Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
UK Coronavirus Infections and Deaths Projections Trend Forecast - Video - 28th Mar 20
The Great Coronavirus Depression - Things Are Going to Change. Here’s What We Should Do - 28th Mar 20
One of the Biggest Stock Market Short Covering Rallies in History May Be Imminent - 28th Mar 20
The Fed, the Coronavirus and Investing - 28th Mar 20
Women’s Fashion Trends in the UK this 2020 - 28th Mar 20
The Last Minsky Financial Snowflake Has Fallen – What Now? - 28th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20
UK Supermarkets Coronavirus Panic Buying, Empty Tesco Shelves, Stock Piling, Hoarding Preppers - 22nd Mar 20
US Coronavirus Infections and Deaths Going Ballistic as Government Start to Ramp Up Testing - 21st Mar 20
Your Investment Portfolio for the Next Decade—Fix It with the “Anti-Stock” - 21st Mar 20
CORONA HOAX: This Is Almost Completely Contrived and Here’s Proof - 21st Mar 20
Gold-Silver Ratio Tops 100; Silver Headed For Sub-$10 - 21st Mar 20
Coronavirus - Don’t Ask, Don’t Test - 21st Mar 20
Napag and Napag Trading Best Petroleum & Crude Oil Company - 21st Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy - Government PANICs! Sterling Crashes! - 20th Mar 20
UK Critical Care Nurse Cries at Empty SuperMarket Shelves, Coronavirus Panic Buying Stockpiling - 20th Mar 20
Coronavirus Is Not an Emergency. It’s a War - 20th Mar 20
Why You Should Invest in the $5 Gold Coin - 20th Mar 20
Four Key Stock Market Questions To This Coronavirus Crisis Everyone is Asking - 20th Mar 20
Gold to Silver Ratio’s Breakout – Like a Hot Knife Through Butter - 20th Mar 20
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis - 20th Mar 20
Is This What Peak Market Fear Looks Like? - 20th Mar 20
Alessandro De Dorides - Business Consultant - 20th Mar 20
Why a Second Depression is Possible but Not Likely - 20th Mar 20

Market Oracle FREE Newsletter

Coronavirus-bear-market-2020-analysis

Refugee Crisis is a Far Bigger Risk to Your Money than the Fed or China

Stock-Markets / Refugee Crisis Sep 17, 2015 - 11:38 AM GMT

By: ...

Stock-Markets

MoneyMorning.com Keith Fitz-Gerald writes: Today we’re going to talk about the 800 pound gorilla in the room. No politician will touch it and no citizen wants to acknowledge it in an era where political correctness has run amok.

But we have to.

“It” is Europe’s desperate refugee crisis, and “it” is by far the single biggest threat to your money today. You’re not hearing about this at the moment but you will in the months ahead.


The situation is considerably more dangerous than a potential Fed rate hike and much more worrisome than China’s economic train wreck. As was the case in 2007 with the Financial Crisis when most viewed it as a localized $300 billion problem and I warned you otherwise, the refugee crisis is a truly global situation, the seriousness of which is unparalleled in modern times.

I have no doubt you have your feelings on the matter just as I have mine. Whether we agree or disagree is moot.

In my role as Chief Investment Strategist for Money Map Press, I do not have the luxury of taking one side or another. My job is to help you protect your money and profit no matter what events are at hand.

That’s what we’re going to talk about today. Then, of course, I’m going to give you my take on what this means for your money and a few specific investments you can make right now to help tame an otherwise unruly situation.

Here’s what no one understands about the refugee crisis… yet.

Put very simply, the refugee crisis is the largest single human movement in Europe since WWII and a religio-sociographic earthquake the likes of which the world hasn’t seen for centuries.

Ultimately, the situation can be a good one.

That’s because adept, intelligent politicians can turn social, political and economic risks into opportunity. Migrants, for example, can backfill an aging European labor pool, are ready to work, and can help by raising overall birth rates to shore up a shaky demographic pyramid.

Wharton University Professor Robert Meyer notes, for example, that refugee immigration can have long term positives. The highly skilled start businesses while the lower skilled or no-skilled take jobs locals don’t want. That’s what happened in the 1960s when Castro sent people packing for the United States. Today, Meyer observes, at least 40% of the start-ups in Silicon Valley have an immigrant as a founder.

Naturally, this is where things get tricky.

Like many people, I am hard pressed to use intelligent and politician in the same sentence these days. A positive outcome is dependent on positive people.

Right now, Europe is a stunted mess and its citizens, like our own, feel economically insecure. Many are still reeling from the global Financial Crisis of 2008-2009.

Citizen trust is at or near the bottom of the barrel when it comes to entrenched political leaders. If even a single Syrian refugee commits an act of terrorism, there’s going to be hell to pay politically. Not surprisingly, nationalist sentiment is building.

Over the short term, this will be played out as humanitarian concerns collide with austerity policies, housing needs and integration. Already strained public finances are going to get crushed. That’s not yet registered for most people.

If Europe is to survive, its self-interested officials have to involve business leaders and private finance in making rapid policy changes. That’s because business leaders are far more direct than political apparatchiks.

They will make decisions based on skills, benefits and training needs that by their very definition involve a level of segregation. Critics will call foul based on the apparent “discrimination” much the way they have lined up against Donald Trump’s position on Mexican immigration. They’re not the same thing.

One is an economic/humanitarian need while the other is a security risk. Countries that have refused to engage abroad are now going to bear the brunt of that failure. Germany and America, for example, still do not grasp that inaction has led to direct battlefield escalation.

