Phoenix Capital Research

This is a continuation of a series of essays I wrote concerning the global shift away from the US Dollar as reserve currency. If you missed those essays, a brief recap of the items listed were:

1)   China and Russia dropping the US Dollar for trade

2)   China ramping up trade with Brazil

3)   Saudi Arabia moving to strengthen trade with China and Russia

4)   China, Russia, Brazil, India, and now South Africa are moving to trade more in their own currencies (not the US Dollar)

5)   Singapore (major financial center in Asia) starting to trade yuan

 

All of these items are real and documented. And the pace of the move away from the Dollar as reserve currency is not slowing.

Indeed, it was just revealed that ASEAN+3 countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, China, Japan, and South Korea) are researching the prospect of a “common currency” similar to the Euro.

The significance of this development cannot be overstated. The primary question those who do not believe the US Dollar could lose its reserve currency status ask is: what will be the replacement?

For certain there is no one currency that could fit the bill. The Chinese yuan could not do it as China is not ready and in fact ready to suffer a housing and banking collapse. Russia’s economy is a disaster aside from a few key areas (Moscow, St Petersburg, etc), the Euro in its current form won’t even exist in a few years, and Japan is both an ecological and financial disaster (they’ve just announced a 1 QUADRILLION stimulus plan.

Thus, the idea that any one of these currencies could replace the US Dollar as reserve currency of the world at this time is absurd.

However, a common currency comprised of most Asian countries (the primary creditor nations and manufacturing base of the world) is a completely different story.

Understand, I am aware that common currencies in general are flawed (especially when you’re uniting a bunch of bankrupt aging countries like Europe). However, a common currency comprised of Asian countries would overcome be a much more viable alternative to the US Dollar as reserve currency of the world.

The reason for this is that a common currency in Asia would get past the individual risks of any one Asian nation’s currency (Thailand and Japan in particular are a mess) at least in the beginning.

True, ultimately a common currency there would prove as futile as the Euro. However, it would serve as a “stepping stone” in the process of finding a replacement of the US Dollar as world reserve currency.

What I mean is that should a common currency be introduced in Asia, it would probably work for about 10-15 years. By then we’re well into the 2020s if not the 2030s at which point it is quite possible China will indeed be in a place to provide a world reserve currency on its own.

I wish to stress that even if Asia doesn’t implement a common currency and the US Dollar remains the world’s reserve currency (I put the odds of this at 20%), we are still facing a debt default in the US which will result in the US Dollar dropping dramatically in value and ushering in serious if not hyper-inflation.

Indeed, most commentators fail to understand the real reason Weimar Germany suffered hyperinflation. Niall Ferguson’s book, “The Ascent of Money” explains that it was in fact a political mistake that ushered in hyperinflation:

Yet it would be wrong to see the hyperinflation of 1923 as a simple consequence of the Versailles Treaty. That was how the Germans liked to see it, of course…All of this was to overlook the domestic political roots of the monetary crisis. The Weimar tax system was feeble, not least because the new regime lacked legitimacy among higher income groups who declined to pay the taxes imposed on them.

At the same time, public money was spent recklessly, particularly on generous wage settlements for public sector unions. The combination of insufficient taxation and excessive spending created enormous deficits in 1919 and 1920 (in excess of 10 per cent of net national product), before the victors had even presented their reparations bill… Moreover, those in charge of Weimar economic policy in the early 1920s felt they had little incentive to stabilize German fiscal and monetary policy, even when an opportunity presented itself in the middle of 1920.

A common calculation among Germany’s financial elites was that runaway currency depreciation would force the Allied powers into revision the reparations settlement, since the effect would be to cheapen German exports.

What the Germans overlooked was that the inflation induced boom of 1920-22, at a time when the US and UK economies were in the depths of a post-war recession, caused an even bigger surge in imports, thus negating the economic pressure they had hoped to exert. At the heart of the German hyperinflation was a miscalculation.

The similarities between the US today and Weimar pre-hyperinflation are striking. As in Weimar, US fiscal authorities are not taking any steps to rein in their loose money policies. Similarly, the US Fed, like Germany’s financial elites believes that currency depreciation is a good thing.

Thus we have a rather frightening set-up for hyperinflation in the US: the largest emerging market players are moving away from using the US Dollar at the same time that US monetary authorities are engaging in disastrous policies similar to those employed by the men who brought hyperinflation to Weimar Germany.

I firmly believe the US will see serious (‘70s style inflation) if not hyperinflation within the next 2-3 years. It could come sooner depending on how the Fed’s policies play out.

On that note, if you’ve yet to take steps to prepare your portfolio for the coming inflationary disaster, our FREE Special Report, The Inflationary Holocaust explains not only why inflation is here now, why the Fed is powerless to stop it, and three investments that absolutely EXPLODE as a result of this.

All in all its 14 pages contain a literal treasure trove of information on how to take steps to prepare AND profit from what’s to come. And it’s all 100% FREE.

To pick up your copy today, go to http://www.gainspainscapital.com and click on FREE REPORTS.

Good Investing!

Graham Summers.

 

PS. We also offer a FREE Special Report specifying exactly how to prepare for the coming collapse in the US stock market (inflation will NOT be positive for stocks for much longer).

I call it The Financial Crisis “Round Two” Survival Kit. And its 17 pages contain a wealth of information about portfolio protection, which investments to own and how to take out Catastrophe Insurance on the stock market (this “insurance” paid out triple digit gains in the Autumn of 2008).

Again, this is all 100% FREE. To pick up your copy today, go to http://www.gainspainscapital.com and click on FREE REPORTS.

 

 

 

 

 

 

The following is an excerpt from my paid newsletter Private Wealthy Advisory detailing the global shift away from the US Dollar as the world’s reserve currency. It also specifies what the most likely replacement of the US Dollar will be (a basket of Asian currencies). To find out more about Private Wealthy Advisory including my inflation hedges that will outperform even Gold and Silver during the future inflationary disaster Click Here Now.

This is a continuation of a series of essays I wrote concerning the global shift away from the US Dollar as reserve currency. If you missed those essays, a brief recap of the items listed were:

1)   China and Russia dropping the US Dollar for trade

2)   China ramping up trade with Brazil

3)   Saudi Arabia moving to strengthen trade with China and Russia

4)   China, Russia, Brazil, India, and now South Africa are moving to trade more in their own currencies (not the US Dollar)

5)   Singapore (major financial center in Asia) starting to trade yuan

All of these items are real and documented. And the pace of the move away from the Dollar as reserve currency is not slowing.

Indeed, it was just revealed that ASEAN+3 countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, China, Japan, and South Korea) are researching the prospect of a “common currency” similar to the Euro.

The significance of this development cannot be overstated. The primary question those who do not believe the US Dollar could lose its reserve currency status ask is: what will be the replacement?

For certain there is no one currency that could fit the bill. The Chinese yuan could not do it as China is not ready and in fact ready to suffer a housing and banking collapse. Russia’s economy is a disaster aside from a few key areas (Moscow, St Petersburg, etc), the Euro in its current form won’t even exist in a few years, and Japan is both an ecological and financial disaster (they’ve just announced a 1 QUADRILLION stimulus plan.

Thus, the idea that any one of these currencies could replace the US Dollar as reserve currency of the world at this time is absurd.

However, a common currency comprised of most Asian countries (the primary creditor nations and manufacturing base of the world) is a completely different story.

Understand, I am aware that common currencies in general are flawed (especially when you’re uniting a bunch of bankrupt aging countries like Europe). However, a common currency comprised of Asian countries would overcome be a much more viable alternative to the US Dollar as reserve currency of the world.

The reason for this is that a common currency in Asia would get past the individual risks of any one Asian nation’s currency (Thailand and Japan in particular are a mess) at least in the beginning.

True, ultimately a common currency there would prove as futile as the Euro. However, it would serve as a “stepping stone” in the process of finding a replacement of the US Dollar as world reserve currency.

What I mean is that should a common currency be introduced in Asia, it would probably work for about 10-15 years. By then we’re well into the 2020s if not the 2030s at which point it is quite possible China will indeed be in a place to provide a world reserve currency on its own.

I wish to stress that even if Asia doesn’t implement a common currency and the US Dollar remains the world’s reserve currency (I put the odds of this at 20%), we are still facing a debt default in the US which will result in the US Dollar dropping dramatically in value and ushering in serious if not hyper-inflation.

Indeed, most commentators fail to understand the real reason Weimar Germany suffered hyperinflation. Niall Ferguson’s book, “The Ascent of Money” explains that it was in fact a political mistake that ushered in hyperinflation:

Yet it would be wrong to see the hyperinflation of 1923 as a simple consequence of the Versailles Treaty. That was how the Germans liked to see it, of course…All of this was to overlook the domestic political roots of the monetary crisis. The Weimar tax system was feeble, not least because the new regime lacked legitimacy among higher income groups who declined to pay the taxes imposed on them.

