Phoenix Capital Research

Add the total and complete hypocrisy of France to the list of reasons to avoid putting a cent in the EU.

We already know about Spain where Prime Minister Mariano Rajoy was “allegedly” receiving bribes from property developers throughout the housing bubble… while THREE different treasurers have been accused of everything from money laundering to fraud.

Rajoy’s defense to the allegations? “I repeat what I said Saturday: everything that has been said about me and my colleagues in the party is untrue, except for some things that have been published by some media outlets.”

Then there’s Italy where Prime Minister Silvio Berlusconi has a track record a mile long (including numerous allegations of sexual misconduct, tax evasion, and collusion with the mafia).

Berlusconi’s latest charge is for bribing an Italian senator to change political sides. His defense? Bribery is a “necessary part of business.” Mind you, this is the same man who once called tax evasion a God-given “right.”

Now there’s France where we find out that the man in charge of catching those committing tax fraud was in fact engaged in massive tax fraud himself.

The French government is in crisis after François Hollande’s former budget minister and tax tsar was charged with tax fraud following a shock confession that he had held a secret foreign bank account for 20 years and had repeatedly lied about it.

Jérôme Cahuzac’s sudden admission that he hid €600,000 (£510,000) offshore for more than two decades is the biggest scandal to hit Hollande’s presidency.

http://www.guardian.co.uk/world/2013/apr/02/jerome-cahuzac-france-offshore-account

So… in the last few months we’ve discovered…

1)   EU political leaders were on the dole during the boom times often receiving bribes and then hiding the money via tax evasion schemes.

2)   EU political leaders feel it’s acceptable to throw out issues like personal property rights and Democracy during the bust times.

3)   EU political leaders are so corrupt they don’t even deny their crimes.

4)   When push comes to shove, EU leaders won’t hesitate to STEAL citizens’ money to bail out their banker friends.

At this point, there is literally not one single reason to invest a cent in Europe. Banks are lying about their balance sheets. Politicians are lying about citizen’s rights. The Central Bank is lying about everything…

By the way, Germany’s minster of education recently quit when it was discovered that she plagiarized her PhD thesis.

This is what systemic collapse looks like. This is what happens when society as a whole breaks down. It’s now happening in Europe… the single largest economy in the world. And eventually it will be making its way around the world as the overleveraged financial system breaks down.

You DO NOT want to be on the bad end of this. What’s coming will make what happened following Lehman’s failure look like a joke.

We have just posted a report warning all investors of what’s coming… in it you can find detailed information about how it will unfold and how to prepare yourself and your loved ones.

To read this warning… and take action to protect yourself and your hard earned wealth…

Click Here Now!!!

Best Regards
Graham Summers

 

 

Cyprus should scare the living daylights out of everyone.

Cyprus has shown us that when things get bad enough in Europe, bureaucrats will STEAL money from the people. That is bad enough as it completely goes against the central tenants of Capitalism and Democracy. Not to mention it also targets the wrong people (average citizens) instead of the banks that created this whole mess.

However, we now know that when it comes time to STEAL, the STEALING will only hit those who are not well connected with the corrupt elite. To wit, the media has revealed that a number of Cypriots actually managed to transfer funds outside of Cyprus right before the banking holiday was put in place.

A company owned by in-laws of Cypriot President Nicos Anastasiades wired €21 million from Laiki Bank to London days before the Eurogroup’s crisis-triggering levy proposal, claims a Cypriot newspaper. The president demands an investigation.

During two days, 12 and 13 of March, the company A.Loutsios & Sons Ltd., co-owned by Loutsios John, the husband of Nikos Anastasiadis’ daughter, Elsa, took five promissory notes worth €21 million from Laiki Bank. The money was then transferred to London, reported Cypriot newspaper Haravgi, affiliated to the communist-rooted AKEL party.

The withdrawal was fulfilled just three days before the Eurogroup meeting when euro finance ministers agreed a 10 billion euro ($13 billion) bailout for Cyprus.

The company, however, has firmly denied the reports.

http://rt.com/news/cyprus-president-money-withdraw-129/

Let me get this straight… the in-laws of the President of Cyprus somehow magically decided to wire €21 million a few days before the Cyprus banking system collapsed… and we’re supposed to believe this is a coincidence?

Let me blunt here to anyone who resides in Europe or who believes that investing in Europe in any way is a good idea: the people running the show over there are NOT there to help you.

Look at Italy where a Democratically elected Prime Minister was removed and replaced by an un-elected technocrat… who also failed to solve anything… and now there is NO GOVERNMENT.

Look at Spain where the current Prime Minster is embroiled in a massive corruption scandal (he is alleged to have received numerous bribes by real estate developers throughout Spain’s housing boom) and not one but THREE ex-Treasurers are implicated in fraud, bribery, and MONEY LAUNDERING.

And of course, there’s Cyprus, where Government “leaders” CLEARLY tipped off its friends and families to get their money out of Cyprus, before freezing everyone else’s money.

I’ve said it before and I’m saying it again: NO SANE PERSON SHOULD EVEN CONSIDER INVESTING OR HAVING MONEY IN EUROPE.

The folks in charge of that situation have failed to fix Greece. They’ve had three years and over €100 billion to do it and they FAILED. They’re now so desperate that they’re even taking peoples’ money from right out of their banking accounts.

This is what systemic failure looks like. And eventually it will be making its way around the world as the overleveraged financial system breaks down.

You DO NOT want to be on the bad end of this. What’s coming will make what happened following Lehman’s failure look like a joke.

We have just posted a report warning all investors of what’s coming… in it you can find detailed information about how it will unfold and how to prepare yourself and your loved ones.

To read this warning… and take action to protect yourself and your hard earned wealth…

Click Here Now!!!

Best Regards
Graham Summers

 

The following is an excerpt from the most recent issue of Private Wealth Advisory. To learn more about Private Wealth Advisory and how we’re preparing our readers for the next Crisis… Click Here Now!

The EU Crisis went into overdrive in the spring of 2012 when the Spanish banking system as a whole nearly collapsed. Having pumped €1 trillion into EU banks via its LTRO 1 and LTRO 2 programs in December 2011 and February 2012, the European Central Bank found itself facing a problem far greater than Greece (Spain’s banking system is over €3.7 trillion assets in size, compared to Greece’s  €338 billion) and on the verge of losing control of the entire system.

To understand why this happened, you first need to understand that European banks as a whole are leveraged at 26 to 1. In simple terms, this means they have just €1 in capital for every €26 in assets (bought via borrowed money).

When you are leveraged at these levels you only need the assets you invest in to fall 4% before you’ve wiped out all of your underlying capital (€26 * 0.04 = €1.04). At that point you are total insolvent.

In the case of Spain, Spanish banks were leveraged at 20 to 1 with most of their borrowed money invested in Spanish sovereign bonds. At these leverage levels Spanish Sovereign bonds only needed to fall 5% to render the Spanish banks insolvent. And in the spring of 2012, Spanish bonds were plummeting.

At this point, ECB President Mario Draghi had to do something to make Spanish bonds rally. He couldn’t simply start buying them because Germany had stated time and again it was against the open monetization of bonds. And the ECB cannot do anything without Germany’s support if it wants to keep the EU whole.

So Mario Draghi delivered the mother of all head fakes, first hinting at providing unlimited bond buying for EU sovereign bonds in June 2012, before officially stating that this would be the ECB’s policy is September 2012.

Note very carefully that Draghi didn’t actually buy any bonds. He simply stated that he would if he had to and if countries formally requested a bailout (handing over control of their finances to the ECB and Germany in the process).

The promise worked, effectively putting a floor beneath EU sovereign bonds. Investors, now convinced that the ECB would buy if it had to, began to buy Spanish debt again. Spanish bonds rose, and Europe’s banking solvency crisis was considered “over.”

And then came Cyprus.

With some €83 billion in assets, Cyprus’s banking system is well over FOUR times the size of its GDP, putting it in far worse shape than Spain, France, even Greece.

The Cyprus situation has been brewing for months, with Cyprus first formally requesting a bank bailout back in June 2012. The media largely ignored this development due to the country’s small size. By November 2012, Cyprus announced it had reached an informal agreement on the bailout terms, though the actual amount requested wouldn’t be formalized until Cyprus banks had been reviewed by the EU, ECB, and IMF.

Last weekend, Cyprus formalized the bailout amount at €10 billion (lower than the expected €17 billion). However, it lowered the amount by stating that it would raise €6+ billion itself by TAXING Cyprus savings accounts.

Words almost cannot describe the seriousness of this. Cyprus proposed to simply STEAL money from those with savings accounts in its banking system to help fund a bailout of its banks. The theft was presented as a “levy” or “tax,” but the act of confiscating someone’s property without permission is THEFT no matter how you word it.

Indeed, the very fact that this option was even considered, indicates several MAJOR issues. They are:

1)   During times of Crisis, personal property and common rule of law will be discarded if deemed necessary by the political and financial elites.

2)   Germany has reached the limit of its willingness to aid Europe.

3)   The IMF and ECB are essentially out of options and funds.

4)   European leaders are growing truly desperate.

At this point, Europe is literally beginning to run out of options. It’s only a matter of time before the Crisis goes into hyperdrive and we have an event even worse than 2008.

In simple terms, this time around, when Europe goes down (and it will) it’s going to be bigger than anything we’ve seen in our lifetimes. And this time around, the world Central Banks are already leveraged to the hilt having spent virtually all of their dry powder propping up the markets for the last four years.

Given what is happening in Europe right now, we wanted to alert investors to a major development we’ve noticed in the markets.

The markets look to be setting up for the next Crisis. Indeed, multiple metrics we track are flashing RED ALERT.

To read more about this…

Click Here Now!!

Best Regards,

Graham Summers

Chief Market Strategist

The news coming out of Cyprus only gets worse.

It was bad enough that the political class even promoted the idea of STEALING depositors’ savings. But now we’re finding out that they lied time and again about how much they’d take.

