

In fact, we’ve closed out 32 straight winners and NO losers since JULY.

But don’t worry that all the profits have already been made. We currently have several trades open that are primed to explode higher in the coming weeks. By subscribing today, you’ll immediately be given access to them.

You’ll also gain immediate access to my Protect Your Family, Protect Your Savings, and Protect Your Portfolio Special Reports outlining how to prepare these areas of your life for the coming Great Crisis.

These reports outline:

1) how to prepare for bank holidays

2) which banks to avoid

3) how much bullion to own

4) how much cash is needed to get through systemic crises

5) how much food to stockpile, what kind to get, and where to get it

And more…

To take out an annual subscription to Private Wealth Advisory now… start profiting from the market’s gyrations (again we haven’t closed a losing trade since JULY)… and gain access to all my Special Reports…

Click Here Now!!!

Best Regards,

Graham Summers

 

 

 

 

 

Stocks have entered a kind of fantasy world, completely detached from any kind of economic, political, or financial reality. Indeed, last week the #1 driver of stock prices was unfounded rumors that were refuted within hours of their being published (I’ve circled the rumor-based rallies in the chart below).

Again, these were rumors… based on lies… that were refuted within hours of their being published… pushing the market into vertical rallies. Like I said, we’re in La La Land.

The reality of the financial system today is that we’re entering another global economic contraction. Earning have been abysmal in the US. Europe’s banking system is in a liquidity crisis on par with the post-Lehman Brothers collapse. China is entering a hard landing. And the US economy is in a second recession within a larger DE-pression.

The reasons stocks aren’t reacting to these realities (yet) are:

1)   Hedge funds and institutions are desperately trying to boost their returns before year-end (most have had HORRIBLE years)…

2)   Barring REAL selling pressure, most market action is dominated by high frequency trading programs (which don’t think or make qualitative judgments)… AND

3)   Traders have been conditioned to only care about one thing: more juice from the world’s central banks.

Indeed, if you want the real story for what’s happening to the world economy, take a look at the agricultural commodities. They (not stocks) were the first asset class to pick up on inflationary pressures from the Fed’s largesse in 2010. They were also the first asset class to pick up on the downturn in global economic activity in February 2011. And right now, they’re reflecting a reality that is far, FAR uglier than the one equities are discounting

This is an UGLY, DEFLATIONARY chart. It is a chart the predicts a SHARP economic contraction. Indeed, commodities as a whole don’t seem to be buying into the “risk on” atmosphere that dominated equities for most of 2011 (with the exception of late July-August).

The final, most glaring example of stocks being in La La Land comes from their inability to comprehend the current situation in Europe. Europe’s banking system is in a full-scale liquidity crisis that rivals the aftermath of Lehman Brothers’ bankruptcy. Indeed, multiple European nations are relying on the ECB to insure they don’t post FAILED bond auctions.

Against this backdrop, EU leaders just decided to impose stricter budgetary requirements from EU members. Only in La La Land could this be viewed as progress. The EU already had budgetary requirements… which the PIIGS countries all ignored. So how will these NEW budgetary requirements change anything? And who or what is going to enforce them?

And yet… stocks viewed this decision as a success. Again, we’re in La La Land.

Does this mean stocks can’t rally more from here? Not at all, in La La Land stocks can rally for no reason at all. But you should be aware that the credit, bond and commodities markets are all indicating we’re heading into a MASSIVE wave of deflation in the near future.

Remember, stocks were the last to “get it” in 2008. They’re the last to “get it” today too. And when they finally DO “get it,” we’re going to see some REAL fireworks.

On that note, if you’re an individual investor (not a day trader) looking for the means of profiting from all of this, then you NEED to check out my Private Wealth Advisory newsletter.

Private Wealth Advisory is a bi-weekly investment advisory that uses stocks and ETFs to profit from the dominant market trends.

Every two weeks I outline what’s REALLY going on behind the scenes in the markets, as well as which investments will profit best from these developments.

Case in point, Private Wealth Advisory subscribers caught the initial market Collapse in August. They’ve also profited beautifully from the ongoing turmoil in Europe as well as the volatility in the US Dollar.

