“The only time in history going back to 1881 when [CAPE] has been higher are, A: 1929 and B: 2000.
We are at a high level, and its concerning.
People should be cautious now.”
Robert Shiller, Nobel Prize winning economist and Yale professor of economics
Last week was a historic week. The White House was under fire after a deadly protest in Charlottesville. The fallout included another White House official being voted off the island Survivor-style, with the unceremonious ousting of Stephen Bannon. A CEO exodus from the White House business advisory councils forced the 45th President to disband them. With that kind of upheaval in the central government, as one might expect, the U.S. stock market took its second straight week of losses. As of today’s close, the Dow Jones Industrial Average was at 21,703.75, trading down 2% from its August 7, 2017 high.
Investors were looking for signs of stability from the central government. However, the real reason for the losses was fundamental economics, not politics. In fact, after the ousting of Bannon, the markets applauded only briefly, and then headed south again as news of an earnings miss by Foot Locker made the rounds.
Foot Locker sales declined 4.4%. Net income was off 60% year over year, as the company was hit with a $50 million pre-tax litigation charge relating to its handling of a pension plan conversion in 1996. Incidentally, S&P 500 companies are underfunded on their pension and Other Post Employment Benefit obligations by over half a trillion currently. Only 4.52% are fully funded on their pensions and OPEBs, with OPEBs (like health insurance) the furthest behind. “If OPEB were a patient, it’s status would be critical,” according to Howard Silverblatt, the senior index analyst S&P Dow Jones Indices.
Foot Locker isn’t the only retailer suffering. There has been a wave of bankruptcies in retail, with over half liquidating completely, rather than just restructuring debt. Malls across America are like expensive ghost towns, with no one, save the salesmen, inside the well-appointed and overstocked stores. Marketing firms say that Millennials prefer experiences to shopping. However, that’s a convenient simplification of what’s really happening. Many Millennials are strangled with college debt, working multiple jobs and still not able to make ends meet. Shopping is a luxury many simply cannot afford.
The Middle Class has been squeezed out of its comfort zone. Home prices are higher than they have ever been. Consumer debt is higher than it has ever been. "Flows of credit card balances into both early and serious delinquencies climbed for the third straight quarter—a trend not seen since 2009," according to the Federal Reserve Bank of New York. Wages have stagnated. The “Gig” Economy has many people trying to piece together a living with multiple part-time jobs. Health care costs are out of reach and unsustainable. (There are ways to personally put yourself in the best position during these hard times. Click to learn more about my Investor Educational Retreat this October, if you want to save thousands of dollars every year in your annual budget, protect your retirement plan from the next crash, live a richer life and have more money for retail and bucket list vacations. It’s less time and less money than you are currently spending, with solutions that will last a lifetime.)
With 69% of the GDP growth reliant upon the American consumer, and the Middle Class being squeezed, can the American Consumer continue to carry this economy?
The Stock Market and Earnings
According to Robert Shiller, Nobel Prize winning economist and Yale professor of economics, “The CAPE ratio that John Campbell and I devised 30 years ago is at unusual highs. The only time in history going back to 1881 when it has been higher are, A: 1929 and B: 2000. We are at a high level, and its concerning. People should be cautious now.” 1929 marked the beginning of the Great Recession; 2000 was the market high before the Dot Com Recession. Click to hear Professor Shiller discuss this in greater detail on CNBC.
Essentially, the CAPE ratio takes a look at 10-years of earnings when calculating the price to earnings ratio because earnings fluctuate wildly year-to-year. By either the CAPE or the annual average Price to Earnings ratio, the current PE ratio is high. Interestingly, the PE ratios are high even though corporations have done massive buying and retiring of stock – which reduces the PE.
NASDAQ dropped 78% between its highs in March of 2000 and its lows of October 2002.
The Dow Jones Industrial Average lost 55%, sinking to a low of 6547 on March 9, 2009.
Is this the new normal? 8-year bull markets followed by colossal implosions? It’s entirely possible, particularly as long as the Middle Class is being squeezed out of profits and strangled with debt, while being expected to continue to buy buy buy and fuel earnings.
As I’ve pointed out repeatedly, and as Robert Shiller stresses in his video interview with CNBC, market timing doesn’t work. PE ratios were high for a couple of years in the late 1990s before the Dot Com Crash. Also, if you move all into cash, then it’s very difficult to know when to move back in. If you did that just before two years of solid gains, then you’ll rue your actions and want to jump back in even if the prices are high and unsustainable.
Overweighting safe, diversifying and annual rebalancing work great. Getting safe in today’s climate is tricky. There are lots of “safe” assets that are losing money, and other “safe” products that have recently adopted redemption gates and liquidity fees. You can’t rely on Buy and Forget About It or any of the old investment adages.
Wisdom is the cure. Get the ABCs of Money so that you can be the Boss of Your Money. This has never been more important than now.
The last time the U.S. was in this position, in terms of consumer debt and squeeze, it resulted in the Great Recession and a meltdown of the U.S. banking system. The Federal Reserve and taxpayers have already bailed out the banks. U.S. corporations have more cash than many countries – particularly Silicon Valley companies like Apple, Google, Microsoft and Oracle. Corporate buybacks have largely fueled the current bull market. When economists talk about a sustained rally, they often point to buybacks and the amount of cash being held in corporations.
However, corporate cash can’t jumpstart personal consumption, when so many Americans have more debt than savings or retirement. Lower spending means lower sales and missed earnings. Financial engineering, like corporate buybacks, can only work for so long. Declining sales has already slain countless retail companies. What industry is vulnerable next?
If Nobel Prize winning economist Robert Shiller is right about the CAPE ratio indicators, it could be all of them.
Don’t get scared. Get smart. Call 310-430-2397 to learn more now.
Below are other Warning Signs in the Economy, which I outlined in greater detail in my BlogTalkRadio show this month. Click to listen to that show.
Bright Spots in the Economy
More Blogs With Additional Information and Data
What is the Smart Money Doing?
Are You Gambling With Your Future?
Will Congress Raise the Debt Ceiling in Time?
Social Security is Cash Negative, at 28% of the Public Debt and Growing
Minutes of the July 25-26, 2017 FOMC Meeting
Economic Projections from the June 2017 FOMC Meeting
PCE % of GDP Charts
In August 2000, a broker salesman attempted to take all of my hard-earned gains from a real estate sale, saying he would diversify and protect me, by investing in Enron, Global Crossing and AOL funds. I had 1000 sound reasons why all of those investments were a bad idea at the time, but I didn’t (then) have the confidence and wisdom to know definitively that I was right. If I had placed my trust and money with the salesman, I would've lost everything. I don't know as a single mother how I could've survived that.