At the same time, public money was spent recklessly, particularly on generous wage settlements for public sector unions. The combination of insufficient taxation and excessive spending created enormous deficits in 1919 and 1920 (in excess of 10 per cent of net national product), before the victors had even presented their reparations bill… Moreover, those in charge of Weimar economic policy in the early 1920s felt they had little incentive to stabilize German fiscal and monetary policy, even when an opportunity presented itself in the middle of 1920.

A common calculation among Germany’s financial elites was that runaway currency depreciation would force the Allied powers into revision the reparations settlement, since the effect would be to cheapen German exports.

What the Germans overlooked was that the inflation induced boom of 1920-22, at a time when the US and UK economies were in the depths of a post-war recession, caused an even bigger surge in imports, thus negating the economic pressure they had hoped to exert. At the heart of the German hyperinflation was a miscalculation.

The similarities between the US today and Weimar pre-hyperinflation are striking. As in Weimar, US fiscal authorities are not taking any steps to rein in their loose money policies. Similarly, the US Fed, like Germany’s financial elites believes that currency depreciation is a good thing.

Thus we have a rather frightening set-up for hyperinflation in the US: the largest emerging market players are moving away from using the US Dollar at the same time that US monetary authorities are engaging in disastrous policies similar to those employed by the men who brought hyperinflation to Weimar Germany.

I firmly believe the US will see serious (‘70s style inflation) if not hyperinflation within the next 2-3 years. It could come sooner depending on how the Fed’s policies play out.

On that note, I’m already preparing subscribers of Private Wealthy Advisory for hyperinflation with a SIX PART How to Survive Hyperinflation report detailing exactly how and when hyperinflation will hit the US.

I’m also unveiling FIVE new inflation hedges that will outperform even Gold and Silver in the coming months as inflation rips through the financial system.

I have to be honest, I’m even more bullish on these investments than I was on the first five (which showed us gains of 18%, 20%, 28%, even 42% in just a few months).

Part 1 of How to Survive Hyperinflation which details exactly how and when hyperinflation is already online now. And I’ll be unveiling Parts 2-6 over the next two week including the names, symbols, and how to buy FIVE new inflation hedges ALL of which will outperform Gold and Silver in the coming months.

And… you can even keep these reports if you decide Private Wealthy Advisory isn’t for you and request a full 100% refund during the first 30 days of your subscription.

To take out a trial subscription to Private Wealthy Advisory reserve your copies of How to Survive Hyperinflation Parts 1-6…

Click Here Now!!!

Graham Summers
Editor In Chief
Gains Pains & Capital

 

 

 

 

 

Many commentators are baffled that Ben Bernanke decided NOT to announce QE 3 a month ago.

The reason for this is obvious: the Fed only got about three months’ worth of positive economic movement from QE 2 and it blew gas and commodities through the roof doing it.

Remember, QE 2 was only just announced in November 2010. And anyone watching the US economic data knows that we took a sharp turn for the worse in Feb 2011.

So all told, we spent some $600 billion and only got about three months’ worth of improved economic data (not to mention that this “improved” data was massaged heavily).

So it’s pretty obvious why the Fed hasn’t announced QE 3 yet… it needs things to get terrible in the financial markets again so everyone will be clamoring for it to intervene.

Remember last year? QE ended in March. Then we get the worst May performance in over 40 years with stocks dropping like a brick… which then allowed the Fed to announced QE lite and QE 2.

Just like today.

The Fed is going to let QE 2 end in June. We will very likely see some kind of collapse in stocks start even before then. My personal expectation is the S&P 500 will drop to 1,100 or so at which time it will announced QE 3 with a “SEE? We NEED Qe in order to keep things afloat.”

And that’s when the US Dollar will REALLY collapse and inflation hedges will explode across the board.

The Fed is already setting this up. Their latest FOMC minutes make it clear that they are downplaying the negative news today so that when things get REALLY bad in a few months, they can act surprised and push for a MASSIVE QE program.

So in the near-term deflation is now the biggest risk. It may only be for a month or so, but it’s coming (commodities’ and the US Dollar’s performance over the last two weeks were the warm-up. And then comes the REAL fireworks.

… which is why I’m already preparing subscribers of my Private Wealth Advisory newsletter for this with three investments that will all lock in double digit returns in a matter of days when deflation hits.

Indeed, all three of them are up sharply in the last few weeks alone… and we haven’t even gotten to the REAL deal for the markets yet.

To take action now so you’ll profit from the coming round of deflation while ALSO preparing your portfolio for hyperinflation (which will erupt as soon as the Fed announces QE 3 later this year), all you need to do is take out a trial subscription to my Private Wealth Advisory newsletter.

You’ll immediately be access to my latest issue (published just one hour ago) featuring our three new “deflation trades.”

You’ll also receive my SIX PART How to Survive Hyperinflation report detailing exactly how and when hyperinflation will hit the US Dollar and which FIVE investments will outperform even Gold and Silver when it does.

Heck, you can even keep these reports if you decide Private Wealth Advisory isn’t for you and request a full 100% refund during the first 30 days of your subscription.

To take out a trial subscription to Private Wealth  Advisory, and take action to prepare your portfolio from both deflation (now) and hyperinflation (coming)…

Click Here Now!!!

Graham Summers
Editor In Chief
Gains Pains & Capital

 

 

 

This is part 2 of our “Global Dollar Dump” article series.

In part we noted how China has already begun moving away from the US as a major trading partner. This move has set in motion a series of events that will result in the US Dollar losing its status as reserve currency of the world.

Indeed, we are now seeing various other nations preparing for the end of the US Dollar as reserve currency. Consider that Saudi Arabia becoming so fed up with the US that it is sending trade representatives to China and Russia to strengthen trade ties.

Saudi Arabia is the single largest oil producing country in the world. Saudi Arabia IS oil in some regard. Whatever currency Saudi Arabia chooses to denominate its oil exports in will be the world’s reserve currency.

So Saudi Arabia’s decision to send trade representatives to China and Russia should be seen as Saudia Arabia seeing the writing on the wall, (death of the US Dollar) and starting the process of moving away from the greenback.

Saudi Arabia is not the only one. Singapore announced today that it will begin trading Yuan. The significance of this is enormous. Singapore is one of the four largest financial hubs in the world (the others are New York, London, and Tokyo). It’s also the second largest private banking center behind Switzerland. With its English-speaking population, first-world accounting standards, and close proximity to China, Singapore is literally a “gateway to the east” through which world capital flows into Asia.

In simple terms, the world is beginning to shift away from the US Dollar as a reserve currency. This is not idle conjecture. This is fact. The writing is clearly on the wall for those who can read between the lines of the media’s US-centric focus.

Indeed, officials from China, India, Brazil, Russia, and South Africa (the latest addition to the BRIC acronym, now to be called BRICS) recently met in southern China to discuss expanding the use of their own currencies in foreign trade (yet another move away from the US Dollar).

To recap:

• China and Russia have removed the US Dollar from their trade
• China is rushing its trade agreement with Brazil
• China, Russia, Brazil, India, and now South Africa are moving to trade more in their own currencies (not the US Dollar)
• Saudi Arabia is moving to formalize trade with China and Russia
• Singapore is moving to trade yuan

The trend here is obvious. The US Dollar’s reign as the world’s reserve currency is ending. The process will take time to unfold. But the Dollar will be finished as reserve currency within the next five years.

The process will not be linear in fashion: the Greenback will not simply collapse in one go. Moreover, it will not be obvious at first. Remember, the US Dollar is currently priced against a basket of currencies primarily comprised of garbage paper currencies backed by insolvent nations or broken unions (the Japanese Yen and the Euro).

However, ultimately the US Dollar will be losing some 50% of its value in the future. The US Dollar chart is already forecasting this.

That’s why I’m already preparing subscribers of my Private Wealth Advisory newsletter with my How to Survive Hyperinflation Special Report.

I’ve already published Part 1 of this report which explains in painstaking detail just HOW and WHY the US is to a hyperinflationary collapse. And over the next three weeks, I’ll be releasing Parts 2-6 each of which will detail one EXTRAORDINARY inflation hedge that will outperform even Gold and Silver when hyperinflation takes hold

We’ve already seen gains of 23%, 29% and 42%, from similar inflation hedges. However, the five I’m about to unveil over the next three weeks are hands down better than ANYTHING I’ve ever seen.

To reserve your copies of my How to Survive Hyperinflation special report (Part 1 is already online, Parts 2-6 will be released over the next three weeks), all you need to do is take out a “trial” subscription to my Private Wealth Advisory newsletter.

You’ll immediately be granted access to Part 1 of the How to Survive Hyperinflation report. And you’ll be notified via email when each of the next Five Reports is published including the names, symbols and how to buy each one of these extraordinary inflation hedges.

And ALL of these reports are yours to keep, even if you choose to cancel your subscription within the first 30 days and ask for a full refund.

To take out a “trial” subscription to Private Wealth Advisory…

Click Here Now!!!

Good Investing!
Graham Summers

 

 

 

 

 

 

 

The following quotes signal the beginning of the End Game for the US Dollar:

“We hope the U.S. government will take responsible policies and measures to safeguard investors’ interests,” [China’s ministry] said in a statement.