In fact, we’ve closed out 32 straight winners and NO losers since JULY.

But don’t worry that all the profits have already been made. We currently have several trades open that are primed to explode higher in the coming weeks. By subscribing today, you’ll immediately be given access to them.

You’ll also gain immediate access to my Protect Your Family, Protect Your Savings, and Protect Your Portfolio Special Reports outlining how to prepare these areas of your life for the coming Great Crisis.

These reports outline:

1) how to prepare for bank holidays

2) which banks to avoid

3) how much bullion to own

4) how much cash is needed to get through systemic crises

5) how much food to stockpile, what kind to get, and where to get it

And more…

To take out an annual subscription to Private Wealth Advisory now… start profiting from the market’s gyrations (again we haven’t closed a losing trade since JULY)… and gain access to all my Special Reports…

Click Here Now!!!

Best Regards,

Graham Summers

 

 

Every day that Germany continues to flirt with the idea of propping up Europe, is another day that the country gets closer to its own fiscal crisis.

The mainstream media believes that Germany is somehow the bastion of fiscal strength. However, even a cursory look at the facts disproves this.

For starters, German banks post some of the highest leverage rations in Europe: higher that Italy, higher than Ireland, even higher than Greece. In fact, German banks are actually sporting leverage EQUAL to that of Lehman Brothers when it went bust.

To make matters worse, Germany has yet to recapitalize its banks. Indeed, by the German Institute for Economic Research’s OWN admission, German banks need 147 billion Euros’ worth of new capital.

Mind you, this is just NEW capital demands. In addition to this, German banks need to roll over 40% of their total outstanding debt within the next 12 months.

This is at a time when the many European nations are relying on the ECB to insure they don’t have a failed bond auction (by the way Germany had a failed bond auction just a few weeks ago).

Suffice to say, the German banking system isn’t as rock solid as the mainstream consensus. The German government knows about this situation which is why it’s already preparing for the potential nationalization of Germany’s largest banks should things get messy.

Germany’s sovereign balance sheet isn’t a whole lot better either. Officially, Germany has a Debt to GDP ratio of 84%. However, according to Axel Weber, the most recent head of Germany’s Central Bank (he left April 2011), Germany is in fact sitting on a REAL Debt to GDP ratio of over 200%. This is Germany… with unfunded liabilities equal to over TWO times its current GDP.

What’s truly frightening about this is that Weber is most likely being conservative here. Jagadeesh Gokhale of the Cato Institute published a paper for EuroStat in 2009 claiming Germany’s unfunded liabilities were in fact closer to 418% (and that was two years ago).

This further goes with my primary view: Germany has its own problems to deal with. So the idea that Germany is somehow going to prop up the EU is not really realistic. After all, if Germany was indeed going to serve as the mega-European backstop, don’t you think it would already have done so?

The truth is this: the German constitution won’t permit the issuance of Euro bonds. And the German population/ social contract between German politicians and voters will not stand for money printing of any kind.

So… don’t bank on Germany coming to save the day. Indeed, even the option of Germany somehow taking over other EU nations budgetary controls is ridiculous as NO EU member would submit to that.

Instead, I expect Germany to duck out of the Euro in the near future. It may happen in the next few weeks or it may happen in early 2012. But considering that the Federal Reserve had to step in to save the European banking system today I believe it will be sooner rather than later.

So if you believe that Germany is going to save the EU… you’re in for a rude surprise. Indeed, if we look at the bond or credit markets, it’s clear we’re into a Crisis far greater than 2008. Forget the stock market rally. Stocks ALWAYS get it last (just like in 2008). And before the smoke clears on this mess we’re going to see sovereign defaults, bank holidays, riots, and more.

Many people will lose everything in this mess. Yes, everything. However, you don’t have to be one of them. Indeed, I can show you how to turn this time of collapse into a time of profits.

Few people on the planet can match my ability to return a profit during times of Crisis.

To wit, my clients MADE money in 2008 outperforming every mutual fund on the planet as well as 99% of investment legends.