It was then that I became determined to expose the conflict of interest that is inherent in much of the financial services industry, so that others could be saved, too. I developed simple, easy investing solutions that cost less time and money than having blind faith in a “financial planner” who often makes more commission when they sell you things that you don’t need. I also developed the Thrive Budget, which allows you to stop making the billionaire corporations rich at your own expense, which allows you to live a much richer life, have more bucket list vacations and provide far better for your future.
I love my job. I love hearing the stories of people who earn gains when the economy and markets lose more than half. (Yes, we have those testimonials.) Or retired couples who downsize to a sustainable lifestyle, and are able to live a richer life in retirement as a result. Or college students who get a far better degree for half the cost of their colleagues, and exit college capable of finding a job without the crushing debt.
There are people who complain about their problems, and there are those who can see beyond their problems, or at least have faith that there is a life beyond what crushes their spirit now. Having a vision of where you'd like to go and a plan to get there will always work better than throwing your hands up in the air and complaining that you have no control. Complaining and doing nothing are choices, too.
However, none of this happens without you. The status quo has more money, more advertising and thus a larger reach than I do. It is your 5-star reviews, your passionate support, your shares, your likes and your questions that enable me to save another down the road. And for that, I thank you.
All of my hottest tips, and most important alerts, from Bitcoin fraudsters to penny pot stock scams, from picking Tesla and Google at their product launches, all come from questions posed by people, like you, who follow my work. Money is a very personal topic, and that’s why we offer a number of ways that you can get your questions answered anonymously. Below are just a few ways you can do just that.
There are solutions for your challenges. They just aren’t found in the mainstream. Otherwise, your problem would already be solved.
I wanted to take a moment to thank you for joining my mailing list, my Facebook page, Twitter, Instagram, YouTube, Medium, Blog, BlogTalkRadio, etc.
If you are having difficulty making ends meet (who isn’t), if you’ve been approached with a surefire investment opportunity with promises of astronomical 100% guaranteed gains, or if you’re interested in a second opinion on the way your money is being managed, then it’s a very good idea to reach out for wisdom and a second opinion. Call 310-430-2397 or email info @ Nataliepace.com to reach my office directly.
Thank you for joining my mailing list, my Facebook page, Twitter, Instagram, YouTube, Medium, Blog, BlogTalkRadio, etc. Stay in touch. Ask your questions. Get your answers. Share hot opportunities (that you want me to check up on).
Have a wonderful summer. Now is the time to make sure that the plan and path that you are on is a good one. I’m here to help. I love empowering Main Street with the easy systems needed to thrive in today’s volatile economy. It is an honor, and a job that I cherish and take very seriously – since 2000!
What’s The Smart Money Doing?
Basic supply and demand tells you that prices decline when people sell en masse, and increase when there is colossal buying. Knowing what the big money is doing can help the Main Street investor get it right. So, what’s the smart money doing these days?
The Federal Reserve Board
The Federal Reserve Board announced that they will begin divesting themselves of the bonds they are carrying in a timely manner “relatively soon,” assuming the economy doesn’t tank. They are selling their long-term Treasury bonds and their mortgage-backed securities. Kathy A. Jones, SVP and the chief fixed income strategist of Charles Schwab Inc. & Co. believes this will impact interest rates on mortgages, and encourages everyone who is able to secure a fixed-rate on their mortgage to do so now (from my interview with her on July 19, 2017).
The stock market gains of the last few years have been thanks to cheap, easy money. The Feds kept interest rates at zero. Companies, even heavily indebted companies, could borrow almost free capital, and buy back their own stock. Thus, stock buybacks were robust, just as they were prior to 2007 (the year before the Great Recession). Buybacks have come to a screeching half of late. Buybacks were down 17.7% year over year in the first quarter of 2017. As Howard Silverblatt, the senior index analyst for S&P Dow Indices wrote on June 21, 2017, “Companies may need to make money the old-fashioned way – earn it.” (For information on how companies can push up earnings by buying back their own stock, read my blog on “Financial Engineering.”)
Less insider buying also means less price support. Companies are relying upon future push-ups in stock price to come from investors.
The bottom line is that the corporate “smart money” has pulled back on purchases of their own stock.
What Happens When Wall Street Invades Washington?
A 17-year Goldman Sachs veteran is the Secretary of the Treasury. A hedge fund owner is now the head of communications at the White House. Is it “smart” for someone who earns in the multi-millions annually to lop two zeroes off of his income and take a job in government that pays $170,000 or less? The answer is yes, sometimes. When someone is willing to take that kind of pay cut, Main Street should be alarmed and take note.
First of all, here’s how the math works. A salary of under $200,000 doesn’t come close to funding the lifestyle of a one-percenter! How can they even afford to do this? Hmmm…
What few Americans realize is that at the top of a bull market, taking the government job and being forced to sell high (when otherwise there might be constraints on how much they can sell, and when) and having the taxes on that sale deferred can be the biggest payday of all. As one example, Henry Paulsen was “forced” to sell over $500 million of Goldman Sachs stocks to become the Treasury Secretary in June of 2006. He was allowed to use the proceeds to purchase government bonds, under a Certificate of Divestiture, which means he paid no taxes on the sale of that half a billion (or more) in stock. When he sells the T-bills, he’ll be liable for the capital gains then. However, the sale can be spaced out, and the tax rate on long-term capital gains is currently 20%, roughly half of what the earned income tax rate can be.
So, guess how closely correlated market losses are with having a Wall Street Treasury of the Secretary?
As you can see in the chart above, since 2000, Wall Street rallies were all under the tenure of Treasury Secretaries who came from politics. The crashes occurred under the aegis of the one-percenter Wall Street veterans. It just doesn’t pay for Wall Street executives to take a salary that is a rounding error of their earning potential during bull markets. The payday comes when they get to sell en masse high without taxes, while their colleagues are vulnerable to losses, and would go to jail if they tried to dump all of their insider holdings at once.
Not surprisingly, Anthony Scaramucchi is seeking a federal tax break for his sale of Skybridge Capital. He calls it “taking a mega-opportunity cost for getting rid of all of your assets.” Others might see it as selling high and keeping all of the money, while deferring taxes, which can be the biggest payday of all, particularly if the markets head south.
The bottom line is that having so many Wall Street guys (i.e. the “smart money”) willing to take a meager salary for a job on Capitol Hill is not a good sign for investors. They don’t do that unless it adds up.
Remember that market timing doesn’t work. The systems that I’ve taught in my Investor Educational Retreats have outperformed the bull markets and earned gains in the bear markets since 1999, at a time when most people have lost more than half in two of the worst recessions the U.S. has seen since the Great Depression. Call 310-430-2397 to register for my Old West Financial Empowerment and Healing Retreat, which will be held in Arizona Oct. 13-15, 2017. Register by Monday, July 31, 2017 to receive the lowest price.
