Best of the Week
Most Popular
1. Climate Change Mass Extinction - Birds, Bees and Bugs: Going Going Gone - Richard_Mills
2.A Purrrfect Gold Price Setup! - Peter_Degraaf
3.Who Finances America's Borrowing? Recession Indicator for Independent Thinkers Part 2 - F_F_Wiley
4.America’s One-sided Domestic Financial War - Raymond_Matison
5.Gold Price Summer Doldrums - Zeal_LLC
6.Two Key Events Will Unleash Gold - Jim_Willie_CB
7.Billionaire Schools Teacher in NAFTA Trade Talks - Richard_Mills
8.Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - Jeb_Handwerger
9.Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - Troy_Bombardia
10.G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - Chris_Vermeulen
Last 7 days
Stock Market Longer-Term Charts Show Incredible Potential - 18th Jul 18
A Better Yield Curve for Predicting the Stock Market is Bullish - 18th Jul 18
U.S. Stock Market Cycles Update - 18th Jul 18
Cayton Bay Hoseasons Caravan Park Holiday Summer 2018 Review - 18th Jul 18
What Did Crude Oil - Platinum Link Tell Us Last Week? - 17th Jul 18
Gold And The Elusive Chase For Profits - 17th Jul 18
Crude Oil May Not Find Support Above $60 This Time - 17th Jul 18
How Crazy It Is to Short Gold with RSI Close to 30 - 16th Jul 18
Markets Pay Attention Moment - China’s Bubble Economy Ripe for Bursting - 16th Jul 18
Stock Market Uptrend Continues, But... - 16th Jul 18
Emerging Markets Could Be Starting A Relief Rally - 16th Jul 18
(Only) a Near-term Stock Market Top? - 16th Jul 18
Trump Fee-Fi-Foe-Fum Declares European Union America's Enemy! - 16th Jul 18
US Stocks Set For Further Advances As Q2 Earnings Start - 15th Jul 18
Stock Market vs. Gold, Long-term Treasury Yields, 10yr-2yr Yield Curve 3 Amigo's Update - 15th Jul 18
China vs the US - The Road to War - 14th Jul 18
Uncle Sam’s Debt-Money System Is Immoral, Tantamount to Theft - 14th Jul 18
Staying in a Caravan - UK Summer Holidays 2018 - Cayton Bay Hoseasons Holiday Park - 14th Jul 18
Gold Stocks Summer Lows - 14th Jul 18
Trump US Trade War With China, Europe Consequences, Implications and Forecasts - 13th Jul 18
Gold Standard Requirements & Currency Crisis - 13th Jul 18
Focus on the Greenback, Will USD Fall Below Euro 1.6? - 13th Jul 18
Stock Market Outlook 2018 - Bullish or Bearish - 13th Jul 18
Rising Inflation is Not Bearish for Stocks - 13th Jul 18
Bitcoin Picture Less Than Pretty - 13th Jul 18
How International Observers Undervalue the Chinese Bond Market - 13th Jul 18
Stocks Trying to Break Higher Again, Will They? - 12th Jul 18
The Rise and Fall of Global Trade – Redux - 12th Jul 18
Corporate Earnings Q2 2018 Will Probably be Strong. What This Means for Stocks - 12th Jul 18
Is the Relative Strength in Gold Miners to Gold Price Significant? - 12th Jul 18
Live Cattle Commodity Trading Analysis - 12th Jul 18
Gold’s & Silver’s Reversals’ Reversal - 12th Jul 18
The Value of Bitcoin - 11th Jul 18
America a Nation Built on Lies - 11th Jul 18
China, Asia and Emerging Markets Could Result In Chaos - 11th Jul 18
Bullish Gold Markets in the Big Picture? - 11th Jul 18
A Public Bank for Los Angeles? City Council Puts It to the Voters - 11th Jul 18
Yield Curve Inversion a Remarkably Accurate Warning Indicator For Economic & Market Peril - 11th Jul 18
Argentina Should Scrap the Peso and Dollarize - 11th Jul 18
Can the Stock Market Close Higher For a Record 10th Year in a Row? - 11th Jul 18
Why Life Insurance Is A Must In Financial Planning - 9th Jul 18
Crude Oil Possibly Setting Up For A Big Downside Move - 9th Jul 18
BREAKING: New Tech Just Unlocked A Trillion Barrels Of Oil - 9th Jul 18
How Trade Wars Penalize Asian Currencies - 9th Jul 18
Another Stock Market Drop Next Week? - 9th Jul 18
Are the Stock Market Bulls Starting to Run? - 9th Jul 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

The Biggest Risk – And Greatest Reward – Facing Your Portfolio Today

Portfolio / Investing 2013 Jan 27, 2013 - 06:23 PM GMT

By: Investment_U

Portfolio

Alexander Green writes: Virtually every American knows Uncle Sam is carrying a gargantuan debt and that we face sharply higher deficits in the future. What you may not know is how bad the situation really is, how much worse it will soon become, how widespread the problem around the world, and how little will be done about it anytime soon.


