Yesterday, Fed Chair Jerome Powell made a starling admission,

 “The U.S. federal government is on an unsustainable fiscal path,” Powell told the Senate Banking Committee, noting that “debt as a percentage of GDP is growing, and now growing sharply… And that is unsustainable by definition.”

Source: Yahoo! Finance

What Powell said has been obvious to anyone with a functioning brain for years. However, we have to remember one key item…

This is the FED CHAIR talking… the person in charge of maintaining STABILITY for the financial system and who controls the printing the of the US currency… not just some talking head on TV.

So just how bad are the US’s finances that the Fed Chair would be willing to admit this PUBLICLY?

Total US debt has just hit $22 trillion. The US now has a Debt to GDP ratio of 105%. This is roghly where Greece was when it entered a debt crisis in 2010 (though there are certain key differences between the US’s and Greece’s abilities to deal with their debt issues).

Fed Chair Jerome Powell has also made it clear that it is NOT the Fed’s job to fix this.

“We need to stabilize debt to GDP. The timing the doing that, the ways of doing it —through revenue, through spending — all of those things are not for the Fed to decide.”

Source: Yahoo! Finance

So… either the US Political Elite needs to spend less (not going to happen) or it needs to find access to new sources of capital… ours.

With that in mind, the current political agenda to push for Wealth Taxes, cash grabs and other means of raising capital all makes sense.

Consider the following:

• The IMF has already called for a wealth tax of 10% on NET WEALTH.

• More than one Presidential candidate for the 2020 US Presidential Race has already openly called for a wealth tax in the US.

• Polls suggest that the majority of Americans support a wealth tax.

And if you think this will stop with the super wealthy, you’re mistaken. You could tax 100% of the wealth of the top 1% and it would finance the US deficit for less than six months.

Which means…

Cash grabs, wealth taxes, and more will soon be coming to Main Street America.

Indeed, we’ve uncovered a secret document outlining how the Fed plans to both seize and STEAL savings during the next crisis/ recession.

We detail this paper and outline three investment strategies you can implement right now to protect your capital from the Fed’s sinister plan in our Special Report The Great Global Wealth Grab.

We are making just 100 copies available for FREE the general public.

You can pick up a FREE copy at:

http://phoenixcapitalmarketing.com/GWG.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Too many investors are focusing on what the Fed is doing today. The REAL issue that matters is what the Fed did from 2008-2016.

When the Fed created a bubble in US government bonds, also called Treasuries, it was effectively creating a bubble in the risk-free rate of return for the ENTIRE financial system.

As a result of this, EVERY asset got bubbly. We’re talking about municipal debt, corporate debt, subprime mortgages and auto loans, commodities, and more.

This is why I coined the term “the Everything Bubble” in 2014. And it’s why those investors who are obsessed with stock prices today are going to get destroyed just like those who focused on stock prices (not housing) did in 2008.

Why?

The REAL problem, the one that is going to crash the markets, is occurring in the BOND/ debt space, NOT stocks.

The US Corporate bond market is larger, more leveraged, and lower quality than it has EVER been in history.

Today, over 34% of ALL corporate debt is high risk.. as in JUNK… as in there is a HIGH probability the corporation will default on it.

Put another way, over $1 out of every $3 in the corporate debt market is going to be defaulted/restructured during the next downturn.

By the way, that downturn is already here. The Junk Bond markets has taken out its bull market trendline AS WELL as support. There are many ways to look at this chart… NONE of them are bullish.

As if that were not bad enough, there is compelling evidence that a significant amount of the so-called High Quality corporate market (the investment grade part) is in fact… NOT high quality at all.

Consider that 50% of the Investment Grade (IG) bond market is rated BBB, the lowest possible credit rating within the IG space. And there is considerable evidence that much of this stuff is actually JUNK.

The Bond Market knows this too. The Investment Grade Bond market has taken out its multi-year trendline while forming a CLEAR Head and Shoulders topping pattern. Here again, there are many ways to look at this chart… NONE of them are bullish.

Again, what happens in stocks is almost irrelevant… when even the IMF expects 20% of corporates to default in the coming months, you’ve got the makings of another 2008… only this time in corporate debt, not mortgages.

As usual… stocks will be the last to “get it.”

If you are not already preparing for this, NOW is the time to do so.

On that note we just published a 21-page investment report titled Stock Market Crash Survival Guide.

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

Today is the last day this report will be available to the public. We extended the deadline based on yesterday’s sucker rally, but this it IT… no more extensions.

To pick up yours, swing by:

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

Too many investors are focusing on what the Fed is doing today. The REAL issue that matters is what the Fed did from 2008-2016.

