“Being the richest man on a sinking ship is a bitter victory.” — John A. Pugsley
“What is the greatest danger to your investments? Inflation.” — Paul Cabot
As the economy has opened up, the stock market has skyrocketed and now the Nasdaq is nearly positive for the year. In my newsletter, Forecasts & Strategies, I am now 100% invested in stocks, gold and mutual funds.
What’s propelling Wall Street? Rock-bottom interest rates, ultra-cheap energy, massive fiscal stimulus and unlimited central bank liquidity are a powerful tonic.
And the stock market, a forward-looking indicator, has simply been pricing in an economic recovery.
So, is there anything to worry about in the long run?
It turns out there is.
We are facing serious economic problems. On Wednesday, the Organisation for Economic Co-operation and Development announced that we have entered a severe recession, and it may take a long time to recover. Wall Street is down sharply today.
In this issue, I publish two important charts that suggest serious trouble down the road.
Don’t Fight the Fed — Fear the Fed!
First is the Federal Reserve policy. In an effort to counter the economic collapse, the Fed is buying everything in sight. The Fed has cut interest rates to zero and has adopted another round of quantitative easing (QE).
As a result, the broad-based money supply (M3) is growing at the fastest rate in peacetime history — over 25% a year! See chart #1 below.
As Tim Congdon states, “In the year to May, the M3 measure of money — which corresponds to the M2 measure favored by Milton Friedman and Anna Schwartz in their 1963 A Monetary History of the United States — increased by just over 25.5%. This was the highest increase in the quantity of money in modern American peacetime history.”
Chart #1: Growth of US Money Supply (M3), 2009-2020
Source: Tim Congdon, Institute of International Monetary Research.
The Fed may be forced to expand the money supply even more if it is forced to finance the massive government deficits.
Government Spending out of Control
And that brings me to the second chart, the dramatic rise in the federal deficits. And this chart doesn’t even include the state deficits.
The federal deficit is expected to increase five-fold in 2020 alone. The national debt has just surpassed $26 trillion and is expected to reach $36 trillion in 2030.
In essence, we are reliving the 2008 financial crisis, only this time it’s much worse. The fiscal policy never fully recovered from the Great Recession, and now the spending and debt are completely out of hand.
And if the Democrats have their way in November, it could get worse.
What Does This Mean for Investors? Danger Ahead!
Know the signs of the times! The economic recovery from the financial crisis of 2008 and the pandemic of 2020 has left behind a real mess in both monetary and fiscal policy. The Fed has panicked and so has Congress.
Investors need to be prepared for a boom-bust cycle and more inflation. Stocks are responding positively to the easy-money and spending spree policies out of Washington, but the party will not last forever.
In my newsletter, I continue to recommend investing in tech stocks, precious metals and mining stocks.
I’m so concerned about the direction of our country and Washington’s impact on our investments that I’m holding a special “Emergency Meeting” at this year’s FreedomFest, July 13-16, at Caesars Palace, Las Vegas.
This Just In: Senators Rand Paul and Mike Lee to Join Us at Our ‘Emergency Meeting’ at FreedomFest!
Remember when Vegas hotels gave out “twofers” — you get two bets for the price of one?
Well, FreedomFest 2020 is offering its own twofer: the two most libertarian senators on Capitol Hill, fighting for liberty and fiscal sanity.
Senator Mike Lee has a 100% voting approval rating from FreedomWorks. Second, at 98%, is Senator Rand Paul. Both will share the stage for the first time at FreedomFest, the first live convention to open in Vegas since the lockdown.
Senator Rand Paul and his wife Kelley will both be speaking on their co-authored book “The Case Against Socialism.”
The Global Financial Summit
“A forecast is never so useful as when it warns man of a crisis.” — Bertrand de Jouvenal
Who has 20-20 vision? It’s a rare gift!
It’s uncommon to find experts who can accurately predict the future in science & technology, politics and the markets. I have on my bookshelf a dozen titles by authors who missed the mark by a mile.
But there are rare exceptions, and in this year’s FreedomFest, we have invited the most successful forecasters and visionaries to give their best estimates about where we are headed.
My Own Forecasts & Strategies for the New Decade
Our theme for this year’s investment conference is “Forecasts & Strategies for 2020 and Beyond,” in celebration of the 40th anniversary of my newsletter, Forecasts & Strategies. I hope you will join us for this celebration, which will include a reception on Wednesday evening, after the mock trial, July 15.
We will start the Global Financial Summit at FreedomFest on Monday afternoon, July 13, with my session, “Who Has 20-20 Vision? The History, Science and Art of Forecasting, from the Oracle of Delphi to Modern Times.”
It will include a review of my own record of forecasting over my 40 years of experience on Wall Street — hits, misses and home runs.
I’ll explain my own surprise forecast in the January 2020 issue of my newsletter, with the headline: “The outlook for stocks, gold and the dollar is positive as we enter 2020, but beware of a ‘black swan’ event that could derail the longest-running bull market in history.”
Who Will Win in November?
Since 2020 is an important election year, we’ve invited Prof. Allan Lichtman, author of “Keys to the White House,” to speak on “Who Will Win November? My Surprise Prediction.”
Lichtman has accurately forecast every presidential election from Reagan to Trump.
Can the Wall Street Recovery Last?
Wall Street has been on a roller-coaster ride this year. Where will it end?
To answer that question, we have both Jim Woods, who co-edits with me the Fast Money Alert, and Alexander Green, chief investment strategist at the Oxford Club.
Both have excellent long-term track records.
Jim Woods wisely urged investors to get out of the market in late February – and then issued a “buy” signal a few weeks ago. He will speak on, “How My System Got Us Out of Stocks Before the COVID-19 Crash — and Why We Are Back in Now!”