Have you become confused (or alarmed) at the new acronyms flying around, or the potential service disruptions that you’ve been learning about of late? Or (even more alarming), is your Bitcoin Club not even advising you about the events that are happening in just a few days?
Important Information That You Need to Know Now About the User Activated Forks.
The bottom lines on Bitcoin, Ethereum, Litecoin and other crypto currency is that the gains have been meteoric in 2017, and so has the volatility and the amount of speculation and outright scams. It’s very important to get informed before you buy or trade crypto currency. If you don't understand the necessary confirmations, how to get a a reliable wallet, which websites are legit and which aren't, etc., then your first investment should be in information and wisdom (not crypto currency).
I’ve penned two important blogs over the last month. (See below for links.) And I will spend some time at the Old West Retreat Oct. 13-15, 2017 outlining how to embrace the opportunities and avoid the dangers of crypto currency. Call 310-430-2397 or email info @ NataliePace.com with your questions, or to learn more.
Crypto Currency Crashes and the Bitcoin Chain Split of July 31, 2017. (published on July 16, 2017).
Bitcoin and the Crypto Currency Flash Crash. (published on June 25, 2017).
Crypto Currency Crashes and Bitcoin’s July 31st Network Disruption.
Ethereum is down 60% in just a few weeks. Bitcoin is off 34% from its high of $2,894, set on June 10, 2017. So, is this a buying opportunity? Before we jump in, let’s figure out what’s causing all of the volatility.
Bitcoin Network Disruption on July 31, 2017
Bitcoin.org is warning of a potential network disruption on July 31, 2017 during the User Activated Soft Fork (UASF). The official website for Bitcoin is recommending to stop accepting Bitcoin on July 28, 2017, and to “be wary of storing your bitcoins on an exchange or any service that doesn’t allow you to make a local backup copy of your private keys.” GDAX, the leading crypto currency exchange will be monitoring the situation closely. According to Adam White, the general manager of GDAX, GDAX will " temporarily suspend the deposit and withdrawal of bitcoin on GDAX and may pause the trading of bitcoin as well."
For a full list of the action points, and further explanation on the Bitcoin chain split, go to BitCoin.org and read the alert. You can also follow GDAX and Coinbase (GDAX' owner) on Twitter and on the exchange website for live updates during the chain split. Ultimately, the chain split should sort itself out. It's mainly the transition leading up to August 1, 2017 and the days/weeks thereafter where existing and potential bitcoin investors need to be more cautious.
Is this potential disruption what is behind the current sell-off of BitCoin, Ethereum and LiteCoin? Investors don’t like uncertainty, and they love gains. The July 31st event offers an incentive for anyone who has seen an extraordinary run-up of their investment to make sure that those paper gains are translated into their local, traditional currency. We’ll know in just a few weeks whether the July 31st chain split goes more smoothly than expected. Until then, I’d expect to see more volatility. Bitcoin.org is advising everyone that the currency could see “significant price fluctuations.” However, Ethereum is experiencing even more volatility more Bitcoin.
Ethereum’s Flash Crash
On June 13, 2017, investors were buying Ethereum at $381. The rapid rise from just $7 a year ago, prompted a multi-million dollar sell order on June 21, 2017 that triggered a cascade of chaos, where limits and stops were triggered. In a matter of seconds, an Ethereum flash crash caused an implosion of the price to just ten cents! GDAX, the premiere crypto currency trading exchange, is honoring the purchases and reimbursing the forced sales. This will help to reinforce legitimacy, and reduce the customers’ righteous indignation of massive, instant losses. However, the flash crash illustrates one of many concerns of investing early in any disruptive innovation. (See below.) Refer to my first report of the Flash Crash and other problems with crypto currency in June 2017.
Early Adopters Cashing In
Schumpeter’s Creative Destruction
Lessons from Skype
Hucksters and Hackers
Become an Early Adopter
Being on the Right Side of Massive Opportunity
That 10 Cent Trade
And here’s additional information on each Concern and Opportunity.
Flash crashes – massive drops in an investment – are exacerbated by High Frequency Trading, automated programs and derivatives. Ethereum’s drop to 10 cents on June 21, 2017 was the result of a multi-million dollar sell order that triggered multiple stop-loss and margin covers. Because those orders are automated, the crash occured in nano-seconds – before GDAX had a chance to halt trading. The large exchanges – NYSE and the Nasdaq stock exchanges – have breakers to stop rapid drops in the overall exchange. However, the May 6, 2010 Flash Crash, which saw a drop of 9% in the Dow Jones Industrial Average in less than half an hour, exhibits just how far and how fast the mood can change in an investment. Incidentally, Flash Crashes are one of the reasons why it is critically important to have a Capture Gains strategy, rather than a Stop Loss mentality. I teach this important distinction at my Investor Empowerment Retreats. Call 310-430-2397 to learn more about the Oct. 13, 2017 retreat now.
Early Adopters Cashing In
Whenever you see gains of 1000% or more, like we’ve seen this year Ethereum, you have to worry about the early adopters cashing in their gains. If you’re trying to buy while most are selling, it’s like trying to catch a falling knife. You’re bound to get cut.
Schumpeter’s Creative Destruction
Disruptors and unicorns are the hallmark of the tech industry today. They were in 1999 as well before the Dot Com REcession. As Schumpeter pointed out in his econ classic, Capitalism, Socialism and Democracy, there are two waves of innovation. The first is fast and furious, which is followed by a big crash that wipes out most of the investors and the more vulnerable companies. The second wave of the new technology, after all the chaff has been winnowed away, tends to be longer and more prolonged. For instance, Bitcoin was the first, but is LiteCoin (developed by Charlie Lee) or Ethereum (co-founded by Vitalik Buterin) the better platform? And what about all those Bitcoin clubs that are sprouting up?
Hucksters and Hackers
I’ve seen a massive amount of questionable opportunities (i.e. most likely scams) associated with Bitcoin lately. They have all of the hallmarks of hucksters, including claims of fast, easy profits and demands that you “join now or miss out.” Behind these billboards, are multiple red flags, including toll-free 800 numbers and P.O. boxes, often without any mention of where the company operates or who is running it.
Over the past few years, hackers have breached Bitcoin Wallet providers. Hucksters have faked Bitcoin Wallets, photoshopping in multi-millions of dollars worth of the crypto currency. And scam artists have faked Bitcoin wallet apps that they’ve successfully made available in your smart phone store. If you want to be sure that you’re dealing with a legitimate wallet source or exchange platform, then rely on information from BitCoin.org and CoinBase.com.
Lessons from Skype
Bitcoin has become a religion for people who are fed up with banksters preying on the Middle Class American. Be careful drinking the Kool-Aid that crypto currency will replace the banking industry altogether, however. Even Bitcoin.org, in its alert on the July 31, 2017 chain split, recommends that you only hold as much Bitcoin as you can afford to lose. A lot of the same predators who were selling you gold a few years ago as the apocalypse currency are now cashing in on Bitcoin hype. Skype was marketed as a disruptive technology that would put the telecom industry out of business. That never happened, though the industry now enjoys video conferencing as a result of the innovations that Skype pushed forward. The financial industry is moving fast to figure out how Bitcoin's block-chain might benefit the industry.