When the Fed created a bubble in US government bonds, also called Treasuries, it was effectively creating a bubble in the risk-free rate of return for the ENTIRE financial system.

As a result of this, EVERY asset got bubbly. We’re talking about municipal debt, corporate debt, subprime mortgages and auto loans, commodities, and more.

This is why I coined the term “the Everything Bubble” in 2014. And it’s why those investors who are obsessed with stock prices today are going to get destroyed just like those who focused on stock prices (not housing) did in 2008.

Why?

The REAL problem, the one that is going to crash the markets, is occurring in the BOND/ debt space, NOT stocks.

The US Corporate bond market is larger, more leveraged, and lower quality than it has EVER been in history.

Today, over 34% of ALL corporate debt is high risk.. as in JUNK… as in there is a HIGH probability the corporation will default on it.

Put another way, over $1 out of every $3 in the corporate debt market is going to be defaulted/restructured during the next downturn.

By the way, that downturn is already here. The Junk Bond markets has taken out its bull market trendline AS WELL as support. There are many ways to look at this chart… NONE of them are bullish.

As if that were not bad enough, there is compelling evidence that a significant amount of the so-called High Quality corporate market (the investment grade part) is in fact… NOT high quality at all.

Consider that 50% of the Investment Grade (IG) bond market is rated BBB, the lowest possible credit rating within the IG space. And there is considerable evidence that much of this stuff is actually JUNK.

The Bond Market knows this too. The Investment Grade Bond market has taken out its multi-year trendline while forming a CLEAR Head and Shoulders topping pattern. Here again, there are many ways to look at this chart… NONE of them are bullish.

Again, what happens in stocks is almost irrelevant… when even the IMF expects 20% of corporates to default in the coming months, you’ve got the makings of another 2008… only this time in corporate debt, not mortgages.

As usual… stocks will be the last to “get it.”

If you are not already preparing for this, NOW is the time to do so.

On that note we just published a 21-page investment report titled Stock Market Crash Survival Guide.

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

Today is the last day this report will be available to the public. We extended the deadline based on yesterday’s sucker rally, but this it IT… no more extensions.

To pick up yours, swing by:

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

Ignore the day-to-day moves in the markets, in the big picture, some MAJOR is happening… namely, that the Everything Bubble is bursting.

By creating a bubble in sovereign bonds, the bedrock of the current financial system, Central Banks created a bubble in EVERYTHING. After all, if the risk-free rate of return is at FAKE level based on Central Bank intervention… ALL risk assets will eventually adjust to FAKE levels.

This whole mess starting blowing up in February when we saw the bubble in passive investing/ shorting volatility start to blow up (some investment vehicles based on these strategies lost 85% in just three days).

The media and Wall Street swept that mess under the rug… which allowed the contagion to start spreading to other, more senior asset classes… like corporate bonds.

The US Corporate bond market took 50 years to reach $3 trillion. It doubled that in the last 9 years, bringing it to its current level of $6 trillion.

This debt issuance was a DIRECT of result of the Fed’s intervention in the bond markets. With the weakest recovery on record, US corporations experienced little organic growth. As a result, many of them resorted to financial engineering through which they issued debt and then used the proceeds to buyback shares.

This:

1)   Juiced their Earnings Per Share (the same earnings, spread over fewer shares= better EPS).

2)   Provided the stock market with a steady stream of buyers, which…

3)   Lead to higher options-based compensation for executives.

If you think this sounds a lot like a Ponzi scheme that relies on a bubble in corporate debt, you’re correct. And that Ponzi scheme is now blowing up. The question now is
how bad will it get?”

VERY bad.

The IMF estimates about 20% of U.S. corporate assets could be at risk of default if rates rise – some are in the energy sector but it also includes companies in real estate and utilities. Exchange-traded funds that buy junk bonds, like iShares iBoxx $ High Yield Corporate Bond Fund (HYG) and the SPDR Barclays Capital High Yield Bond ETF (JNK), could be among the most vulnerable if credit risks rise. iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) could also suffer.

Source: Barron’s

With a $6 trillion market, a 20% default rate would mean some $1.2 trillion in corporate debt blowing up: an amount roughly equal to Spain’s GDP.

This process is officially underway.

Credit Markets Are Bracing for Something Bad

Cracks in corporate debt lead market commentary.

…the Bloomberg Barclays U.S. Corporate Bond Index losing more than 3.5 percent and on track for its worst year since 2008.

Source: Bloomberg

Indeed, the chart for US corporate junk bonds is downright UGLY.

This is just the beginning. As contagion spreads we expect more and more junior debt instruments to default culminating in full-scale sovereign debt defaults in the developed world (Europe comes to mind).