The consequences are substantial. Everyone knows what eventually happens to an individual who takes on more debt than he can afford: personal bankruptcy. We also know what happens when a company takes on more debt than it can service: corporate bankruptcy. But in the years ahead, we are going to see something most Americans have never experienced or imagined: national bankruptcies.

Greece is at the front of the line. But there are other countries hobbling along behind them and some of the names may surprise you.

This will have far-ranging consequences for global economic growth and the performance of world financial markets. Indeed, this crisis of spending in the public sector of the world’s leading democracies is the single greatest threat facing your portfolio today.

In the next few minutes, you may find my depiction of the problem more than a little depressing. But stick with me. I am not a gloom-and-doomer. Indeed, I intend to reveal something in my next few columns that trumps our ailing public sector problems and represents a titanic investment opportunity. So hear me out.

The Tip of the Iceberg
Let’s start at the beginning…

The U.S. national debt is currently $16.5 trillion. (Both political parties concede it will grow by trillions more over the next few years.) The current debt is so large it doesn’t mean much to the average citizen. So let me put it in perspective. Today’s debt is equal to $145,875 per taxpayer.

Unfortunately, this is only the tip of the iceberg. U.S. unfunded liabilities for Social Security, Medicare, Medicaid and the Prescription Drug Benefit are more than $122.4 trillion. That is equal to $1,084,065 per taxpayer. In other words, if you are an American taxpayer, your personal share of the national debt and current unfunded entitlement liabilities amounts to over $1.2 million.

(Will that be check or cash?)

And you will owe more tomorrow… and the day after. That is why some of us snicker when well-meaning but uninformed folks say we just need to chip in and pay a little more in taxes and everything will be ok.

Republicans can blame Obama and Democrats can blame George W. all they want. The truth is both parties have acted with gross irresponsibility and while whoever is president is complicit – since he signs legislation into law – the real blame falls on Congress. It is the first branch of government and the center of real power. Congress writes the laws, levies taxes, and authorizes the borrowing of money.

Not surprisingly, surveys show that Americans are deeply dissatisfied with Congress. The Gallup organization recently found that 90% of us disapprove of the way Congress is handling its job. (No word what planet the other 10% are living on.) A New York Times/CBS News poll found that 80% of Americans believe members of Congress are more interested in serving special interests than the people they represent.

Yet senators and House members know something most Americans don’t: It doesn’t matter what voters say, or how long they vent, or how much they curse, or what they tell pollsters. It only matters whether and how they vote.

Forty percent of eligible voters in the United States don’t cast a ballot. According to a 2012 study from the Institute for Democracy and Electoral Assistance, the United States ranks No. 120 of the 169 countries for which data exists for voter turnout. That puts us just beneath the Dominican Republic, where the annual GDP per capita is $9,450.

If just a small percentage of these Americans exercised their right to vote, election results might be dramatically affected. But they don’t vote, can’t be bothered, and most of them never will. This is a long-standing reality, not a new one.

But let’s also look at the folks who do turn out, the angry 90% who are disgusted with how Congress is handling its business. Turns out that – for all their huffing and puffing – they mellow out considerably when they get to the polls. Even in 2012 – when our approval of Congress was near an all-time low – 91% of incumbents were re-elected.

This is no anomaly. Only rarely are less than 90% of House members or 80% of senators re-elected. Despite their abysmal record, members of Congress enjoy some of the best job security in America. Apparently, most Americans loathe Congress but believe their guy (or gal) is doing a swell job.

We can yack all day about the advantages of incumbency: money, power, name recognition, etc. But that’s mostly a bunch of hooey. Surveys regularly show that less than a third of citizens can recall the name of their representative and even fewer remember anything he or she has done for the district.

So the first thing to tell voters incensed about the job Congress is doing is this: Despite their negligence and fiscal irresponsibility, we keep sending the same clowns back to the Hill.

This is only the first part of the problem, however. In my next three columns, I’ll outline why this won’t change, how this increases the chances of financial instability in the future and, perhaps most surprising of all, why this is actually creating one of the biggest investment opportunities of your lifetime.

Stay tuned…

Alex

Source : http://www.investmentu.com/2013/January/biggest-risk-and-greatest-reward.html

by Alexander Green , Oxford Club Investment Director Chairman, Investment

http://www.investmentu.com

Copyright © 1999 - 2013 by The Oxford Club, L.L.C 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 Investment U, Attn: Member Services , 105 West Monument Street, Baltimore, MD 21201 Email: CustomerService@InvestmentU.com

Disclaimer: Investment U Disclaimer: Nothing published by Investment U 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 investment 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 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Investment U Archive

© 2005-2018 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