Alex Green got in even earlier, on March 24, the very bottom of the market. His topic will be: “My Most Success Technique of Making Money in the Stock Market.”
Hilary Kramer, author of the bestseller, “Game Changer Investing,” will hold a session on her exciting new trading service, “The Two-Day Trader,” that has a 76% success rate. Traders start your engines!
Louis Navellier, the editor of the Navellier Growth Letter, is one of our most speakers. His portfolio has beaten the market 2-to-1 in the past 10 years.
He will speak on: “Income Investing is Still Hot: My Five Favorite Growth + Income Stocks.”
The Godfather of Smart Beta Says: ‘Value Investing — the Best Opportunity in a Decade!’
I’m especially excited to have Rob Arnott, who heads a multi-billion-dollar consulting firm. He will be attending all four days of FreedomFest. He is the author of “Fundamental Indexing” and considered the “godfather of smart beta” by the Wall Street Journal.
He will be discussing why “Value Investing is the Best Opportunity to Buy in a Decade!” and debating Steve Moore on “Inflation vs Deflation: Where are We Headed?”
The Golden Bear Is Back!
What about gold, oil and commodities? We have experts in this field as well.
Gold and mining stocks have been a big winner this year. Every once in awhile, penny mining stocks offer incredible opportunities to double or triple your money in short order. 2020-2021 may well be that time!
Jeff Phillips, president of Global Market Development and a venture capitalist in the mining business, has discovered a small number of penny stocks that have an upside of 300% to 800% in this gold cycle. You won’t want to miss his talk.
Van Simmons, president of David Hall Rare Coins, will bring you up to date on the rare coin and collectibles market. There is an incredible shortage of numismatic gold and silver coins right now, and where the best deals are now.
He and other coin dealers will have plenty of 2020 American eagle silver dollars on hand for sale. The silver dollar is our symbol of liberty and sound money. Buy a silver dollar and join Steve Forbes and other speakers on stage at the closing panel.
Has the ‘Greater Depression’ Come and Gone?
Veteran speculator, and bestselling author Doug Casey, has been predicting financial Armageddon for years. Then suddenly in 2020, his prediction came true, with nearly 40 million Americans suddenly unemployed. He will address the all-important question, “Has the Greater Depression Come and Gone? No!”
Despite the recovery, the threat of inflation, reckless spending and unlimited easy money is still very real and will wreak havoc in the future.
Afterward, he will join Jeff Phillips, Adrian Day and Van Simmons to discuss their favorite crisis hedge: “The Gold Bull Market: It’s Just Getting Started!”
Taxes and Estate Planning: The Rules Have Changed!
Despite the moratorium on taxes, “death and taxes” are still inevitable!
David T. Phillips, president of Estate Planning Specialists, will update you on all the changes in taxes and estate planning in his session, “The Top 7 Estate Planning Strategies After the 2020 SECURE Act,” followed by Rick Durfee on the best legal structures to minimize your taxes.
Special Sessions on Austrian Economics
Austrian economics is one of the few schools of economics that has warned the West of the boom-bust cycle. Economist Harry Veryser will speak on his book, “It Didn’t Have to Be This Way: Why Boom and Bust Is Unnecessary — and How the Austrian School of Economics Breaks the Cycle”
I’ll also be discussing “A Viennese Waltz Down Wall Street: A Eureka Moment in Austrian Economics for Investors.”
Finally, to top off the three-day investment conference, Eagle Publishing will host a closing panel, “10 Stocks to Buy Now,” with Mark Skousen, Jim Woods, Hilary Kramer, and Alex Green, moderated by Roger Michalski.
Now is the time to review your investments and lifestyle. The most recent crisis won’t be the last!
I urge you to sign up today by going to www.freedomfest.com, or calling 1-855-850-3733, ext. 202. Be sure to provide code FF20EAGLE. And bring a friend/spouse/colleague for only $299. We also offer discounts for students and young professionals.
Remember these words from Sir Harry Schultz, “Never underestimate the size of a panic, and the power of a politician.”
See you in Vegas! Fly there, drive there, bike there, be there!
Yours for peace, prosperity, and liberty, AEIOU,
You Blew it!
Now They Tell Us: Coronavirus Isn’t as Contagious as Thought
One of the justifications for the unprecedented lockdowns of the economy, schools, sporting events and concerts was that the coronavirus was different than past influenzas.
So-called medical experts claimed that the COVID-19 virus could easily enter people who never showed signs of being sick but nonetheless were able to spread the virus to others. It was called “asymptomatic transmission.”
This was the key reason for locking up healthy populations for the first time in modern history.
Yesterday, I played golf here in California, and the golf club imposed a requirement that people of any age had to wear a mask while on the practice putting green. They even removed all the rakes next to the sand traps because it was believed a golfer might infect others by touching the rakes. How crazy is that?
Now it turns out that the thesis was wrong. The World Health Organization has revised its view. “Asymptomatic transmission is very rare,” it says.
“From the data we have, it still seems to be rare that an asymptomatic person actually transmits onward to a secondary individual,” Dr. Maria Van Kerkhove, head of WHO’s emerging diseases unit, said on Monday, June 8. “It’s very rare.”
There is no question that the coronavirus is a serious threat to elderly individuals who have compromising illnesses or diseases, such as those who live in nursing homes. But, according to the latest studies, it turns out to be only 4% more fatal than previous influenzas.
It’s high time to end the lockdown and let people go back to work, students go back to school, congregations go back to church and fans go to a sporting event or concert.
Those who are vulnerable should stay home.