Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Signs the "End of America" Is Nearing, Buy and Hold Gold

Interest-Rates / US Bonds Jan 14, 2011 - 06:14 AM GMT

By: DailyWealth

Interest-Rates

Best Financial Markets Analysis ArticleDan Ferris writes: I keep getting subscriber e-mails asking me what good it is to buy stocks when the U.S. dollar will soon be destroyed, taking the value of most equities with it.

This question is a better one now than it's ever been in my lifetime.


I remember many years ago, in the 1980s and early 1990s, when I started investing on my own. Back then, I often read arguments by various gold bugs and libertarian-leaning economists about how the U.S. dollar was on a path to total destruction. Even then, I was often reminded that all fiat currencies meet the same fate, and that the dollar would be no different.

Fast-forward a few years to 1997, when I started communicating that same message for a living. Though I remained more concerned with other things, I kept revisiting this message. I kept thinking the Fed's actions would have dire financial consequences for all of us... but for about 10 years, nothing apocalyptic happened. Every time it looked like the end was finally nigh and the day of economic, political, and financial reckoning was upon us, the Fed would ease, the market would rebound, and away we went on another bullish tear.

But at long last, it seems as though we've finally arrived at the point of no return. Anyone who lends the U.S. government a penny at this point is simply suicidal.

And you don't have to guess about this, either. Listen to the market. It's trying hard to tell you something very important...

More than once, I've said late 2008 was the blow-off top of a multi-decade bull market in Treasury bonds. That's still correct, as interest rates continue to make higher highs and higher lows. Treasury bond prices move opposite to interest rates. So they're making lower highs, and soon, I expect, even lower lows.

Thirty-year U.S. Treasury bonds were yielding as little as 3% in late 2008. Today, they're yielding over 4.5% – an enormous move. If interest rates double in the next year or two, it won't surprise me a bit.


Big moves down in U.S. Treasury bond prices aren't supposed to happen. You're not supposed to think of Treasury bonds as risky. They're where you go when you're afraid of risk.

It's not just the federal government in trouble. The iShares S&P National Municipal bond fund has collapsed. Every time it looks like it's rebounding, it bounces to a lower step. Its recent 52-week low is 10% below its 52-week high. That's an enormous move for municipal bonds.

That kind of drop isn't supposed to happen to municipal bonds. All my life, muni bonds were the second safest investment in the world, next to U.S. Treasury debt. Now, they're loaded with risk, and everybody either knows it, or is starting to get wind of it.


Finally, after years of believing the collapse of the U.S. dollar, though inevitable, was apparently far in the future... it's here.

The crisis so many people have thought and written about for so many years has finally arrived on our doorstep. It's no longer appropriate to say we're worried about the world our children or grandchildren will inherit. We need to be worried about ourselves.

Like any good demon, the destruction of the U.S. dollar has arrived with a smile on his face, in the form of an ebullient stock market. The S&P 500 has rallied 75% since early 2009.

Focused, as usual, on the rearview mirror, investors are way too bullish according to every stock market sentiment indicator I've seen. The American Association of Individual Investors Sentiment Survey, the Investors Intelligence survey of newsletters, Ned Davis Research's Crowd Sentiment Poll... they all point in the same direction: The great horde of individual stock market dabblers is in a hypnotic trance, deliriously happy in its belief that stocks can and will rise to the moon. The Fed is selling pure B.S., and the herd is buying it.

At the risk of seeming callous or unconcerned for my fellow man (the poor sod), this is the stuff of which Opportunity (with a capital "O") is made. The first bet is one we've encouraged you to make dozens of times...

Gold, the anti-dollar, has been telling us for 10 straight years that the crisis is coming. Gold was around $252 an ounce in the summer of 1999. It's now around $1,350. Gold is up fivefold against the U.S. dollar. That's not a great statement of confidence in the world's reserve currency. And it's important that we continue to pay attention to it. It's something you should notice – and something the government, the Fed, CNBC, and Wall Street hope you don't notice.


Buy gold. Hold it. Caress it. Love it. Hide it. But don't sell it.

With the (allegedly) safest bonds in the world crashing, stocks clearly overvalued, and gold near new all-time highs, it's not hard to figure out what to do. Own gold and silver bullion. Own natural resource stocks. Hold plenty of cash and sell fairly valued and overvalued stocks.

The market is telling you tough times are here. Stick with my advice and you'll protect yourself and even profit while others lose... and wonder what the heck is going on.

Good investing,

Dan Ferris
P.S. In my Extreme Value newsletter, I've been studying and preparing my readers for the coming crisis. In my latest issue, I feature two positions that will profit on a market correction and an increase in the value of hard assets – both likely consequences of dollar destruction. And I show readers exactly what actions to take as the value of Treasurys and municipal bonds crash. Learn how to get immediate access to my research here.

http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2010 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Daily Wealth Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in