“Foreign-exchange reserves have exceeded the reasonable levels that we actually need,” [China’s central bank governor] said. “The rapid increase in reserves may have led to excessive liquidity and has exerted significant sterilization pressure. If the government doesn’t strike the right balance with its policies, the build-up could cause big risks,” he said, without elaborating.

These two statements, in plain terms, are China saying it’s sick of the US Dollar. Remember, the US Dollar and Dollar-denominated assets (Treasuries etc) are China’s single largest holding.  So the reference to “foreign-exchange reserves,” is synonymous with “US Dollar denominated assets.”

On the surface, it will be easy to chalk all of this up to politician speak. After all, China has been issuing warnings to the US regarding the latter’s financial condition since 2009.

However, a few key developments have occurred that make it clear this latest round of statements are the real deal.

First and foremost, China and Russia agreed late last year to begin trading with one another in their own currencies, NOT the US Dollar. In that step alone, two of the largest emerging markets (and economies) in the world moved away from the US Dollar. Add to this the fact that China just agreed to expedite trade relations with Brazil and you’ve got the beginnings of a flight from the US Dollar and the end of the Dollar’s reserve currency status.

Indeed, not three months after China signed this deal with Russia, China’s president visited Washington and delivered a speech in which he stated that, “the current international currency system is the product of the past” (edits mine).

Consider the “past” comment in relation to China’s decision shutting the US Dollar out of its trade with Russia (and other items I’m about to detail). In this sense, the “past” is the US Dollar as the world’s reserve currency.

Indeed, China has been actively moving to distance its reliance on the US as a trade partner.

As you can see, in just four years, the US has gone from accounting for nearly a third of China’s exports to less than a quarter. That is a MASSIVE shift in less than a decade (at this pace the US will be down to just 15% of China’s exports by 2015).

China is literally putting its money where its mouth is. And its mouth is now openly telling the world that it’s no longer interested in US Dollars or Dollar denominated assets.

In plain terms a US Dollar collapse is on the way. What follows will be a hyperinflationary disaster that will shred savings and paper assets to nothing.

That’s why I’m already preparing subscribers of my Private Wealth Advisory newsletter with my How to Survive Hyperinflation Special Report.

I’ve already published Part 1 of this report which explains in painstaking detail just HOW and WHY the US is to a hyperinflationary collapse. And over the next three weeks, I’ll be releasing Parts 2-6 each of which will detail one EXTRAORDINARY inflation hedge that will outperform even Gold and Silver when hyperinflation takes hold

We’ve already seen gains of 23%, 29% and 42%, from similar inflation hedges. However, the five I’m about to unveil over the next three weeks are hands down better than ANYTHING I’ve ever seen.

To reserve your copies of my How to Survive Hyperinflation special report (Part 1 is already online, Parts 2-6 will be released over the next three weeks), all you need to do is take out a “trial” subscription to my Private Wealth Advisory newsletter.

You’ll immediately be granted access to Part 1 of the How to Survive Hyperinflation report. And you’ll be notified via email when each of the next Five Reports is published including the names, symbols and how to buy each one of these extraordinary inflation hedges.

And ALL of these reports are yours to keep, even if you choose to cancel your subscription within the first 30 days and ask for a full refund.

To take out a “trial” subscription to Private Wealth Advisory…

Click Here Now!!!

Good Investing!
Graham Summers

 

 

 

The primary question now is whether last week’s rout in commodities was the start or something bigger or simply the bursting of mini-bubbles in Silver and Oil.

Don’t get me wrong, I believe Silver remains in a bull market long-term. However, any time an investment more than doubles in six months, there’s simply too much leveraged money behind it. This was the case with Silver, which went parabolic in the build up to May 2011. Consequently, we were set for a collapse of some kind.

The collapse took Silver to support at $35. We have since bounced hard. This situation needs to be monitored closely as it will indicate what’s coming for commodities in general. If Silver is able to continue upwards then last week’s action was just a shakeout of the weak hands in an overheated market.

However, if Silver rolls over again and falls below $35, we’re going to $40 in a hurry. This will drag down commodities in general.

Another contributing factor to the sharp sell-off in commodities was the collapse in the Euro on announcements that Greece might leave the Euro-zone. As one would expect, Greece immediately refuted the claim. And thus began the “some official claimed that… another official refutes that,” nonsense.

The key item to note from this development is that insolvent Euro-zone countries will begin using the “we’re going to leave Europe” threat in order to get more favorable terms in their debt restructuring (none of them will pay the debt back).

From a technical standpoint, the Euro is now at support. If we break below here, it’s 140 then 137.5 relatively quickly.

This move in the Euro pushed the US Dollar up which put more pressure on commodities and stocks. This is the consequence of a market dominated by quant funds and trading algorithms: one asset moves and all others follow it tick-for-tick.

Thus the primary issue this week is: are we heading for another round of deflation (all inflation assets collapse) or was this just a brief correction in an overheated market. Keep your eyes on Silver and the Euro, they’re the primary items that will signal what’s to come.

Regardless of what shenanigans come next, the outcome will ultimately be the same: HYPERINFLATION.

Consider that US is now running deficits and debt-to-GDP ratios that are comparable to Greece, which has already needed to bailouts and is now trying to restructure its debt. Greece can draw on the ECB for help with this. But who can the US  draw on for a bailout?

No one.

Make no mistake, the US Dollar is set to implode in the coming months. That’s why I’m already preparing subscribers of my Private Wealth Advisory newsletter with my How to Survive Hyperinflation Special Report.

I’ve already published Part 1 of this report which explains in painstaking detail just HOW and WHY the US is to a hyperinflationary collapse. And over the next three weeks, I’ll be releasing Parts 2-6 each of which will detail one EXTRAORDINARY inflation hedge that will outperform even Gold and Silver when hyperinflation takes hold.

To reserve your copies of these amazing reports, all you need to do is take out a “trial” subscription to my Private Wealth Advisory newsletter.

You’ll immediately be granted access to Part 1 of the How to Survive Hyperinflation report. And you’ll be notified via email when each of the next Five Reports is published including the names, symbols and how to buy each one of these extraordinary inflation hedges.

And ALL of these reports are yours to keep, even if you choose to cancel your subscription within the first 30 days and ask for a full refund.

To take out a “trial” subscription to Private Wealth Advisory…

Click Here Now!!!

Good Investing!
Graham Summers

 

 

Here’s a zinger of a news story that most commentators haven’t bothered to take note of…

The CEO of Smithfield Farms, the largest pork producer in the US. Among other things he said:

“Maybe to someone in the upper incomes it doesn’t matter what the price of a pound of bacon is, or what the price of a ham, or the price of a pound of pork chops is,” he says. “But for many of the customers we sell to, it really does matter.” Workers can share cars when the price of oil rises, he quips, but “you can’t share your food.”

Mr. Pope also worries about the impact on farmers, who are leveraging up operations to afford the ever-rising price of land and fertilizer that has resulted from the increased corn demand. “There are record prices for livestock but farmers are exiting the business!” he exclaims. “Why? Farmers know they won’t make money.”

Weather is a factor, too. “We’ve had the luxury for the last three years of extremely good corn crops, with high yields and good growing conditions. We are just one bad weather event away from potentially $10 corn, which once again is another 50% increase in the input cost to our live production.”

…Not all companies will survive this economic whirlwind. Mr. Pope recalls what happened the last time there was a surge in corn prices, in 2008: “The largest chicken processor in the United States, Pilgrim’s Pride, filed for bankruptcy.” They “couldn’t raise prices, so their cost of production went up dramatically.” Could it happen again? “It darn well could!” Mr. Pope exclaims.

…Mr. Pope says the “losers” here “are the consumer, who’s going to have to pay more for the product, and the livestock farmer who’s going to have to buy high-priced grain that he can’t afford because he’s stretching his own lines of credit. The hog farmer . . . is in jeopardy of simply going out of business ’cause he doesn’t have the cash liquidity to even pay for the corn to pay for the input to raise the hog. It’s a dynamic that we can’t sustain.”

So here’s a CEO, someone with actual business experience (not some moron academic who’s never run a business a day in his life) telling us the following:

• Food prices are up a lot and going higher in the future.
• Despite high food prices, farmers are quitting farming (lower supplies are coming).
• Food companies will be going bankrupt (even lower supplies are coming).

In other words, we are rapidly heading into a food crisis. Food prices are NOT going to be coming down. And we’re going to be seeing food shortages in the US in the coming months.

Smart folks are already preparing their families and portfolios for what’s to come.  This is why I’ve recently published four reports designed to help folks cover all the bases in terms of protecting their loved ones, savings, and portfolios for what’s coming.

Three of these are devoted to preparing you for the return of systemic risk to the financial system. Together I call them the Phoenix Investor Personal Protection Kit. However, individually, they’re titled Protect Your Family, Protect Your Savings, and Protect Your Portfolio.

All told, these reports contain over 50 pages of detailed information on how to protect these three areas of your life from another “2008-type event.”