Become an Early Adopter
Getting in early on a trend always pays off. Investing fundamentals must still be applied, however. Buying high, or at the top of a market, is never a good idea. Investing in Amazon pre-Dot Com crash would have cost you 80% in losses -- something that would have taken a decade to recover from.
Being on the Right Side of a Massive Opportunity
There is no doubt that purchasing any crypto currency in January of this year was a great idea, particularly if you’re cashing in with 1000% gains, as some Ethereum investors are. However, whenever you start hearing about sure-fire investments on Facebook, that’s often your sell signal, not your buy opportunity. I started getting inundated with requests to report on crypto-currency in June, after a number of Bitcoin clubs started emerging from highly questionable founders and ads were everywhere touting gains. In my blog then, I warned of many scams and of high prices. Since that 4-alarm warning, all of the currencies have fallen 27-70%. Click here to access my June 2017 Bitcoin blog.
Though I do believe that crypto currency is a unicorn. It may have to spend some time back in the stable before it grows to its full glory. I’ll report again on the currency soon – after the July 31, 2017 Bitcoin chain split. However, the crypto currency environment right now is the Wild, Wild West. Be sure that you associate yourself with a town that has a sheriff, and buy your bank at a great price.
That 10-Cent Trade
The investor who is sitting pretty with an Ethereum investment that s/he picked up for just 10-cents on June 21, 2017, the day after someone else paid $318 has a Capture Gains, Buy on Opportunity mentality. Most clubs that I’m reading about are talking about a Stop Loss strategy, a losing strategy that is wiping out wallets, with egregiously high fees piled on top of the losses. Successful investing requires learning the fundamentals. Join me for my Investor Educational Retreat in October, where you can learn how to swim in this sea of opportunity. Otherwise, you could be jumping in without your water wings, and drown.
Are Bitcoin, Ethereum and Litecoin Great Buys Now?
All of the currencies are experiencing extreme volatility this summer. If you are an experienced trader who knows how to be on the right side of volatility, then there’s opportunity. If you’re a novice who is interested in jumping into the hottest investment of the year, your first investment should be in wisdom so that you learn how to be on the right side of the Wild, Wild West, in the first phase of a disruptive innovation.
Call 310-430-2397 to learn more about our #finlit #fintech training. Receive the best price when you register by July 31, 2017.
Are You Gambling With Your Future?
My question to you is this. Are you gambling on your future, without even knowing it?
Here are just a few of the concerns that I have.
*Congress is not taking the Debt Ceiling seriously enough. They’ve been warned to raise it before July 31, 2017. However, internal documents show that they believe they can wait until Sept. 30, 2017. If they cut it too close, we risk getting a credit downgrade from Fitch Ratings and Moody’s. The last time that the U.S. received a credit downgrade, on August 5, 2011, stocks sank and gold soared.
*The Feds are de-levering. The Smart Money always moves first.
*We are in a Bubble economy. Buy and Forget About It doesn’t work, and hasn’t worked since 1999.
*Wages have stagnated for three decades, while expenses have tripled or quadrupled (or more) in the basics of housing, insurance, transportation and food. Life doesn’t add up.
*The public debt is expected to soar to $30 trillion in the next decade. It’s at $20 trillion currently.
*Housing costs and consumer debt levels are higher than they were before the Great Recession.
*The total debt and loans in the U.S. exceed $66 trillion.
*Social Security went cash negative in 2010 (5 years early). Disability dried up completely in 2016, and is currently borrowing from Social Security. Social Security accounts for 28% of the public debt and is one of the reasons why the debt is ballooning.
*Financial engineering has been keeping stocks artificially high, and making them look like a better buy than they really are. However, the funds for that ruse are becoming more expensive, and reversed the trend starting in 2015.
*”Income-producing” retirement plans designed by broker-salesmen are actually losing money, due to high fees, in an up market! Imagine how poorly these plans will perform in a downturn.
*Financial predators and scams are proliferating and preying on everyone’s fear and anxiety. Worry and doubt are warranted, but require a real cure, not snake oil. These scams include Gold IRAs, Bitcoin clubs and penny pot stocks, most of which are being run out of "offices" with PO Box addresses by people with a history of predatory practices.
*The financial experts predict that the U.S. will have GDP growth of 1.9-2.2% over the next 3 years, while the politicians are basing their plans on 3% growth.
*REITs and annuities pay very high commissions and are being sold like hot cakes without the buyer truly understanding the risks of these products.
Yup. That’s right, you just read a dozen concerns. (There are many highlighted links in the list above, where I offer even more details on the issues.) And I could continue, until you passed out from boredom and exasperation. But rather, I’m going to give you the important information about how you can protect yourself. You don’t need to know anything about the above list to protect what you have, adopt a safe plan for your nest egg and even start saving thousands of dollars in your annual budget. It’s The ABCs of Money that we all should have received in high school, and it is easy as a pie chart.
I know you have heard phrases like this bantered about by other people, but there is a simple difference. The systems and strategies that I developed in 1999 have a Ph.D. in results. They worked fantastically in two of the worst recessions the U.S. has ever experienced (The Dot Com and The Great Recessions), at a time when almost nothing else has worked. The Easy-as-a-Pie-Chart Nest Egg Strategies and Thrive Budget have proven right on the money, time and again, for two decades now.
The last time I wrote a blog with this much alarming language in it was December 23, 2007 – right before the Great Recession. If you heeded that warning (as many did), then you earned gains in the Great Recession. If you did not, chances are that you lost more than half of your nest egg. Over seven million people lost their homes in the Great Recession. Incidentally, I began sounding the alarms on the real estate bubble in April of 2005 – in plenty of time for my readers to have avoided that problem.
You know that I am optimistic and a fundamentally happy person. When I turn serious on you, you should take it as a call to action to learn and adopt the systems that you need to protect yourself now. I do not put myself on the line and make claims idly. It may sound like a brash statement, but it is a true and provable one nonetheless. I began talking like this in Christmas of 1999, just a few months before the Dot Com recession, in April of 2005 before the real estate bubble burst and then again in December of 2007, before the Great Recession. No one wanted to hear about it then either.
Here is a mental test. Did you lose more than 25% in any or all of those downturns? If so, once again, you might be on the wrong side of a bubble that is ready to burst. The problem is that this time it is even more difficult to get safe because so much of the “safe” investments are now very vulnerable, including bonds, bond funds and money market funds.
