By Martin Weiss, PhD
It is THE story of the day.
It is THE event that will impact every investment decision you make.
If you ignore it, it will cost you. If you harness it, it can make you substantially richer.
I’m talking about the end of austerity programs and so-called “fiscal pacts” all over the world.
Last year, for example, Congress debated endlessly about budget cutting but never actually DID anything of substance. Nor are they likely to do a darn thing during this election season.
Also last year, after months of agonizing debate, the Europeans finally managed to cobble together an agreement to cut their deficits. But just in the last couple of weeks, the entire agreement has started to collapse.
Sarkozi in France, who was a major linchpin of the pact, has fallen from grace. The government of the Netherlands, another major supporter of the pact, has collapsed. The upcoming elections in Greece could be another game changer.
And now, May Day in Europe will launch new street protests against austerity all across the continent.
Suddenly and without warning, the pressure is building for MORE spending, BIGGER deficits, and a bigger pile-up of DEBT.
Plus, I’m talking about an enormous amount of money that’s already being created by the world’s central banks right now.
From Tokyo to Brussels and from London to Washington, the world’s governments are printing money like there’s no tomorrow.
Everybody knows about it. Everybody’s talking about it. But almost nobody has any idea what to DO about it!
This vast, massive, GLOBAL orgy of money printing — and the explosion in the world’s money supply that it’s creating — IS THE 800-pound gorilla in the room.
Already, that money has helped push U.S. stocks up to unsustainable levels as investors from all over the world pour new money into Wall Street.
Just since the first of this year, the Dow is up nearly 7% — and many household name stocks have fared much better …
Tractor Supply is up 42% … Polaris Industries is up 43% … Red Hat is up 47% … VeriFone Systems is up 50% … and Netflix is up 53%.
Plus Fossil is up 62% … LinkedIn is up 67% … Sears is up 67% … Cobalt Energy is up 73% … and Regeneron Pharmaceuticals is up 128%.
And this may surprise you given the global debt problems, but Bank of America has surged a mind-boggling 50% since January 1.
Now, you have to wonder: Is the company — Bank of America — 50% more valuable than it was just 16 weeks ago?
Of course not!
It’s still choking on toxic assets. It still has a Weiss Financial Strength Rating of just D+ (‘Weak’). Worst of all, the European crisis is erupting again, exposing the bank to major new dangers.
But the trillions of newly created dollars, euros, pounds and yen sloshing around in the U.S. economy have to go somewhere — and for reasons known only to themselves, many investors have decided that BofA stock is where they want to be.
Across America, Asset Inflation Is Beginning
to Pop Up in Some of the Most Unlikely Places
Stocks aren’t the only assets getting inflated by central bank money pumping.
Prices for some collectibles are surging, too. Art and antique auctions that just a few months ago were sparsely attended are suddenly packed to the rafters.
A vinyl banner posing as a work of pop art recently sold at a Woodbury, Connecticut auction for an astounding $15,990!
A friend of mine just finished planning his summer vacation. He says HALF of the places he wanted to stay were already booked solid. Instead of staying at posh resorts and spas, he’s settling for Hampton Inns and Motel 6.
Another friend is looking for a low-priced duplex or condo here in Florida. There are plenty in her price range, but on several occasions, as soon as she found one she liked, it was snapped up by another buyer.
The rental market is also strong in Florida. With a $100,000 property, you can get up to $1,500 per month in rent. That’s $18,000 per year, or an 18% gross return on your money before expenses — nearly six times more than 30-year treasuries are paying.
Everywhere you look, you see prices rising — especially if it’s related to an asset that’s the target of speculation. You see higher prices on clothing, e-books, grapes, fertilizer and health care products.
Why? Fed money printing is creating a temporary “wealth effect.” It’s also making millions worry about how much their money will be worth tomorrow.
Which of these blips are temporary and which are going to gain momentum? Which are just bubbles waiting to pop and which have real substance?
What Should YOU Be Doing to Protect Yourself
And Profit from this Money-Printing Orgy?
That’s the $64,000 question right now — and my team is going to answer it for you in your regular issues in the days and weeks ahead.
We don’t have all the answers. And we’re not always right. But it was a time like this that our team first forecast a huge bull market in gold, silver and other natural resources — a superboom that ultimately took gold from $255 per ounce to over $1,800.
And it was in one of our special briefings in 2007 that we warned the world that a real estate bust would push the banking industry to the brink of collapse and even named the banks and other companies that would get hit the hardest.
Similarly, it was right here in Money and Markets in 2008, that we warned Washington’s attempts to fight the crisis would only create short-term relief, while sinking the U.S. deeper in debt and making matters much, MUCH worse over the long haul.
And most recently, it was at a special online briefing we warned that the debt meltdown in Europe could NOT be solved with new loans — loans that would only drive the weakest nations DEEPER into debt.
Today, all of those forecasts and warnings have come true in spades; and the world has caught up with those forecasts. So now it’s time to take things to the next level.
Why the World Has Just Passed a Major
Landmark; a “Point Of No Return.”
In the weeks and months ahead, the impact of decisions that have been made in the world’s financial capitals will have tremendous implications for every financial decision you make.
Our view: Millions of wage-earners, savers and investors who ignore this historic shift will be unceremoniously pushed to the brink of bankruptcy.
But those who heed this warning and take appropriate action stand to multiply their wealth.
This is why we communicate with you so regularly and so often.
Our mission is to help you make more profitable investment decisions in this bewildering investment environment.
So be sure to stay tuned.
Good luck and God bless!
Martin