On top of this, you also get my How to Survive Hyperinflation report due to be published this Wednesday after the market closes.

This report will explain in painstaking detail just how close the US is to a hyperinflationary collapse. It also identifies two extraordinary inflation hedges (they’re not Gold or Silver) that will produce ENORMOUS gains AND maintain your purchasing power when hyperinflation hits the markets.

To reserve your copies of these amazing reports, all you need to do is take out a “trial” subscription to my Private Wealth Advisory newsletter.

You’ll immediately be granted access to Phoenix Investor Personal Protection Kit. And you’ll receive your copy of my How to Survive Hyperinflation report via email this Wednesday after the market closes.

And ALL of these reports are yours to keep, even if you choose to cancel your subscription within the first 30 days and ask for a full refund.

To take out a “trial” subscription to Private Wealth Advisory…

Click Here Now!!!

Good Investing!
Graham Summers

 

The “hit job” is in reference to Bin Laden and the precious metals, both of which got taken out over the weekend. The implications of the Bin Laden hit are complicated. The implications for the precious metals hit job is not.

Regarding Bin Laden, aside from the fact the guy was finally taken down (which he should have been ten years ago), the first thing we need to address is that it will spark retaliation of some kind. Whether or not the retaliation will be large in scope depends on whether Bin Laden was such a crucial player for Al Queda that his removal will leave them directionless. I cannot claim to know that.

What I can tell you is that if there is a terror attack there will be a panic rush into the US Dollar. The world IS moving away from the US Dollar as its reserve currency, but we’re not so far along in the process that there wouldn’t be a “flight to safety” move or at least massive short-covering into the US Dollar if a terror attack or Crisis hits.

Indeed, just about the only thing that COULD cause a major US Dollar rally would be a Crisis of some kind (financial, political, etc). The last two US Dollar rallies were induced by Crises (2008 and the Euro Crisis of 2009-2010). Unless we get another one soon (I don’t want this just pointing out the facts) the US Dollar is heading towards a serious collapse.

Indeed, it’s telling that ALL of the US Dollar’s gains on the Bin Laden news evaporated this morning in a matter of minutes. In the futures session we’re now into the sub-73 region: approaching the precipice.

Conversely, Silver and Gold both took a hit over the weekend. The reasons for this are not entirely clear, but given the speed of the move it must have been related to the margin hikes that occurred over the weekend.

For certain Silver needed to cool off. The precious metal had gone positively parabolic in the last month. Regardless of the fundamentals of the move (shortages, short-covering by large institutions, etc) a move like this is unsustainable and needs to cool and consolidate if an investment is to begin a new leg up.

However, what’s truly staggering about the weekend losses in Silver is that it had already retracted most of them by Monday AM. Indeed, if you were not up Sunday night looking at the futures, you would have thought Silver was just opening sharply lower (about 5%) completely unaware that the precious metal was down some 16% over the weekend.

What does this tell us? That unless we get a MAJOR Crisis in the near-future, the US Dollar will collapse and inflation hedges will explode even higher. Indeed, at the current pace we’re going the US Dollar will be collapsing within one month. This could change, but we’d need another 2008 type event to pull the US Dollar back from the brink. And judging from stocks and inflation hedges’ performance today, that ain’t happening.

So if you are not already preparing for mega-inflation, you need to get moving now. Because time is running out.

Indeed, this is why since March 2010, I’ve been shifting subscribers of my Private Wealth Advisory into extraordinary inflation hedges: investments that will outperform even Gold and Silver in the coming inflationary disaster.

How is this possible? Well, it’s really quite simple. EVERY SINGLE ONE of these investments is sitting atop some massively underpriced asset.

I’m talking about an asset that the market is currently pricing at 1/10th of its true value if not more.

And as commodity prices explode across the board, larger firms are going on buyout  binges snatching up smaller players to  boost their reserves.

Companies like my inflation hedges.

A perfect example is TimberWest, one of the inflation hedges I recommended on February 23 2011.

TimberWest is the largest privately held  timber company in Western Canada. Timber has been the top performing inflation hedge over the last 50 years, and TimberWest’s holdings were undervalued by some 50%.

The set-up was quite simple. It was only a matter of time before a larger firm came knocking and bought out TimberWest at a hefty premium.

Indeed, we didn’t have to wait long… Less than two months after I recommended
it, TimberWest was bought out letting Private Wealth Advisory subscribers lock in a 42% gain.

Over the same time period, Gold rose 6% while Silver rose 19%.

So we made 42%… vs. 6% and 19%.

Like I said, these investments WILL beat Gold and Silver.

And the set-up is the exact same for the four remaining Inflationary Storm investments in my Inflation Portfolio.

It’s only a matter of time before they’re all BOUGHT OUT at massive premiums, allowing Private Wealth Advisory subscribers to lock  in gains exceeding those produced by Silver and Gold over the same time period.

So if you’re looking to produce some enormous gains from inflation… and have the discipline to wait for the market to recognize the insane value of your investments, you still have FOUR inflation hedges to choose from in my Inflation Portfolio.

And I’m about to unveil three more this week in my next issue of Private Wealth Advisory. So  you’ll be able to get in on the groundfloor with them (several of the others are already up a good bit).

To sign up for Private Wealth Advisory now and be on board for the next round of my extraordinary inflation hedges…

Click Here Now…

Good Investing!

Graham Summers

 

 

 

 

Yesterday, Bernanke staged a “conference” answering “questions” from “journalists.” It’s striking that the man with the most power in the world would be handled with kid gloves. After all, if he’s in charge of directing the world’s reserve currency, surely he could answer a few hardball questions about his insane policies.

However, instead of holding this miscreant accountable for his monetary madness, the “journalists” let him prattle on with his meaningless drivel.

The markets, on the other hand, read through his BS. Soon after the conference the US Dollar collapsed to a three year low.

At this point, there is only one line of support left for the US Dollar. That’s one line, standing between us and the abyss of all-time lows: a point at which there is no support left.

Gold and Silver also bounced back after having been slammed by various suppression schemes last week. All those, “the rally is over,” folks got shanked in the ribs as Gold hit a new all-time high and Silver retraced almost all of its former losses in a few hours.

In other words, the great inflationary collapse of the US Dollar is in full effect. Again, there is only one line of support left for the greenback. If Bernanke was going to do ANYTHING to support the Dollar, yesterday was the day for him to have done it. Instead, we’re going to enter a mega-inflationary collapse.

Indeed, at the current pace we’re going the US Dollar will be collapsing within one month. This could change, but we’d need another 2008 type event to pull the US Dollar back from the brink. And judging from stocks and inflation hedges’ performance today, that ain’t happening.

So if you are not already preparing for mega-inflation, you need to get moving now. Because time is running out.

Indeed, this is why since March 2010, I’ve been shifting subscribers of my Private Wealth Advisory into extraordinary inflation hedges: investments that will outperform even Gold and Silver in the coming inflationary disaster.

To whit, since March 2010, our inflation portfolio is up 29% vs. the S&P 500’s performance of 14%. We’re currently sitting on gains of 17%, 34%, 35% and a whopping 176%.

To find out about my inflation portfolio… including the nine extraordinary investments in it… all you need to do is take out a “trial” subscription to Private Wealth Advisory.

You’ll then immediately be given access to the Private Wealth Advisory archives where you can find out the names, symbols, and how to buy all nine of these incredible inflation hedges.

You then have 30 days to decide if Private Wealth Advisory is for you. If at any point during those 30 days you decide it’s not, just drop me an email and I’ll issue a full refund NO QUESTIONS ASKED.

To take out a “trial” subscription to Private Wealth Advisory…

Click Here Now…

Good Investing!

Graham Summers

 

Many commentators are discussing the collapse of the US today. Indeed, the most common theme I see one of “it’s all over,” usually focusing on the math/ debt problems in the US.

Debt is a major problem, but it’s not always one that destroys a nation.  History is replete with countries that defaulted on their debt… and the world kept chugging along regardless.

So, the idea that the US will default on its debt and we’ll somehow re-enter the stone-age is false. Human ingenuity and survival skills are far better than that.  Indeed, the human race was in much worse conditions when we were hiding in caves and running from prehistoric monsters.

We somehow survived that situation and evolved to make peanut butter and jelly sandwiches and drive cars… so I’m sure we’ll figure out how to deal with the collapse of the US empire and the end of the Dollar’s status as world reserve currency.

So rather than freaking out about our debt problems, I think we need to address the real issue that LEAD TO our disastrous debt situation. And that issue in the US today is that the people making the major decisions are not problem solvers but politicians.

Let’s consider this for a moment.

Problem solving requires critical analysis and flexible thinking. Anyone who’s tried to tile a bathroom or even balance his or her personal finances knows that the process is not linear in nature. That is, there is no one single correct answer.

Instead, there are endless solutions and the real issue is one of picking the solution that best utilizes what’s on hand in a realistic way to create the best outcome.

This involves being able to accurately assess the situation/ problem, taking account of the resources at hand, and then coming up with creative or traditional approaches to use the latter to address the former.

