First off I want to say that all of us here at Phoenix Capital Research are sending our prayers to the victims of the Boston Terror Attacks. We sincerely hope none of you, our readers, or your loved ones were injured or harmed by these events.

The markets today are snapping back from yesterday’s sharp drop. However, in the bigger picture we believe that Ben Bernanke must be terrified.

The Fed and other Central banks of the world have done their darnedest to inflate away the debts of the developed world. These folks wanted more than anything to create inflation… because it meant it was easier to service their debt loads provided interest rates stayed low.

It is beginning to look like they failed. The Fed has announced QE 3 and QE 4, the Bank of Japan just announced a $1.2 trillion stimulus, the European Central Bank has promised unlimited bond buying… and yet deflation looks to be rearing its head again.

Copper has taken out its “recovery’ trendline.

Oil is breaking down:

So is Gold:

These are all signs of rising deflation. If deflation IS back then Bernanke’s efforts to create inflation will have failed. IF this is the case, the Fed is literally out of bullets.

Investors take note, the global economy appears to be contracting again. China’s recent GDP miss is the just the latest in a series of economic surprises to the downside.

And stocks are always the last asset class to realize this.

I’ve been warning subscribers of my Private Wealth Advisory that we were heading for a dark period in the markets. I’ve outlined precisely how this will play out as well as which investments will profit from another bout of Deflation.

As I write this, all of them are SOARING.

Are you ready for another Collapse in the markets? Could your portfolio stomach another Crash? If not, take out a trial subscription to Private Wealth Advisory and start protecting your hard earned wealth today!

We produced 72 straight winning trades (and not a SINGLE LOSER) during the first round of the EU Crisis. We’re now preparing for more carnage in the markets… having just seen another SIX trade winning streak…

To join us…

Click Here Now!

Best Regards,

Graham Summers

 

 

Good Morning Investors

Gold is crashing this morning, falling over $90 to $1413 per ounce.

This move is looking to be largely based on institutional liquidation in Asia where Japanese bonds are being sold.

The Bank of Japan announced a massive $1.2 trillion QE effort on April 6. The move was lunacy given that Japan has already announced QE equal to over 20% of its GDP in the preceding years and GDP growth was still slowing.

According to Central Banker thinking, if something doesn’t work for 20 years the only answer is to do even more of it. So the Bank of Japan attempted a “shock and awe” move with an unprecedented QE equal to $1.2 trillion. Japanese bonds, already strained as investments by the demographic and economic issues plaguing Japan, have since become extremely volatile.

With this in mind, the move in Gold looks to be several large institutions liquidating positions to meet margin calls or redemptions due to the plunge in Japanese bonds. The technical damage to Gold has been severe.

Another factor here is the slowdown in China. The post-2009 “recovery” has largely been driven by China’s growth. The People’s Republic reported GDP growth of 7.7% on expectations of 8% last week. This, combined with misses in retail and industrial production, doesn’t bode well for the global economy.

On that note, now is the time to be preparing for a potential bloodbath in the markets. Just looking around the globe we see China’s economy slowing, Japan’s bond bubble bursting, Gold crashing, and more.

I’ve been warning subscribers of my Private Wealth Advisory that we were heading for a dark period in the markets. I’ve outlined precisely how this will play out as well as which investments will profit from another bout of Deflation.

As I write this, all of them are SOARING.

Are you ready for another Collapse in the markets? Could your portfolio stomach another Crash? If not, take out a trial subscription to Private Wealth Advisory and start protecting your hard earned wealth today!

We produced 72 straight winning trades (and not a SINGLE LOSER) during the first round of the EU Crisis. We’re now preparing for Japan’s onslaught.

To join us…

Click Here Now!

Best Regards,

More and more analysts are catching on to the fact that Government measures of inflation are phony. The US Government tells us that inflation, as measured by the CPI, is 0.8%. This is largely a work of fiction however as the actual cost of goods purchased by consumers has increased.

The US Government hides this fact by changing the CPI regularly to underplay the threat of inflation. One of the most famous examples is the decision to drop food and energy prices from directly impacting the CPI via a gimmick called “hedonic adjustments.”  In simple terms, if food or gas prices jump 100%, the CPI won’t rise anywhere near that much.