We also outperformed the market by 15% during the Euro Crisis of 2010. And since the latest round of the Euro Crisis began in July 2011, we’ve locked in not 10, not 20, but 32 STRAIGHT WINNERS including gains of 12%, 14%, 16% and 18%,

So if you’re looking for a guide to get you through the coming disaster, I’m your man.

I’ve been helping investors, including executives at many of the Fortune 500 companies, navigate their personal portfolios through the markets for years.

I can do the same for you with m y Private Wealth Advisory newsletter.

The minute you subscribe to Private Wealth Advisory you’ll be given access to my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports telling you precisely which steps to take to prepare your loved ones and your personal finances for what’s coming.

You’ll also join my private client list in receiving my bi-weekly market updates outlining what’s really happening behind the scenes in the markets and which investments will profit in the coming months.

And when it’s time to pull the trigger on a given investment, I’ll send you real-time trade alerts.

All of this is yours for just $249 per year.

The time for dilly dallying is over. Europe is literally on the eve of systemic failure. Even the IMF has warned we’re facing a global collapse.

To take action to protect yourself… and insure that the coming weeks and months are a time of profit and safety, NOT losses and pain…

Click Here Now!!!

Best Regards

Graham Summers

 

 

 

 

 

 

 

 

 

 

 

 

I’ve stated before that I fully believe Germany will be leaving the Euro. With that in mind, I want to draw your attention to recent comments from Germany’s finance minister, Wolfgang Schauble.

Wolfgang Schauble admits euro bail-out fund won’t halt crisis

Europe’s “big bazooka” bail-out fund is not ready and won’t stem the debt crisis that on Tuesday pounded Italy and the European Central Bank (ECB), admitted Wolfgang Schauble, Germany’s finance minister.

http://www.telegraph.co.uk/finance/financialcrisis/8924462/Wolfgang-Schauble-admits-euro-bail-out-fund-wont-halt-crisis.html

This is a pretty strong admission from the finance minister of the country that Europe looks to as a financial backstop. And the following is even more disconcerting for the future of the Euro:

Seeing in Crisis the Last Best Chance to Unite Europe

MR. SCHÄUBLE said the German government would propose treaty changes at the summit of European leaders in Brussels on Dec. 9 that would move Europe closer to the centralized fiscal government that the currency zone has lacked. The ultimate goal, Mr. Schäuble says, is a political union with a European president directly elected by the people.

“What we’re now doing with the fiscal union, what I’m describing here, is a short-term step for the currency,” Mr. Schäuble said. “In a larger context, naturally we need a political union.”

Critics say the spending cuts German leaders have demanded from other countries are hurting growth across the Continent, in the process making debts only harder to repay. And his proposals to give the European Commission far-reaching powers to enforce budgetary discipline have been likened by skeptics in Britain to an invasive new “super state.” Even some euro supporters fear that Mrs. Merkel and Mr. Schäuble are talking about long-term changes while panicked investors and practiced speculators are tearing the euro to pieces right now.

“There is a limited transition period where we have to manage the nervousness on the markets,” Mr. Schäuble said. “If it is clear that by the end of 2012 or the middle of 2013 that we have all the ingredients for new, strengthened and deepened political structures together, I think that will work.”

He sees the turmoil as not an obstacle but a necessity. “We can only achieve a political union if we have a crisis,” Mr. Schäuble said.

http://www.nytimes.com/2011/11/19/world/europe/for-wolfgang-schauble-seeing-opportunity-in-europes-crisis.html?_r=1&pagewanted=2

Note that Schauble repeatedly emphasizes the goal of a “political union,” NOT a “fiscal union” or “monetary union.” Indeed, his one reference to a “fiscal union” is in the “short-term,” while stressing that in a “larger context” the EU needs a “political union.”

The message here is very, very clear: Germany is interested in the EU as a political entity, NOT the Euro as a currency. With that in mind, consider the following story which received almost NO attention from the media:

-German Chancellor Angela Merkel’s conservatives on Monday passed a resolution at a party convention urging the government to establish rules in Europe that would allow a country to voluntarily leave the euro zone without giving up membership in the European Union.