Investing wisely does not require more time or money. It is simply understanding that you are the boss of your money and that, more often than not, the broker-salesman you are relying on is making a commission to sell you things that might not be in your best interest. You might have been told that you don’t pay them a commission. However that doesn’t mean that they don’t earn a commission from the fund provider. Buy and forget about it stopped working in 2000 and will not work going forward. Some, but not all, of the biggest dangers right now lie in the areas that have been traditionally known as safe.
I will be discussing all of this in a teleconference on August 3, 2017 (Thursday). You can call into (347) 215-7305 at noon ET (9 am PT), or listen back to the show 24/7 on demand at the link below. If you have questions feel free to email them to Heather now.
July 31, 2017 is the last day to register for my boardroom Investor Educational Retreat at the lowest price. It is also the deadline day for raising the Debt Ceiling to ensure that the U.S. does not receive a credit downgrade. Join me at the October 13-15, 2017 Old West Retreat, and you will learn the easy-as-a-pie chart investing strategy that has worked fantastically through bull and bear markets and will work for you for the rest of your life. It is as simple as getting the ABCs of money that you should have received in high school.
Does it pay off? Retreat attendees earned money during the Great Recession using the Natalie Pace system, while those around them lost half or more of their net worth. My 2009 Company of the Year earned up to 19X gains; my 2013 Company of the Year tripled, while the 2014 Company of the Year quadrupled! Two of the hot funds doubled last year. This is no accident, and it is not rocket science. It is a system that you need to learn in order to protect and grow your assets during the volatile economic times that we face now and in the decades to come, as we try to cycle through an unsustainable debt load.
Do you have any idea how much of your nest egg is at risk and how much is safe from a downturn? Did your investments crash in 2008 and 2001? Have you had difficulty getting rich on the software you purchased or the program you signed up for? Are you still underwater on your home? Are you having trouble making ends meet, or contributing to your own retirement plan due to high bills or high debt? If you answer yes to any of these questions, you have a lot to gain by attending my Old West Retreat in October, and a lot to lose if you don’t.
If you lost money in 2008 and haven’t made any changes to your plan, if you do not have a clue what holdings you have in your retirement plan, if you have a pattern of chasing or losing money, if you are relying on blind faith (and hope) in someone else to manage your money for you, whether you have $10,000 or $10 million invested in your account, you need to move heaven and earth to be at my retreat this October. Here is why. At the retreat, we will look at what is hot, what is not, and the danger zones that you need to avoid NOW before the retail implosion starts to spread into REITs and the general economy. You will learn how you can carefully (and easily) restructure your nest egg so that you are better protected against a downturn. You will learn sound, higher performing, less risky investment alternatives that could provide you with a great income and are not being offered by other pundits (largely because they can’t make money off of selling them to you). And you will learn which industries could be poised to soar above the rest, no matter what the market conditions are.
I have been looking at a lot of purported “income-producing” portfolios, which are actually losing money now (in an up market!) and are extremely vulnerable to severe capital loss in the years ahead. Whether you are a Millennial or a Baby Boomer, there’s no reason to make everyone else rich at your own expense. Wisdom is the cure. A better strategy could deliver as much as ten times the ultimate wealth creation, income and security over your lifetime. It is not more money invested. It is simply getting more performance for the money that you work so hard to earn and invest.
I have put together a 3-day process that is extremely unique, powerful and result certain. On Day One, we cover nest egg strategies. On Day 2, you learn what’s safe and how to get safe, including very low risk investments that can earn you thousands or tens of thousands annually with very low capital outlay. On Day 3, I open up my time-proven bag of tricks to teach you what’s hot and how to avoid the money pits. The rich are getting richer in America these days. You can join them because the Smart Get Richer, too.
Now I have to stop for a minute and introduce the secret weapon that is going to make this work so well for you, not just in the moment, but now and forever in your everyday life. I’m not handing you a fish, and then forcing you to buy fish from me for the rest of your life. This is a hands-on conference, where I teach you how to fish. You will learn and do and practice, so that you walk out with a plan that works instantly and for the rest of your life. With seven billion people on the planet to protect, I’ll have my work cut out for my entire lifetime, without having to rely on making you dependent upon me. In truth, financial independence requires financial wisdom, and that is what I’m offering you.
By the time you leave that room on the third day, you will no longer be the same person. I cannot promise you that you will make a billion dollars, but I can tell you that if you have enough capital in play and you invest with the foundation and strategies we will teach you, it is certainly possible. The one thing I will promise is that these three days will absolutely be the most enriching, the most important and the most valuable three days of your investment life, and that your results will be in direct proportion to the amount of effort you invest in learning and perfecting my strategies. As you can see from the testimonials below, the only thing people ever regret about my retreat is that they didn’t come sooner.
Speaking of which, I am not charging the $5,000 or $10,000 that most investment training programs ask. I am not even charging half of that. I am creating a value-priced, valuable retreat where I can work deeply, intimately and personally with my most motivated, serious and ambitious retreat attendees. The information you will receive and experiences and opportunities you will enjoy are quite simply not available anywhere else – not in universities, other seminars or even your brokerage.
If this resonates with you, register now by calling 310-430-2397 and speaking with Heather. I am holding a limited amount of rooms at a deliciously low rate for an Old West Inn that is surrounded by natural hot springs and healing waters. Mark your calendar right now and clear it for the dates October 13-15, 2017. The place is Thatcher, Arizona.
You need this information now, especially given all of the economic pressures that we are facing. There is no downside to you attending my October retreat, outside of the costs of travel and the modest hotel.
You do not want to miss this unique opportunity. You may never get the chance again to save, protect and nurture your nest egg.
On Wednesday, June 21, 2017, the GDAX (a leading digital asset exchange) experienced a flash crash in its Etherean crypto currency (ETH-USD). The currency dropped from a value of $317.81 to ten cents. Trading was halted, while the GDAX exchange could evaluate what had caused the implosion.
So, what happened? The cascade of chaos began as a multi-million dollar sell order. That dropped the price to $224.48, at which point stop-loss orders and margin calls kicked in.
The currency is back trading at $271.89 (down 14.4%) and GDAX has promised to credit any customers who had losses as a result of a stop-loss or margin call (with their own money). This is all according to GDAX VP Adam White, in his blog on the matter.
There are many lessons to be learned here.
And here are a few details.
1. Think Capture Gains, Not Stop Losses.
Exchanges don’t have to refund stop losses or margin calls. It’s important to have a good strategy in place that truly puts you in the best seat possible. In a volatile marketplace with wild price swings, stop losses mean you lose frequently. Capture gains would have you winning frequently in that same scenario. In fact, it has been reported that someone had a buy order at 10 cents for ETH-USD, which the GDAX has vowed to honor. That person made $307 for every dime invested. (Hopefully the entire stratagem wasn’t a scam by the multi-million dollar seller.)