This will coincide with a stock market crash that will make 2008 look like a picnic.

If you are not already preparing for this, NOW is the time to do so.

On that note we just published a 21-page investment report titled Stock Market Crash Survival Guide.

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

Today is the last day this report will be available to the public.

To pick up yours, swing by:

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

Ignore the day-to-day moves in the markets, in the big picture, some MAJOR is happening… namely, that the Everything Bubble is bursting.

By creating a bubble in sovereign bonds, the bedrock of the current financial system, Central Banks created a bubble in EVERYTHING. After all, if the risk-free rate of return is at FAKE level based on Central Bank intervention… ALL risk assets will eventually adjust to FAKE levels.

This whole mess starting blowing up in February when we saw the bubble in passive investing/ shorting volatility start to blow up (some investment vehicles based on these strategies lost 85% in just three days).

The media and Wall Street swept that mess under the rug… which allowed the contagion to start spreading to other, more senior asset classes… like corporate bonds.

The US Corporate bond market took 50 years to reach $3 trillion. It doubled that in the last 9 years, bringing it to its current level of $6 trillion.

This debt issuance was a DIRECT of result of the Fed’s intervention in the bond markets. With the weakest recovery on record, US corporations experienced little organic growth. As a result, many of them resorted to financial engineering through which they issued debt and then used the proceeds to buyback shares.

This:

1)   Juiced their Earnings Per Share (the same earnings, spread over fewer shares= better EPS).

2)   Provided the stock market with a steady stream of buyers, which…

3)   Lead to higher options-based compensation for executives.

If you think this sounds a lot like a Ponzi scheme that relies on a bubble in corporate debt, you’re correct. And that Ponzi scheme is now blowing up. The question now is
how bad will it get?”

VERY bad.

The IMF estimates about 20% of U.S. corporate assets could be at risk of default if rates rise – some are in the energy sector but it also includes companies in real estate and utilities. Exchange-traded funds that buy junk bonds, like iShares iBoxx $ High Yield Corporate Bond Fund (HYG) and the SPDR Barclays Capital High Yield Bond ETF (JNK), could be among the most vulnerable if credit risks rise. iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) could also suffer.

Source: Barron’s

With a $6 trillion market, a 20% default rate would mean some $1.2 trillion in corporate debt blowing up: an amount roughly equal to Spain’s GDP.

This process is officially underway.

Credit Markets Are Bracing for Something Bad

Cracks in corporate debt lead market commentary.

…the Bloomberg Barclays U.S. Corporate Bond Index losing more than 3.5 percent and on track for its worst year since 2008.

Source: Bloomberg

Indeed, the chart for US corporate junk bonds is downright UGLY.

This is just the beginning. As contagion spreads we expect more and more junior debt instruments to default culminating in full-scale sovereign debt defaults in the developed world (Europe comes to mind).

This will coincide with a stock market crash that will make 2008 look like a picnic.

If you are not already preparing for this, NOW is the time to do so.

On that note we just published a 21-page investment report titled Stock Market Crash Survival Guide.

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

Today is the last day this report will be available to the public.

To pick up yours, swing by:

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

Ignore the day-to-day moves in the markets, in the big picture, some MAJOR is happening… namely, that the Everything Bubble is bursting.

By creating a bubble in sovereign bonds, the bedrock of the current financial system, Central Banks created a bubble in EVERYTHING. After all, if the risk-free rate of return is at FAKE level based on Central Bank intervention… ALL risk assets will eventually adjust to FAKE levels.

This whole mess starting blowing up in February when we saw the bubble in passive investing/ shorting volatility start to blow up (some investment vehicles based on these strategies lost 85% in just three days).

The media and Wall Street swept that mess under the rug… which allowed the contagion to start spreading to other, more senior asset classes… like corporate bonds.

The US Corporate bond market took 50 years to reach $3 trillion. It doubled that in the last 9 years, bringing it to its current level of $6 trillion.

This debt issuance was a DIRECT of result of the Fed’s intervention in the bond markets. With the weakest recovery on record, US corporations experienced little organic growth. As a result, many of them resorted to financial engineering through which they issued debt and then used the proceeds to buyback shares.

This:

1)   Juiced their Earnings Per Share (the same earnings, spread over fewer shares= better EPS).

2)   Provided the stock market with a steady stream of buyers, which…

3)   Lead to higher options-based compensation for executives.

If you think this sounds a lot like a Ponzi scheme that relies on a bubble in corporate debt, you’re correct. And that Ponzi scheme is now blowing up. The question now is
how bad will it get?”

VERY bad.