The resolution reads:

“Should a member [of the euro zone] be unable or unwilling to permanently obey the rules connected to the common currency he will be able to voluntarily–according to the rules of the Lisbon Treaty for leaving the European Union–leave the euro zone without leaving the European Union. He would receive the same status as those member states that do not have the euro.”

http://online.wsj.com/article/BT-CO-20111114-712771.html

I fully believe that Germany is laying the groundwork for it to leave the Euro while still remaining a member of the EU. The alternative to this would be for Germany to demand other nations give up their fiscal sovereignty and make Germany a kind of monetary authority in exchange for additional bailouts. However, the likelihood of this option being presented is next to ZERO as ALL of Europe remembers WWII and the threat of German rule.

So I expect Germany to duck out of the Euro in the near future. It may happen in the next few weeks or it may happen in early 2012. But considering that the Federal Reserve had to step in to save the European banking system today I believe it will be sooner rather than later.

So if you believe that Germany is going to save the EU… you’re in for a rude surprise. Indeed, if we look at the bond or credit markets, it’s clear we’re into a Crisis far greater than 2008. Forget the stock market rally. Stocks ALWAYS get it last (just like in 2008). And before the smoke clears on this mess we’re going to see sovereign defaults, bank holidays, riots, and more.

Many people will lose everything in this mess. Yes, everything. However, you don’t have to be one of them. Indeed, I can show you how to turn this time of collapse into a time of profits.

Few people on the planet can match my ability to return a profit during times of Crisis.

To wit, my clients MADE money in 2008 outperforming every mutual fund on the planet as well as 99% of investment legends.

We also outperformed the market by 15% during the Euro Crisis of 2010. And since the latest round of the Euro Crisis began in July 2011, we’ve locked in not 10, not 20, but 32 STRAIGHT WINNERS including gains of 12%, 14%, 16% and 18%,

So if you’re looking for a guide to get you through the coming disaster, I’m your man.

I’ve been helping investors, including executives at many of the Fortune 500 companies, navigate their personal portfolios through the markets for years.

I can do the same for you with m y Private Wealth Advisory newsletter.

The minute you subscribe to Private Wealth Advisory, you’ll be given access to my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports telling you precisely which steps to take to prepare your loved ones and your personal finances for what’s coming.

You’ll also join my private client list in receiving my bi-weekly market updates outlining what’s really happening behind the scenes in the markets and which investments will profit in the coming months.

And when it’s time to pull the trigger on a given investment, I’ll send you real-time trade alerts.

All of this is yours for just $249 per year.

The time for dilly dallying is over. Europe is literally on the eve of systemic failure. Even the IMF has warned we’re facing a global collapse.

To take action to protect yourself… and insure that the coming weeks and months are a time of profit and safety, NOT losses and pain…

Click Here Now!!!

Best Regards

Graham Summers

 

 

 

 

 

 

 

 

 

 

 

A few months ago, I stated that Ben Bernanke was going to come under increased scrutiny and possibly even face legal trouble based on the fact that someone was going to take the fall for the bailout madness/ theft/ fraud that occurred from 2007-onward.

At the time I wrote:

First off, Goldman Sachs CEO Lloyd Blankfein has hired a criminal defense attorney… and not just any attorney, but Reid Weingarten… If Blankfein is under investigation and hiring someone of Weingarten’s caliber, a massive legal storm is about to begin on Wall Street. These lawsuits will involve the US Federal Reserve. And when push comes to shove, Blankfein (and other Wall Street executives who broke the law) will be blaming Bernanke and the Fed.

After all, the easiest defense is for Blankfein and his kind to simply say that they were pressured into defrauding investors and the public by Bernanke and the Fed when the financial system imploded in 2008.

Since I wrote this, things have indeed gotten hot for Bernanke. He’s now a verbal punching bag for virtually every GOP Presidential Candidate. And recent revelations by Bloomberg have shown that the Fed made secret bailouts to Wall Street to the tune of several TRILION Dollars.