In contrast, a politician has one primary goal: getting elected.  Consider that the perceived problem in this situation is not actually a problem at all, but an issue of ego, i.e. “I must win.”

These people are not problem solvers. As we find out regularly, they often cannot organize their own personal finances (or cheat on them), their personal lives are in shambles (how many members of Congress leave their wives for lobbyists?), and in truth they don’t even understand the issues they are debating/ need to address if elected.

Instead, all of their efforts are aimed at saying the right things so they can get in office.  And once elected, the focus is on getting re-elected or preparing to run for a higher office.

Consequently, their focus never actually shifts to address or implement real change or solutions to the problems facing the country. The reason for this is:

a)    none of them have a clue how to fix these problems

b)   taking a risk with implementing a real solution could result in too much career risk

If your primary concern is getting re-elected, you’re not going to go out on a limb and implement some policy that could go wrong. Instead you’ll look for half-measures, small moves that could produce small changes, band-aids for society’s wounds rather than actual healing.

However, as bad as Congress is, the US Federal Reserve is much worse. These guys don’t even actually address reality, but are stuck in a world of models and formulas. Seriously, they can say with a straight face that inflation is contained, fill their gas tanks at the pump (with $5 gas) and not connect those dots.

You can see it in their policies. The Fed really only has one policy: printing money. Everything the Fed’s done revolves around this (interest rates, are secondary). Every time a problem surfaces, the Fed’s answer is to print more money.

Small wonder then that the US Dollar is falling off a cliff. And it’s only going to get worse. The idea that somehow these guys are going to wake up one day and think, “maybe we shouldn’t print money” is delusional. And any public comments they make about considering this as an option is just posturing by those looking for political points.

Which is why the US is set to enter a period of mega-inflation in the coming months. The Fed’s going to keep printing GUARANTEED. And we all know how this will turn out: the Dollar collapses.

So if you’re not already moving into inflation hedges, you’re in major trouble.

It doesn’t have to be this way.

Indeed, since March 2010, I’ve been shifting subscribers of my Private Wealth Advisory into extraordinary inflation hedges: investments that will outperform even Gold and Silver in the coming inflationary disaster.

To whit, since March 2010, our inflation portfolio is up 29% vs. the S&P 500’s performance of 14%. We’re currently sitting on gains of 17%, 34%, 35% and a whopping 176%.

To find out about my inflation portfolio… including the nine extraordinary investments in it… all you need to do is take out a “trial” subscription to Private Wealth Advisory.

You’ll then immediately be given access to the Private Wealth Advisory archives where you can find out the names, symbols, and how to buy all nine of these incredible inflation hedges.

You then have 30 days to decide if Private Wealth Advisory is for you. If at any point during those 30 days you decide it’s not, just drop me an email and I’ll issue a full refund NO QUESTIONS ASKED.

To take out a “trial” subscription to Private Wealth Advisory…

Click Here Now…

Good Investing!

Graham Summers

 

The Fed will absolutely have to engage in some kind of QE. It might be a toned down version like QE lite (which supposedly doesn’t involve additional money printing). Or the Fed might try to make it a QE that would be more palatable to homeowners (targeting mortgage rates or some such thing).

However, the fact remains that the Fed HAS to continue with QE of some kind. The reasons for this are:

1)   The $180+ TRILLION interest rate based derivatives market (90+% all of which are owned by the TBTFs)

2)   The debt implosion a spike in interest rates would have

3)   Having become the primary buyer of US debt, the Fed must continue to buy or risk a debt collapse in the Treasury market

Whether or not you like QE (yes, there are some insane people who think it’s a good idea… unfortunately they work for the Fed), this is the reality our financial system faces.

Indeed, if the Fed were to quit QE for good the resulting crisis would make 2008 look like a picnic (the 2008 collapse was triggered by the CDS market which was only $50-60 trillion in size, les than one third of the interest rate based derivatives market).

So more QE is on the way. Which ultimately will result in the US Dollar collapsing. In fact, the only reason the Dollar hasn’t collapsed already is because it’s priced against a basket of similarly flawed currencies.

In other words, we’re pricing junk (the Dollar) with other junk.

The whole point of all of this is that inflation is coming in a BIG way. What we’ve seen so far is nothing compared to what’s going to hit once the US Dollar breaks to new all-time lows (at the pace we’re going this will hit within two months).

Having since this coming, I’ve been shifting subscribers of my Private Wealth Advisory into extraordinary inflation hedges: investments that will outperform even Gold and Silver in the coming inflationary disaster.

To whit, since March 2010, our inflation portfolio is up 29% vs. the S&P 500’s performance of 14%. We’re currently sitting on gains of 17%, 34%, 35% and a whopping 176%.

To find out about my inflation portfolio… including the nine extraordinary investments in it… all you need to do is take out a “trial” subscription to Private Wealth Advisory.

You’ll then immediately be given access to the Private Wealth Advisory archives where you can find out the names, symbols, and how to buy all nine of these incredible inflation hedges.

You then have 30 days to decide if Private Wealth Advisory is for you. If at any point during those 30 days you decide it’s not, just drop me an email and I’ll issue a full refund NO QUESTIONS ASKED.

To take out a “trial” subscription to Private Wealth Advisory…

Click Here Now…

Good Investing!

Graham Summers

 

 

 

 

 

The US Dollar broke to a new low in the overnight futures session. It’s not surprising as China announced over the weekend that it expects to trim its US Dollar exposure by 2/3.

Yes, China has finally had enough of the US and its Federal Reserve. All of us were wondering at what point this would happen: China would only remain heavily invested in an asset that is rapidly losing value for so long.

Well, now it’s happened.

Last week, several high-ranking Government officials in China announced that the country needs to diversify away from the Dollar… lowering the country’s exposure to Dollar related assets to $1 trillion (1/3 of its current levels).

Soon after this, the US Dollar definitively took out its 2009 low.

This only leaves the 2008 low for major support.

Gold and Silver have both exploded higher on the news.  Gold cleared $1,520 per ounce while Silver cleared $50 per ounce.

In simple terms, the world is now moving away from the US Dollar in a rapid pace. Russia and China are no longer using the US Dollar for trade between each other. Saudi Arabia is sending representatives to China and Russia to strengthen trade ties (which hints that oil may not be priced in Dollars in the coming years). And the BRICS (Brazil, Russia, India, China and now South Africa) recently staged a conference in southern China to discuss trading in their domestic currencies rather than the US Dollar.

If you have not prepared for mega-inflation in the financial system already, you cannot afford to wait any longer. The only thing holding the Dollar up was the belief that China and other foreign nations would continue to use Dollars: the Fed’s intervention was based on the idea that these countries would play along.

This is no longer the case. China has broadcast to the world that it’s had enough. It’s now only a matter of time before the US Dollar collapses. So if you’re not already moving into inflation hedges, you’re in major trouble.

It doesn’t have to be this way.

Indeed, since March 2010, I’ve been shifting subscribers of my Private Wealth Advisory into extraordinary inflation hedges: investments that will outperform even Gold and Silver in the coming inflationary disaster.

To whit, since March 2010, our inflation portfolio is up 29% vs. the S&P 500’s performance of 14%. We’re currently sitting on gains of 17%, 34%, 35% and a whopping 176%.

To find out about my inflation portfolio… including the nine extraordinary investments in it… all you need to do is take out a “trial” subscription to Private Wealth Advisory.

You’ll then immediately be given access to the Private Wealth Advisory archives where you can find out the names, symbols, and how to buy all nine of these incredible inflation hedges.

You then have 30 days to decide if Private Wealth Advisory is for you. If at any point during those 30 days you decide it’s not, just drop me an email and I’ll issue a full refund NO QUESTIONS ASKED.

To take out a “trial” subscription to Private Wealth Advisory…

Click Here Now…

Good Investing!

 

Graham Summers

If the US were a company, it’d already be in Chapter 11.

FoxNews published a WHOPPER of a story yesterday, though it somehow has not caught the attention of most people. If you have issues with Fox them at the door for a moment and simply focus on the numbers.

For the first time since the Great Depression, the US is now officially paying out more in benefits than it takes in via tax receipts.

If the US were a company, it’d be spending more in salaries than it makes in sales. Aside from being unprofitable, it’s also got a MASSIVE debt load. And it’s current policy of paying out more than it makes only increases this debt load… which begs the question… who’s going to pay the interest payments on the debt?

Now, about those payments…

More than half of all Americans (59%) receive a Government payout in one form or another. This is not a sliver of the population… it is endemic to the system. So those who complain endlessly about Government spending need to consider they as well as half of everyone they know, likely gets some kind of assistance in the form of social security, Medicare, food stamps or what have you.

Here’s another zinger: Government payouts account for 79% of household growth since 2007. In other words, the only thing that has kept the US consumer afloat in the last four years is payouts from Uncle Sam.

Put another way, the private sector has contributed roughly one out of every five dollars in household growth since the Great Depression 2.0 started in 2007.

