Scary Times Or Perfect Storm?
The DOW is down another 800 points today at the time of this writing.
The following is a message from WMI CEO Kip Herriage. As a former VP a one of the largest investment banks in the country, Kip has been predicting this mess for a long time. Read what he has to say and learn how YOU can take advantage of this PERFECT STORM!
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We are in very scary times folks. In 2005 I began warning VRA Subscribers about the biggest risk to the markets since the Great Depression….derivatives. Warren Buffet called them “weapons of mass financial destruction” and they have proven to be just that. If you are unclear at all about why our entire financial system is at risk, make no mistake about it…derivatives are the root cause.
Wall Streets Frankenstein has now spilled over into Main Street and there is a significant crisis of confidence in our government, in the Federal Reserve, in the overall economy and in our ability to deal with the coming serious recession (or worse). Right now it is very difficult to borrow money for even the most legitimate of projects, and the derivatives meltdown that we have feared is becoming a reality right before our eyes. This is exactly why we have been positioning our Members into precious metals, energy, and international real estate…these remain safe havens even today.
Check out this stat from the Federal Reserve: In 1980, U.S. debt(as percentage of GDP) was 163%. By 2007, it had risen to 346%. What ended this 27-year party was a correction of the most-leveraged asset, the U.S. residence. The bust was accelerated by the complexity of the ways in which the Wall Street masters of the universe leveraged all of us to the boom… and now to the bust. Home prices will now correct to a level where people can buy a house with 35% of their take-home pay. And we’re already there in some parts of the United States.
Now we have millions of Americans in the poor house (literally)overloaded with bills, not enough cash flow and just about zero money for discretionary purposes, and heaven forbid any emergencies. Lots of twenty-somethings with college degrees, young kids, 3 or 4 new leased cars and living McMansion lifestyles are only one paycheck away from obscurity. We are talking about dual income families earning $200,000 to $250,000 who are basically broke-busted and over-burdened.
As the perfect storm of a slowing economy, job layoffs and job reductions arrived, these former hot stuff consumers lay inbill-paying wreckage. These folks along with many others are significantly underestimating future fallout from inflation,hyperinflation, recession and maybe even a depression. There is nomore wealth effect remaining from this three-year rabid housing rally. The money is gone, the bills go unpaid and consumer cash flow is diminishing, or stopping entirely.
Keep a very close eye on things folks. The news is as almost as bad as it can get, which is when we usually see a significant selling climax that scares everyone to death. This will be the perfect time to load the boat with your favorite investments. We have not seen a market like this in over 50 years and likely since the Great Depression. The good news is that the Global Super Cycle that we have been educating our Members about over the last 3-4 years is still very much in effect. When we reach a real bottom, these incredible values will give us the opportunity of a lifetime.
Kip Herriage
CEO Wealth Masters International
Tags: wealth wave movement, protect your assets, baby boomers retirement