As a result of this, Bernanke has gone into full-blown damage control mode, staging town-hall meetings and granting the press Q&A session (an unprecedented move), in a clear attempt to make himself appear more accessible and likeable to the public.

Indeed, things have gotten so heated that Bernanke even wrote a letter to policymakers defending the Fed and stating that the media’s [Bloomberg] recent reporting of the Fed’s actions contained “egregious errors.”

The significance of this CANNOT be overstated. This is a man who just a year or two ago was so arrogant of his power that he committed blatant perjury in front of Congress (the famed “debt monetization” lie)… NOW writing a letter to politicians whining about how unfair the media has been regarding his monetary actions.

This is a massive and I mean MASSIVE shift for Bernanke… and it underscores just how much the political environment has changed. Bernanke is politically toxic and he knows it. So expect him and his cronies to be much MUCH more attentive to how their moves appear to the public.

Which makes it all the more UN-likely that he’ll be able to unveil any major new policies/ QE 3 without some kind of systemic issue (a major bank going under, etc) happening first.

Consider the latest Fed move to lower the cost of borrowing US Dollars. First of all, the Fed acted with other central banks to implement this… so it was not the Fed acting alone. Secondly this move didn’t involve throwing the usual hundreds of billions of dollars around. Instead, all it did was lower the cost of borrowing Dollars.

This is a very reactive, more politically palatable move compared to the more aggressive actions of QE 1, QE lite, and QE 2. Indeed, even a brief overview of the Fed’s moves in 2011 show them to be largely symbolic or verbal in nature, especially compared to the Fed’s actions in 2010.

Which brings me back to one of my core themes for the future: that the Fed will NOT be able to act aggressively (if at all) without some systemic issue occurring first. Which means that the market and the bulls are completely misguided in believing the Fed’s about to unveil QE 3 or some major new policy any time soon… if at all.

So if you believe the Fed is coming to save the day for the EU… or the financial system in general… you’re in for a rude surprise. Indeed, if we look at the bond or credit markets, it’s clear we’re into a Crisis far greater than 2008. Forget the stock market rally. Stocks ALWAYS get it last (just like in 2008). And before the smoke clears on this mess we’re going to see sovereign defaults, bank holidays, riots, and more.

Many people will lose everything in this mess. Yes, everything. However, you don’t have to be one of them. Indeed, I can show you how to turn this time of collapse into a time of profits.

Few people on the planet can match my ability to return a profit during times of Crisis.

To wit, my clients MADE money in 2008 outperforming every mutual fund on the planet as well as 99% of investment legends.

We also outperformed the market by 15% during the Euro Crisis of 2010. And since the latest round of the Euro Crisis began in July 2011, we’ve locked in not 10, not 20, but 32 STRAIGHT WINNERS including gains of 12%, 14%, 16% and 18%,

So if you’re looking for a guide to get you through the coming disaster, I’m your man.

I’ve been helping investors, including executives at many of the Fortune 500 companies, navigate their personal portfolios through the markets for years.

I can do the same for you with my Private Wealth Advisory newsletter.

The minute you subscribe to Private Wealth Advisory, you’ll be given access to my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports telling you precisely which steps to take to prepare your loved ones and your personal finances for what’s coming.

You’ll also join my private client list in receiving my bi-weekly market updates outlining what’s really happening behind the scenes in the markets and which investments will profit in the coming months.

And when it’s time to pull the trigger on a given investment, I’ll send you real-time trade alerts.

All of this is yours for just $249 per year.

The time for dilly dallying is over. Europe is literally on the eve of systemic failure. Even the IMF has warned we’re facing a global collapse.

To take action to protect yourself… and insure that the coming weeks and months are a time of profit and safety, NOT losses and pain…

Click Here Now!!!

Best Regards

Graham Summers

 

 

 

 

 

 

 

 

 

 

 

Something fishy is going on in the markets. Stocks are holding up relatively well this morning, while the credit markets deteriorate. That the market could digest S&P putting Austria, France, and Germany under credit downgrade review this easily is a bit much to stomach.