2. Future Flash Crashes Are Possible.
All exchanges have a policy toward halting trading for 15 minutes or longer in a single company when there are suspicious circumstances, or when the exchange falls too far too rapidly. (You can search to find the Market Wide Circuit Breaker Policy of each exchange). However, with all of the options and margins alive in the markets today, crashes will still occur – at speeds that are far more rapid than we’ve seen in the past. Multi-million dollar trades do happen. While the market pauses may delay the inevitable and spread it out over a few days (or months), they can't prevent market drops. The Dow Jones Industrial Average fell from a high of over 14,000 in October of 2007, to 6547 on March 9, 2009.
3. Buy Low; Sell High.
It's always tempting to buy high in the hopes of selling higher. However, the surefire market rule is, "Buy low, sell high." Sure, the value of crypto currency might go higher. However, you should be aware that you could have purchased almost every crypto currency for pennies on the dollar just a few years ago.
Coinbase (and its digital currency exchange GDAX) is one of the few legitimate crypto currency companies. Coinbase is backed by some of the most respected venture capitalists in technology, including Andreessen Horowitz, with a board that includes Kathryn Haun, a former Dept. of Justice prosecutor.
Bitcoin and Crypto Currency Scams
Sadly, whenever you have an young, fast-growing business that is posting the kind of gains that crypto currency is posting, it’s like the Wild West, full of Snake Oil salesmen, gunslingers and highway robbery.
Trade Coin Club
Joff Paradise and his Trade Coin Club, appears to be a MLM proposition that has bathed in Ponzi perfume. The business will kill you in trading fees (25% of your ups) if it gives you anything back at all. There are multiple red flags with this website and the info-videos, and scathing warnings from former recruiters and customers. “Joff” has a LinkedIn page showing a graveyard of past “businesses.” (Just Google “Joff Paradise complaints” to get 11,300 results.) The recruitment video says that trading on other platforms is difficult, boasting that this club makes it easy with “Stop Loss buttons that allow you not to jeopardize your Bitcoin.” Trading Bitcoin is very easy on GDAX (a far more reputable exchange). Stop loss buttons are a terrible idea in a volatile marketplace. (See above.)
BitcoinIRA.com is another website that is rife with red flags. It’s a virtual office with an 800 number, with a website that has broken links when you try to find out who is behind the operation.
Bitcoin Buyer Beware! Know the executives and board members behind the operation before getting involved. If you're going to travel to the Wild West, make sure that you haven't selected a pistol-packing Ponzi clown as your tour guide. Bitcoin scams are becoming as widely spread as the Nigerian email scams were at the beginning of the Internet.
Early Adopters May Want to Take Quick Profits
Most investors want an exit strategy within three years of their investment. Traders who are sitting on millions from their small, early investment are going to be itching to turn their paper profits into real cash (and then probably a Tesla) – even if they are crypto-currency philes. It’s never a good idea to buy high. Whenever you see a quick spike, as there has been in both Bitcoin and Etherean, you have to be very cautious about catching a falling knife, when the sellers back up the truck to turn multi millions of crypto into USD. -- as happened on June 21, 2017 with Etherean.
Disruptive Technology vs. a Trillion Dollar, Global Industry
Bitcoin feels a lot like VOIP and video conferencing, ala Skype 2002. It’s a disruptive technology taking on an entrenched trillion dollar, global industry. Many of us would love to circumvent the banks altogether (particularly after their shenanigans that resulted in the meltdown of the Great Recession). However, the truth is that it is difficult to topple a trillion dollar, global industry. Skype didn’t wipe out telecom, and it’s hard to imagine Bitcoin wiping out banks. The technology will revolutionize the industry, however – something the financial industry is already moving to embrace and to regulate.
FINRA (the Financial Industry Regulatory Authority) is hosting a Blockchain Symposium in New York City this July.
If you purchased Bitcoin or Etherean two years ago on a respected exchange, like GDAX, then you are the most eligible bachelor/bachelorette in your city. If you're been sold into paradise recently on any other platform, you'd better make sure you aren't kissing a frog, hoping he'll make you a princely sum.
Creating a Community.
Partnerships are key to success! The Golden Gate Bridge wasn’t built by one person. The more you can partner with like-minded people, the more big problems you can solve. Partnerships can help you to commit to an exercise regimen, to study, to invest and to do almost anything you want to do.
The key is getting the right kind of support. For instance, your workout buddy might be a great, fun way to keep regular with your routine. However, s/he is probably not the best person to design your routine. For that, you want someone who is well-schooled in diet and exercise regimens, and who knows how to keep you from hurting yourself. It’s very common for people to pray and meditate individually, and come together each Sabbath to study the scriptures for guidance on how to live a more divine life.
Getting wisdom from a qualified source (not just your friends) is key to success. You don't want to get your spiritual practice from Jim Jones, your diet tips from an anorexic model or your financial wisdom from a salesman. Grade your guru before you listen to anything they say. Make sure that they have a Ph.D. in success that spans at least a decade. The most common way that people lose money is by trusting blindly, without verifying, in a friend, family member or commission-based salesman.
I want to encourage all of us to learn more about financial literacy, and to form partnerships that help us to take our learning and actions deeper. Our team offers the time-proven systems and solutions that can support you and your community to make sure that you are drinking your #finlit from the well of wisdom (instead of from sales-speak). The more you drink in and apply what works, the better your results will be. Your community can then help you to be disciplined about applying what you learn, and even in forming partnerships that might take on larger projects that you couldn’t handle on your own.
Please see below for ways that we can support your continued learning up the path to financial empowerment and wisdom. Also, we are here to help, particularly when you have a hot tip/idea, or are concerned about a popular video or email that is circulating. Some of the hottest companies that I’ve featured came in as a hot tip from our community, as have some of our most valuable investor alerts.
*21-day coaching program.
*Free teleconferences, blogs and online community.
*Private, prosperity coaching
And here is more information on each resource.
*21-day coaching program.
The Gratitude Game was originally designed as a 21-day coaching series for retreat attendees to do after they attended a retreat, in order to make sure that they were remembering and implementing all of the wisdom and strategies that they had learned. We recommend this book in the audio format, using The ABCs of Money and Put Your Money Where Your Heart Is as textbooks.
*Free teleconferences, blogs and online community.
You can join me in a monthly teleconference, in my money blogs and access daily money tips. I frequently post links to relevant videos and articles on my Twitter and Facebook pages, and always post when a new blog is up or a teleconference is scheduled. Check out the links below for each page that you should consider following and visiting on a regular basis. If you have a suggestion, hot tip, investor alert or a question for the monthly teleconference, please tag me with it on Twitter or Facebook, or email Heather @ NataliePace.com.
Feel free to start your own conversations and share Stock Report Cards on our Facebook.com page.