To say that these policies are unsustainable is the understatement of the year. The only reason the US hasn’t seen a complete debt implosion followed by hyperinflation is because the Federal Reserve is propping up the debt market with money printing.

Yes, we are supporting our debt load by creating more money out of thin air. It is absolute insanity and a clear signal that we’re rapidly approaching GAME OVER for the US’s monetary system.

There is only one way out of this mess and that is default. The US cannot EVER pay back its debts. A US default is going to happen GUARANTEED (hyperinflation induced by endless money printing is just another form of default). When this happens, the US Dollar will collapse, lose reserve currency status, and inflation will rip through the system destroying the purchasing power of anything paper-related.

So if you’re not preparing for mega-inflation already, you need to start doing so NOW. The Fed WILL continue to pump money into the system 24/7 and it’s going to result in the death of the US Dollar.

On that note, there are only TEN (10) copies of my Inflationary Storm PT 2 reports left.  So if you want to get your hands on one, you NEED to order it now.

We’ve already seen one of the three investments from the report get bought out for a 41% gain (in TWO MONTHS). It’s only a matter of time before the other two explode higher either due to a buyout or inflation (one is already up 16% and the other isn’t far behind).

Again, there are only TEN (10) copies of the Inflationary Storm PT 2 report left. Once we sell out THAT’S IT, there will not be another copy released to the public and the doors are forever closed on this opportunity.

So if you want one, you need to order NOW. Because we will be selling out today.

To reserve one of the last ten copies…

Click Here Now!

Good Investing!

Graham Summers

 

 

 

 

 

 

 

 

 

Graham’s note: The following is an excerpt from my most recent Private Wealth Advisory newsletter. In it I explain why the Fed will perform QE 3 and kill the US Dollar in the process. In this same issue, I alerted subscribers to three new inflation hedges that will produce out-sized gains from the Fed’s madness. These three come on the heels of the three investments detailed in my Inflationary Storm Pt 2 Report (one of which has already been bought out for a 41% gain). To learn more about Private Wealth Advisory click here.

The financial world is awash with a debate as to whether the Fed will engage in QE 3 in the future. To me this debate is pointless.

Indeed, the Fed HAS to engage in more QE 3 if it doesn’t want the entire market to collapse. Given the breakdown in Europe, the IMPLOSION in the Middle East, and the ongoing nuclear disaster in Japan, the removal of Fed liquidity would kick off a MASSIVE systemic Crisis.

Remember, we had a full-scale market breakdown when QE 1 ended and that was because of Greece: a country with a GDP of $329 billion. Removing liquidity from the markets when Japan, the fourth largest economy in the world (if you count Europe as one economy), the largest Oil exporting region in the world (the Middle East), and Spain and Portugal are all breaking down would lead to an absolute market DISASTER.

The Fed will not risk this. Besides it HAS to keep the liquidity going if it’s to continue supporting the TBTF banks in the US. Remember, 99% of what the Fed’s done in the last two years has been aimed at supporting the large, Too Big To Fail (TBTF) Wall Street banks. The reasons for this are:

1)   The Fed is in fact CONTROLLED by these banks via the Primary Dealer network

2)   Fed leaders are all front-men for Wall Street

In order to understand these, you need to know that the REAL power of the Fed lies in its primary dealer network, NOT stooges like Ben Bernanke.

If you’re unfamiliar with the Primary Dealers, these are the 18 banks at the top of the US private banking system. They’re in charge of handling US Treasury Debt auctions and as such they have unprecedented access to US debt both in terms of pricing and monetary control.

The Primary Dealers are:

1.     Bank of America

2.     Barclays Capital Inc.

3.     BNP Paribas Securities Corp.

4.     Cantor Fitzgerald & Co.

5.     Citigroup Global Markets Inc.

6.     Credit Suisse Securities (USA) LLC

7.     Daiwa Securities America Inc.

8.     Deutsche Bank Securities Inc.

9.     Goldman, Sachs & Co.

10. HSBC Securities (USA) Inc.

11. J. P. Morgan Securities Inc.

12. Jefferies & Company Inc.

13. Mizuho Securities USA Inc.

14. Morgan Stanley & Co. Incorporated

15. Nomura Securities International Inc.

16. RBC Capital Markets

17. RBS Securities Inc.

18. UBS Securities LLC.

Of this group four banks in particular receive unprecedented favoritism of the US Federal Reserve. They are:

1.     JP Morgan

2.     Bank of America

3.     Citibank

4.     Goldman Sachs

You’ll note that these are the firms deemed “Too Big To Fail.” The Fed not only insured that they didn’t go under during 2008, but in fact allowed these firms to INCREASE their control of the US financial system.

Consider that JP Morgan took over Bear Stears. Bank of America took over CountryWide Financial and Merrill Lynch. Citibank and Bank of America were the only two banks to have their liabilities directly backed by the Fed ($280 billion for Citi and $180 billion for BofA).

Then there’s Goldman Sachs which was made whole from all AIG liabilities, received $13 billion in direct funding from the Fed, and was supported while ALL of its investment bank competitors either went under or were consumed by other entities, granting Goldman a virtual monopoly over the investment banking business (the firms that were merged with larger firms all laid off large portions of their employees and closed down whole segments of their business).

My point with all of this is that we NEED to ignore what the Fed says and instead focus on what it does. And in the last two years, the Fed has done everything it can to support these four firms. Indeed QE’s 1, 2, and the coming 3 are nothing but an attempt to funnel TRILLIONS into these firms (and the other primary dealers).

The reasons the Fed is engaging in QE rather than simply dishing out the funds are:

1.     Political outrage would be EXTREME if the Fed just gave the money away

2.     The Fed needs to support those firms with the largest derivative exposure

The reason that the 2008 debacle happened was very simple. The derivatives market, the largest, most leveraged market in the world.

Today, the notional value of the derivatives sitting on US banks’s balance sheets is in the ballpark of $234 TRILLION. That ‘s 16 times US GDP and more than four times WORLD GDP.

Of this $234 trillion, 95% is controlled by just four banks.  Those four banks and their derivatives exposure (in $ TRILLIONS) are charted below:

The above picture summates two things:

1)   Who REALLY controls the US financial system

2)   Why QE 3, 4, etc are guaranteed

The Fed HAS to continue pumping money into the system to support these firms’ gargantuan derivative exposure. Failing to do so would mean a disaster on the scale of four to five times that of 2008.

Remember 2008 was caused by the credit default swap market which was $50-60 trillion in size. The interest-rate derivate market is $200+ TRILLION in size.

So I am certain QE 3 will be coming. If it doesn’t come in June we’ll get hints of it until it’s finally announced. The Fed cannot and will not stop the money printing. Bernanke will be forced to resign long before he takes the paperweight off the print button. Small wonder then that the US Dollar is falling off a cliff. Indeed, the way things are going, the Fed will push into a full-scale inflationary collapse within three months.

So if you’re not preparing for mega-inflation already, you need to start doing so NOW. The Fed WILL continue to pump money into the system 24/7 and it’s going to result in the death of the US Dollar.

On that note, there are only a handful of my Inflationary Storm PT 2 reports left.  So if you want to get your hands on one, you NEED to order it now.

We’ve already seen one of the three investments from the report get bought out for a 41% gain (in TWO MONTHS). It’s only a matter of time before the other two explode higher either due to a buyout or inflation (one is already up 16% and the other isn’t far behind).

Again, there are less only a few copies of the Inflationary Storm PT 2 report left. Once we sell out THAT’S IT, there will not be another copy released to the public and the doors are forever closed on this opportunity.

So if you want one, you need to order NOW.

To do so…

Click Here Now!

Good Investing!

Graham Summers

 

 

 

 

 

 

 

 

… and we just passed $500 billion.

I’ve shown the below chart before in other pieces. However, given its significance, it deserves regular review.

This is a chart of the adjusted US Monetary Base. It’s essentially a very simple means of charting how much money the US Federal Reserve is pumping into the system (on top of QE 2 which is providing another $100 billion in liquidity per month).

As you can see, starting in January 2011, the Fed left a paperweight on the “print” button. Since that time, it’s put $500 BILLION into the system. When you combine the $100 billion in liquidity provided by QE 2, we’re talking about $800-900 billion enter the financial system in 2011 alone.

There is only one period in which the Fed engaged in a similar amount of money pumps. And that was… during the depth of the 2008 Crisis from October- December 2008 (the two periods are comparable as the Fed didn’t have QE2 in 2008).

This of course leads one to ask, “what is the Fed combating now?” And it’s not just Japan (the adjusted monetary base went vertical back in January). So what is requiring $200 billion per month?

To provide some context to this, consider that during QE 1, the Fed was putting roughly $50 billion into the system. After QE 1 ended, the Fed’s monthly liquidity pumps fell to roughly $30 billion or less.

That’s when this happened:

So it’s not surprising the Fed freaked out and started QE lite in August.

This kept things chugging along until QE 2 was announced in November at which point the Fed began putting $100 billion into the market. And the Fed is now pumping $200 BILLION into the system.