Initially the plan in Cyprus was the following:

• Simply TAKING 6.75% of ALL savings accounts up to the official insurance limit of €100,000
• A 9.9% levy (THEFT) on all deposits above the official insurance limit of €100,000.

The idea was put to a vote by the Cyprus Government, which rejected it. However, the facts remain that this idea WAS suggested. In fact, the original proposal from Germany and IMF was even more dramatic:

Cyprus state broadcaster CyBC reported on Saturday that German Finance Minister actually entered the Eurogroup meeting on Friday proposing a 40 percent haircut on Cypriot bank accounts. Sarris stated on Saturday that this had also been the proposal of the International Monetary Fund.

Sarris stated in Brussels that in view of the threat from the European Central Bank for banks in Cyprus to shut down and chaos to ensue, the increase in interest taxation and the haircut to bank accounts became necessary. “A disorderly default, that was a genuine possibility, has been averted,” he said.

http://ekathimerini.com/4dcgi/_w_articles_wsite2_1_16/03/2013_488169

Please reread that first paragraph: Germany and the IMF wanted to take 40% of all depositors’ accounts. Imagine nearly half of your savings being simply TAKEN one day to bail out a bank. That’s what Germany and the IMF proposed.

And we now find out that it could be far worse than even that:

Cyprus’s finance minister said Tuesday that large deposit holders at Cyprus Popular Bank PCL (CPB.CP), the island’s second biggest lender, could face losses of as much as 80% on their deposits as the government moves to wind down its operations.

Speaking in a television interview with state broadcaster RIC, Michalis Sarris indicated that it could also take years before those depositors see any of their money returned.

“Realistically, very little will be returned,” Mr. Sarris said.

http://www.foxbusiness.com/news/2013/03/26/cyprus-finance-minister-uninsured-laiki-depositors-could-face-80-haircut/#ixzz2OqctR6pb

So… first it’s 10% on savings about €100,000… then we find out actually 40% was proposed… and NOW they reveal that realistically it could be as much as 80%.

As a quick aside, anyone who believes this could never happen in the US should consider that John Corzine stole over $1 billion worth of client funds during MF Global’s collapse in the US. Corzine is not in jail and in fact remains one of the most connected financial elites in the US. Indeed, NO ONE went to jail for MF Global’s theft.

There can be little doubt that European elites took note of the MF Global case and believed a similar idea could be foisted upon the European public during extreme times of Crisis. The only difference between MF Global and Cyprus is that in the former case the funds that were stolen were invested in commodity futures and other securities whereas in Cyprus they were savings.

Investors take note: a major development is at hand. As bankrupt nations and banks continue to spiral downward there will be more and more desperate attempts to plug the holes in their balance sheets by any means necessary.

The idea of confiscating savings is now on the table. And under an extreme enough crisis, this idea could indeed be implemented: the proposal will likely be “you, the people of this nation can choose…we can take 7% of your savings and your bank remains afloat or you lose everything.” Be prepared for this.

Given what is happening in Europe right now, we wanted to alert investors to a major development we’ve noticed in the markets.

The markets look to be setting up for the next Crisis. Indeed, multiple metrics we track are flashing RED ALERT.

To read more about this…

Click Here Now!!

Best Regards,

Graham Summers

Chief Market Strategist

The big news out of Europe is whether or not Cyprus will be a template for future bailouts.

Having seen that issues like personal property, rule of law, and democracy got thrown out of the window in Cyprus as soon as things got hairy, investors and depositors throughout Europe are panicked as to whether they will be targeted next when the next European Domino starts to fall.

EU politicians are out claiming the usual fluff “don’t worry, Cyprus is a one off deal, this won’t happen again!” Sure. Greece was a one off deal until it needed another bailout. Spain was a one off deal. So was Ireland and Portugal.

Obviously, European bureaucrats are the sorts of folks you can trust.

Let’s cut through the nonsense here.

Europe is totally and completely bust. The European banks are leveraged at 26 to 1 because they CANNOT raise capital… because no one in their right mind wants to invest in them… not even European countries.

European nations are bankrupt because AGAIN no one in their right mind wants to buy their bonds UNLESS they believe they can dump their investments on the ECB at a later date. Who is the greater fool there?

At the end of the day, the reason Europe hasn’t been fixed is because CAPITAL SIMPLY ISN’T THERE. Europe and its alleged backstops are out of money. This includes Germany, the ECB and the mega-bailout funds such as the ESM.

Germany has already committed to bailouts that equal 5% of its GDP. The single largest transfer payment ever made by one country to another was the Marshall Plan in which the US transferred an amount equal to 5% of its GDP. Germany WILL NOT exceed this. So don’t count on more money from Germany.

The ECB is chock full of garbage debts which have been pledged as collateral for loans. If anyone of significance defaults in Europe, the ECB is insolvent. Sure it can print more money, but once the BIG collateral call hits, money printing is useless because the amount of money the ECB would have to print would implode the system.

And then of course there are the mega bailout funds such as the ESM. The only problem here is that Spain and Italy make up 30% of the ESM’s supposed “funding.” That’s right, nearly one third of the mega-bailout fund’s capital will come from countries that are bankrupt themselves.

What could go wrong?

At this point, Europe is literally beginning to run out of options. It’s only a matter of time before the Crisis goes into hyperdrive and we have an event even worse than 2008.

In simple terms, this time around, when Europe goes down (and it will) it’s going to be bigger than anything we’ve seen in our lifetimes. And this time around, the world Central Banks are already leveraged to the hilt having spent virtually all of their dry powder propping up the markets for the last four years.

Given what is happening in Europe right now, we wanted to alert investors to a major development we’ve noticed in the markets.

The markets look to be setting up for the next Crisis. Indeed, multiple metrics we track are flashing RED ALERT.

To read more about this…

Click Here Now!!

Best Regards,

Graham Summers

Chief Market Strategist

Cyprus put another nail in the coffin of Democracy and capitalism over the weekend.

Having found that the Cyprus people and Parliament wouldn’t stand for the confiscation (THEFT) of depositors’ savings, the EU bureaucrats simply chose an option in which voting doesn’t occur.

This is precisely what I feared would happen: that any basic rules or laws would be tossed out the window during times of extreme crisis. This has unfortunately proven to be the case.

The EU has now established that it will not only depose elected officials and replace them with unelected technocrats (Italy) but that it will impose its own laws and decisions on countries that do not proceed with its goals.

There is a word for this: it’s totalitarianism.

This was essentially an economic act of war. A sovereign nation has now officially seen its Government superseded by an outside governing body. For the EU, Cyprus is no longer Cyprus, it’s just a troublesome territory of the EU.

How the Cyprus Government and people will react remains to be seen. But as I warned Private Wealth Advisory subscribers last week, we’re approaching a time in which the option of open wealth confiscation has been put on the table. And it’s likely that going forward this option will be promoted more and more, often with an argument such as, “you have a choice, either you lose x% of your deposits and the bank stays afloat OR you lose everything.”

The Cyprus banks will reopen tomorrow. The key issue now is how depositors respond to all of this. If a bank run begins in Cyprus, then things could get very hairy. The only thing between Europe and a total banking collapse are bank runs. And if large depositors in Spain and Italy (or elsewhere in the EU) get spooked by what’s happened in Cyprus, then there’s little the EU or anyone else can do.

These are absolutely critical issues for the markets. Whether the market rallies or not this week is irrelevant. The market is notorious for failing to grasp the seriousness of banking issues (it rallied after Bear Stearns). What happens this week will set the stage for what happens later this year. And it could potentially be VERY big.

Now more than ever, investors need to be evaluating how to allocate their portfolios given the risks in the system. If you’re tired of being guided by namebrand analysts whose work is largely based on the companies their firms have a relationship with, you should consider joining us at Phoenix Capital Research.

Phoenix Capital Research is a boutique financial research firm offering innovative investment strategies to investors seeking fact-based guidance to successfully navigate today’s financial markets.

We offer several investment newsletters designed to help investors avoid market risk and profit from unique investment opportunities.

Private Wealth Advisory is a bi-weekly (every other week) investment newsletter devoted to helping individual investors get an unbiased, expert understanding of what’s really happening in the global economy and which investments will best profit from these developments.

Individual investors around the world look to Private Wealth Advisory to help them get a clear view of the risks and opportunities they and their wealth need to be aware of. Subscribers reside in over 50 countries around the world and include retirees, businessmen, Fortune 500 executives, hedge fund analysts, and others.

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Thank you for reading,

Best Regards,
Graham Summers

Phoenix Capital Research

German Chancellor Angela Merkel has walked a tightrope over the last few years of keeping the EU together without infuriating the German populace to the point of having to abandon ship.

To do this, Merkel has maintained a firm stance of “we’ll write the check provided conditions are met” much as a parent would give a child his or her allowance provided the child performed its chores satisfactorily. In the case of German, the “chores” are required conditions of austerity measures and budgetary requirements in exchange for bailout funds.

By doing this, Merkel is able to play hardball on an economic front (having failed to meet its German-required financial targets Greece had to wait an additional six months to receive another installment of its Second bailout) without appear too hard-nosed on a political front (she continually pushes to keep the Euro together, expressing a willingness to help other nations… as long as they meet her budgetary requirements).

The policy has thus far been a success with Merkel’s approval rating soaring to its highest level since 2009 (before her re-election bid). However, the latest state election in Germany upset this situation with Merkel’s party losing.

Indeed, things are worsening for Merkel and her pro-Euro efforts at an alarming rate… … a recent poll showed 26% of Germans would be willing to vote for an anti-Euro party if the German elections were held today. When you consider middle-aged Germans, the percentage against the Euro rises to 40%.

Which is why Merkel is playing hardball with Cyprus… she’s up for re-election in September, and wants to make the appearance of not putting up with any more bailouts.

Unfortunately for her, Cyprus is telling her and Germany to shove it.

Why does all of this matter? Because Merkel cannot simply go ahead with another bailout without killing her chances of re-election. And Cyprus has indicated it is not going to confiscate depositors savings to help Germany out (at least for now).

