Individual Investors Are About To Get Clobbered!
This is the alarming message that I received today from the editor-in-chief of a certain financial newsletter. He goes on to say, "The period we're about to enter is likely to be as dire as any in our nation's financial history. What can investors expect over the next few months as the bubbles begin to burst...and our financial system begins to implode?"
"First, I need to tell you what has already happened. The news I bring you may be a bit unsettling...but it's absolutely necessary in order to understand the full impact of the disaster that looms. The fiscal position of the United States is much worse than anyone suspects -- and this is the case at three levels: personal, corporate, and federal."
"Individual investors are about to get clobbered. Rising interest rates -- caused primarily by our own government's betrayals -- will burst the enormous housing bubble that has created so much artificial wealth in our country. Imagine your neighbor's surprise when in just a matter of days, his home's value has fallen by more than 50%...his retirement account has plummeted thanks to a stock market collapse...and his interest payments have doubled, thanks to that adjustable-rate mortgage he used to refinance his home."
"Corporate America has already seen what can happen to debt-riddled companies in down cycles. The coming bear market in stocks -- which will take place soon after the housing market begins to collapse -- virtually guarantees that corporations will have to deal with higher borrowing costs, and lower profits. That means those corporations, overloaded with debt -- and there are thousands -- will begin defaulting and be forced to shut their doors...If you thought the Enron 'scandal' was bad, this scenario will be exponentially worse; imagine if a thousand Enrons went bankrupt overnight. Literally thousands of companies would be forced to close their doors, leaving hundreds of thousands of unsuspecting employees scrambling for jobs and unemployment benefits."
"At the federal level is the biggest bombshell of them all: the financial destruction of the U.S. dollar. The fact of the matter is that foreign interests now own more than 50% of U.S. Treasurys. So the United States is - for all practical purposes - at the mercy of these nations."
"What will happen next is that these foreign nations - particularly Japan and China - will begin getting out of the U.S. dollar. They may do so simply because they need to trade their financial reserves for 'real' assets. Or, their bailing out on the U.S. dollar may come in response to some terrorist act that sends the oil market reeling. But no matter if it happens over the couse of several months - or in the span of just a few days - it's going to happen!...Foreign nations will soon begin dumping U.S. Treasurys. That much is now certain...and the result will be disastrous!"
"Interest rates will rise at a much faster pace than anyone imagined. Homeowners - especially those who have grown used to borrowing against their home - will lose their shirts. And the stock market will take a nose dive of historic proportions."
But again, here's the thing to remember about the importance - and immediacy - of the problem in the United States right now:
Over 35% of U.S. Treasury debt has a maturity date of less than one year.
That means any rise in interest rates makes it almost instantly more expensive for the government to borrow money. Bottom line: The interest expense of the federal budget - already more than 20% - is about to skyrocket. Thus, the financial future of the United States is anything but bright. And it really doesn't matter who wins the election on November 2nd, because the country is destined to go bust no matter who sits in the Oval Office!"
Ed Note: There is much more to that message, but I have given you the essence of what that writer has to say. I believe there is much food for thought contained in those paragraphs, and one fact that stands out in my mind from reading his statements, is the idea that now more than ever is the time to avoid debt, and to be most prudent in making future investment decisions!
Bob Moser
________________________________________________
"First, I need to tell you what has already happened. The news I bring you may be a bit unsettling...but it's absolutely necessary in order to understand the full impact of the disaster that looms. The fiscal position of the United States is much worse than anyone suspects -- and this is the case at three levels: personal, corporate, and federal."
"Individual investors are about to get clobbered. Rising interest rates -- caused primarily by our own government's betrayals -- will burst the enormous housing bubble that has created so much artificial wealth in our country. Imagine your neighbor's surprise when in just a matter of days, his home's value has fallen by more than 50%...his retirement account has plummeted thanks to a stock market collapse...and his interest payments have doubled, thanks to that adjustable-rate mortgage he used to refinance his home."
"Corporate America has already seen what can happen to debt-riddled companies in down cycles. The coming bear market in stocks -- which will take place soon after the housing market begins to collapse -- virtually guarantees that corporations will have to deal with higher borrowing costs, and lower profits. That means those corporations, overloaded with debt -- and there are thousands -- will begin defaulting and be forced to shut their doors...If you thought the Enron 'scandal' was bad, this scenario will be exponentially worse; imagine if a thousand Enrons went bankrupt overnight. Literally thousands of companies would be forced to close their doors, leaving hundreds of thousands of unsuspecting employees scrambling for jobs and unemployment benefits."
"At the federal level is the biggest bombshell of them all: the financial destruction of the U.S. dollar. The fact of the matter is that foreign interests now own more than 50% of U.S. Treasurys. So the United States is - for all practical purposes - at the mercy of these nations."
"What will happen next is that these foreign nations - particularly Japan and China - will begin getting out of the U.S. dollar. They may do so simply because they need to trade their financial reserves for 'real' assets. Or, their bailing out on the U.S. dollar may come in response to some terrorist act that sends the oil market reeling. But no matter if it happens over the couse of several months - or in the span of just a few days - it's going to happen!...Foreign nations will soon begin dumping U.S. Treasurys. That much is now certain...and the result will be disastrous!"
"Interest rates will rise at a much faster pace than anyone imagined. Homeowners - especially those who have grown used to borrowing against their home - will lose their shirts. And the stock market will take a nose dive of historic proportions."
But again, here's the thing to remember about the importance - and immediacy - of the problem in the United States right now:
Over 35% of U.S. Treasury debt has a maturity date of less than one year.
That means any rise in interest rates makes it almost instantly more expensive for the government to borrow money. Bottom line: The interest expense of the federal budget - already more than 20% - is about to skyrocket. Thus, the financial future of the United States is anything but bright. And it really doesn't matter who wins the election on November 2nd, because the country is destined to go bust no matter who sits in the Oval Office!"
Ed Note: There is much more to that message, but I have given you the essence of what that writer has to say. I believe there is much food for thought contained in those paragraphs, and one fact that stands out in my mind from reading his statements, is the idea that now more than ever is the time to avoid debt, and to be most prudent in making future investment decisions!
Bob Moser
________________________________________________
posted by Bob Moser at
5:57 PM
1 Comments:
Thank you for posting your comments and you make some very good points. I merely offered this for what it's worth, allowing any reader to draw his/her own conclusions as to its merits!
To answer your question, however, those comments were taken from an investment newsletter, "Strategic Investment" - and they are the words of its Editor, Mr. Daniel Denning.
RWM
By
Bob Moser, at 10:59 AM
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