The CPI rigging goes much further than this.  The CPI also adjusts how it measures the price of homes and rents. So if home prices or rent prices jump substantially, the jump won’t show up in the CPI.

By way of example, think back to the summer of 2008. At that time, the price of gasoline was at an all time high with Oil priced at nearly $150 per barrel. Food prices were approaching records. And home prices were only 10% off their all-time highs.

At that time, the official reading for CPI was 4%. The US Government claimed that with gas, food and housing prices (the most basic essentials) all at or near all time highs, that inflation was just 4%.

Why do this?

Because by downplaying inflation you can overstate growth. All economic growth in the US accounts for inflation via a “deflator” measure. If GDP grows 3% and inflation was 2%, then real growth was 1% in very very simple terms.

By using a low CPI deflator, the Government can overstate growth dramatically. A great example is the fourth quarter GDP growth measure for 2012 which, if using an accurate inflation measure, would have registered over NEGATIVE 1%.

However, by using a phony deflator measure, the US got away with a 0.4% growth rate. And the media could proclaim that things are still positive, albeit not as positive as they were in the third quarter.

This is yet another reason why Governments and Central bankers will always downplay inflation. It’s also why you’ll never hear a Central banker warn that inflation is a problem.

However, by any reasonable measure, real inflation today is closer to 6%. Stocks love inflation at first, until their costs start to increase dramatically. At that point inflation is a REAL KILLER for profits. This doesn’t mean stocks can’t soar (see Zimbabwe’s stock market returns) but it does mean you’re not getting any richer from them.

If you’re looking to stay more informed about the markets and global economy… and get an expert understanding of why things are moving the way they are… we suggest our Private Wealth Advisory newsletter.

To learn more about Private Wealth Advisory…

Click Here Now

Best Regards,

Graham Summers

 

 

 

 

 

Anyone who wants to get to the truth behind the inflationary threats to their wealth should ignore everything the Central Banks say about inflation and look instead at their actions.

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

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

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

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

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

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

Other major investors are looking to get their hands on Gold… not the promise of Gold, but the actual metal.

Germany has the second largest Gold reserves in the world behind the US. Since the early ‘80s, it has stored the majority of these reserves with the NY Fed (45% vs. 13% in London, 11% in Paris and the remaining 31% in Frankfurt).

With that in mind, everyone needs to be aware that last Monday Germany’s Bundesbank announced it will be moving a major portion of its reserves from the US and all of its reserves from France back to Frankfurt.

Nearly half of Germany’s gold reserves are held in a vault at the Federal Reserve Bank of New York — billions of dollars worth of postwar geopolitical history squirreled away for safe keeping below the streets of Lower Manhattan.

Now the German central bank wants to make a big withdrawal — 300 tons in all.

On Wednesday, the Bundesbank said that it would begin moving some of the reserves, the second-largest stock in the world after that of the United States. The goal is to house more than 50 percent of German gold in Bundesbank vaults in Frankfurt by 2020, up from a little less than a third today, the bank said…

The new policy will include the complete withdrawal of 374 tons of German gold stored at the Banque de France in Paris, about 11 percent of the total. Bundesbank officials were quick to note that the decision was not a reflection of French trustworthiness. Rather, because France and Germany now share the euro, there is no need for reserves as insurance against currency crises.

http://www.nytimes.com/2013/01/17/business/global/german-central-bank-to-repatriate-gold-reserves.html

This announcement came with the usual political statements that the decision had nothing to do with a lack of trust between the Bundesbank and the US Fed or Bank of France, but the message is obvious: Germany sees the writing on the wall and is moving to secure its Gold reserves.

The same goes for Texas:

Texas Republican State Representative Giovanni Capriglione authored the bill demanding state owned gold bars be returned to the Lone Star State. The legislation to pull $1 billion in gold reserves from a Federal Reserve vault in New York is supported by Governor Rick Perry.

The financial crisis in Cyprus which prompted a run on the bank and ultimately a closure of the financial institutions reportedly bolstered support for the Texas gold bar return bill. State Representative Capriglione had this to say about why he penned the bill:

“For us to have our own gold, a lot of the runs on the bank and those types of things, they happen because people are worried that there’s nothing there to back it up.”