Which brings us the core point we’ve been making for over two years: that Europe in its current form is finished. It’s simply a matter of who quits first: a smaller country like Greece or Cyprus, or if things hold together long enough that the bi bill comes due and Germany walks (Germans will promise to pick up the tab, but when the actual tab comes due, they won’t pay).

So what happens when Europe breaks up? Systemic failure.

EU banks are packed to the brim with garbage debts. Add to this the sovereign bonds they own in bankrupt nations and the entire European banking system resembles Lehman Brothers. We all know how that turned out.

If you are not prepared for this… prepared for potential systemic collapse brought about by Europe…YOU NEED TO ACT NOW.

We have released a number of Special Reports outlining precisely how to prepare for all of this.

The single most important one is called “The C Word: the Dark Secret the Fed Wants Hidden” and it explains in stark detail how Europe can bring about systemic collapse… WHY the Fed is terrified about Europe and is secretly pumping HUNDREDS OF BILLIONS of Dollars into the European banking system (QE 3 and QE 4 were European bank bailouts).

We also have three reports titled Protect Your Family, Protect Your Savings, and Protect Your Portfolio and they outline:

1) how to prepare for bank holidays (just like the one in Cyprus today)

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…

Collectively, these reports are worth nearly $900. But you can get all of them for FREE with a subscription to my Private Wealth Advisory newsletter.

To pick up your own copies of these reports., all you need to do is take out a subscription to my Private Wealth Advisory newsletter.

You’ll immediate be given access to the Private Wealth Advisory archives, including my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports.

You’ll also join my private client list in receive my bi-weekly market commentaries as well as my real time investment alerts, telling you exactly when to buy and sell an investment and what prices to pay.

So you get my hard hitting market insights, actionable investment recommendations, and real time trade alerts, for one full year, for just $299.99.

To take out an annual subscription to Private Wealth Advisory now and start taking steps to insure your loved ones and personal finances move through the coming storm safely…

Click Here Now!!!

Best Regards,

Graham Summers

The following is an excerpt from the latest issue of Private Wealth Advisory. In it, we outline in stark detail the single biggest threat to investors’ wealth today. Over 99% of investors fail to grasp these issues. But the consequences for those who miss this, will be catastrophic, possibly a 30%+ loss of portfolio.

Not subscribers. We made money during 2008 and throughout the Euro Crisis. And this next implosion will make us money to. To join us… Click Here Now!

As noted previous issues of Private Wealth Advisory, the global central banks have begun to realize that the success of their reflationary efforts has resulted in yet another speculative bubble in asset classes, specifically stocks and real estate.

Nowhere are these issues more evident today than in China.

Many commentators have spent a great deal of ink proclaiming China to be the next great economic power. While it is true China has seen dramatic improvements in its economy over the last 30 years, my view has been and remains that most of the “growth” of the China “miracle” is just a debt-fueled bubble built upon a loose foundation of Government corruption and fraud.

The reason 99% of investors fail to see this is because:

1)   They believe Chinese economic data as gospel.

2)   They fail to understand China’s economic policies from a political perspective.

Regarding #1, Chinese economic data is absurdly gimmicked to the point of making the US’s look clean in comparison (no small feat).  Indeed, back in 2007, no less than current First Vice Premiere of China, Li Keqiang, admitted to the US ambassador to China that ALL Chinese data, outside of electricity consumption, railroad cargo, and bank lending is for “reference only.”

Put another way, one of the top-level Chinese politicians admitted in private that China’s economic data is a total fiction. However, the reality is even worse than this admission. The truth is that even China’s electrical consumption data is dodgy at best as it has become a political tool for the Chinese Government to illustrate its “growth” much like China’s GDP.

The reason for this economic gimmicking pertains to #2 above: the political perspective of China’s economic data. As a communist regime, China’s government has one focus and one focus only. It’s not economic growth for growth’s sake, nor is it improving the quality of life for China’s population.

No, China’s Government is obsessed solely with remaining in power.

The reasoning for this is that a Government job remains the easiest, cushiest means of becoming wealthy in the People’s Republic. Case in point, last year Chinese officials are known to have stolen at a minimum the equivalent of $157 billion.

The CDIC report, which was obtained by the Economic Observer newspaper, suggested that nearly 10,000 luxury homes had been sold by government officials in Guangzhou and Shanghai alone last year.

It also claimed that an astonishing $1 trillion (£630 billion), equivalent to 40 per cent of Britain’s annual GDP, had been smuggled out of China illegally in 2012.

Economists and experts cast doubt on the figure, but said the flow of money from China was dramatic. Li Chengyan, a professor at Peking University, suggested that a total of roughly 10,000 officials had absconded from China with as much as £100 billion.

http://www.telegraph.co.uk/news/worldnews/asia/china/9815998/Chinas-Communist-party-cadres-launch-property-fire-sale.html

To put the above numbers in perspective, this theft is equal to roughly 2% of China’s total GDP. On a per official basis, we’re looking at roughly $15.7 million… not over the course of a decade but in ONE year.

In contrast, the average college graduate in China makes $2,500 per year. So you’re talking about an average theft equal to over 6,250 years’ worth of work for a college educated Chinese civilian.

A few other indications of just who is getting ahead in China:

• Immediate family members of Premiere Wen Jiabao control assets worth at least $2.7 billion.
• Gong Aiai, a deputy chief of a county bank, (not even a major bank) was found to have assets worth $160.2 million.
• Zhang Xiuting, an anticorruption official, is currently under investigation for amassing 19 properties along with his former wife.

In simple terms, many if not most of the people who have gotten wealthy in China over the last few decades were corrupt Government officials or those close to them. In this light, you can see that China’s Governmental policies are all really aimed at one issue: keeping the Government in power by keeping the Chinese population content enough not to demand real change.

All other issues (economic growth, improved air quality, stimulus projects, etc.) are secondary to this issue. And the single biggest threat to Chinese officials’ abilities to live high on the hog is inflation.

throughout the globe in the coming months.

History has shown us countless times that you cannot print money without prices soaring. There is not one single instance in which currency devaluation has not done this. And the US Federal Reserve is now printing $84 billion every single month.

I’m sure you’ve noticed prices have begun rising already. This is only going to be getting worse going forward. Which is why now is the time to be preparing ourselves and our portfolios for this. Inflation can take its time to arrive. But once it does… things move very very quickly.

If you’re concerned about inflation… and want to learn more about simple bit highly effective ways you can shield yourself from it…

Click Here Now!!!

Best Regards,

Graham Summers

 

The markets are staging a bounce today based on:

1)   The ECB surfacing to say it will provide liquidity to help with the Cyprus situation.

2)   Bernanke’s speech today and the Fed’s FOMC (stocks tend to rally going into FOMC meetings).

This is once again the markets praying and hoping for divine guidance from the Central Bankers. However, the fact remains that every sensible investor in the world should be absolutely horrified by what was proposed in Cyprus.

Forget Bernanke forget Mario Draghi forget all of that. None of it matters as much as what was proposed in Cyprus.

The simple fact remains that politicians proposed stealing savings deposits from the people in order to fund a bank bailout. You can dress this idea up however you like, calling it a “levy” or “tax” but taking someone’s personal property without their permission is theft plain and simple.

The idea was amended to focus on punishing the wealthy (those with over €100,000 in deposits) leaving those with less than €20,000 in deposits unscathed. The Cyprus parliament voted against this proposal, but the mere fact it was EVEN suggested (and that Germany and the IMF wanted to take 40% of deposits) should leave everyone terrified.

Again, political leaders proposed simply TAKING money from the people to fund a bank bailout… not the people as in the public’s balance sheet for a sovereign nation, but actual savings deposits sitting in banks.

This idea should never have been even brought to the table. Savings are personal property. Declaring a bank holiday so people cannot get their money out and then trying to simply TAKE their money is STEALING. This violates the very basis of personal property at its core.

The fact this idea was even brought up indicates that the political and financial elite are growing truly desperate.

Cyprus will not be the end of this… NO, this idea will be likely spreading in the future. Both New Zealand and Spain have already hinted at adopting similar policies. These ideas will be sold to the public as “well, we can take 7% and the bank remains afloat OR you can lose everything.” And during an extreme enough crisis, people will go along with it.

But get ready because this will be coming to a country near you. Are YOUR savings safe?

If you are not prepared for this…YOU NEED TO ACT NOW.

We have released a number of Special Reports outlining precisely how to prepare for all of this.

The single most important one is called “The C Word: the Dark Secret the Fed Wants Hidden” and it explains in stark detail how Europe can bring about systemic collapse… WHY the Fed is terrified about Europe and is secretly pumping HUNDREDS OF BILLIONS of Dollars into the European banking system (QE 3 and QE 4 were European bank bailouts).

We also have three reports titled Protect Your Family, Protect Your Savings, and Protect Your Portfolio and they outline:

1) how to prepare for bank holidays (just like the one in Cyprus today)

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…

Collectively, these reports are worth nearly $900. But you can get all of them for FREE with a subscription to my Private Wealth Advisory newsletter.

To pick up your own copies of these reports., all you need to do is take out a subscription to my Private Wealth Advisory newsletter.

You’ll immediate be given access to the Private Wealth Advisory archives, including my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports.

You’ll also join my private client list in receive my bi-weekly market commentaries as well as my real time investment alerts, telling you exactly when to buy and sell an investment and what prices to pay.

So you get my hard hitting market insights, actionable investment recommendations, and real time trade alerts, for one full year, for just $299.99.

To take out an annual subscription to Private Wealth Advisory now and start taking steps to insure your loved ones and personal finances move through the coming storm safely…

Click Here Now!!!

Best Regards,

Graham Summers

The EU continues to flounder around as Cyprus, a country whose GDP accounts for just 0.2% of the Europe’s economy, has proven the truth behind all of the “solutions” thrown around by the ECB and EU politicians: that they really don’t have a clue how to fix the problem plaguing Europe.

Why is this?

Because at the end of the day, there is really only one solution to this whole mess: DEFAULT… both by the banks and by EU nations as a whole.

