Best of the Week
Most Popular
1.Stock Market Continues Defying Gravity, Dow New All Time High - Nadeem_Walayat
2.America Superpower 2016 - Ian Bremmer
3.The US Dollar and the Precious Metals Complex - Rambus_Chartology
4.UK Immigration Crisis Could Prompt BREXIT, Propelling Britain Out of EU Despite German Factor - Nadeem_Walayat
5.The “Real Flash Crash” Will Scare You to Death - Shah Gilani
6.Gold Price Trend Forecast - Bob_Louka
7.UK Deflation Warning - Bank of England Economic Propaganda to Print and Inflate Debt - Nadeem_Walayat
8.Gold Lifeboat to Global Economies “Titanic Problem” Warn HSBC - GoldCore
9.Will Interest Rates Ever Rise? - BATR
10.Who’s Killing the Stock Market? - Shah Gilani
Last 5 days
This New Currency Could Wipe Out the Euro - 28th May 15
US Housing Market - Something Smells Fishy - 28th May 15
US Economy – Semi b2b Amps Up its Trend - 28th May 15
U.S. Fed Exported QE Travesty: Meet The BLICS Nations - 28th May 15
World War D—Deflation - Secular Bear Markets Analysis - 28th May 15
George Soros Warns of “Third World War” - 28th May 15
Why You Shouldn't Try to Invest Like Warren Buffett - 28th May 15
Stock Markets Buy and Hold is Back! - 28th May 15
We're Now Frighteningly Vulnerable to a Bond Market Crash - 28th May 15
Austerity, Economics and Religion - 28th May 15
National Holidays London and the Magic of Legoland UK Review - 27th May 15
Imminent Stocks Bear Market Signaled by Dow Theory ... - 27th May 15
Gold Price Has Bottomed – More Evidence - 27th May 15
Three Reasons You Shouldn’t Try to Invest Like Warren Buffett - 27th May 15
Gold Is “100% Guarantee from Legal and Political Risks” States Russian Central Bank - 27th May 15
Don't Drown in the Sea of Global Debt - 27th May 15
Three Reasons Why Carl Icahn Is Wrong About Apple Stock - 27th May 15
Crude Oil Price Stochastic Signals - 26th May 15
Why the Stock Market Will Crash - 26th May 15
GDP, Inflation, Employment Economic Statistics: It’s All a Lie - 26th May 15
Introduction to Peak Food - 26th May 15
Should We Dump the Euro? - 26th May 15
A Geopolitical Net Assessment of Europe - 26th May 15
Stock Market Top in Place? - 26th May 15
Best Cash ISA SBI 2.3% - 2.8 Year Fix, UK Interest Rates 2016 - 26th May 15
China Sets Up Gold Bullion Fund For Central Banks - 25th May 15
Is The Silver Trade Getting Crowded? - 25th May 15
Money Murder Mystery: Who Killed the Stock Market? - 25th May 15
Why Do We Celebrate Rising U.S. House Prices? - 24th May 15
Mario Draghi’s Slippery Downward Slope - 24th May 15
Gold : Truth is Stranger than Fiction - 24th May 15
Facebook Stock Price Forecast - 24th May 15
Make a Killing on the Coming Energy "Debt Bubble" - 24th May 15
Stock Market SPX Uptrend Inflection Point - 23rd May 15
What You Know for Certain - Huge Demand for Gold And Silver - 23rd May 15
Are We in Another Credit Bubble? And Is It Different than Before? - 23rd May 15
The “Real Flash Crash” Will Scare You to Death - 23rd May 15
Venezuela: No Rule of Law, Bad Money - 23rd May 15
Robots That Can Beat the Market by 100% - 23rd May 15
Why Shake Shack Stock Is a Bad Investment - 23rd May 15
Gold Price Primary Driver Bullish - 23rd May 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Biggest Debt Bomb in History

The "Fiscal Cliff" Story You're Not Hearing from the Mainstream Press

Stock-Markets / Financial Markets 2012 Nov 26, 2012 - 08:16 AM GMT

By: DailyWealth

Stock-Markets

Dan Ferris writes: Investors are scared...

In fact, they're even more scared today than they were in late 2008.

That's hard to believe... In 2008, the market was down close to 50% from its late-2007 highs. The housing market was crushed. Bear Stearns, Merrill Lynch, Lehman Brothers, and AIG had all gone out of business in one way or another. Officials from the Federal Reserve and U.S. Treasury were running around like chickens with their heads cut off... bailing out losers in the financial industry.



It felt like the end of the world.

For many investors, it feels like the end of the world... again. And that gives investors who can remember just one important idea about the market a tremendous advantage...

The media has whipped investors into a frenzy over the "fiscal cliff." The "fiscal cliff" is a shorthand term for the government spending cuts, tax increases, and a reduction to the U.S. federal budget deficit that – unless Congress does something to stop it – will automatically go into effect at midnight, December 31.

Of course, fear sells, so I'm not surprised the media is playing it up so much. But you'd be insane to pay much attention to it. It's a smokescreen.

Instead, pay attention to the trend I told you about last year. My managing editor once told me it might be the most important concept our readers will ever learn:

To succeed in the stock market, you must believe that shopping trumps politics...

That's the simplest (and maybe the crudest) way to say that what happens in the business world is more important to your daily life and the daily lives of everyone in America than what happens in the White House or the Capitol.

The amount of shopping for hamburgers at McDonald's is more important than the debt ceiling debate. The amount of shopping for beer at the local convenience store is more important than any contest for the Republican presidential nomination. And the number of shoppers occupying the aisles of Target and Wal-Mart is more important than the number of protestors occupying Wall Street.

Don't believe it? Think of all the horrible things that happened in the 20th century: the Great Depression, two World Wars, and the end of gold-backed U.S. dollars. Despite all that and more, U.S. stocks – as tracked by Dimson, Marsh, and Staunton in their excellent book, Triumph of the Optimists – appreciated about 1.5 million percent.

Last year, the big bogeyman wasn't the fiscal cliff... it was the debt ceiling. President Obama called the debt ceiling issue "financial Armageddon." Treasury Secretary Tim Geithner called it a "catastrophe." Federal Reserve Chairman Ben Bernanke said it was "calamitous."

But I told you it was just "The Great Debt Ceiling Hoax."

And what happened? Well, investors got scared... Stocks bottomed out in early October 2011... And the market is now about 26% higher than it was then.

To put an end to the phony drama of the debt ceiling hoax, President Obama signed the Budget Control Act of 2011 into law on August 2, 2011. That law created what's now being sold to us as the "fiscal cliff."

So guess what they'll do this time? The most likely outcome is that our government will create another law to prevent the so-called fiscal cliff from ever arriving. But even if it does... it will never be as important as the idea of buying great companies at good prices... and then holding them for years, while collecting ever-increasing dividends.

No matter what happens with the "fiscal cliff," people will continue to drink Coke. They'll continue to use computers powered by Microsoft software. They'll continue to eat burgers from McDonald's. They'll continue to use IT services from IBM.

If you want an idea that'll help you cut through the noise and make great, winning bets when everybody else is panicked, this is it.

Business trumps politics. It's been true for at least a century now... and it will continue for at least a few more.

Good investing,

Dan Ferris

Further Reading:

Last year, Dan explained why the debt ceiling was a government hoax... and showed why the government's credit rating was a phony issue. Learn the simple steps Dan says you can take to protect yourself here: Don't Be Distracted by the Next Great Government Hoax.

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 2011 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

© 2005-2015 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

Biggest Debt Bomb in History