Best of the Week
Most Popular
1. Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - Nadeem_Walayat
2.Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - James Burgess
3.Gold Price Trend Analysis - - Nadeem_Walayatt
4.The Beginning of the End of the Dollar - Richard_Mills
5.Stock Market Trend Forecast Update - - Nadeem_Walayat
6.Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - Troy_Bombardia
7.Precious Metals Sector: It’s 2013 All Over Again - P_Radomski_CFA
8.Central Banks Have Gone Rogue, Putting Us All at Risk - Ellen_Brown
9.Gold Stocks Forced Capitulation - Zeal_LLC
10.The Post Bubble Market Contraction Thesis Receives Validation - Plunger
Last 7 days
Palladium Shortages Expose Broken Futures Markets for Precious Metals - 9th Dec 18
Is an Inverted Yield Curve Bullish for Gold? - 9th Dec 18
Rising US Home Prices and Falling Sales - 8th Dec 18
Choosing Who the Autonomous Car Should Kill - 8th Dec 18
Stocks Selloff Boosting Gold - 8th Dec 18
Will Weak US Dollar Save Gold? - 7th Dec 18
This Is the End of Trump’s Economic Sugar High - 7th Dec 18
US Economy Will Deteriorate Over Next Half Year. What this Means for Stocks - 7th Dec 18
The Secret Weapon for Getting America 5G Ready - 7th Dec 18
These Oil Stocks Are a Ticking Time Bomb - 7th Dec 18
How Theresa May Put Britain on the Path Towards BrExit Civil War - 7th Dec 18
How easy is it to find a job in the UK iGaming industry? - 6th Dec 18
Curry's vs Jessops - Buying an Olympus TG-5 Tough Camera - 5th Dec 18
Yield Curve Harbinger of Stock Market Doom - 5th Dec 18
Stock Market Crashed While the Yield Curve Inverted - 5th Dec 18
Global Economic Outlook after Trump-Xi Trade War Timeout - 5th Dec 18
Stock Market Dow Plunge Following Fake US - China Trade War Truce - 5th Dec 18
Subverting BREXIT - British People vs Parliament Risks Revolution - 5th Dec 18
Profit from the Global Cannabis Boom by Investing in the Beverage Industry - 4th Dec 18
MP's Vote UK Government Behaving like a Dictatorship, in Contempt of Parliament - 4th Dec 18
Isn't It Amazing How The Fed Controls The Stock Market? - 4th Dec 18
Best Christmas LED String and Projector Lights for 2018 - Review - 4th Dec 18
The "Special 38" Markets You Should Trade ebook - 4th Dec 18
Subverting BrExit - AG Confirms May Backstop Deal Means UK Can NEVER LEAVE the EU! - 3rd Dec 18
The Bottled Water Bamboozle - 3rd Dec 18
Crude Oil After November’s Declines - 3rd Dec 18
Global Economic Perceptions Are Shifting - Asia China Markets Risks - 3rd Dec 18
Weekly Charts and Update on Equity Markets, FX Trades and Commodities - 3rd Dec 18
TICK TOCK, Counting Down to the Next Recession - 3rd Dec 18
Stock Market Key (Short-term) Support Holds - 3rd Dec 18
Stocks Bull Market Tops Are a Process - 3rd Dec 18
More Late-cycle Signs for the Stock Market and What’s Next - 3rd Dec 18
A Post-Powell View of USD, S&P 500 and Gold - 2nd Dec 18
Elliott Wave: SPX Decision Time Is Coming Soon - 2nd Dec 18
Junior Gold Stocks Q3’18 Fundamentals - 1st Dec 18
Little-Known BDC Stocks Thrive Amid Rising Rates and Earn Investors +7% Yields - 1st Dec 18
Ray Dalio: This Debt Cycle Will End Soon - 1st Dec 18
Bank of England Warns UK House Prices 30% BrExit Crash! - 1st Dec 18
Gold Fundamentals Improving but Not Bullish Yet - 30th Nov 18
What the Oil Short-sellers and OPEC Don’t Know about Peak Shale - 30th Nov 18
Global Economic Perceptions Are Shifting Imnplications for Stock Market - 30th Nov 18
The US Economy is Getting Worse. What this Means for Stocks - 30th Nov 18
Trailblazers Leading the Way in Online Reputation Management - 30th Nov 18
The Shift in Trend from Physical Printers to Online Printers - 30th Nov 18
UK House Prices 2019 No Deal BrExit 30% Crash Warning! - 30th Nov 18
Stocks Rallied, New Uptrend? - 29th Nov 18
The Fed Will Probably Stop Hiking Rates in 2019. What’s Next for Stocks - 29th Nov 18
Love. Fear. Inflation. A Precious Metals' Trifecta - 29th Nov 18
GBP/USD – Double Bottom or Further Declines? - 29th Nov 18
Stock Market Santa Rally Still a GO to Dow 27,000? - 29th Nov 18
UK Government and Bank of England BrExit Economic Armageddon Propaganda - 29th Nov 18
Why the Crude Oil Price Collapsed to $50 - 28th Nov 18
Gold Joins the Decline – the Earth is Shaking - 28th Nov 18
Watch This Picture As Asset Prices Fall - 28th Nov 18
GE’s Stock Price Crash Holds an Important Lesson About Investing - 28th Nov 18
5 Rules for Successful Trading - 28th Nov 18
Dollar Trend Imposes: EURUSD to Fall to 1.11 - 28th Nov 18
Gold, Original Money, Fiat Money - 28th Nov 18
When Will the Stocks Bull Market End? - 28th Nov 18
Looking ahead: Why the Smart Money is Investing in Green Energy - 28th Nov 18
The Yield Curve Will Invert Soon. What’s Next for the Stock Market - 27th Nov 18
Silver Trading and the Hands of a Broken Clock - 27th Nov 18
What's Inside SMIGGLE Christmas Advent Calender 2018 - 27th Nov 18
Investing in Recession Proof Trailer Parks - 27th Nov 18
The Advantages and Disadvantages of Debt Consolidation - 27th Nov 18
GDX, This Most-Hated Stock Could Return You 140% in Just a Few Months - 27th Nov 18

Market Oracle FREE Newsletter

How You Could Make £2,850 Per Month

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