What happened to Wall Street in 2008? Banks that were over leveraged (meaning they borrowed far more money than they actually had on hand) went bust because the assets they bought with the borrowed money fell in value to the point that it erased the actual money they had on hand.

Think of it this way, if you borrow $30 for every $1 you actually own, and you invest that $30 in various assets, you only need those assets to fall 3% (0.03 * 30 = 0.9) before you’ve wiped out almost all of your actual money (the $1 you owned and which you borrowed the $30 against).

This is what took down Lehman. And it’s what is taking down Europe today. The entire European banking system is leveraged at 26 to 1. Lehman was 30 to 1, Europe as a whole is only slightly below that,

And where did they invest the $26 in borrowed money?

EU sovereign bonds… (as well as garbage mortgages in the various EU housing bubbles).

When you are leveraged at $26 to 1, you only need the assets you’ve invested in to fall 4% before you are totally bankrupt. This 4% drop in asset prices has already happened across Europe, the only reason that we haven’t seen a systemic collapse there is because Mario Draghi, the head of the ECB, said he’d buy unlimited amounts of EU bonds.

Note, Draghi said he would buy these bonds, he hasn’t actually bought anything since he said this.

So why did Draghi’s statement matter?

Because the primary assets owned by EU banks are EU sovereign bonds. And if EU bonds keep falling, it results in the dreaded 4% drop in asset prices that would wipe out all the EU banks’ capital.

So Draghi stepped in last summer, promised to buy EU bonds, EU bonds went up,  and EU banks could breathe a sigh of relief… for a while.

But anyone with a modicum of common sense can look at this situation and say, “but wait, nothing was actually fixed, all that happened was Draghi promised something and the markets reacted.”

PRECISELY. And that is what Cyprus just proved: that the ENTIRE EU “fix” was a huge lie. Nothing changed. Nothing was fixed. The banks are still leveraged at 26 to 1 and sitting on loads of garbage debts. And the EU countries are all still totally bankrupt.

So what happens when EU bonds start rolling over again… and what happens when EU banks start seeing their asset prices falling… falling… falling to -4% or even more?

SYSTEMIC FAILURE IN EUROPE.

If you are not prepared for this…YOU NEED TO ACT NOW.

We have released a number of Special Reports outlining precisely how to prepare for all of this.

The single most important one is called “The C Word: the Dark Secret the Fed Wants Hidden” and it explains in stark detail how Europe can bring about systemic collapse… WHY the Fed is terrified about Europe and is secretly pumping HUNDREDS OF BILLIONS of Dollars into the European banking system (QE 3 and QE 4 were European bank bailouts).

We also have three reports titled Protect Your Family, Protect Your Savings, and Protect Your Portfolio and they outline:

1) how to prepare for bank holidays (just like the one in Cyprus today)

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…

Collectively, these reports are worth nearly $900. But you can get all of them for FREE with a subscription to my Private Wealth Advisory newsletter.

To pick up your own copies of these reports., all you need to do is take out a subscription to my Private Wealth Advisory newsletter.

You’ll immediate be given access to the Private Wealth Advisory archives, including my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports.

You’ll also join my private client list in receive my bi-weekly market commentaries as well as my real time investment alerts, telling you exactly when to buy and sell an investment and what prices to pay.

So you get my hard hitting market insights, actionable investment recommendations, and real time trade alerts, for one full year, for just $299.99.

To take out an annual subscription to Private Wealth Advisory now and start taking steps to insure your loved ones and personal finances move through the coming storm safely…

Click Here Now!!!

Best Regards,

Graham Summers

 

 

 

 

 

 

On February 22 2013, we released an article focusing on the little known fact that depositors’ savings were at risk in Europe. At that time we wrote:

It’s a little known fact about the Spanish crisis is that when the Spanish Government merges troubled banks, it typically swaps out depositors’ savings for shares in the new bank.

So… when the newly formed bank goes bust, “poof” your savings are GONE. Not gone as in some Spanish version of the FDIC will eventually get you your money, but gone as in gone forever.

Over the weekend, we received confirmation that Spain is not the only country pulling such schemes: Cyprus along with Germany and the IMF has confiscated savings accounts to help fund a bailout of the country.

Confiscated… as in stolen. To fund a bailout that Cyprus citizens have no interest in funding. In exchange, they, like the Spanish, will receive shares in the garbage banks that were bailed out.

Why does this matter? Cyprus is a tiny country of only 1.1 million people right?

This matters because it indicates what we’ve been saying since June 2012, the entire European “fix” was one enormous lie. NOTHING was fixed in Europe at all. ON top of this, your SAVINGS in Europe can be seized at any time if things get bad.

Reread that last sentence… people in Europe just woke up and found that the IMF without their consent, can SEIZE their savings during a bailout.

What do you think will be the end result of this?

BANK RUNS and systemic failure.

The deep dark secret of the entire European Mess is that the minute a real legitimate bank run begins, it’s game over. Spain got a taste of this last year when a bank-run brought the country to its knees in less than six months.

Now that Cyprus has revealed that deposits are not safe in Europe, you better buckle up because the bank-runs are coming. And when they do, the European Crisis will hit overdrive. Once deposits flee, banks have to sell assets to meet the capital flight. When banks have to sell assets to meet deposit flight, they need capital.

And European banks don’t have any extra capital. They’re leveraged at 26 to 1 and would need to raise over €1 trillion AT LEAST.

If you are not prepared for this… prepared for potential systemic collapse brought about by Europe…YOU NEED TO ACT NOW.

We have released a number of Special Reports outlining precisely how to prepare for all of this.

The single most important one is called “The C Word: the Dark Secret the Fed Wants Hidden” and it explains in stark detail how Europe can bring about systemic collapse… WHY the Fed is terrified about Euroe and is secretly pumping HUNDREDS OF BILLIONS of Dollars into the European banking system (QE 3 and QE 4 were European bank bailouts).

We also have three reports titled Protect Your Family, Protect Your Savings, and Protect Your Portfolio and they outline:

1) how to prepare for bank holidays (just like the one in Cyprus today)

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…

Collectively, these reports are worth nearly $900. But you can get all of them for FREE with a subscription to my Private Wealth Advisory newsletter.

To pick up your own copies of these reports., all you need to do is take out a subscription to my Private Wealth Advisory newsletter.

You’ll immediate be given access to the Private Wealth Advisory archives, including my Protect Your Family, Protect Your Savings, and Protect Your Portfolio reports.

You’ll also join my private client list in receive my bi-weekly market commentaries as well as my real time investment alerts, telling you exactly when to buy and sell an investment and what prices to pay.

So you get my hard hitting market insights, actionable investment recommendations, and real time trade alerts, for one full year, for just $299.99.

To take out an annual subscription to Private Wealth Advisory now and start taking steps to insure your loved ones and personal finances move through the coming storm safely…

Click Here Now!!!

Best Regards,

Graham Summers

 

 

 

The US has been lying to all of us for decades now.

We’re not talking about some kooky conspiracy theory… we’re talking about INFLATION.

By understating inflation, the Federal Government and Federal Reserve have done two things:

1)   Exaggerated our economic growth.

2)   Lied about the true cost of living in the US.

Regarding #1, every time the US prints GDP growth numbers, it adjusts this data for inflation. The reason for this is that if the economy grows at 10%, but prices also rise at 10%, then there really hasn’t been any actual growth.

To deal with this, the US adjusts its GDP measures for inflation to make it appear as f they’re objective. The only problem is that the US adjusts GDP using a phony inflation number that is much lower than reality.

A great example is last quarter when we were told that the GDP grew at an annual rate of 0.1%. The reality is that if you used realistic inflationary measures, the US economy SHRANK at a rate of over -1% last quarter. Yes, negative 1%. The worst GDP print since 2009.

The same lie has been extended to the US population about our standard of living.

For decades now we’ve been told that we were getting wealthier because incomes were growing and asset prices like stocks and real estate were rising.

However, the reality is that inflation was the source for much of this “growth.” The US Dollar has lost nearly 20% of its value in the last decade. The end result is all of us are paying much more for EVERYTHING. But we’re being told that we’re actually richer because incomes are up

This is why understating inflation is a HUGE LIE: it is a lie to all of us that our living standards are improving when in fact they’re not.

And the media is FINALLY beginning to report on it.

Those who know the price of everything and the value of nothing are said to be cynics. Americans can be forgiven for being a bit cynical, though, when it comes to prices. Their own cost of living rarely seems to be as low as official statistics claim it is.

Friday’s consumer-price index for February is seen rising 0.2% month on month, excluding volatile food and energy costs. That would bring the year-on-year pace to 2%.

A change to the inflation-measuring process 30 years ago by the Bureau of Labor Statistics, Uncle Sam’s arbiter of prices, is starting to raise eyebrows again. Since 1983, house prices haven’t been part of the consumer-price index. Instead, the BLS calculates “owners’ equivalent rent,” a mix of actual rents and what homeowners guess their homes would fetch if rented.

http://online.wsj.com/article/SB10001424127887324392804578360553019755538.html

Look around you. The cost of everything is increasing dramatically. Gas prices are UP. Home prices are UP. Healthcare costs are UP. Energy prices area UP. Everything you need to survive is UP.

Forget the Fed’s CPI measure. Inflation is here now. And things are only going to be getting worse going forward. History has shown us countless times that you cannot print money without prices soaring. There is not one single instance in which currency devaluation has not done this. And the US Federal Reserve is now printing $84 billion every single month.

What effect do you think this will have on the cost of everything? Yes, everything will be going up even MORE.

Make no mistake, now is the time to be preparing yourself and your portfolio for this. Inflation can take its time to arrive. But once it does… things move very very quickly.

If you’re concerned about inflation… there are some very simple but HIGHLY EFFECTIVE means of shielding yourself from it… and you can learn about them in detail by…

Clicking Here Now!!!

Best Regards,

Graham Summers

 

 

Let’s wind the clock back to 2008.

The world was thought to be ending. Lehman went bust. Markets were plunging. Everyone was scared that growth was over. It was as though the global economy was grinding to a halt.

