Written by seasoned Wall Street prognosticator Peter Schiff–author of the bestselling book Crash Proof: How to Profit from the Coming Economic Collapse–The Little Book of Bull Moves in Bear Markets reveals how you should protect your assets and invest your money when the American economy is experiencing perilous economic downturns and wealth building is happening elsewhere. Filled with insightful commentary, inventive metaphors, and prescriptive advice, this book shows you how to make money under adverse market conditions by using a conservative, nontraditional investment strategy.
After a period of excellent returns since 2008, Gilts will no longer be a profitable investment and those investors that ventured into Gilts as a way of increasing income from cash could get a nasty surprise when they realise how sensitive Gilt prices are to changes in yield. With the 10 year yield at just 1.3% compared to an inflation rate of 3.1%, those investors are already suffering a loss in real terms. But if we get an adjustment back to a positive real yield, the capital loss will be extremely damaging to prices. For long dated securities, losses could be in excess of 20% for a movement in yield of just 1% and that would be just the start of the adjustment. That recovery period could stretch into years.
Jim: It can certainly continue. Things do. I guess that people would perhaps be looking at real rates of interest rather than nominal ones. Perhaps the learned people in the bond market would be saying: In its history over the past 50 years, the average real interest rate, the average real yield, on the ten-year US Treasury is on the order of 2.1% or so (I think).
Whether the market is in bear territory or not matters because declines tend to feed on themselves. It also suggests that investors have lost faith that the economy can keep producing the big gains it has turned in lately. If anyone still believes that President Donald Trump’s tax cuts will lead to a prolonged boost to corporate profits, it is hard to see evidence of that in the market. On top of that, when the psychology of investors is glum, bad news tends to send stocks downstream much faster than at times when stocks are trading at bull-market premiums.
The current sell-off comes as a shock to investors who have grown accustomed to the eerie market calm and steady gains during much of the administration of President Trump. But this volatility is something you should get used to because it’s more typical of the advanced stages of a bull market, says Robert Bacarella, founder and chairman of Monetta Financial Services, who helps manage the Monetta Fund MONTX, -0.52% and the Monetta Core Growth Fund MYIFX, -0.67%
Before I get into my analysis and the reasons we are heading towards the Seneca Cliff, I wanted to share the following information. I haven’t posted much material over the past week because I decided to spend a bit of quality time with family. Furthermore, a good friend of mine past away which put me in a state of reflection. This close friend was also very knowledgeable about our current economic predicament and was a big believer in owning gold and silver. So, it was a quite a shame to lose someone close by who I could chat with about these issues. Read More
It’s just amazing what is happening in China. And I think that it represents a clear and present danger to everyone with money at risk. Not just the Chinese. Not just the real estate markets in countries favored by the Chinese, such as Australia. Not just in the industrial metals markets – China has been kind of 100% of the demand for the margin for steel and the like. But this debt thing is a very, very important low-hanging dark cloud over the world, and we have all gotten used to it.
For context, consider the last three bear markets. The most recent one, which lasted for 517 days from October 2007 to March 2009, saw a whopping 57% plunge in the S&P 500. During the 929-day bear market from March 2000 to October 2002, the benchmark lost 49%. And during the relatively brief, 101-day period from August to December 1987, the index tumbled 34%.
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In 2012, NASA, the U.S. Forest Service, the Texas Forest Service, and Smokey Bear teamed up to celebrate Smokey's 68th birthday at NASA's Johnson Space Center in Houston. The popular mascot toured the center and recorded a promotional announcement for NASA Television. NASA astronaut Joe Acaba and the Expedition 31 crew chose a plush Smokey doll to be the team's launch mascot, celebrating their trip to the International Space Station. During his tour about 250 miles above Earth, Smokey turned 68 years old.
It’s been 30-weeks since the last 6-month low (December). The intermediate cycle has averaged about 23-weeks, so we are well overdue for a bottom. Interestingly, while gold crashed nearly 10% in 2-months, gold miners remained relatively stable. Currently, they linger just 6% below their April highs; their resilience should not be ignored. It speaks of a hidden energy that once loose, should deliver brilliant gains. Read More
As with many other industries, the reality of supply and demand impacts every aspect of the financial market. It is predicted that in 2018 the United States Treasury will have net new issue of $1.3 trillion in treasury bonds and the national debt will continue to rise. This new influx of debt will need to be purchased by the market, but the Federal Reserve is reducing the amount that it’s purchasing – their bond holdings will decrease by 10% over the next year. International buyers will become an even more important cog in the wheel, and David comprehensively explores the global supply and demand structure on this episode of Money For the Rest of Us. You also don’t want to miss his bear market investment suggestions, so be sure to listen.