The IMF estimates about 20% of U.S. corporate assets could be at risk of default if rates rise – some are in the energy sector but it also includes companies in real estate and utilities. Exchange-traded funds that buy junk bonds, like iShares iBoxx $ High Yield Corporate Bond Fund (HYG) and the SPDR Barclays Capital High Yield Bond ETF (JNK), could be among the most vulnerable if credit risks rise. iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) could also suffer.

Source: Barron’s

With a $6 trillion market, a 20% default rate would mean some $1.2 trillion in corporate debt blowing up: an amount roughly equal to Spain’s GDP.

This process is officially underway.

Credit Markets Are Bracing for Something Bad

Cracks in corporate debt lead market commentary.

…the Bloomberg Barclays U.S. Corporate Bond Index losing more than 3.5 percent and on track for its worst year since 2008.

Source: Bloomberg

Indeed, the chart for US corporate junk bonds is downright UGLY.

This is just the beginning. As contagion spreads we expect more and more junior debt instruments to default culminating in full-scale sovereign debt defaults in the developed world (Europe comes to mind).

This will coincide with a stock market crash that will make 2008 look like a picnic.

If you are not already preparing for this, NOW is the time to do so.

On that note we just published a 21-page investment report titled Stock Market Crash Survival Guide.

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

Today is the last day this report will be available to the public.

To pick up yours, swing by:

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

Inflation is here and it’s BAD.

You see, inflation enters the economy in stages. It’s not as though the Fed begins to print money and POOF! inflation appears. It takes time.

The first stage occurs in the manufacturing/ production segment of the economy when you see producers suddenly paying more for the raw goods and commodities they use to manufacture/ produce finished goods.

You can see this development in the chart below. The highlighted periods featured times in which Producer Prices for commodities or raw goods spiked approached record highs.

One or two months of higher Producer Prices for commodities or raw goods is no big deal, but once you’re talking 6-8 months of steadily rising Producer Prices it’s significant. At that point manufacturers/ producers have to start raising the prices of finished goods or face shrinking profit margins

At that point you move into the second stage of inflation: when the prices of ordinary objects begin to increase.

Bear in mind that phase 2 can happen in different ways. Management at companies don’t just say “raise the price now!” Instead they can do different things such as charge the same amount for less of a finished product/ shrink the size of the container. This is called shrinkflation.

Another strategy is to start using cheaper/ lower quality raw goods (to reduce costs/ quality) while charging the SAME amount for the finished good. This too is inflation as the cost of the SAME item is MORE expensive, though it’s being masked because the QUALITY is LOWER and the price is the same.

We are now at THAT stage of inflation.

That Big Mac and Coke Now Comes With a Side Order of Inflation

U.S. companies are raising prices on everything from plane tickets to paint, passing on to customers higher costs for fuel, metal and food after years of low inflation.

Source: Wall Street Journal

This is when things start to get REALLY ugly for the economy.

And the bond market knows it.

The bond market continues to blow up with yields on the ALL-IMPORTANT 10-Year US Treasury retesting their recent highs. Bear in mind, this is happening at a time when the US is planning a $1.3 TRILLION deficit next year and will be relying HEAVILY on the debt markets to fund this.

This is a MASSIVE deal. This is effectively the bond markets telling the US that if it wants to issue debt, it’s going to cost it more.

And this is happening PRECISELY when the US is planning an astonishing $1.3 TRILLION deficit.

Mark my words,… 2019 will be when the US debt crisis hits.

On that note, we are putting together an Executive Summary outlining all of these issues as well as what’s coming down the pike when the Everything Bubble bursts.

It will be available exclusively to our clients. If you’d like to have a copy delivered to your inbox when it’s completed, you can join the wait-list here.

https://phoenixcapitalmarketing.com/TEB.html
Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

 

The Everything Bubble is bursting.

After the 2008 Crisis, global central banks created a bubble in the sovereign bond market via ZIRP and QE. Because these bonds are the bedrock of our current financial system, when Central Banks created a bubble in this asset class, they were effectively creating bubbles in EVERYTHING.

That bubble is now bursting.

Historically, when stocks collapse as they did yesterday, the bond market rallies. Not yesterday.  Both stocks AND bonds finished the day DOWN.

————————————————-

Who said getting rich from trading was hard?

Since inception in 2015, this trading system has produced average annual gains of 41%.

And it’s doing this with just one trade once per week. In fact we just closed a 15% gain last week. And we only held it 24 hours!

We are closing the doors on this system to new clients on Friday this week.

To lock in one of the last slots…

Click Here Now!

————————————————-

Unfortunately, yesterday was not an anomaly. Both bonds and stocks are DOWN for the month for October thus far.