There’s also a corresponding danger inside Europe itself from sleeper agents using millions of refugees as cover for hijrah or immigration jihad. ISIS has openly threatened to flood Europe with 500,000 fake refugees and unlike President Obama’s “red line” chances are they mean it.

I am not surprised that the Bulgarian State Agency for National Security, for example, is already investigating five men – refugees – caught at the Gyueshevo checkpoint with decapitation videos, jihadist prayers and ISIS propaganda on their phones. More will follow.

It’s worth noting that not a single Gulf States nation has taken in refugees citing that the risk of terrorism is too high even as Jordan, Lebanon and Turkey have accommodated an estimated 3 million people. Evidently they know something Europe doesn’t or simply doesn’t yet have the stomach to admit.

There is no concept of “burden sharing” notes Sara Leah Whitson, executive director of Human Rights Watch for the Middle East and Africa to CNBC. “The Saudi, Emirati and Qatari approach has been to sign a check and let everyone else deal with it,” she says. Even so, according to Breitbart, Britain has already donated more than Saudi Arabia, the UAE and Qatar combined throwing in more than £920 million versus a collective £589 million.

Meanwhile, Greece, Italy and France are merely acting as conduits and sending desperate people onward. Hungary, Austria and Germany have clamped down as I write this.

At the end of the day, you can call “it” Islamophobia, unadulterated racism or even xenophobia but the net result is the same – a massive economic impact at a time when Europe is almost totally unprepared to handle a rolling parade of desperation.

Making matters worse, we are talking about potentially millions of people who, by their own admission, are not culturally compatible and who are showing very little if any desire to fit in to the millennia- old civilization Europe enjoys today.

To put this in perspective, Eurostat reports that the EU never settled more than 7,400 refugees a year between 2008 and 2014, despite having a population of 507 million. The United States with a population of 330 million settles only an average of 66,000 refugees a year.

More poignantly, approximately 516,219 non-EU citizens are ordered to return home each year… and, not surprisingly, less than half do.

Source: – Quartz, Eurostat

The staggering numbers involved here suggest that everything from women’s rights, to law, to intellectual freedom… concepts brought forth in the Age of Enlightenment dating from the 1620s to roughly the 1780s… is at risk.

Europe’s got about 60 days to figure things out before the markets do. I say that because it’ll take about that long for quarterly reporting to reflect what’s happening right now.

The short-term effects are already apparent.

Closed borders are causing traffic jams, delaying rail traffic, and overloading local distribution systems. There are huge backups everywhere from border crossings to the Chunnel. Grocers and pharmacies are particularly at risk with their emphasis on just-in-time delivery.

Medium and long-term effects potentially include an even faster decline in earnings than is underway now, a precipitous drop in cross-border business transactions, and a slowdown in manufacturing and purchasing that  boomerangs back to China, one of the EU’s key trading partners.

We’re also going to see nations decrease benefits. You’d think that they’d be increasing them, but actually I think we’re going to see the Total Wealth Unstoppable Trend of Allocation surface rather quickly.

Denmark, for example, has already declared a new “immigration benefit” of 5,945 kroner for single adults with no children. That’s down 45% from the 10,849 kroner that used to be offered to asylum seekers. That nation also published ads in four Lebanese papers declaring the changes in an attempt to stop smuggling before it begins, or at least redirect it to other more generous countries.

Barring a massive policy change and a unified front from EU leaders and the business community, I see two distinct scenarios.

In the short term, U.S. Treasuries are going to remain strong and the dollar gets even stronger as part of a flight to safety. This will confound Yellen for obvious reasons. Funds like the PIMCO Strategic Income Fund (NYSE:RCS) with its yield of 12% are a great place to start, as is the PowerShares DB US Dollar Index Bullish (NYSEARCA:UUP), which will appreciate as the dollar strengthens.

You could short the euro with a choice like ProShares Ultra Short Euro (NYSE:EUO), but do so judiciously knowing that you’re going to be fighting the ECB every step of the way at a time when the euro has already weakened considerably. It’s a crowded trade.

Buy U.S. equities, which are going to absorb global funds. Right now, the logical choices are technology giants like Apple Inc. (NasdaqGS:AAPL) and defense players like Raytheon Co. (NYSE:RTN) because of their role in global growth and built-in defensiveness.

Gold, incidentally, is a non-starter. There’s simply too much manipulation and too much leverage to get a clean trade at the moment. Owning it as part of a properly constructed hedge against interest rates is still valid, though.

Longer term, the economic chaos associated with millions of refugees will result in a good number of bargains in everything from Greek olives to French wine, German cars and Italian leather. Consumers are going to have a field day.

Investors will, too. Rather than target individual companies, swooping in to grab a little of everything makes more sense.

The Fidelity Spartan International (FSIIX) is a solid start, with holdings like Nestle SA, Novartis AG, Bayer AG and Royal Dutch Shell. If ETFs are more your style, consider the Vanguard FTSE Europe ETF (NYSEArca:VGK), which holds a total of 514 stocks, including many of the same top-tier names I’ve just mentioned. Your goal is to pick up the best companies tied into global trends at a deep discount.

In closing, crisis investing is never fun, especially when the crisis in question is not yet fully understood.

But that doesn’t mean “it” has to be a disaster for your money.

There is always opportunity in chaos.

Until next time,

Keith

Source http://totalwealthresearch.com/2015/09/this-is-a-far-bigger-risk-to-your-money-than-the-fed-or-china/

Money Morning/The Money Map Report

©2015 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.


© 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

6 Critical Money Making Rules