Governor Perry stated that if Texas owns the gold, then no one else should be able to determine if the state can reclaim possession of the bars of precious metal. Representative Capriglione also noted that Texas is not interested in implementing its own gold standard. According to the Republican’s statements about the gold bars bill, he simply wants to bolster the state’s fiscally secure reputation. The Texas public servant also feels that such a solid financial persona would be beneficial in case an international of national fiscal crisis occurred.

The legislation notes the state does not merely want gold certificates from the Federal Reserve, they want the actual gold bars to store inside a planned Texas Bullion Depository. Moving $1 billion in gold bars from New York to Texas would be a huge task, one some are calling impractical. State Representative Capriglione suggested selling the gold currently housed inside the New York vault and then repurchasing the same amount in Texas.

http://www.inquisitr.com/600185/texas-wants-gold-stored-at-federal-reserve-returned-to-lone-star-state/#XHeg60ztpexhAROW.99

Investors forget that the single most important role played by Central Banks is to maintain confidence in the system. For that reason they will NEVER admit inflation is a problem. But if inflation isn’t a problem, WHY ARE CENTRAL BANKS LOADING UP ON GOLD?

Watch what they do, not what they say.

If you’re looking to stay more informed about the markets and global economy… and get an expert understanding of why things are moving the way they are… we suggest our Private Wealth Advisory newsletter.

To learn more about Private Wealth Advisory…

Click Here Now

Best Regards,

Graham Summers

 

As Cyprus has now shown us, when systemic collapse hits, it hits FAST and FURIOUS.

The quick timeline for Cyprus is as follows:

• June 25, 2012: Cyprus formally requests a bailout from the EU.
• November 24, 2012: Cyprus announces it has reached an agreement with the EU the bailout process once Cyprus banks are examined by EU officials (ballpark estimate of capital needed is €17.5 billion).
• February 25, 2013: Democratic Rally candidate Nicos Anastasiades wins Cypriot election defeating his opponent, an anti-austerity Communist.
• March 16 2013: Cyprus announces the terms of its bail-in: a 6.75% confiscation of accounts under €100,000 and 9.9% for accounts larger than €100,000… a bank holiday is announced.
• March 17 2013: emergency session of Parliament to vote on bailout/bail-in is postponed.
• March 18 2013: Bank holiday extended until March 21 2013.
• March 19 2013: Cyprus parliament rejects bail-in bill.
• March 20 2013: Bank holiday extended until March 26 2013.
• March 24 2013: Cash limits of €100 in withdrawals begin for largest banks in Cyprus.
• March 25 2013: Bail-in deal agreed upon. Those depositors with over €100,000 either lose 40% of their money (Bank of Cyprus) or lose 60% (Laiki).

The most important thing I want you to focus on is the speed of these events.

Cypriot banks formally requested a bailout back in June 2012. The bailout talks took months to perform. And then the entire system came unhinged in one weekend.

One weekend. The process was not gradual. It was sudden and it was total: once it began in earnest, the banks were closed and you couldn’t get your money out (more on this in a moment).

If you think this cannot happen in the US, think again. The FDIC has already proposed legislation that would allow it to TAKE CONTROL OF A BANK IT DEEMS SYSTEMICALLY IMPORTANT AND WRITE DOWN YOUR SAVINGS ACCOUNTS as part of the bail-in.

This power was granted in the 2010 Dodd-Frank bill, although 99% of investors are not aware of it. We’ve just drafted a Special Report outlining the precise legislation as well as the powers of Life and Death it grants the FDIC over YOUR SAVINGS.

To pick up a copy of this Special Report…

Click Here Now!

Best Regards,

Graham Summers

What happened in Cyprus isn’t a “one off” event.

The financial media and elite have been trying to convince the world that Cyprus was a unique situation… a “one time” deal… and that our money is safe in the banks.

This is untrue.

Spain, Canada, and New Zealand have already proposed similar measures through which individuals’ SAVINGS accounts would be used to prop up the banks during times of Crisis.

It’s called a “bail-in,” but really it’s “THEFT” plain and simple. The banks made the terrible mistakes that rendered them insolvent. They (the banks) should simply fail. But instead of failing, the regulators want to keep the banks in business… using YOUR money.

Why is this?

Two reasons:

1)   The regulators don’t have the money to actually insure deposits that they claim.

