Hi Do, Here are Todd’s latest fun picks to take your financial skills to the next level... First, a little humor. And then I'll share something really serious with you...
Joke: An alien invasion comes to the United States threatening to take over the world. (Screams, fear, drama)
How does the U.S. government respond?
It cuts interest rates.
I was laughing so hard when I told that to my kids that my stomach hurt.
Of course, they didn't get the humor. That's the problem with having a financial geek for a dad.
One daughter said my joke didn't make sense because there's no interest rate. #mindblown.
She's in college and that's the only reality she's ever known - zero percent interest rates.
I was shocked.
Has it really been that long?
"We're only down 15% from the all-time high on February 19th, and it seems to me that the world is more than 15% screwed up." Howard Marks, April 20, 2020
"This is the Greenspan-Bernanke-Yellen legacy: a financialized political economy where the preservation of asset prices is our government's primary objective." Ben Hunt
I'm not too concerned about the economic fallout from this crisis, but I am worried about the recovery.
Deflationary economic collapses are both predictable and manageable. Ultimately, they're good for the economy because they clear bad debt from the system setting the stage for the next wave of prosperity.
However, our government leaders don't see it that way.
They've chosen to run-up trillions of dollars in new debt to stop the downturn, but they were already broke and couldn't pay their bills.
Surprisingly, few people questioned the wisdom of this action. Everybody wanted a bailout.
I believe time will prove that the cure was worse than the disease.
Paraphrasing a wise mathematician... risk never leaves the system, it just changes form.
If the Fed stimulus solved the immediate market meltdown risk then what risk replaced it? What form will it take?
That's a very important question...
Wise investors learn to look where others are blind. You want to see the risk that others are missing so you can manage ahead of it.
That is the topic of today's resources. They are going to take some time for you to consume. This is not a quickie. But it will be time well spent.
Your future self will thank you, but only if you take action.
This article shows how bear markets in purchasing power (not prices) can devastate your wealth... even while your stocks rise in price. This is the first in a series of articles I will be sending to help you understand how the economic cure for this virus is likely worse than the disease itself. I believe that the trillions of dollars in stimulus announced in the past few weeks will prove to be an economic turning point from which there is no way back. We are entering a new investment era very different from what we have been living through. Inflation is bad for stock prices, bad for bond prices, and it destroys the purchasing power of what remains. It is one of the hardest market environments to earn a real profit. You need to understand how it works. Dan Amerman (the author of the above article) offers two educational DVD sets that I recommend. One teaches you about the counter-cyclical role of gold in your portfolio, and the second provides unusual research showing how to strategically use mortgage debt in a very specific way to increase both safety and profits. In the 1990's, I did extensive research on the counter-cyclical gold phenomenon, and I still manage my money according to similar principles. Given recent economic changes and the fact that gold and the U.S. dollar are making new 52 week highs, you need to know what's in this "Gold Out Of The Box" DVD set. The markets are sending a clear message. Similarly, Dan's "Real Estate ALM" DVD set provides essential research for positioning your real estate portfolio for the next decade of risky markets. Big change is afoot, so you need to arm yourself with the knowledge to preserve and grow your wealth. I promise you these DVD's will not replace Netflix. It's not entertainment. It's serious research about the only two strategies you can use to create a synthetic short position on the dollar and transform your portfolio in adverse economic conditions. I negotiated a special 2 for 1 deal with Dan for a limited supply of 100 of these DVD sets so that you can prepare for what lies ahead. No, I'm not a gold bug. But yes, there is a theme to today's resources. It's the inevitable consequence of reckless government spending, deficits, and debt. There is a mathematical limit to this game, and the Fed leapfrogged dangerously close to the precipice when it announced the trillions of dollars in stimulus this month. Most U.S. citizens don't realize there is an end-game. Surprisingly, when I announced the above 2-for-1 DVD set deal to my Expectancy Wealth Planning students (they always get first privilege), dramatically more foreign students purchased the sets than did my U.S. students. That's very telling. Russians and Europeans know how this ends. It's part of their history. United States citizens remain blissfully ignorant. I thought this Cry Wolf video made some important points. We can see the economic sickness all around us from not having an apex predator. We are ripe for a change.
Onward and upward!
Todd Tresidder
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