But then China’s stock market bottomed. The Chinese Government announced a massive stimulus plan to turn its economy around. And sure enough the Chinese economy took off again.

A few months later, the US markets bottomed courtesy of extraordinary stimulus from the US Federal Reserve. Three months after that, the US economy was showing what everyone claimed were “green shoots.”

And the world began to gradually shift towards growth and increased confidence.

Why do I bring all of this up? Because it was China’s stimulus and China’s economy that supposedly lead the world back towards growth again. China is the proverbial canary in the coalmine, the economy that most quickly reveals what’s coming and where we’re all heading…

Well, China’s heading for inflation.

BIG INFLATION.

China should be on “high alert” over inflation after February’s figures exceeded forecasts, central bank Governor Zhou Xiaochuan said, signaling a heightened focus on controlling prices.

Monetary policy is “no longer relaxed” and is “relatively neutral” as demonstrated by a 13 percent target for money-supply growth that’s tighter than expansion in the last two years, Zhou, head of the People’s Bank of China, said at a press conference today during the annual gathering of China’s National People’s Congress…

“The central bank has always attached great importance to consumer prices,” Zhou said. “Therefore we will use monetary policy and other measures to hopefully stabilize prices and inflation expectations.”

China’s new leaders including Li Keqiang, set to become premier this week, inherit the task of sustaining a recovery from the slowest growth in 13 years while reining in asset prices and credit. February inflation, distorted by the weeklong Lunar New Year holiday, accelerated to a 10-month-high of 3.2 percent.

http://www.bloomberg.com/news/2013-03-13/pboc-s-zhou-says-china-should-be-on-high-alert-on-inflation.html

Bear in mind, the above story is greatly downplaying the REAL increase in inflation in China. A recent study from shows that prices in some Chinese cities are in fact higher than in NEW YORK. And China’s per capita is income is less than 25% of the US’s!

A South China Morning Post survey of some commonly bought grocery items found that a 500 gram loaf of bread that sells for HK$8.60 in Hong Kong and the equivalent of HK$9.93 in London, cost the equivalent of HK$13.52 in Beijing.

The latest annual cost of living survey by the compensation-consulting firm Mercer found Beijing and Shanghai to be pricier than New York and London. Shanghai was ranked 16th followed by Beijing at 17th, ahead of London (25th) and New York (32nd).

http://www.scmp.com/news/china/article/1091651/cost-living-china

This is a MAJOR warning sign to investors worldwide. Indeed, inflation is so out of control in China, that the country suffered 71 strikes in January 2013 alone.

The cause of these strikes?

Workers were demanding higher wages because prices had risen to the point that their old paychecks weren’t cutting it anymore.

China has sounded a warning bell, inflation is coming. And it’s going to be spreading throughout the globe in the coming months.

History has shown us countless times that you cannot print money without prices soaring. There is not one single instance in which currency devaluation has not done this. And the US Federal Reserve is now printing $84 billion every single month.

I’m sure you’ve noticed prices have begun rising already. This is only going to be getting worse going forward. Which is why now is the time to be preparing ourselves and our portfolios for this. Inflation can take its time to arrive. But once it does… things move very very quickly.

If you’re concerned about inflation… and want to learn more about simple bit highly effective ways you can shield yourself from it…

Click Here Now!!!

Best Regards,

Graham Summers

 

The following is an excerpt from the latest issue of Private Wealth Advisory. In it, we outline in stark detail the single biggest threat to investors’ wealth today. Over 99% of investors fail to grasp these issues. But the consequences for those who miss this, will be catastrophic, possibly a 30%+ loss of portfolio.

Not subscribers. We made money during 2008 and throughout the Euro Crisis. And this next implosion will make us money to. To join us… Click Here Now!

The Fed’s let the inflation genie out of the box. It’s not going to show up in the CPI because US Government changes the CPI regularly to underplay the threat of inflation. However, if you look at what’s happening in the real economy with corporations, all of the warning signs area already there.

Chipotle Mexican Grill Inc. higher food costs to dampen fourth-quarter earnings, despite continued strength in its underlying sales trends.

The Denver burrito chain, which has about 1,350 locations in the U.S., has been looking for ways to boost its customer traffic growth, which began tapering off last spring.

“While food costs driven by underlying inflation increased faster than expected in the fourth quarter, we’re optimistic that food inflation will level off in 2013,” said co-Chief Executive Monty Moran.

http://online.wsj.com/article/SB10001424127887323468604578246201531551498.html

Xstrata plc, the Swiss mining company, which is subject of a $US33 billion ($A32.4 billion) takeover by Glencore International, said 2012 profit plunged 37 per cent on weaker commodity prices and higher costs.

Net income, excluding exceptional items, such as impairment charges, fell to $US3.65 billion from $US5.79 billion a year earlier, the company said. Sales at the world’s largest exporter of power-station coal slid 7 per cent to $US31.6 billion.

”The combined impact of falling commodity prices, ongoing inflationary pressure on operating costs and continued strong producer currencies relative to the US dollar put pressure on our margins,” chief executive officer Mick Davis said in the statement

http://www.theage.com.au/business/commodity-prices-and-rising-costs-push-xstrata-profits-down-37-per-cent-20130305-2fj3y.html

LOWER PROFIT: Fourth-quarter net income at Southwest Airlines Co. fell by nearly half, to $78 million. Adjusted profit still beat analysts’ expectations, however.

HIGHER COSTS: Earnings were pulled down by increases in the cost of labor, maintenance and fuel. Expenses rose faster than revenue.

http://bigstory.ap.org/article/news-summary-costs-cut-southwests-4q-profit

The key point here is that inflation is already present in the financial system no matter what the Fed admits. This situation is only going to worsen. Indeed, you consider that costs are rising at the precise time that incomes are falling, you have a recipe for serious economic contraction similar to that of 2008:

U.S. incomes fell the most in two decades in January as higher tax rates kicked in, though American consumers opted to cut back on savings.

Personal incomes dropped 3.6% in January, the Commerce Department said Friday. Economists surveyed by Dow Jones Newswires expected a 2.5% decline.

The decline more than reversed big gains in December, when companies accelerated payouts of dividends and bonuses ahead of January tax increases. Many economists expect incomes to resume their slow growth after a bumpy couple of months.

Generally, if Americans have less money in their pockets they spend less on goods and services. But personal-consumption expenditures, which measure purchases ranging from cars and clothes to health care and travel, rose 0.2% in January, in line with economists’ expectations. Consumers cut back on big-ticket items but spent more on services.

http://online.wsj.com/article/SB10001424127887323978104578333961864183212.html?mod=googlenews_wsj

Indeed, Bernanke’s “wealth” effect for the markets has been totally negated by the fact that households are selling their retirement to make ends meet:

One in four Americans is raiding their meager retirement savings to pay their monthly bills, according to a new study.

When Amy Shankland’s husband, John, was laid off from his job, they tapped into their IRAs to get by. With credit card debt, big medical expenses, two young sons, the Shanklands had few options.

“We didn’t know what to do. It was either bankruptcy or cash in our IRAs,” Amy Shankland told NBC News.

The Shanklands are not alone. Americans are borrowing against their 401(k) to pay for non-retirement needs such as mortgages, credit card debt or college tuition, according to a new study from financial advisory firm HelloWallet. That amounts for more than $70 billion in annual withdrawals.

http://www.nbcnews.com/business/more-americans-raiding-401-k-s-pay-bills-1B7989986

All of this indicates that we are heaving into another massive economic contraction. Against this backdrop, stocks have formed a bubble. We all know how this will end. But most investors are ignoring all of the warning signs and buying stocks like there’s no tomorrow

This is precisely the sort of action we saw going into the Tech top and the 2007 top. The Fed has managed to create a bubble in stocks and housing again… right as the US economy collapses (just like in 2000 and 2007).  We all know what came next.

This is precisely the sort of “unquantifiable” investment analysis we specialize in with our Private Wealth Advisory newsletter.

With most of the markets dominated by computer programs and Wall Street sharks, the only way to make serious money is by focusing on the opportunities and risks that no computer or group-think Wall Streeter can come up with. If you can do this, you can still making a killing in the markets.

We’re speaking from experience here.

By focusing on investment ideas and portfolio risks that are “unquantifiable” we’ve shown a success rate of OVER 80% on our investments.

Put another way, we’ve made money on more than eight out of ten investments. This includes a 74 trade-winning streak (from July 2011-July 2012 we didn’t close a single losing trade).

And this is not some flash in the pan either.. Private Wealth Advisory has a history of beating the market and locking in serious gains when others are losing their shirts (we saw a 7% gain in 2008 when the markets fell over 30%)

Indeed, I’m so confident in this newsletter that it comes with a 30-day refund period. If you’re not totally satisfied with Private Wealth Advisory in the first month, simply drop us a line and we’ll refund every cent of your subscription.

You’ll have full access to the Private Wealth Advisory archives in that time. You’ll also receive two new hot off the press issues and very likely several trade signals (it’s getting close to time to close out our 7^th and 8^th  winners for the year).

To find out more about Private Wealth Advisory and how it can help you beat Wall Street and the market…

Click Here Now!!!

Phoenix Capital Research

 

 

 

 

 

 

 

Back in 2011, I predicted that when push ultimately came to shove, Germany would leave the Euro before it picked up the full tab. The reasoning is simple: the Germany population will not stand for rampant monetization. They know how that ends (Weimar) and they will kick out any politician who seems to support the idea.

German Chancellor Angela Merkel has walked a tightrope over the last few years of keeping the EU together without infuriating the German populace to the point of having to abandon ship.

To do this, Merkel has maintained a firm stance of “we’ll write the check provided conditions are met” much as a parent would give a child his or her allowance provided the child performed its chores satisfactorily. In the case of Germany, the “chores” are required conditions of austerity measures and budgetary requirements in exchange for bailout funds.

