It’s a Bull Market

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

 

 

 

 

 

 

 

Enough is enough.

The mainstream financial media always tries to offer fundamental reasons for why stocks do what they do. If stocks rally it’s because on good earnings or improved consumer confidence or some other development.

On the surface, this approach is valid: the markets are meant to react to economic and financial developments. However, the problems with the mainstream media’s attempts to explain the market’s actions today are:

1)   These people are journalists, NOT investors or businesspeople.

2)   None of them know what they’re talking about.

3)   The markets haven’t moved based on fundamentals since 2008

4)   Most if not ALL of the data coming out of the US is massaged at best or fraudulent at worst.

Let’s start of with the first two points. The people on the mainstream financial media channels talking about investing aren’t investors themselves. They’re not entrepreneurs or businesspeople either. As such they have little if any actual experience in the markets other than as observers (on the outside I might add).

However, this doesn’t mean that they’re not very good at acting knowledgeable or convincing on camera. And this is where things become confusing for viewers. Oftentimes the people speaking on camera is so good at looking confident and knowledgeable that you are tempted to believe what they say.

However, if you listen closely to what they’re actually saying, it’s clear they do not actually understand what they’re talking about. Yes, they have the right vocabulary and have some basic grasp of the terms and relationships they’re describing, but that’s as far as it goes.

Case in point, when was the last time ANYONE reporting for a mainstream financial media outlet pointed out that the US’s GDP, employment, and inflation numbers are an absolute crock?

Name one time a talking head addressed the fact that the Federal Reserve is chaired by a guy who has absolutely NO understanding of finance or economics. Or that he’s committed perjury, fraud, and outright theft.

I could go on for another 12 pages, but you get the general idea. These people are nothing more than front-people for large corporations that make their revenue from advertising dollars (usually from the financial sector). Their salaries and income are directly related to how much money Wall Street wants to spend on advertising. That, and their viewership, which is directly related to how high the market is (and the US Government’s bailout of their bankrupt parent companies… which of course results in them being objective in their reporting).

So don’t expect to ever hear any of these folks tell the truth, which is that that the market’s moves are in fact controlled by just three factors:

1)   The Fed’s money pumps

2)   High Frequency Trading Programs

3)   The suspension of accounting standards and permission of endless fraud in the financial system

Everything else is simply peripheral issues at this point. Indeed, if you remove any of these three key market props we’d be at sub-1000 on the S&P 500 in a matter of days (if not hours).

We’ll go there again at some point regardless, but don’t expect any of the guys on TV to let you know it’s coming in advance. Did they warn about it in 2008?

Similarly, do you think they’ll warn about the Inflationary Disaster in time for you to prepare yourself?

Yesterday, the COO of Wal-Mart warned the US to prepare for “serious inflation” in the coming months.

Let’s put that into perspective, Wal-Mart is the lowest priced rung on the retail food chain. And because of their size have the highest amount of pricing power of any retailer in the US. So if prices will “seriously” rise for it, then they’ll absolutely EXPLODE everywhere else.

In fact they already are.

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