We know that the Fed and other Central Banks have a tendency to leak information to certain friends in advance, so I cannot help but wonder if stocks are showing this strength based on someone knowing something we don’t.

Alternatively, this could just as easily be stocks showing their usual cluelessness about the true state of affairs in the financial system as traders gun the market higher for whatever misguided reason they come up with.

For certain, all eyes are on Europe where Merkel and Sarkozy continue to claim they have reached new agreements, only for it to be revealed that in point of fact they haven’t come up with anything new, nor are their proposed solutions A) viable or B) palatable to other EU members.

There is a price for kicking the can time and again: every day Germany continues to play with the idea of backstopping Europe is a day it creeps closer to losing its AAA rating. Germany already sports a real Debt to GDP of 200% (when you include unfunded liabilities) and has yet to recapitalize its banks.

Moreover, the German populace will not tolerate either Eurobonds or money printing from the ECB. So all proposed ideas so far won’t fly with German voters anyway (to say nothing of other EU members who will not be too excited about a German-lead Europe).

In other words: so far no one has any REAL solutions. So unless someone is about to unveil a REAL new proposal, stocks are misguided in their enthusiasm here.

Regardless, this is a very dangerous market environment and one that needs to be traded with extreme caution. Only those in the know can guess the Fed’s day to day moves. We’re not in that crowd.

However, big picture, nearly every indicator is pointing towards trouble ahead. The issue is whether we’re going to see another intervention before the stuff hits the fan. But things have reached a critical point in Europe. And we’re now getting some staggeringly bad data out of China as well. Barring more interventions, the trend will likely be down.

On that note, if you’re an individual investor (not a day trader) looking for the means of profiting from all of this, then you NEED to check out my Private Wealth Advisory newsletter.

Private Wealth Advisory is a bi-weekly investment advisory that uses stocks and ETFs to profit from the dominant market trends.

Every two weeks I outline what’s REALLY going on behind the scenes in the markets, as well as which investments will profit best from these developments.

Case in point, Private Wealth Advisory subscribers caught the initial market Collapse in August. They’ve also profited beautifully from the ongoing turmoil in Europe’s banking system as well as the volatility in the US Dollar.

In fact, we just closed out our 32nd straight winner last week. And we haven’t closed a single loser since the END OF JULY.

But don’t worry that all the profits have already been made. We currently have several trades open that are primed to explode higher in the coming weeks. By subscribing today, you’ll immediately be given access to them.

You’ll also gain immediate access to my Protect Your Family, Protect Your Savings, and Protect Your Portfolio Special Reports outlining how to prepare these areas of your life for the coming Great Crisis.

These reports outline:

1) how to prepare for bank holidays

2) which banks to avoid

3) how much bullion to own

4) how much cash is needed to get through systemic crises

5) how much food to stockpile, what kind to get, and where to get it

And more…

To take out an annual subscription to Private Wealth Advisory today… start profiting from the market’s gyrations (again we haven’t closed a losing trade since JULY)… and gain access to all my Special Reports…

Click Here Now!!!

Best Regards,

Graham Summers

 

Equities got giddy last week when the world’s central banks, lead by the US Federal Reserve, lowered the global cost of borrowing Dollars. Regardless of the market’s reaction, the whole thing smells of desperation and quite frankly, everyone should be questioning the Fed’s move.

First of all, the situation in Europe is a solvency Crisis, not a liquidity Crisis. European banks need over one trillion Euros in new capital. Providing more cheap credit is not going to do anything other than give those European banks which are facing liquidity troubles a few more weeks life support.

Speaking of which, it’s now clear that Europe is fast approaching its Lehman moment. Forbes noted that a large European bank was on the ropes the night before the Fed intervention. We also see France and Germany are implementing plans to nationalize large banks that fail. I can assure you they’re not doing this because things are going well over there.

As for the market’s reaction to the Fed’s move… it could kick off a short-term end of the year rally depending on how much the market falls for the “this time we’ve got a REAL solution” tripe coming our of Europe. But, you must remember that none of the proposed solutions address the underlying problems Europe’s banks are facing.