By doing this, Merkel is able to play hardball on an economic front (having failed to meet its German-required financial targets Greece had to wait an additional six months to receive another installment of its Second bailout) without appear too hard-nosed on a political front (she continually pushes to keep the Euro together, expressing a willingness to help other nations… as long as they meet her budgetary requirements).

The policy has thus far been a success with Merkel’s approval rating soaring to its highest level since 2009 (before her re-election bid). However, her political party has begun to realize that there will be consequences for defending the Euro no matter what the cost, suffering an unexpected defeat in January of this year.

Germany’s center-left opposition won a wafer-thin victory over Chancellor Angela Merkel’s coalition in a major state election Sunday, dealing a setback as she seeks a third term at the helm of Europe’s biggest economy later this year.

The opposition Social Democrats and Greens won a single-seat majority in the state legislature in Lower Saxony, ousting the coalition of Merkel’s conservative Christian Democratic Union and the pro-market Free Democrats that has run the northwestern region for 10 years. The same parties form the national government.

The 58-year-old Merkel will seek another four-year term in a national parliamentary election expected in September. She and her party are riding high in national polls, but the opposition hoped the Lower Saxony vote would show she is vulnerable.

The outcome could boost what so far has been a sputtering campaign by Merkel’s Social Democratic challenger, Peer Steinbrueck.

“This evening gives us real tailwind for the national election,” said Katrin Goering-Eckardt, a leader of Steinbrueck’s allies, the Greens. “We can and will manage to replace the (center-right) coalition.”

However, the close outcome also underscores the possibility of a messy result in September, with no clear winner.

http://bigstory.ap.org/article/merkel-risks-election-year-setback-state-vote

Merkel is up for re-election this year. So she will be more attentive to voter needs than usual. With that in mind, the following news story doesn’t bode well for her and her pro-Euro policies:

One in four Germans would be ready to vote in September’s federal election for a party that wants to quit the euro, according to an opinion poll published on Monday that highlights German unease over the costs of the euro zone crisis.

Germany’s mainstream parties remain solidly pro-euro despite grumbling over bailouts of countries such as Greece. A German taboo on nationalism, rooted in atonement for the crimes of the Nazi era, has helped to muffle eurosceptic voices.

But the poll conducted by TNS-Emnid for the weekly Focus magazine showed 26 percent of Germans would consider backing a party that wanted to take Germany out of the euro and as many as four in 10 Germans in the 40-49 age bracket would do so.

“This suggests there may be potential here for a new protest party,” Emnid chief Klaus Peter Schoeppner told Focus.

http://www.reuters.com/article/2013/03/11/us-germany-eurosceptics-idUSBRE92A07F20130311

This is a MAJOR trend to watch. If the German population begins to swing more in favor of leaving Euro, to the extent that it could cost Merkel her re-election, then my 2011 prediction could indeed begin to become a reality.

I’ve already alerted Private Wealth Advisory  subscribers to 6 trades that will all produce HUGE profits as this mess collapses… And I expect BIG GAINS in the coming months. The set up today is much like that in 2007/2008, when I warned of a major Crash… and we saw triple digit gains while everyone else lost their shirts.

However this time around the collapse will be even greater for the simple reason that the Central Banks have already spent 99% of their ammo propping the system up after 2008. So when things hit the fan this time around, they won’t have the tools to fix it. Which means… systemic collapse.

We’ve also taken steps to prepare our loved ones and personal finances for systemic risk with my Protect Your Family, Protect  Your Savings,  and Protect Your Portfolio Special Reports.

With a total of 20 pages, 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…

I can do the same for you. All you need to do is take out a subscription to my Private Wealth Advisory newsletter.

You’ll immediate be given access to the Private Wealth Advisory archives, including my Protect Your Family,Protect Your Savings, and Protect Your Portfolio reports.

You’ll also join my private client list in receive my bi-weekly market commentaries as well as my real time investment alerts, telling you exactly when to buy and sell an investment and what prices to pay.

So you get my hard hitting market insights, actionable investment recommendations, and real time trade alerts, for one full year, for just $299.99.

To take out an annual subscription to Private Wealth Advisory now and start taking steps to insure your loved ones and personal finances move through the coming storm safely…

Click Here Now!!!

Best Regards,

Graham Summers

 

 

Stocks hit a new high in the Dow yesterday. CNBC cheered and Fed economists everywhere patted each other on the back.

The unfortunate reality for this “success” is that it only works in nominal terms. A DOW at 14,296 vs. a DOW at 13,000 only means something if the rise in price occurs against low inflation. If inflation was 10% during the time period that this rise occurred, then you’ve not generated any actual wealth. At best you’ve maintained your purchasing power.

On that note, unfortunately for the Fed, real inflation in the US is nearly 10% today. Indeed, if you look at the economy the primary costs for consumers (food, energy, housing and healthcare) have been increasing dramatically.

FOOD-The severe drought that swept through much of the U.S. last year is continuing into 2013, threatening to cripple economic growth while forcing consumers to pay higher food prices.

“The drought will have a significant impact on prices, especially beef, pork and chicken,” said Ernie Gross, an economic professor at Creighton University and who studies farming issues.

“Forecasts are for a four percent (price) increase in food this year, but I think that’s on the low side if the drought continues,” Gross said. “Food prices will likely be going up much more than the forecast.”

http://www.cnbc.com/id/100372886/Drought_Still_Plagues_US_Food_Prices_039Going_Up039

ENERGY–After sending consumers into sticker shock the past month, how much more can gasoline prices climb?

Another 20 to 50 cents a gallon — a level that could propel the cost of gasoline, now $3.77 a gallon, to all-time highs, some experts say.

Gasoline prices typically climb from February to Memorial Day on expectations of rising consumption and costlier summer-blend gas. But so far this year, prices are surging sooner and faster than ever before — up 47 cents since mid-January.

Consumers in some metropolitan areas, such as Southern California, are already paying nearly $5.20 a gallon, up more than 75 cents since December lows.

http://www.usatoday.com/story/money/nation/2013/02/19/2013-gasoline-prices-could-flirt-with-all-time-highs/1930681/

HOUSING-Home prices closed out 2012 with the biggest annual gain in more than six years while sales of new homes spiked in January, the latest sign that the long-suffering housing market was on the mend, data showed on Tuesday.

American consumers, meanwhile, grew more optimistic in February even as payroll taxes rose and about $85 billion worth of government spending cuts were due to take effect on March 1.

“The numbers are all pretty strong. It’s a significant rise in confidence and a strong rise in new homes sales — there is not really much to argue in those numbers,” said David Sloan, an economist at 4Cast Ltd in New York.

http://www.reuters.com/article/2013/02/26/us-usa-economy-newhomes-idUSBRE91P0JF20130226

HEALTHCARE-Rapidly rising health insurance premiums and higher cost-sharing continue to strain the budgets of U.S. working families and employers. Analysis of state trends in private employer-based health insurance from 2003 to 2011 reveals that premiums for family coverage increased 62 percent across states—rising far faster than income for middle- and low-income families.

http://www.commonwealthfund.org/Publications/Issue-Briefs/2012/Dec/State-Trends-in-Premiums-and-Deductibles.aspx

A secondary issue to the rise in stock pries pertains to dividends. A little known fact is that dividends account for 60% of stocks gains historically… going back to 1900.

U.S. equities returned 6 percent a year on average since 1900, inflation-adjusted data compiled by the London Business School and Credit Suisse Group AG show. Take away dividends and the annual gain drops to 1.7 percent, compared with 2.1 percent for long-term Treasury bonds, according to the data.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a0lVup_0DDwI

Take away dividends, and stocks underperform even Treasuries. And inflation east away at dividends too. If a company pays you $1.00 last year, and then pays you $1.05 this year and inflation is over 5%, you’re not making more money. And if you use this new dividend to buy more overpriced stock which is rallying on the back of a falling Dollar… you’re not getting any richer… at all.

Checkmate, Fed. You’re spending over $100 million per day to create a grand illusion. Stocks are hitting new all time highs, but none of us are any richer for it.

This will end very badly. The Fed has set the stage for another Crash. And this time around its hands will be tied as it has used up all of its tools just creating this bubble. History has shown us time and again how money printing ends. It NEVER turns out well. There is not one example in history where it has.

So if you have not already taken steps to prepare for systemic failure, you NEED to do so NOW. We’re literally at most a few months, and very likely just a few weeks from the economy taking a massive downturn, potentially taking down the financial system with them. Think I’m joking? The Fed is pumping hundreds of BILLIONS of dollars into financial system right now trying to stop this from happening.

I’ve already alerted Private Wealth Advisory  subscribers to 6 trades that will all produce HUGE profits as this mess collapses.

We’ve also taken steps to prepare our loved ones and personal finances for systemic risk with my Protect Your Family, Protect  Your Savings,  and Protect Your Portfolio Special Reports.

With a total of 20 pages, 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…

I can do the same for you. All you need to do is take out a subscription to my Private Wealth Advisory newsletter.

You’ll immediate be given access to the Private Wealth Advisory archives, including my Protect Your Family,Protect Your Savings, and Protect Your Portfolio reports.

You’ll also join my private client list in receive my bi-weekly market commentaries as well as my real time investment alerts, telling you exactly when to buy and sell an investment and what prices to pay.

So you get my hard hitting market insights, actionable investment recommendations, and real time trade alerts, for one full year, for just $299.99.

To take out an annual subscription to Private Wealth Advisory now and start taking steps to insure your loved ones and personal finances move through the coming storm safely…

Click Here Now!!!

Best Regards,

Graham Summers

The US Government and the US Federal Reserve downplay the threat of inflation. There are two primary reasons for this:

1)   Acknowledging higher inflation would mean both revising GDP growth much lower (last quarter’s FDP growth would have been negative 1% if you accounted for the real increase in costs of living).

2)    One of the primary arguments the Fed uses for why it can print hundreds of billions of Dollars without hurting consumers it because inflation remains “contained” or “transitory.”

Because of this, you won’t see any real acknowledgement of inflation by the US Government or the Fed until it’s far too late. Remember, one of the central goals for these organizations is to maintain confidence in the system.

