She is a low-interest-rate person. She has always been a low-interest-rate person. And I must be honest. I am a low-interest-rate person. If we raise interest rates, and if the dollar starts getting too strong, we’re going to have some very major problems.

— Donald Trump


BALTIMORE – With startling clarity, the presumptive Republican presidential nominee described himself… and Fed chief Janet Yellen. 

But he could have just as easily been talking about his rival in this year’s presidential elections, Hillary Clinton.

Planet Debt

Donald Trump had already gone broke – twice – by the time Bill Clinton took office. But then, the combination of lower interest rates and rising asset prices saved him.

And extraordinary abundance and prosperity of the Clinton years owes little to Mr. and Mrs. Clinton and much to the fact that Alan Greenspan had inaugurated his famous “Greenspan Put” in 1987.

Greenspan reassured investors that he had their backs with a rate cut whenever the stock market took a turn for the worse.

This led to an “illusion of prosperity,” as stock prices rose, helping Bill get reelected… and gaining national prominence for Hillary as the aggrieved wife in the Monica Lewinsky affair.  

Stock prices filled with hot air… until the bubble in the Nasdaq blew up in Clinton’s last year in office.

Both of this year’s presumptive candidates are “low interest rate” people, all right.

Their adult lives were marked by the credit cycle and their careers shaped by ballooning debt. And now, almost the entire world economy depends on low rates. 

We live on Planet Debt. 

Subzero Yields

The amount of government debt trading below zero yield rose to $11 trillion last week.

In Japan, negative yields run out the yield curve until 2051.

Overall, interest rates are said to be lower than they’ve been in 5,000 years. (This is a fanciful but entertaining factoid; you can’t compare the apples of Sargon the Great to those of Donald the Tremendous.)

“How cometh it to be that interest rates ride so low… while the hack and the hustler ride so high?” you might wonder.

We are glad you asked…

We have been connecting dots. These are dots that others do not want to connect. Because they connect to too many reputations, too many fortunes, and too many opinions.  

We are talking about the line that runs from the post-1971 money system to the Deep State, passing through the spectacular rise of China… the spectacular fall of the U.S. (where the average man has made no financial progress in the last 40 years)… to the remarkable luck of the 1% (who got richer and richer, as most people around them lost ground).

Yes, the line ties together the great kvetches of our time: inequality… stagnation… alienation… globalization… debt… the failure of the economy… the failure of democracy… and the failure of our own culture.

According to political scientist Charles Murray, white middle- and lower-middle-class Americans now suffer from the ills that were once confined to ghettos – broken homes, drug addiction, unemployment, and violence.

Surely, we’re not going to try to pin that on the Deep State, too?

Yes… we are.

Deep State Money

“Our” money system is not “ours.” It is the money system created by, for, and of the financial insiders.

It is the Deep State’s money system!

But wait… we sense an objection: “Isn’t it the money system set up by our elected representatives… and supposed to serve us all?”

Oh, dear reader, sometimes you make us laugh. Really, where have you been?

America’s money system is largely under the control of one organization – the Fed. And the Fed was set up at a secret meeting of plutocrats and bankers. (No kidding they rode down to Georgia in a private train, using phony names so they wouldn’t be identified.)

It is not owed by the people… nor by their government. It is owned by private banks. And it is controlled by a small group of unelected insiders – mostly bankers and their economists.

It has never been audited. And no member of Congress really knows what it is up to.

Miracle-Gro

On August 15, 1971, President Nixon made the fateful announcement that the world’s reserve currency, the U.S. dollar, would no longer be directly convertible to gold.

But do you think Mr. Nixon came up with that on his own? Do you think he was advised by our elected representatives?

No chance.

Instead, the insiders, the bankers, and the deepest of the Deep State elite had his ear. The president – and probably almost everyone else – had no real idea of what was going on… or why.

But that was 45 years ago. A lot has happened since. The new money was a Sahara for the common American; his income growth dried up… his wealth ceased growing.

But it was Miracle-Gro for the Deep State.

The insiders sank their roots deeper and deeper into the U.S. economy, sucking out more and more wealth and power.

Whether the insiders fully realized what they were doing in August 1971, we don’t know. But as the system developed, they liked it.

More than that, they became dependent on it.

And now, almost the entire world – its stocks, bonds, real estate, and collectibles… along with its businesses, retailers, factories, investors, bonused-up executives, papered-up speculators, Ph.D. economists, and politicians – almost everybody with wealth or power depends on the insiders’ cheap money.

“Government can have no more than two legitimate purposes,” wrote the 18th-century English political philosopher William Godwin, “the suppression of injustice against individuals within the community and the common defense against external invasion.”

But now it has another purpose… a goal it is desperate to achieve – keeping the low-interest rate planet spinning.

