The S&P 500 index has been in the green for 10 out of the past 11 weeks, ever since the Fed launched its T-Bill POMO. The only down week was the one that saw the Federal Reserve shrink its balance sheet.
Seriously, this has to be John Maynard Keynes’ wet dream.
The government is pushing deficits that 30 years ago would have sounded preposterous; at the same time the Federal Reserve is generating record amounts of liquidity, the private sector is enjoying historically-low unemployment rates and households are experiencing their lowest debt burdens in decades.
If this is all true – as it seems largely to be the case, aside from coercion and messing around with the numbers here and there – why are most people struggling and living paycheck to paycheck?
The answer lies in the following charts:
For one, clear as a pimple on your prom date’s face on the eve of the event, is the correlation between PUMPING currency into the banking system and the valuation of stocks.
Secondly, 2008 caused a MAJOR transfer of wealth from the hands of the naïve and innocent public – especially pensioners and retirees – into the hands of Wall Street.
Dropping rates to zero forced millions into the markets, since their income from bond coupons became irrelevant.
The thing is that while we thought the free markets would chase yield and enter stocks, in 2019 we have witnessed the LARGEST quantity of withdrawals from equities in the market’s history.
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People are scared. They’re concerned with Brexit, upset with politicians and dismayed with the trade deal, but most of all, they’re scared that their savings won’t be enough to retire on.
That’s what this low-rates world has created: a generation of soon-to-be retirees, professionals at the age of 45-65, who are calculating that they’ll live until 80 or 85 and REQUIRE safe income every month.
This is the reason that real estate has suddenly turned into a must-have holding; rents are very safe, especially with ownership not being the great American Dream anymore.
Many families have no problem renting the same house for a period of 3-5 years, only then buying it or purchasing another. The amount of institutional money entering into real estate since 2011 has been the most dramatic transformation in finance since the recession.
The average person doesn’t need to be concerned with Brexit, impeachment or China, so much as he needs to be focused on finding great deals. What I’ve done is to participate as an equity partner in highly-profitable ventures and you can too.
- Realtymogul.com, Fundrise.com, Peerstreet.com: You MUST check these out, since they’re revolutionizing everything about real estate investments, from the minimal amounts to the comfort, experience and hassle of owning, down to user interface.
Through these platforms, you can make good, consistent and reliable returns in real estate. Best of all, it’s 100% online.
- Attend real estate conferences: You MUST make it a priority to either read up on what’s going on with online platforms and to physically sit in a chair and learn about what’s happening right now in the world of real estate.
I sit down with 5 investment firms a month. You need to be in the game of money in order to make big sums.
Courtesy: U.S. Global Investors
As you can see, the Yuan, despite the attempts of government to keep it undervalued and support exports, is getting stronger.
Investors around the world understand that if (1) the greatest bull market in U.S. equities, (2) coupled with record unemployment, and (3) according to the president, “the hottest economy ever,” can’t help to shrink the deficit, the dollar is in trouble.
No one really trusts the Bank of China, but in this war, the coming battle might be won by investors, who are shorting the dollar.
Research Partner, PortfolioWealthGlobal.com
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This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.
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