Monthly Teleconferences: http://www.BlogTalkRadio.com/NataliePace
Money, Personal Finance, Investor Alerts and Hot Stocks Blogs: http://NataliePace.com/Blog
Sustainability Blog: https://Medium.com/@NataliePace/
*Private, prosperity coaching
This is your chance to make sure that you understand how our time-proven systems in budgeting and investing can apply to your own personal situation. Private prosperity coaching packages can be a great, affordable way to get your life on track. We recommend that you attend a retreat and learn the basics first, so that the private coaching can be more effective. Call 310-430-2397, if you’re interested in learning more.
Our 3-day Investor Educational Retreats offer the ABCs of Money that we all should have received in high school, taught by a No. 1 stock picker. You can find additional information about the next retreat on the home page at http://www.NataliePace.com/. The next retreat will be Oct. 13-15, 2017 in Southeastern Arizona – our Old West Financial Empowerment and Healing Retreat. This is our most affordable retreat. Receive the best price if you register by July 31, 2017. Receive a complimentary private, prosperity coaching session (value $300), when you register by June 30, 2017.
Wonder what news I read? How I know what is happening before it hits the headlines? How I am able to identify great companies before they get a Buy rating from the analysts? Learn my tricks, so that you can match my results. If you wait for the headlines, it’s too late to act and to protect yourself. The Master Class is available to volunteers and repeat retreat attendees only.
Recent Blogs To Check Out
Will Congress Raise the Debt Ceiling in Time?
The Debt Ceiling Must Be Raised By August.
The SnapChat IPO
Penny Pot Stocks
Important Disclaimer: Natalie Pace is not a broker or a financial advisor. She doesn't sell financial products. She is a bestselling author and has been ranked the #1 stock picker. She offers financial education and the ABCs of Money that we all should have received in high school.
Will Congress Raise the Debt Ceiling Before the Summer Recess? How will this affect the U.S. economy, and your income and nest egg?
The House Freedom Caucus will not approve a clean debt ceiling, according to their press release, issued on May 24, 2017. Here are the demands of the Freedom Caucus, which is chaired by Representative Mark Meadows (R: North Carolina).
We oppose any clean raising of the debt ceiling, we call for the debt ceiling to be addressed by Congress prior to the August Recess, and we demand that any increase of the debt ceiling be paired with policy that addresses Washington’s unsustainable spending by cutting where necessary, capping where able, and working to balance in the near future.
This puts the far right in opposition to Democrats, who have called for a clean debt ceiling bill. Treasury Secretary Mnuchin requested for politics to be put aside for now to get the Debt Ceiling passed before Congress breaks for summer. Twice Secretary Mnuchin was pressed to support a clean Debt Ceiling bill, and twice he iterated that was his preference.
However, the White House economic team, headed by Gary Cohn and Mick Mulvaney, wants the Debt Ceiling to be accompanied by a debt reduction and spending reform plan. National Economic Council director Cohn and White House budget director Mulvaney, who founded the Freedom Caucus, have both spoken in interviews this past week assuring Americans (and the world) that the Debt Ceiling will get passed and that there will be no default on payments. However, Mulvaney has also made it clear that The White House Administration would “like to see things attached to it that drive certain spending reforms and debt reforms in the future.”
Paul Ryan has little choice, but to go along with the Freedom Caucus. Without their member votes, he will be unable to get the Debt Ceiling raised, unless he writes a bill that caters to the Democrats. Speaker John Boehner went around the Freedom Caucus, and used Democratic support to raise the Debt Ceiling in October of 2015. It cost Speaker Boehner his job. Speaker Ryan could conceivably craft a bill that would get all of the Democrats and a small number of Republicans on his side to get it passed. However, the key number here might not be the roll call. It’s more likely to be Ryan’s age. Speaker John Boehner was 65 when he committed political suicide – a time when he was ready to retire. Speaker Paul Ryan is only 47 years old. Speaker Ryan has been in office since 1999 – for almost two decades. It’s hard to imagine him doing something that would cost him his job.
The Debt Ceiling bill is bound to include concessions that the Democrats will find it tough to swallow. However, there is another massive problem. All of this must be done before Congress breaks for summer. If they get too close to the X date – the date when we run out of money to pay our bills – then the U.S. risks a credit downgrade from both Fitch and Moody’s. The Debt Ceiling was hit on March 15, 2017. Secretary Mnuchin has been using extraordinary means to pay bills since then, but warned that tax receipts were weaker than anticipated. This put X date before the Summer Break, rather than fall.
In August of 2011, when the U.S. credit was downgraded by Standard and Poor’s after coming too close to the X date, gold soared to its all-time high and stocks sank. Stocks did ultimately recover. However, that was the third year in the bull market cycle, and Moody’s and Fitch Ratings did not downgrade the U.S. credit from its AAA rating. 2017 is entering the 9th year of the bull market – a milestone that is very difficult to achieve. The last two times the economy went 8 years without a correction, the losses were catastrophic. The Dow Jones Industrial Average lost 55% in the Great Recession and the NASDAQ Composite Index lost 78% in the Dot Com Recession (and took 15 years to recover).
A political log jam will cause a flood of distress in the world economic system and a downgrade to the U.S. credit by both Moody's and Fitch Ratings. The Powers that Be, both sides of the aisle, understand this. However, the sheer weight of the debt might drown the debate more than investors, and the politicians, are expecting.
One thing is for sure. Protecting what you have is your most important job in 2017, just as it was in 2008 and 2000. That is why I’ve scheduled my Florida Financial Empowerment Retreat for Jun 10-12, 2017 – in plenty of time to get safe before the Debt Ceiling starts dominating the headlines. If you wait until the headlines heat up, it will be too late to protect yourself. Those people who used my Easy-as-a-Pie-Chart Nest Egg Strategies earned gains in the last two recessions, and have outperformed the bull markets in between. These strategies also save thousands in your annual budget! Meaning you can live a richer life today, provide far better for tomorrow and enjoy more bucket list vacations. If you’re employing Buy and Hold, then you are riding the Wall Street rollercoaster, and are as vulnerable today as you were in 2000 and 2008. Call 310-430-2397 to get started on your Debt Ceiling-proof asset protection plan now.
FYI: I first warned that this Debt Ceiling crisis could be problematic, and that the U.S. AAA credit rating was at risk, on March 16, 2017. Click to view that blog. Check out other important updates regularly at http://www.nataliepace.com/blog.
Debt Ceiling Must Be Raised By August
On May 24, 2017, Treasury Secretary Mnuchin warned the House Ways & Means Committee that the Debt Ceiling must be raised by August, before Congress goes on Summer Break. What does this mean to you, your investments and your future?
5 Things the Powers That Be Aren’t Telling You About Our Economy
Here are the details, and how these issues affect you now and in the years to come.