Small wonder then that the US Dollar is falling off a cliff. Indeed, the way things are going, the Fed will push into a full-scale inflationary collapse within three months.

So if you’re not preparing for mega-inflation already, you need to start doing so NOW. The Fed WILL continue to pump money into the system 24/7 and it’s going to result in the death of the US Dollar.

On that note, there are only a handful of my Inflationary Storm PT 2 reports left.  So if you want to get your hands on one, you NEED to order it now.

We’ve already seen one of the three investments from the report get bought out for a 41% gain (in TWO MONTHS). It’s only a matter of time before the other two explode higher either due to a buyout or inflation (one is already up 16% and the other isn’t far behind).

Again, there are less only a few copies of the Inflationary Storm PT 2 report left. Once we sell out THAT’S IT, there will not be another copy released to the public and the doors are forever closed on this opportunity.

So if you want one, you need to order NOW.

To do so…

Click Here Now!

Good Investing!

Graham Summers

 

 

 

 

 

 

The most significant development in the markets today is S&P’s decision to revise its US outlook to negative. This single issue has resulted in stocks taking a nosedive and Gold exploding higher.

Regarding stocks, this has resulted in a clear double top forming. Even more worrisome is the fact the S&P 500 has broken through support at 1,300.

The next lines of support are 1,280 then 1,260.  I want to stress that the rising bearish wedge pattern we broke out of in late February forecast a significant correction with an ultimate target of 1,100. The only reason we didn’t go there in March was because of a concerted effort by the world’s central banks to intervene. However, if they loose control of the market now, we’ll be going there very shortly.

Interestingly, the S&P 500 announcement has resulted in the US Dollar rallying. Over the last 24 months, every time bad news was announced, the Dollar collapsed while stocks rallied on the idea that the Fed would be printing even more money to battle the economic downturn.

However, this time around, stocks are tanking and the US Dollar is rallying hard. The implications of this are vast. Is the Fed telling its buddies (Goldman etc) behind the scenes that they won’t be engaging in QE 3? Is the tide of easy money finally turning?

I doubt it. The Fed HAS to keep funneling the money into the insolvent big banks. Failing to do so will trigger a collapse in the interest rate-based derivatives market which currently stands at $180+ TRILLION in the US alone.

Regardless, in the meantime, the commodity space (with the exception of Gold) is getting slammed. The inflation trade had indeed gotten a little lopsided, but with inflation exploding around the world, I view this pullback as a buying opportunity, not the start of a bear market.

Remember, there is TRILLIONS in liquidity sloshing around the system right now. Inflation is already guaranteed. Sure we might have another debt Crisis, but there is absolutely no question that we’re going to be seeing massive debt defaults in the coming months and years. Currencies will be taking major hits when this occurs.

So with that in mind, I continue to maintain that we’ll be major inflation in the markets before the end of 2012. The weekly US Dollar chart has only one line of support left before the currency collapse hits.

In this sense, the drop in commodities is a great opportunity to prepare for the coming Inflationary Storm. The Fed will pump more money into the system GUARANTEED.  They may have to do it behind the scenes, but they WILL

Have a look at what they’ve done this year already:

What you’re looking at it a $500 billion money pump (ON TOP of QE 2’s $100 billion per month) over the last four months. So all told we’re looking at nearly $1 TRILLION in new money hitting the financial system in the first quarter of 2011 ALONE.

So if you’re not preparing for mega-inflation already, you need to start doing so NOW. The Fed WILL continue to pump money into the system 24/7 and it’s going to result in the death of the US Dollar.

On that note, there are only a handful of my Inflationary Storm PT 2 reports left.  So if you want to get your hands on one, you NEED to order it now.

We’ve already seen one of the three investments from the report get bought out for a 41% gain (in TWO MONTHS).  It’s only a matter of time before the other two explode higher either due to a buyout or inflation (one is already up 16% and the other isn’t far behind).

Again, there are only a few copies of the Inflationary Storm PT 2 report left. Once we sell out THAT’S IT, there will not be another copy released to the public and the doors are forever closed on this opportunity.

So if you want one, you need to order NOW.

To do so…

Click Here Now!

Good Investing!

Graham Summers

As noted in yesterday’s essay, Bernanke and pals’ claims that the US is in a recovery due to the fact the stock market has rallied are totally bogus. Bernanke is measuring his success in US Dollars, which incidentally happens to be a ruler that he can continually shrink with his policies

Much as someone might claim they’ve grown in height because they use a shorter ruler to measure themselves every day, Bernanke claims that the stock market is up because it’s priced in the US Dollar (which is losing value almost every day).

It’s completely absurd, and yet it’s the basis for each and every one of Bernanke’s claims that the US is in a recovery. Nevermind, that employment is falling like a brick or that food stamp usage is at an all time high, the S&P 500 is up since March 2009, so things must be improving right?

Many supposed gurus claim that investing in stocks is a great way to hedge against inflation. The data doesn’t support this claim… at all. During the ‘70s stocks traded in a large range for 10 years. Unless you timed the bottoms and peaks perfectly, most “buy and hold” folks didn’t make anything in these years.

And once again, this is priced in nominal terms. When you price stocks’ performance in Gold for the 70s it’s positively abysmal.

Just like today.

So instead of bemoaning Bernanke and his policies, why don’t we all do something about it? I didn’t vote for this guy. None of us did. And yet we’re all paying the price (literally) for his policies.

How do we vote against him? Simple. Buy Gold and DON’T buy stocks. Don’t fall for the “stock wealth effect” BS and instead invest in something the Fed CAN’T devalue.

Because in the end, doing this means buying an asset that is INCREASING your purchasing power (Gold) and avoiding one that is DECREASING in purchasing power (stocks).

And of course, it has the side benefit of not providing Bernanke and his policies with ANY vote of confidence… or support.

On that note, I’ve put together an ENTIRE portfolio comprised of extraordinary inflation hedges: investments that will outperform even Gold and Silver as inflation erupts in the financial system.

After all, everyone knows that Gold and Silver are the most obvious inflation hedges out there. And to be blunt, anyone who invests in these two assets will likely do very well in the coming months as inflation erupts in the US.

However, to make truly ENORMOUS gains from inflation you need to find the investments that are off the radar… investments that the rest of the investment world hasn’t discovered yet.

I’m talking about investments that own assets of TREMENDOUS value that are currently priced at absurdly low valuations: the sorts of assets that larger companies will pay obscene premiums to acquire.

I’m not speaking in metaphors here either. Earlier this week, one of our inflation hedges was bought out, allowing us to lock in a 41% gain… in under two months.

I just detailed three of the best investments I know that fit these criteria in my Special Report the Inflationary Storm Pt 2 at the end of February. One of them just got bought out this week (the 41% gain I mentioned before). Another is up 24%.

Like I said, EXTRAORDINARY inflation hedges.

And I’m only making 250 copies of the Inflationary Storm Pt 2 available to the public. As I write this, there are 40 copies of this report left. These won’t last much longer either.

So if you want to get your hands on a copy, you better move quickly, because these last 40 will be gone within the next few days.

To reserve a copy…

CLICK HERE NOW!!!

Good Investing!

Graham Summers

PS. If you’re getting worried about the future of the stock market and are looking for a single report rather than an annual subscription, I highly suggest you download my FREE Special Report devoted to helping investors prepare for the Second Round of the Financial Crisis…

I call it The Financial Crisis “Round Two” Survival Kit. And its 17 pages contain a wealth of information about portfolio protection, which investments to own and how to take out Catastrophe Insurance on the stock market (this “insurance” paid out triple digit gains in the Autumn of 2008).

Again, this is all 100% FREE. To pick up your copy today, got to http://www.gainspainscapital.com and click on FREE REPORTS.

PPS. We ALSO publish a FREE Special Report on Inflation detailing three investments that have all already SOARED as a result of the Fed’s monetary policy.

You can access this Report at the link above.

The US Federal Reserve has bet the farm… and the Republic on the idea that they can inflate us back to a recovery.

In plain terms, Bernanke and pals believe that if they can make the stock market rise, people will feel richer and will start spending money again, insuring that the US economy (which is 70% based on the consumer) will come roaring back to life.

The problem with this sort of thinking is that it’s so superficial as to be laughable, especially for those claiming to have an advanced education from a top university.

Indeed, the fact that the S&P 500 goes from 1,000 to 1,330 DOESN’T mean that those who own stocks are that much wealthier. This is because the nominal price of stocks (what the S&P 500 is priced at) IS NOT the same as the PURCHASING POWER of stocks.

Here’s the S&P 500 priced in US Dollars. Looks like investors are getting a lot richer in a hurry doesn‘t it?

Now, here’s the S&P 500 priced in Gold: a currency that the Fed CAN’T turn into toilet paper and a real measure of purchasing power:

In simple terms, those who own stocks have not actually increased their wealth in anyway since March 2008. All they’ve done is owned an asset that increased in nominal terms ONLY when it’s priced in a rapidly devaluing currency (the US Dollar).