Technically, the Fed’s move brought the market to major resistance. Unless the market moves higher aggressively to start this week, we’re heading back down in short order.

Truly, the only reason to buy into a stock rally here is based on the belief that the Fed or someone else is going to be providing more juice in the near future. The US economy has clearly begun to roll over in a big way: retail sales, GDP, and unemployment numbers are all being massaged heavily to make the situation look better than it is.

This is clear in corporate earnings which just posted their worst sequential drop since the first quarter of 2009: when the economy and markets were both falling off a cliff. These kinds of drops don’t happen if everything’s going well.

Across the pond, Europe’s banking system is experiencing a solvency crisis on par with 2008. The markets believe that Germany and France will save the day by re-vamping the EU arrangement. However, this doesn’t mean other EU members will agree to their suggestions (the idea of a German-lead EU is completely unpalatable to many EU states).

So I don’t expect a viable solution to emerge in Europe this week. The math doesn’t support any of the proposals EU leaders have come up with yet. And the fact it was the Fed, NOT the IMF or ECB or EFSF that stepped in to save the day last week should be a major red flag that Europe’s out of ideas.

The markets seem to sense this as the Euro hasn’t cleared resistance in any meaningful way yet. And unless we get above 135 and stay there, we’re heading a LOT lower in the near future.

To conclude, in the short-term the markets are moving based on hope of more juice from the Powers That Be. However, the reality of the financial system today is downright frightening. The US economy is rolling over in a big way. Europe is imploding. China is heading straight into a hard landing. And on and on.

Heck, Europe alone could derail the entire financial system temporarily. The region’s entire banking system is insolvent (with few exceptions). European non-financial corporations are running massive debt to equity ratios. And even EU sovereign states require intervention from the ECB just to meet current debt issuance, to say nothing of the huge amount of sovereign debt roll over that is due over the next 14 months.

The impact of this will be global in nature. The EU, taken as a whole, is:

 

1)   The single largest economy in the world ($16.28 trillion)

2)   Is China’s largest trade partner

3)   Accounts for 21% of US exports

4)   Accounts for $121 billion worth of exports for South America

So if the EU banking system/ economy collapses, the global economy could enter a recession just based on that one issue alone (ignoring the other issues in China, Japan, and the US).

This is the reality of the financial system, no matter what the talking heads say. The IMF, Bank of England, and others have warned of a systemic collapse… do you think they’re doing this for fun?

Many investors will have their portfolios wiped out in the coming carnage. It could be next week, or it could take place next year… but we ARE heading into a Crisis that will be worse than 2008.

If you’re looking for someone to help you navigate this mess, I strongly urge you to try out my Private Wealth Advisory newsletter.

Few investors have my ability to cut through the noise and identify the most important macro- and financial trends. To wit, my clients MADE money in 2008 and the Euro Crisis of May 2010. They’ve also locked in 32 STRAIGHT winners in the last four months, outperforming virtually every investment fund on the planet.

Because of our high quality research as well as our independence (our research is unbiased by relationships or advertising dollars), we’ve become one of the most highly regarded investment research firms out there: our clients include executives and strategists at Exxon Mobil, Time Warner, Boston Scientific, John Deere, Medtronic, Morgan Stanley, Merrill Lynch, Royal Bank of Scotland, UBS, Raymond James and others.

These clients look to us to help them navigate the markets volatility. And we provide them with top quality research and investment returns as a result: we haven’t closed a losing trading since July 2011.

We’d love for you to join us.

To take out an annual subscription to Private Wealth Advisory now… start profiting from the market’s gyrations (again we haven’t closed a losing trade since JULY)… and gain access to all my Special Reports… including my Protect Your Family, Protect Your Savings, and Protect Your Portfolio Special Reports outlining how to prepare these areas of your life for the coming Great Crisis…

Click Here Now!!!

Best Regards,

Graham Summers

 

 

 

 

 

 

 

 

 

The thought that should be on every investor’s mind today is “Why did the Fed have to stage the coordinated intervention yesterday?’