This signals a tectonic shift. Throughout the post-2008 era, anytime stocks collapsed, money rushed into bonds.

Not anymore. Indeed, the bond market is now collapsing ALONG with stocks. The yield on the most important bond in the world, the 10-Year US Treasury, has broken its multi-decade trendline.

If you aren’t actively taking steps to prepare for this, you need to start NOW.

On that note, we offer a FREE investment report outlining when the bubble will burst as well as what investments will pay out massive returns to investors when this happens. It’s called The Biggest Bubble of All Time (and three investment strategies to profit from it).

We made 100 copies to the general public.

As I write this there are only a handful left.

To pick up your FREE copy…

CLICK HERE!

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

The Everything Bubble is bursting.

After the 2008 Crisis, global central banks created a bubble in the sovereign bond market via ZIRP and QE. Because these bonds are the bedrock of our current financial system, when Central Banks created a bubble in this asset class, they were effectively creating bubbles in EVERYTHING.

That bubble is now bursting.

Historically, when stocks collapse as they did yesterday, the bond market rallies. Not yesterday.  Both stocks AND bonds finished the day DOWN.

————————————————-

Who said getting rich from trading was hard?

Since inception in 2015, this trading system has produced average annual gains of 41%.

And it’s doing this with just one trade once per week. In fact we just closed a 15% gain last week. And we only held it 24 hours!

We are closing the doors on this system to new clients on Friday this week.

To lock in one of the last slots…

Click Here Now!

————————————————-

Unfortunately, yesterday was not an anomaly. Both bonds and stocks are DOWN for the month for October thus far.

This signals a tectonic shift. Throughout the post-2008 era, anytime stocks collapsed, money rushed into bonds.

Not anymore. Indeed, the bond market is now collapsing ALONG with stocks. The yield on the most important bond in the world, the 10-Year US Treasury, has broken its multi-decade trendline.

If you aren’t actively taking steps to prepare for this, you need to start NOW.

On that note, we offer a FREE investment report outlining when the bubble will burst as well as what investments will pay out massive returns to investors when this happens. It’s called The Biggest Bubble of All Time (and three investment strategies to profit from it).

We made 100 copies to the general public.

As I write this there are only a handful left.

To pick up your FREE copy…

CLICK HERE!

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

As we have been warning repeatedly over the last few months, the Powell Fed is totally unlike the Bernanke or Yellen Feds.

Former Fed Chairs Ben Bernanke and Janet Yellen were “married” to the bull market in stocks. Indeed, from 2009 to 2016 it became a running joke that the moment the stock market began to break down, Bernanke or Yellen would issue a statement that the Fed was “ready to act” or some other accommodative phrase.

Stocks would erupt higher. And the bull market remained intact.

Not current Fed Chair Jerome Powell. Powell has made it clear he is going to hike rates until “something breaks.” And he doesn’t meant a minor stock market correction; he explicitly stated that stocks would have to enter a prolonged collapse similar to that of 2008 for him to change the Fed’s monetary policy.

Well, he’s going to get what he asked for.

The US Bond Bubble, which I call “the Everything Bubble” is beginning to blow up.

As we noted previously, the yield on the all-important 10-Year US Treasury has broken its multi-decade downtrend (red line). That was bad enough… but now yields have risen above CRITICAL resistance (blue line).

THIS was the proverbial “line in the sand”… the line which yields needed to NOT break. And they just did.

————————————————-

Who said getting rich from trading was hard?

Since inception in 2015, this trading system has produced average annual gains of 41%.

And it’s doing this with just one trade once per week. In fact we just closed a 15% gain last week. And we only held it 24 hours!

We are closing the doors on this system to new clients on Friday this week.

To lock in one of the last slots…

Click Here Now!

————————————————-

This move is not exclusive to the 10-Year Treasury either. The 30-Year Treasury has ALSO broken its restively downtrend (red line) and CRITICAL resistance (blue line).

This is a MASSIVE warning to everyone. If you wanted a comparable situation… this is the equivalent of when subprime mortgages started blowing up before the last crisis.

The only difference is that bubble in mortgages/ real estate was a bubble in a relatively senior asset class. The bubble in sovereign bonds is a bubble in THE MOST senior asset class… the bedrock of the entire global financial system.

Did the next crisis just start? We are about to find out!

If you are not already taking steps to prepare for this, we offer a FREE investment report outlining when the bubble will burst as well as what investments will pay out massive returns to investors when this happens. It’s called The Biggest Bubble of All Time (and three investment strategies to profit from it).

We made 100 copies to the general public.

As I write this there are only a handful left.

To pick up your FREE copy…

CLICK HERE!

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research