Indeed, while the mainstream financial media continues to trumpet the wonders of stocks closing in on all-time highs, larger, more sophisticated players are preparing for a financial meltdown in a much larger market: bonds.

The cause? Inflation…

Goldman Sachs and other large financial entities have begun to warn their clients about an implosion in the bond market.

Goldman Sachs strategists have issued a big warning to clients hiding out in bond funds: You’re about to lose your shirt.

The reason: interest rates began rising this week, and if they return to the historical average yield of 3 percent, prices for long-term bonds will plummet. (By their very nature, fixed income prices must fall if rates rise.)

“A reversion of risk premiums to historical averages of 6% nominal rates (3% real rates and 3% inflation) would suggest estimated losses in portfolios with bond durations of 5 years of 25% or more,” equity strategist Robert D. Boroujerdi said in a note.

http://www.cnbc.com/id/100355153/Why_Goldman_Thinks_You_Should_Dump_Bonds_Now

Goldman is not the only group be warning of a bond market implosion courtesy of rising inflation.

Finra warned investors today that if interest rates rise – as most market pros expect – bond investors could be slammed by long duration.

In an investor alert, the Financial Industry Regulatory Authority Inc. told investors that in the event of rising interest rates, “outstanding bonds, particularly those with a low interest rate and high duration may experience significant price drops.”

A bond fund with 10-year duration will decrease in value by 10% if rates rise one percentage point, the alert warns.

http://www.investmentnews.com/article/20130214/FREE/130219947

We get additional signs of the rising threat of inflation from the wave of Gold purchases made by Central Banks:

Worldwide gold demand in 2012 was another record high of $236.4 billion in the World Gold Council’s latest report. This was up 6% in value terms in the fourth quarter to $66.2 billion, the highest fourth quarter on record. Global gold demand in the fourth quarter of 2012 was up 4% to 1,195.9 tonnes.

Central bank buying for 2012 rose by 17% over 2011 to some 534.6 tonnes. As far as central bank gold buying, this was the highest level since 1964. Central bank purchases stood at 145 tonnes in the fourth quarter. That is up 9% from the fourth quarter of 2011, and the eighth consecutive quarter in which central banks were net purchasers of gol

http://247wallst.com/2013/02/14/central-banks-buy-the-most-gold-since-1964/#ixzz2LMLOfBPK

Note… Central Banks, while talking down money printing and denying the presence of inflation, bought more Gold in 2012 that any year dating back to 1964. Indeed, However, since becoming net buyers of Gold in 2010, the Central Banks have been increasing their Gold purchases rapidly.

In 2010, Governments worldwide bought 77 tonnes of Gold. In 2011 it was 457 tonnes. And last year it was a whopping 535 tonnes. All told, they’ve accumulated  1,000 tonnes of Gold since 2Q09. At today’s price of $1600 per ounce, this stash is valued at over $56 billion.

The key issue here is not the amount ($56 billion in Gold purchases is nothing compared to the over $10 trillion in new money Central banks have printed since 2007), but the trend: Central Banks were net sellers of Gold for decades until 2010.

With that in mind, we’ve recently published a new Special Report outlining the dark secrets of inflation, which mainstream financial professionals never tell their clients.

It’s titled The Inflation Secrets Your Broker Won’t Tell You and it explains in horrifying detail three of the biggest secrets about inflation that result in 99% of investors LOSING MONEY by betting on some of the most popular inflation investments.

Ignore this information at your own peril! Inflation is a far more complicated issue that most investors realize. There’s a reason so few people got rich during the last wave of inflation in the ‘70s.

We are selling this report for $79.99 to the general public, but we are giving it away to ourPrivate Wealth Advisory subscribers FREE OF CHARGE.

Private Wealth Advisory is a bi-weekly investment newsletter that cuts through the financial media’s usual tripe and presents the REAL major developments in the global financial system.

Private Wealth Advisory called the 2008 Crash, the EU Crisis, the US Debt Ceiling collapse, the rise of inflation, and more. Private Wealth Advisory subscribers are not only warned of these issues months in advance, but are guided to investments that have helped them lock in MAJOR gains when these issues hit.

Case in point, our clients returned 7% in 2008. They saw a 34% gain as the EU Crisis began to spin out of control from July 2011-July 2012. And they’re currently positioned in six investment all designed to profit massively as inflation rises in the financial system.

To find out what they are, all you have to do is take out a subscription to Private Wealth Advisory. The minute you do so you’ll receive our Special Report The Inflation Secrets Your Broker Won’t Tell You.

You’ll also begin receiving our bi-weekly investment updates (the next one goes out this Wednesday) alerting you to the most critical developments in the global economy and financial system.

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To begin your journey towards becoming a more informed and profitable investor…

Click Here Now!

Best Regards,
Graham Summers

As we’ve noted in recent articles, the US Federal Reserve has blown another bubble in stocks and facilitating the exact same risk-taking behavior that brought about the 2008.

The Fed realizing that it’s done this, which is why it’s now trying to manage down expectations of future stimulus (see the multiple suggestions from Fed officials that the Fed might reduce QE before hitting its unemployment target).

The Fed is not the only Central Bank to have shifted tone.

Chinese authorities took a step to ease potential inflationary pressures Tuesday by using a key mechanism for the first time in eight months.

The move by the central bank to withdraw cash from the banking system is a reversal after months of pumping cash in. That cash flood was meant to reduce borrowing costs for businesses as the economy slowed last year—but recent data has shown growth picking up, along with the main determinants of inflation: housing and food prices.

The People’s Bank of China used a liquidity-draining tool in the interbank market that enables the central bank to borrow money from commercial lenders. It withdrew 30 billion yuan ($4.81 billion) by offering 28-day repurchase agreements, alternatively known as repos. The PBOC hadn’t offered repos since June.

“The central bank is trying to send a message that it will not tolerate too-easy liquidity conditions,” Dariusz Kowalczyk, a senior economist at Crédit Agricole, ACA.FR +0.99% wrote in a research note.

http://online.wsj.com/article/SB10001424127887323495104578313541983212134.html

Investors are ignoring this story for the most part. This doesn’t bode well for the economy as China was the alleged growth story that pulled the world out of recession in 2009. China did this via a massive stimulus program equal to nearly 20% of GDP (not to mention a massive expansion of its banking system).

So if China is curbing its stimulus, the rest of the world will soon feel the impact.

Another Central Bank that has failed to engage in more monetary stimulus is the Central Bank of Japan. Despite, recently re-elected Prime Minister Shinzo Abe has been talking down the Yen and urging the Bank of Japan to act aggressively to raise the stock market and Japanese economy, the Bank of Japan didn’t announce any new QE or stimulus in its latest meeting.

The significance of this is tremendous. Besides the Fed, the Bank of Japan is one of the most profligate money printers in the globe. For the Bank of Japan to NOT announce any new QE despite extreme pressure from Japan’s prime minister is yet another warning that something major has changed in the financial system.

 

This will end very badly. The Fed and other Central banks have set the stage for another Crash. And this time around its hands will be tied as it has used up all of its tools just creating this bubble.

THIS is the reason Central Banks are beginning to shift their tones. They realize they’ve blown another bubble and that we’re likely headed for another Crash. And this time around the Fed will be totally out of ammo to stop it. Unlike 2008 which was just a warm-up, this will be the REAL CRISIS featuring full-scale systemic failure.

So if you have not already taken steps to prepare for systemic failure, you NEED to do so NOW. We’re literally at most a few months, and very likely just a few weeks from the economy taking a massive downturn, potentially taking down the financial system with them. Think I’m joking? The Fed is pumping hundreds of BILLIONS of dollars into financial system right now trying to stop this from happening.

I’ve already alerted Private Wealth Advisory  subscribers to 6 trades that will all produce HUGE profits as this mess collapses.

We’ve also taken steps to prepare our loved ones and personal finances for systemic risk with my Protect Your Family, Protect  Your Savings,  and Protect Your Portfolio Special Reports.

With a total of 20 pages, 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…

I can do the same for you. All you need to do is take out a subscription to my Private Wealth Advisory newsletter.

You’ll immediate be given access to the Private Wealth Advisory archives, including my Protect Your Family,Protect Your Savings, and Protect Your Portfolio reports.

You’ll also join my private client list in receive my bi-weekly market commentaries as well as my real time investment alerts, telling you exactly when to buy and sell an investment and what prices to pay.

So you get my hard hitting market insights, actionable investment recommendations, and real time trade alerts, for one full year, for just $299.99.

To take out an annual subscription to Private Wealth Advisory now and start taking steps to insure your loved ones and personal finances move through the coming storm safely…

Click Here Now!!!

Best Regards,

Graham Summers

 

 

The Fed has a HUGE problem on its hands.

Fed officials are well aware that stocks have become totally disconnected from reality. However, they cannot simply come out and discuss ending stimulus efforts outright because it would cause a market collapse. Remember, the single most important role for the Fed post-2008 is to maintain confidence in the system. So they cannot risk any explicit statement that they will be pulling the punchbowl.

Consequently, Fed officials have begun a careful process of managing down expectations regarding future stimulus.

Federal Reserve Bank of St. Louis President James Bullard gave remarks Thursday on “U.S. Monetary Policy: Easier Than You Think It Is,” at a special banking forum sponsored by Mississippi State University’s Department of Finance and Economics.

Bullard discussed four considerations for QE3 going forward.  First, while substantial labor market improvement is a condition for ending the program, Bullard said that “the Committee could consider many different aspects of labor market performance when evaluating whether there has been ‘substantial improvement.’”  These include the unemployment rate, employment, hours worked, and Job Openings and Labor Turnover Survey (JOLTS) data.

Second, “Without an end date, the Committee may have to alter the pace of purchases as news arrives concerning U.S. macroeconomic performance,” Bullard said, noting that “substantial labor market improvement” does not arrive suddenly.  “This suggests that as labor markets improve somewhat, the pace of asset purchases could be reduced somewhat, but not ended altogether,” he explained.  “This type of policy would send important signals to the private sector concerning the Committee’s judgment on the amount of progress made to that point.”

