The False Illusion of Prosperity
and Financial Safety
U.S. real estate, stocks, and bonds may be
at or near record highs, but it's a trick
We live in a world where economic growth is
grinding to a halt (or threatening to go negative) -- and
where no financial trickery, monetary interventions, or any
outlandish Central bank "solution" for reversing this trend
should be ruled out.
If someone told you in 2014 that almost 30% of
global government debt would carry a negative yield
(i.e. less than 0.0%) by 2016, what would you have said?
"Are you crazy? That’s preposterous!” Am I right?
But in a desperate attempt to stimulate weakening economic growth, that’s exactly what the Central bankers all around the world have done.
Unfortunately, it hasn’t worked.
Central banks have cut interest rates 667 times since Lehman Brothers collapsed in 2008 -- and have injected over $24 trillion of new money into the global economic system since then -- and economic growth still continues to weaken or go negative.
So what are the central bankers
talking about doing now?
You might also consider these ideas outlandish, however the U.S. Federal Reserve Board is starting to toss around ideas like giving every American working adult a guaranteed income (e.g. $20,000 per year) as a possible solution to our social and economic woes.
The Fed is also considering the potential benefits of dropping money out of helicopters in an attempt to jump start the U.S. economy – which is currently mired in its slowest one-year rate of growth since the financial crisis of 2008.
If this isn't financial insanity, tell me what is.
The idea behind this scheme is this: after the newly printed money is passed out to Americans, it would be immediately be spent – which in turn would provide a stimulus to the economy.
But those aren’t the only "fixes"
being discussed by the Fed
They are also considering eliminating physical cash from the system – and making all money digital.
Or maybe a debt jubilee should be considered for those entities who are overly burdened with debt – such as the U.S. government.
Just like negative interest rates, you might think these ideas are “preposterous” as well – and are therefore highly unlikely to be tried.
Like it or not, fixes like these
may be attempted sooner than you think
It seems clear to me that we are steam-rolling to a place where those in charge are likely to throw all caution to the wind to preserve and protect the status quo – which benefits the financial elites at the expense of the average American citizen today.
Ladies and gentlemen, anything can happen – and financial danger lurks with all the proposed solutions mentioned above ... and even those not mentioned.
The best strategy for protecting your wealth
So what do you do to protect your investments in real estate, stocks and bonds -- which today reside at near or all-time record highs?
The last thing you want to do is be complacent – and simply hope for the best.
And for the naive, nor should you assume the government is always looking out for your best interests … and they will save you.
Those are both bad strategies.
Instead, you should be vigilant, agile, open-minded, and be an active and disciplined trend follower – and constantly be re-positioning your investments so they are always in rising trends and out of falling trends.
Wealth has wings folks. The trends can make you rich -- but they can also make you poor. I'd like to end with the sage words of T.S. Eliot (1888-1965):
"If you haven’t the strength to impose your own terms upon life,
then you must accept the terms it offers you."
Comments/questions are always welcomed - and you can send them to Robert@RealEstateTiming.com