2)   Politicians realize that people are fed up with the public funding bank bailouts… so they’re targeting individual savers in the banks that are in trouble.

It’s a simple question of math regarding #1. Banking deposits are in the trillions of Dollars and most deposit insurance entities only have a few billion Dollars in funds. Obviously, if a large bank were to fail under these circumstances there wouldn’t be the funds to cover deposits…

Regarding #2, politicians have begun to realize that the public simply won’t stomach another Federal bailout of the banks. So instead of getting everyone and their children to chip in by using the public’s funds… they’re going after the deposits of a select few people who have their funds IN the troubled bank.

Their thinking is that if you can’t steal a little from everyone, you might as well try to steal a lot from a few people.

Could this happen in the US?

You better believe it. In fact, the FDIC has already put forth a proposal to do EXACTLY this in the event of a Crisis.

Just four months ago, the FDIC drafted a formal strategy in which it suggested that during the next Crisis, it can…

1)   Decide WHAT banks are systemically important.

2)   Take control of any “systemically important” bank that it deems at risk of default.

3)   Once in control of the bank, YOUR savings deposits can be “written down” in value (meaning you LOSE money you thought was yours) as part of the bank bailout.

Less than 99% of Americans realize this is the case, but the legislation allowing this is already IN PLACE and the FDIC has already written out the rules for what will happen.

We’ve put together a special investment report outlining this situation which EVERY person with a savings deposit needs to read now BEFORE the next Crisis hits the US. Doing this can mean the difference between keeping your nest egg secure… and losing EVERYTHING.

This report is titled, “The Secret FDIC Rule That Puts Your Savings At Risk.”

How much is this report worth?

How much money do you stand to lose if your bank declares a “holiday” and your funds are frozen then WRITTEN DOWN IN VALUE?

We’ve made this report FREE to all subscribers of our Private Wealth Advisory newsletter. An annual subscription to Private Wealth Advisory costs just $299. Given the importance of the risk posed to your wealth, I imagine that “The Secret FDIC Rule That Puts Your Savings At Risk.” alone is worth at a minimum, TEN TIMES that amount.

To reserve a copy of this report (we’re only making 100 copies available)… all you need to do is take out a trial subscription to Private Wealth Advisory.

You’ll immediately be given access to “The Secret FDIC Rule That Puts Your Savings At Risk.”  You’ll also begin receiving my bi-weekly investment alerts outlining the primary risks and opportunities in the financial system today.

To pick up a copy of “The Secret FDIC Rule That Puts Your Savings At Risk.”…

Click Here Now!

Best Regards,

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

Japan is the ultimate basket case for monetization. The country buys its own bonds, stocks, ETFs, foreign bonds, even REITs. All in all, the country has spent over 20% of its GDP in QE… and its economy continues to slow.

And yet, despite its complete, abject failure to produce any significant pick up in economy activity or employment via these policies, the Bank of Japan has decided to do EVEN MORE OF THEM.

Just this morning, the Bank of Japan decided to increase its QE efforts with a new program to spend ¥ 7 trillion month buying bonds per month. It’s complete and utter insanity, especially since there is literally not one single instance in history in which debt monetization has produced economic growth.

Instead, it always produces the same thing: INFLATION.

Japan’s efforts to fight the economic slump by weakening its currency yen have led to a side effect: higher prices. Rising costs of daily necessities, ranging from petrol to food, have started to take a toll on the public.

At a petrol station in Sapporo, one of Japan’s largest cities, soaring petrol prices have kept many price-sensitive motorists away from fully filling their tanks.

A motorist said:”It’s hard for us. For us ordinary folks, even the smallest price rise is not easy to digest.”

http://english.cntv.cn/program/bizasia/20130201/105864.shtml

And this is precisely the policy Ben Bernanke is engaging in. The Fed is spending $85 billion per month, that’s roughly $2.8 billion per day, buying debt and other garbage.

He, like the people running the Bank of Japan, somehow believes that printing money will result in economic growth. This is a bit ironic given that GDP growth is collapsing in the US, DESPITE him launching both QE 3 and QE 4 last year. Indeed, when we account for the real increase in inflation, 4Q12 GDP growth was over NEGATIVE 1%.

We all know how this will end: with higher inflation/ costs of living and now very likely with a market crash. Every bubble the Fed has blown has resulted in disaster. This time will be no different.