A third consideration for the QE program is inflation and inflation expectations, Bullard said.  Current readings on inflation are rather low, which he said may give the FOMC some leeway to continue asset purchases for longer than otherwise.  Although worries about rising inflation have so far been unfounded, “the lesson from QE2 is that inflation and inflation expectations did trend higher,” he said, adding that it is too early to know if that will happen with the current QE program.

Finally, he said, “The size of the balance sheet could inhibit the Committee’s ability to exit appropriately from the current very expansive monetary policy.”  He explained that when interest rates rise, asset values will fall, which could possibly complicate monetary policy decisions.

http://www.stlouisfed.org/newsroom/displayNews.cfm?article=1669

Note that Bullard, like the December Fed FOMC, mentions “inflation expectations.” The Fed cannot ever openly admit that inflation is a problem because doing so would inevitably lead to the realization that the Fed is in fact the primary cause of inflation in the financial system.

Consequently the Fed must use coded terms such as “inflation expectations” to discuss the presence of inflation (note that “inflation expectations” moves the blame for prices to investors who expect inflation as opposed to the Fed which has created inflation).

The fact that this phrase (inflation expectations) pops up in both Bullard’s speech and the Fed’s FOMC minutes indicates that the Fed is well aware that it is causing inflation to spiral out of control. This is a big reason why the Fed is beginning to manage down expectations of future stimulus.

Indeed, Bullard is not the only Fed official to be talking down QE.

Federal Reserve Bank of Cleveland President Sandra Pianalto said the gains from the Fed’s $85 billion in monthly bond purchase may fade.

“Over time, the benefits of our asset purchases may be diminishing,” Pianalto said today in a speech at Florida Gulf Coast University in Fort Myers, Florida.

“Given how low interest rates currently are, it is possible that future asset purchases will not ease financial conditions by as much as they have in the past,” she said. “It is also possible that easier financial conditions, to the extent they do occur, may not provide the same boost to the economy as they have in the past.”

Fed officials are debating how long they should continue their bond buying, designed to foster economic growth and reduce 7.9 percent unemployment. The Federal Open Market Committee last month kept the monthly purchase pace unchanged at $40 billion in mortgage-backed securities and $45 billion in Treasury purchases.

The central bank has said the purchases will continue until the labor market improves “substantially.”

http://www.bloomberg.com/news/2013-02-15/pianalto-says-benefits-of-fed-securities-purchases-may-wane.html

Inflation is on the rise in the financial system in a big way thanks to the Fed and other Central Banks’ money printing. However, the Fed has now realized that things are beginning to spiral out of control. As a result it is managing down expectations for further stimulus. This will not contain inflation in any real way. However, it will have a major impact on asset prices, particularly stocks which are now in a bubble, closing in on all-time highs despite earnings falling, the global economy rolling over, a banking crisis in Europe, a sovereign debt crisis in Europe, China slowing its liquidity injections and more.

This will end very badly. The Fed has set the stage for another Crash. And this time around its hands will be tied as it has used up all of its tools just creating this bubble.

THIS is the reason the Fed is beginning to shift its tone. It realizes it has blown another bubble and that we’re likely headed for another Crash. And this time around the Fed will be totally out of ammo to stop it. Unlike 2008 which was just a warm-up, this will be the REAL CRISIS featuring full-scale systemic failure.

So if you have not already taken steps to prepare for systemic failure, you NEED to do so NOW. We’re literally at most a few months, and very likely just a few weeks from the economy taking a massive downturn, potentially taking down the financial system with them. Think I’m joking? The Fed is pumping hundreds of BILLIONS of dollars into financial system right now trying to stop this from happening.

I’ve already alerted Private Wealth Advisory  subscribers to 6 trades that will all produce HUGE profits as this mess collapses.

We’ve also taken steps to prepare our loved ones and personal finances for systemic risk with my Protect Your Family, Protect  Your Savings,  and Protect Your Portfolio Special Reports.

With a total of 20 pages, 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…

I can do the same for you. All you need to do is take out a subscription to my Private Wealth Advisory newsletter.

You’ll immediate be given access to the Private Wealth Advisory archives, including my Protect Your Family,Protect Your Savings, and Protect Your Portfolio reports.

You’ll also join my private client list in receive my bi-weekly market commentaries as well as my real time investment alerts, telling you exactly when to buy and sell an investment and what prices to pay.

So you get my hard hitting market insights, actionable investment recommendations, and real time trade alerts, for one full year, for just $299.99.

To take out an annual subscription to Private Wealth Advisory now and start taking steps to insure your loved ones and personal finances move through the coming storm safely…

Click Here Now!!!

Best Regards,

Graham Summers

Having pumped the system with liquidity non-stop since the Crash of 2008, the Fed now realizes it’s in big trouble and needs to manage down expectations of further stimulus.

As we noted earlier this year, the Fed, while attempting to appear committed to endless money printing via its QE 3 and QE 4 programs, was in fact decidedly split on whether to commit to more as well as the risks inherent to additional QE. Indeed, the Fed FOMC minutes indicate that some Fed members were concerned about whether QE even worked as a monetary policy.

Below are the notes from the Fed’s December 2012 FOMC minutes (the meeting during which the Fed announced QE 4). I’ve added highlights to emphasize the shift in tone.

With regard to the possible costs and risks of purchases, a number of participants expressed the concern that additional purchases could complicate the Committee’s efforts to eventually withdraw monetary policy accommodation, for example, by potentially causing inflation expectations to rise or by impairing the future implementation of monetary policy.

Participants also discussed the implications of continued asset purchases for the size of the Federal Reserve’s balance sheet. Depending on the path for the balance sheet and interest rates, the Federal Reserve’s net income and its remittances to the Treasury could be significantly affected during the period of policy normalization.

 Participants noted that the Committee would need to continue to assess whether large purchases were having adverse effects on market functioning and financial stability. They expressed a range of views on the appropriate pace of purchases, both now and as the outlook evolved. It was agreed that both the efficacy and the costs would need to be carefully monitored and taken into account in determining the size, pace, and composition of asset purchases.

http://www.federalreserve.gov/monetarypolicy/fomcminutes20121212.htm

There are three key implications here:

1)   The Fed acknowledged that QE causes inflation expectations to rise (red text)

2)   The Fed was divided on the efficacy of QE (green text)

3)   The Fed was not committed to employing QE forever despite its public declarations to that effect (blue text)

This shift in tone went largely unnoticed by the media. However, the implications are very serious. By way of explanation, let’s quickly review the Fed’s primary moves in the post-Crisis era.

In 2008 the Fed had its back against the wall in terms of saving the system. Since that time every new Fed intervention (verbal or monetary) has been aimed at propping up the Too Big To Fail Banks and pushing the stock market higher.

The first wave of this came via QE 1 and QE 2 in which the Fed collectively monetized nearly $2 trillion in assets. However, once QE 2 ended in 2011, we noted the Fed began to realize that it could get the “positive” effects of additional stimulus (higher asset prices) without actually having to engage in more stimulus, simply by issuing verbal interventions at critical moments.

Thus, between QE 2’s end (June 2011) and the start of QE 3 (September 2012), the Fed became increasingly reliant on verbal intervention as opposed to actual money printing.

During this period, any time the markets began to dip, a Fed official, usually an uber-Dove such as NY Fed President Bill Dudley or Chicago Fed President Charles Evans, would indicate that the Fed was ready to act aggressively if need be and VOOM the markets would take off again.

This changed in May 2012, when the entire financial system began to implode courtesy of Spain (see our issue The “C” Word for an explanation of this). At that time the Fed switched back into aggressive monetary policy mode, first promising to provide more QE before launching QE 3 in September 2012 and then QE 4 in December 2012.

Unlike previous QE programs, which had definitive timelines, QE 3 and QE 4 were open-ended, meaning that they can continue forever. This was the Great Global Rig we referred to earlier this year. And while it did push the stock market higher, it did next to nothing for the US economy.

Which brings us to today. The US economy is contracting sharply again (without the massaged data inflation, real GDP growth would have been -1% last quarter) right as stocks close in on new all-time highs (the S&P 500 and Dow) or have already broken to new highs (the Russell 2000).

This is happening at a time when earnings are falling (despite companies booking profits), the economy is slowing, and stocks are closing in on all-time highs.

In plain terms, the stock market has become totally detached from economic realities. There is a term for when asset prices become detached from fundamentals, it’s called “A BUBBLE.”

THIS is the reason the Fed is beginning to shift its tone. It realizes it has blown another bubble and that we’re likely headed for another Crash. And this time around the Fed will be totally out of ammo to stop it. Unlike 2008 which was just a warm-up, this will be the REAL CRISIS featuring full-scale systemic failure.

So if you have not already taken steps to prepare for systemic failure, you NEED to do so NOW. We’re literally at most a few months, and very likely just a few weeks from the economy taking a massive downturn, potentially taking down the financial system with them. Think I’m joking? The Fed is pumping hundreds of BILLIONS of dollars into financial system right now trying to stop this from happening.

I’ve already alerted Private Wealth Advisory  subscribers to 6 trades that will all produce HUGE profits as this mess collapses.

We’ve also taken steps to prepare our loved ones and personal finances for systemic risk with my Protect Your Family, Protect  Your Savings,  and Protect Your Portfolio Special Reports.

With a total of 20 pages, 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…

I can do the same for you. All you need to do is take out a subscription to my Private Wealth Advisory newsletter.

You’ll immediate be given access to the Private Wealth Advisory archives, including my Protect Your Family,Protect Your Savings, and Protect Your Portfolio reports.

You’ll also join my private client list in receive my bi-weekly market commentaries as well as my real time investment alerts, telling you exactly when to buy and sell an investment and what prices to pay.

So you get my hard hitting market insights, actionable investment recommendations, and real time trade alerts, for one full year, for just $299.99.

To take out an annual subscription to Private Wealth Advisory now and start taking steps to insure your loved ones and personal finances move through the coming storm safely…

Click Here Now!!!

Best Regards,

Graham Summers