Huge 'Buy The Rumor' Set-Up
by Pater Leeds on August 30th, 2016
We may be approaching the single biggest example of, "Buy the Rumor, Sell the Fact," which we 've ever seen in our lifetimes. This is setting up lots of opportunities for you.
[Peter explains "Buy the Rumor..." and how to profit from it, here.]
A major breakdown in the overall economy is long overdue (as Peter explains here and also here). However, this "return to logic" has been significantly delayed by trillions of dollars which have been "invented" by the Federal Reserve, and pumped into the system.
This "money printing" (they don't actually literally "print" new money, but it has a similar effect) has gone a long way to help inflate the stock market. Meanwhile, low interest rates have fueled asset bubbles (auto loans, real estate prices, personal debt levels, etc...)
Unfortunately, this "Quantitative Easing" has fallen far short in terms of the original goals; creating inflation; jumpstarting the economy; increasing the availability of credit. All that increased liquidity, and all that new money, is sitting in people's pockets.
Huge multi-billion dollar corporations are keeping much of their assets in cash, in their bank accounts. Individuals are holding on to their money longer, and spending less, as proven by the rapidly declining Velocity of Money [which Peter explains in this video].
Now we find ourselves in a period of quiet (just like the eight month "Sitzkrieg" in WW2, just before the Blitzkreig.) All eyes are fixating squarely on the Federal Election coming up this November, and even before that, when we will have the most widely-watched Presidential debate in the history of our nation.
So, leading up to these big "sell the fact" events, each party will try to increase and/or maintain their base of support. Both candidates for President will typically focus on all the things that are going right for the nation, or at least all the way in which they will fix the problems.
Now America is divided between people who think that Donald Trump will help the nation, and people who think Hillary Clinton will help the nation. It will not matter what camp you are in, the messages that you are probably listening to are very positive, and optimistic (or problems are being spotted, along with all the ways "such and such" candidate will fix them).
This is resulting in people waiting for the election. Why fix anything right now, when we'll get a new President soon who will take care of everything for us?
Mind you, you're not consciously thinking this way. It's just that the majority of us are subconsciously acting exactly in this fashion, even myself to a certain degree.
No matter who wins, everyone seems to be holding their breath, ignoring short term problems, and waiting for the election. Everyone will get jobs, pay less taxes, be safe, make money… (No they won't, but you can't blame Politicians for playing the political game)!
Long story short, there are major and significant cracks already formed in this economy. Under any manner of analysis, or logic, the market should have a correction shortly, and probably a recession at the same time.
Whichever candidate becomes President, they will oversee a major economic meltdown. Most people will lose a lot (some will lose everything), but a few will position themselves to come out on top.
One of the ways we will do this is through some of the more "recession immune" picks we're providing to subscribers. There are also many which will soar not just in spite of the Recession, but because of one.
With such a monumental "Buy the Rumor, Sell the Fact" event on the horizon, it is unlikely that we will see too much (appropriate) volatility between now and election day. However, just as the truth always comes out, the stock market will continue to act the way that it always has since the very first day that it was initiated on March 8th, 1817.
In other words, yes we're going to see a correction. Yes, we're going to see a recession. Both of these will probably show up within the next year and a half, on the long side of things, but probably well before then.
In fact, the artificial delay which has been caused by the Presidential campaign will probably make the eventual volatility greater than it otherwise would have been. While there is sometimes a stock market boost as the new president gets sworn in, the odds are more likely that there will be a "Sell the Fact" moment
- the stock market will move to where it should have been all along (which is lower)
- precious metals will increase in direct proportion to loss of faith in the currency (which is higher)
- the oil glut will increase (pushing prices down)
- recession proof industries (utilities, healthcare, pharma/biotech, military) will survive well
There will be plenty of opportunities, at a time when it's going to appear like there are none. This will represent the difference between people who get hurt financially, and those who use the opportunity to enrich themselves.
Do not fall asleep at the wheel. That's for everyone else to do. You may want to consider starting to position yourself for what is to come, and which is increasingly more likely every day, even when the overall broader markets are acting absolutely irrationally.