Put another way, what exactly does the Fed know that we don’t?

The whole thing smells fishy to me. Aside from the fact that the Fed clearly leaked its intentions as early as Monday night (hence the reason stocks rallied while credit markets weakened), there’s something peculiar about the fact the Fed chose to do this at the end of November.

Why November 30? Why not today or Tuesday?

I think the answer is that the Fed stepped in to help its institutional investor/ hedge fund buddies. November was a horrible month for this crowd. And with Bank of America approaching $5 per share (a level which would require many institutions to liquidate due to regulations), the Fed was also helping out its favorite insolvent bank as well.

Aside from this, Europe was approaching the End Game.  Germany won’t permit the ECB to print nor to issue Euro-bonds. The EFSF plan was dead before arrival, failing to even stage a 3 billion Euro bond auction without having to step in and buy the bonds itself. And the IMF wasn’t going to be an option either.

Put another way, ALL other bailout options had failed for Europe. The Fed was the lender/ intervener of last resort. That alone should have everyone worried as it indicates just how dire things had become in Europe.

However, there’s something far more worrisome about the Fed’s move which is that: IT SOLVES NOTHING.

Europe is facing a solvency crisis. Lowering the cost of borrowing Dollars does absolutely ZERO to help European banks raise capital. All it does is provide even more easy credit… which of course is the entire problem to begin with.

Banks across Europe are leveraged at an average of 26 to 1. This means that they own 26 times more assets (read: loans made to consumers, businesses, etc) than they do equity.

At these leverage levels, if the assets fall even 4% in value, you’ve wiped out ALL equity, rendering the bank bankrupt.

In this situation, providing more liquidity to these banks helps in terms of short-term operations, but it does nothing to address the core issue which is too little capital and too much leverage.

So this move, as dramatic as it was for the stock market has done NOTHING to solve Europe’s solvency crisis.

Indeed, we have reports that a large European bank was on the verge of collapse last night. Things are so bad that Germany has drawn up legislation to allow countries to leave the Euro while remaining in the EU.

I believe Germany itself will be using this option in the next few weeks as it realizes that it cannot and will not be able to prop up the Euro any longer (even Germany doesn’t have the 1 TRILLION Euros’ in capital that European banks need).

So do not be fooled. The Fed’s move today didn’t fix anything. At most its bought the markets a few weeks’ time before the whole mess comes crashing down.

So if you have not taken steps to prepare for this, the time to do so is now.

I can show you how.

Few people on the planet can match my ability to return a profit during times of Crisis.

To wit, my clients made money in 2008 outperforming every mutual fund on the planet as well as 99% of investment legends.

We also outperformed the market by 15% during the Euro Crisis of 2010. And since the latest round of the Euro Crisis began in July 2011, we’ve locked in not 10, not 20, but 32 Straight Winners including gains of 12%, 14%, 16% and 18%… using stocks and ETFs.

So if you’re looking for a guide to get you through the coming disaster, I’m your man.

I’ve been helping investors, including executives at many of the Fortune 500 companies, navigate their personal portfolios through the markets for years.

I can do the same for you with my Private Wealth Advisory newsletter.

The minute you subscribe to Private Wealth Advisory, you’ll be given access to my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports telling you precisely which steps to take to prepare your loved ones and your personal finances for what’s coming.

You’ll also join my private client list in receiving my bi-weekly market updates outlining what’s really happening behind the scenes in the markets and which investments will profit in the coming months.

And when it’s time to pull the trigger on a given investment, I’ll send you real-time trade alerts (this is how we’ve locked in 32 straight winners in the last three months).

All of this is yours for just $249 per year.

In fact, if you subscribe now, you’ll receive my latest issue of Private Wealth Advisory hot off the press and detailing four investments poised to produce HUGE gains in the coming weeks.

The time for dilly dallying is over. Europe is literally on the eve of systemic failure. The Fed’s intervention will at most buy us a week or two.

To take action to protect yourself… and insure that the coming weeks and months are a time of profit and safety, NOT losses and pain…

Click Here Now!!!

Best Regards

Graham Summers