The fact that our monetary system is run by guys who believe that “stocks rise = WEALTH” should give you the chills. Using this level of intelligence, you could rack up $500,000 in debt buying fancy clothes and then claim you’re wealthy cause you look like you have money (which by the way is something many people have done).

This is nothing new for the financial world. Research from the London Business School shows that when you account for inflation, stocks have often LOST money for DECADES despite rising substantially in nominal terms.

A great example of this is France where investors saw NO increase in purchasing power from stocks (as in ZERO) from 1912 to 1977. That’s right, nearly THREE GENERATIONS of investors LOST wealth by owning stocks in France during the 20^th century.

So if you want to buy the whole “I’m missing out by not owning stocks” BS which is slung around like it’s true, you’re being conned into the biggest scam of the century (literally). You’re also actively voting for Ben Bernanke (more on this in another essay) by supplying him with more phony evidence to claim that his insane monetary policies are working.

Meanwhile, I’ll be helping subscribers of my Private Wealth Advisory load up on inflationary hedges… and making REAL wealth in the process.

For months now I’ve been telling you that we’re focusing on extraordinary inflation hedges: companies that own incredible assets priced at levels that make them HUGE takeover targets.

I wasn’t just blowing smoke here. Just yesterday, one of our picks, TimberWest Forrest, announced that it will be bought out. Private Wealth Advisory subscribers locked in a 41% gain… in less than two months.

This comes on the heels of last month’s gains of 42%, 29%, 23%, 20%, and 18% (all REAL gains we locked in on various positions that month).

So while most folks are betting on stocks (which are up some 14% since I opened the Inflation Portfolio) we’re seeing REAL returns AND we’re actually maintaining the purchasing power of our capital by focusing only on inflation hedges.

If you’re looking for a means of profiting from Ben Bernanke’s ongoing insanity and don’t believe the whole “stocks are up so we’re getting rich” nonsense, you should take out a trial subscription to Private Wealth Advisory and start getting some major results from your investments.

To do so…

Click Here Now!

Good Investing!

Graham Summers

The US Dollar has broken down in the overnight futures session to test its 2009 low.

We’ve now definitively taken out the 2010 low. If we break the 2009 low (75) there’s only one line of support left at the 2008 low. After that, the US Dollar is in uncharted territory and all best are off.

As bad as the situation in the US Dollar is, the situation for US Debt is even worse. As ZeroHedge recently noted, the Bond King Bill Gross, who didn’t earn that name from being stupid, has shifted completely out of US Treasuries.

Gross and his colleagues at PIMCO no doubt have noticed that the 30-year bull market in bonds is about to end. Indeed, the long-end of the US Treasury curve, the 30-year Treasury, is dangerously close to taking outs its long-term trendline.

When this happens, the higher interest rates will come with a vengeance. This in turn will accelerate the collapse in the US economy and very likely kick off another round of debt deflation in the markets.

Many commentators believe that should this occur, Gold and other inflation hedges will be hit hard. This is partially true: given the level of leverage in the system liquidations would affect the precious metals to a degree.

However, unlike stocks, Gold and other inflation hedges are rallying due to increased demand: central banks were net buyers in 2010. Demand from China has exploded 500%. And yet Gold is largely under-owned by the vast majority of investors (in online communities this doesn’t appear to be the case as Gold bugs and others of a similar mindset tend to congregate at the same sites/ forums creating the impression that everyone owns Gold; ask your average person on the street if they own Gold and the answer is no. Ditto for Silver).

This is why I believe Gold is forming a rising bearish wedge pattern: it is predicting a potential sell off, possibly to $1,100 or even $1,000. However, we have MAJOR support at these levels which would likely stop any breakdown.

Understand, I am NOT saying that the bull market in Gold is over. What I AM saying is that if we enter another 2008-type environment, the precious metal will come under sell pressure due to liquidations. And I personally would welcome this as a MAJOR buying opportunity.

The reason for this is obvious: we are entering an inflationary death spiral. YES, we might have another round of debt deflation, but the flight from the US Dollar is already beginning worldwide.

Saudi Arabia has sent representatives to China and Russia to strengthen trade ties (an obvious move away from pricing Oil in Dollars). China and Russia have agreed to begin trading in their own currencies rather than Dollars. And in some emerging markets people don’t even want to accept Dollars in business transactions anymore.

The story here is obvious if you read between the lines: the world is starting to shift away from the US Dollar. Which is why you need to be preparing for inflation in a big way, EVEN IF we might have another round of deflation coming.

Indeed, I’ve been preparing subscribers of my Private Wealth Advisory newsletter for the coming inflationary disaster since March 2010. Since that time our Inflation Portfolio is up 40%… more than DOUBLE the S&P 500’s 14% gain.

As I write this, we’re sitting on gains of 23%, 31%, 49%, and a whopping 135%. Out of our 10 positions, only ONE is down and it’s down a measly 3%.

It’s not like we need a lot of time to rack up the gains either. We’ve made 29%, and 42% since December 2010 alone. And two of my most recent picks are up 4% and 5%… since last Thursday.

If you want to get in on this action and start seeing these kinds of incredible returns (again our Inflation portfolio is up 40% vs. the S&P 500’s 14%), you can do so by taking out a “trial” subscription to Private Wealth Advisory.

As soon as you do this, you’ll be given access to all of my extraordinary Inflation Hedges, including their names, symbols, and how to buy them.

To take our a “trial” subscription to Private Wealth Advisory today…

Click Here Now!

Good Investing!

Graham Summers

And we’re back!

Thank you so much for your patience over the last 48 hours. We are still in the process of upgrading parts of the Gains Pains & Capital website, but for the most part, things are working again.

On to the markets.

The financial world is entering a massive process of transition though most folks have failed to see it. That process is that of Ben Bernanke being forced to resign and the US Federal Reserve being broken up.

I know many people believe the Fed is always going to be in power, but they are wrong. The US Federal Reserve is in fact the third central bank the US has had. And it, like the other two, will be dismantled in the next five years.

The reason for this is quite simple. The REAL Crisis (of which 2008 was the warm-up) is fast approaching. When I say REAL Crisis I mean full-scale systemic meltdown, a situation in which the market accomplishes what the Fed, regulators, and US Government at large have failed to do: clean house.

The plain facts are right in front of us. The US is broke on every level: Federal, State, Local, and individual/ consumer. We all know this, but we don’t want to admit it because doing so would likely mean wiping out at minimum 30% of what we have today.

Nobody wants this. Consumers don’t want to lose their retirement accounts or their savings. The Government doesn’t want to lose its unending virtual checkbook. Politicians don’t want to lose their financial backers (the oligarchs). And the Fed certainly doesn’t want to lose its massive Free Lunch.

However, it is clear to everyone that the system is broken. Consider that the very policies that Wall Street developed resulting in the 2008 meltdown (excessive debt, fraud, too much leverage, etc) are now being applied to the Federal balance sheet.

Indeed, the Fed’s response to the Financial Crisis was to do the exact same things Wall Street did.

The only reason it worked for a time was because investors continue to believe that the Fed is some kind of omnipotent financial authority that can take on all debts and back up all monetary transactions. The reason they’re willing to believe this is because not doing so would result in the collapse I referred to before.

To use a metaphor, if your house has a broken foundation (the financial system), you can prop it up using various structures (the Fed). However, eventually the foundation gives way regardless of the support.

We are already seeing this happen in Europe. The Euro is up but the entire European system is broken. No one wants to be a part of it any more. Only the politicians and bankers are trying to keep it together (largely because they don’t want to lose their influence).

However, elections in Germany are making it clear voters will obliterate anyone who is pro bailouts. As a result of this, the tide is turning. Large-scale reform and changes can take a while which is why the process seems to be occurring in slow motion.

But the process is occurring. And nothing can stop it. You can fight the tide tooth and nail, but it will turn regardless of your efforts.

The same situation will hit in the US in the future.  I’ve already detailed why the US Dollar is holding up (it’s priced against other paper currencies) despite the fact an exodus from the greenback is occurring.

Indeed, prices of goods are EXPLODING higher. It’s being hidden because retailers like Wal-Mart are downsizing the size of their packages OR packing less goods in the same space (look inside any cereal box or other dry good and you’ll find that at best it’s 75% full).

This is why I’m already preparing investors for the inflationary disaster NOW rather than waiting for the US Dollar to collapse. It’s also why our hedges are all UP with gains of 17%, 18% 27%, 56%, and 111% though the US Dollar has fallen less than 10%.

How is this possible? Because I’m focusing on extraordinary inflation hedges that 99% of the investment world don’t know about. I’m talking about inflation hedges that will outperform even Gold and Silver because of their incredible value.

And I detail them (including their names, symbols, and how to buy them) in my recently published Special Report The Inflationary Storm Pt 2.

And I’m only making 250 copies of this second report available to the public. As I write this, there are less than 80 copies left and they’re going fast (for obvious reasons).

So if you want to pick up a copy of this report, you better move fast.

To reserve a copy…

Click Here NOW!!!

Best Regards,

Graham Summers