With that in mind, now is the time to be preparing your portfolio for what’s coming. The lessons from Cyprus are obvious: the warning signs of disaster show up very early (Cyprus first requested a bailout in June 2012). However, once things get messy… it happens ALL AT ONCE.

Cyprus’s entire banking system shut down in one weekend. At that point 99% of people couldn’t get access to their money. Those who prepared in advance were fine. Those who didn’t ended up losing 60% of their wealth in less than a week.

Don’t let this happen to you.

We’ve just released a Special Investment Report outlining the threat of inflation to your financial well-being.

To read this report and start taking action to prepare yourself and your loved ones for what’s coming…

Click Here Now!

Best Regards,

Graham Summers

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Click Here Now!!!

Best Regards
Graham Summers

 

 

Cyprus should scare the living daylights out of everyone.

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

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

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

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

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

The company, however, has firmly denied the reports.

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

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

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

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

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

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

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

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

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

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

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

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

Click Here Now!!!

Best Regards
Graham Summers

 

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

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

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

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

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

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

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

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

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

And then came Cyprus.

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

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

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

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

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

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

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

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

4)   European leaders are growing truly desperate.

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

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

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

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

To read more about this…

Click Here Now!!

Best Regards,

Graham Summers

Chief Market Strategist

The news coming out of Cyprus only gets worse.

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

Initially the plan in Cyprus was the following:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

To read more about this…

Click Here Now!!

Best Regards,

Graham Summers

Chief Market Strategist

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

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

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

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

Let’s cut through the nonsense here.

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

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

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

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

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

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

What could go wrong?

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

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

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

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

To read more about this…

Click Here Now!!

Best Regards,

Graham Summers

Chief Market Strategist

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

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

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

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

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

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

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

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

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

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

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

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

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

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

To learn more about Private Wealth Advisory

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This intense discipline has paid off in a big way for our subscribers. Rather than jumping around from one trade to the next, they have realized massive portfolio gains from this simply strategy: year to date, The Perfect Trade model portfolio has produced a return on capital of 50% in 2013. Since its inception in June 2010, the model portfolio is up over 200%.

All from trading just one option.

To learn more about The Perfect Trade

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Thank you for reading,

Best Regards,
Graham Summers

Phoenix Capital Research

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

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

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

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

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

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

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

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

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

So what happens when Europe breaks up? Systemic failure.

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

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

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

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

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

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

2) which banks to avoid

3) how much bullion to own

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

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

And more…

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

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

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

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

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

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

Click Here Now!!!

Best Regards,

Graham Summers

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

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

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

Nowhere are these issues more evident today than in China.

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

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

1)   They believe Chinese economic data as gospel.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

throughout the globe in the coming months.

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

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

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

Click Here Now!!!

Best Regards,

Graham Summers

 

The markets are staging a bounce today based on:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2) which banks to avoid

3) how much bullion to own

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

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

And more…

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

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

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

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

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

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

Click Here Now!!!

Best Regards,

Graham Summers

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

Why is this?

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

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

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

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

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

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

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

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

So why did Draghi’s statement matter?

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

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

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

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

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

SYSTEMIC FAILURE IN EUROPE.

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

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

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

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

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

2) which banks to avoid

3) how much bullion to own

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

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

And more…

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

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

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

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

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

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

Click Here Now!!!

Best Regards,

Graham Summers

 

 

 

 

 

 

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

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

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

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

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

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

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

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

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

BANK RUNS and systemic failure.

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

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

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

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

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

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

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

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

2) which banks to avoid

3) how much bullion to own

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

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

And more…

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

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

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

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

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

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

Click Here Now!!!

Best Regards,

Graham Summers

 

 

 

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

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

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

1)   Exaggerated our economic growth.

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

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

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

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

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

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

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

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

And the media is FINALLY beginning to report on it.

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

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

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

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

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

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

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

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

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

Clicking Here Now!!!

Best Regards,

Graham Summers

 

 

Let’s wind the clock back to 2008.

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

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

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

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

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

Well, China’s heading for inflation.

BIG INFLATION.

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

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

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

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

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

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

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

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

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

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

The cause of these strikes?

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

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

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

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

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

Click Here Now!!!

Best Regards,

Graham Summers