1. Congress must raise the Debt Ceiling by August, Before the Summer Break. May 24, 2017, just a few days before Memorial Day, Treasury Secretary Steven Mnuchin testified before the House Ways and Means Committee. At least two different times, he emphasized that the Debt Ceiling should be raised before Congress leaves for the summer break. He said, “It is absolutely important that this is passed before the August recess. As far as I’m concerned, the sooner, the better.” The same day, White House Budget Director Mick Mulvaney told the House Budget Committee that “The [tax] receipts are coming in slower than expected.”
What does this mean for you? Not a whole lot in the near term, if Congress raises the Debt Ceiling in June. If the process is drawn out or gets to close to X date (the date when the Treasury Department can’t make payments to Treasury Bill holders, government employees and/or Social Security recipients), then the U.S. risks a credit downgrade from both Fitch and Moody’s. If that happens, it could be a serious problem, with pandemic economic consequences, beginning as early as August.
Other world currencies are gaining strength on the IMF Currency Composition of Foreign Exchange Reserves. The Chinese renminbi was added to the SDR basket of currencies in 2016. The Australian and Canadian dollars are increasing as global FOREX reserve holdings. The U.S. dollar currently makes up 46.8% of the total FOREX reserves (according to the IMF). (The IMF data grossly misrepresents the power of the Chinese renminbi, and the trade exchanges that are going on between Russia and China directly, in their own currencies.) As the U.S. debt continues to balloon, this will continue to force pressure on the buying power of the dollar. Basic supply and demand tells you that a weaker dollar translates into more dollars needed to purchase the same thing. That would put even more pressure on the debt, which will start experiencing larger interest payments in the years to come (no matter what). Switching from the dominance of the U.S. dollar to a basket of world currency is happening incrementally. The Powers That Be are trying to prevent it from becoming a snow ball.
The Bottom Line: Cash, though safer than bonds and Money Market Funds, is losing buying power. Safe, income-producing hard assets that you purchase for a good price are a better idea. That’s why we spend a full day on this topic at the Investor Educational Retreat. (Call 310-430-2397 or email Heather @ NataliePace.com to learn more.)
2. Social Security has been cash negative since 2010, and is predicted to run dry in 2034 (in 17 years). Disability Insurance is borrowing from Social Security because it dried up in 2016. $5.5 trillion of the current $20 trillion in debt is social security debt (and climbing). What is a little distressing about these facts is that they are not part of the public debate. In fact, Representative Kevin Brady, the Republican chairman of the House Ways and Means Committee, noted that Medicare and Social Security are the biggest drivers of our debt, yet were absent from Treasury Secretary Mnuchin’s statement dated May 24, 2017, as was any mention of the urgency of raising the Debt Ceiling as soon as possible.
3. GDP Growth is Predicted to Be 2.1-2.3% in 2017 and 2.1-2.6% in 2018, not 3%. Most predictions have the growth under 2% in the years thereafter. (No one ever predicts a recession, until after it has happened.) Meanwhile, The White House Administration and Treasury Department are using 3% GDP growth as rationale for making their tax cuts work. Here’s what Fitch Ratings’ Charles Seville had to say about this (in an email to the press dated May 24, 2017), “The President’s Budget’s proposal to eliminate the federal deficit and reduce the debt/GDP ratio over 10 years rest on an optimistic long-run growth assumption of 3%, which is unlikely to be realized given slowing growth in the labor force.” Mr. Seville is senior director and lead analyst on the U.S. sovereign rating.
The GDP growth in the 1st quarter of 2017 was 1.2%. The prediction for the 2nd quarter is currently 3.8%! (Woo hoo! If those predictions hold true.) We will get new projections from the Federal Reserve Board on June 14, 2017, when they have their next meeting.
We all want a robust economy, strong jobs and less taxes. The basis of a strong economy is innovation and inventing/building the products of tomorrow that the world can’t live without.
4. The Current Administration’s Tax Cuts Help (A Little) in the Short Term, but are predicted to hurt in the Medium and Long Term. And they aren’t expected to get us to 3% GDP growth. Who doesn’t like lower taxes? People and companies all benefit. The problem is that with $20 trillion in debt, when the government cuts its income (with the tax breaks), it can’t pay off its debt. More military spending also equates with more disability and medical claims from young men. Up to 35% of Iraq/Afghanistan Veterans suffer from PTSD, and over one million veterans from those wars were injured. (The VA stopped publishing data on injured veterans in 2013.) The disability insurance went broke in 2016, and is borrowing from Social Security. Tax cuts mean even more borrowing to try and make ends meet – a recipe for disaster. When cutting taxes and increasing military spending is prioritized at the expense of education and investments that fuel desirable, new industries, then GDP growth is held back by the inability to pay what we already owe and increased social and financing costs.
5. Cash is not the safest investment in today’s Debt World, though it is better than bonds and money market funds.
Bonds have lost money over the last decade and are vulnerable in the years to come. Credit risk (bankruptcies and restructurings, ala Detroit, Puerto Rico and the retail stores going belly-up) and interest rate risk are both concerns. Money market funds now have redemption gates and liquidity fees. When currency moves happen, cash can lose buying power overnight. We saw this in the fall of the euro and the British pound in the wake of BREXIT, when both currencies lost 15% or more overnight after the vote.
So, what’s safe? Safe, income-producing hard assets that you purchase for a good price. Every word in that sentence is key, particularly now when real estate is higher than it was in 2007, before the Great Recession. Fortunately, our team has identified some great investments that meet these criteria. The annual savings for most people is in the thousands, and for many can add up to tens of thousands in annual cost benefits. That’s the best ROI in today’s world, and also the lowest risk!
In short, if you’re getting your news from the mainstream media and your budgeting and investing strategy from salesmen and debt collectors, you’re as vulnerable today as you were in 2007. In the Great Recession, stocks lost 55%, 7 million Americans lost their homes and most of the banks, brokerages and insurance companies were bailed out.
Wisdom is the cure. Call 310-430-2397 to get access to budgeting and investing strategies that have worked since 1999 – earning gains in both of the last two (devastating) recessions and outperforming the bull markets in between. If you want to be sure to implement these strategies before August, then attend the June 10-12, 2017 Financial Empowerment Retreat in Cocoa Beach, Florida.
About Natalie Pace
Natalie Wynne Pace is the co-creator of the Earth Gratitude project and the author of the Amazon bestsellers The Gratitude Game, The ABCs of Money and Put Your Money Where Your Heart Is (aka You Vs. Wall Street). She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical).
Natalie Pace is the co-creator of the Earth Gratitude Project and the author of The Gratitude Game, The ABCs of Money and Put Your Money Where Your Heart Is. She blogs on Huffington Post and Medium, and is a frequent guest contributor to national news shows and magazines. She has been ranked the No. 1 stock picker, above over 830 A-list pundits, by an independent tracking agency, and has been saving homes and nest eggs since 1999.