Regards,

Signature

Bill

Market Insight


By Dr. Steve Sjuggerud, Editor, True Wealth Systems


There are two things I believe about how markets work… 

In the short run, markets continue doing what they’re doing. In the long run, markets revert back to their averages (or "mean").

It sounds simple, but understanding these trends, and knowing how to make them work for you, can be incredibly profitable. 

The following table shows what has happened to stock prices after seven great years and after seven bad years since the 1870s. (These are apples-to-apples comparisons… all the gains are annualized.)

Take a look:

 

1 Year Later

3 Years Later

5 Years Later

7 Years Later

After seven great years

-0.7%

-4.2%

-1.1%

2.3%

After seven bad years

15.2%

8.1%

5.2%

4.1%

All periods

4.5%

4.4%

4.4%

4.4%

I called the best 10% of seven-year periods "great" and the worst 10% of seven-year periods "bad." (The last seven years barely made the cut in the top 10% of great seven-year periods.)

A few interesting things stand out…

After seven great years, it takes a very long time for stocks to return to "normal." Returns aren’t back to normal even seven years later.

After seven bad years, you want to buy stocks immediately. One year later, they have been up double digits, historically.

You might say, "All right, Steve, but that’s going back to the 1870s… Times have changed."

Times may have changed somewhat. But this basic story still holds true. Take a look at the results since the 1950s:

 

1 Year Later

3 Years Later

5 Years Later

7 Years Later

After seven great years

-0.6%

-0.4%

0.8%

3.0%

After seven bad years

13.3%

3.9%

7.1%

8.3%

All periods

7.1%

7.0%

7.0%

6.9%

This next table is revealing as well…

It’s the percentage of the times that you made money looking ahead… after seven great years and seven bad years, since the 1950s. Take a look:

 

1 Year Later

3 Years Later

5 Years Later

7 Years Later

After seven great years

49%

56%

42%

83%

After seven bad years

88%

76%

88%

100%

All periods

71%

81%

81%

91%

Look at the column for five years down the road…

Stocks were up only 42% of the time – five years later – if you bought after seven good years.

Stocks were up 88% of the time, five years later, if you bought after seven bad years. (Meanwhile, stocks were up 100% of the time seven years later!)

In short, after seven great years, history paints a pretty grim picture looking ahead. Three years… five years… and even seven years down the road… you’re still looking at below-average returns, based on history.

As you know, I’m fighting this history…

I still believe we will see one last major blast to the upside before a long period of lean years kicks in.

P.S. I’ve spent nearly a decade and more than $1.5 million figuring out the absolute best way to profit from trends. And what I’ve discovered is essentially a "Magic Number" for dozens of investments. These Magic Numbers tell me exactly when to buy – and when to sell – these investments for the largest profits possible.

I recently put together a presentation that explains the full details. If you want to know which assets are most likely to go up 100% or more in the coming months, click here.


Featured Reads

Top Traders Use "Bad Idea" to Get Rich
Behind closed doors, the top traders, investment banks, and hedge funds are using one simple strategy to make billions in profits every year… all while telling you it’s a bad idea.

Bank of England Unveils First Post-Brexit Easing Measure
The Bank of England is worried about the effects Brexit will have on the British economy. In its first easing measure since the Brexit vote, it’s easing banks’ capital requirements… in an effort to spur lending.

Why You Need a Solid Defense as an Investor
Do you have a good defense? If not, you’re going to lose money. As Warren Buffett put it, “Rule No.1 is never lose money. Rule No. 2 is never forget rule No. 1.”


Mailbag

Today… readers weigh in on whether Bill should buy 75,000 acres of land next to his ranch in Argentina. (Catch up on Bill’s thinking behind the move here.)

You must have more money than you know what to do with, if you’re wondering "what to do" regarding the purchase of an additional 75,000 acres in South America.

You’re in the middle of a native land claims fight and are thinking of buying more land in a traditionally unstable country compared to ours and Canada?

— Dan T.

Buy the ranch. He wants 10 times more than what you paid, but if it will enable you to turn a profit on both properties you will come out with two wins instead of a big loss.

Besides, he WANTS 10 times what you paid; that doesn’t mean you have to agree to pay that much. I would like to see Uncle Sam try to take possession when the U.S. government goes under!

— William C.

Meanwhile, not everyone’s happy with Bill’s claim that there’s a new breed of less corrupt politicians taking over in South America

Are you that confident that the new leaders of Argentina, Peru, and Brazil can contain the Deep State?

In my country we have a saying: “To get rid of the dangerous snakes, colonial masters introduce the mongoose.” This animal did a wonderful job, and then started eating the people’s food – their chickens. Think Doc Duvalier… and in more modern times, Chavez.

Democracy is an absolute fraud; Big Government has been allowed to structure everyday living. The mother of all implosions is inevitable…

— Charles S.