“Overconfidence seems to have dulled the faculties usually so alert.”
— Quote about Titanic Captain Edward J. Smith
Congratulations, Janet Yellen — you are now the proud holder of the worst job in the world…
The Captain of the Titanic, a.k.a. the Chairman of the Federal Reserve.
On Yellen’s first day on the job, it’s pretty clear this ship is sinking faster than Ben Bernanke may have let on when he handed over the helm. Bernanke was wise to grab the first lifeboat available; it is now Yellen’s responsibility to decide how best to navigate this sinking vessel to safety before the whole thing winds up at the bottom of the sea — dooming our portfolios and retirement funds to a watery grave.
As you read this, water is rushing into the hull of the economy. You can tell by looking at January’s dismal stock market returns…
The Dow Jones Industrial Average closed down almost 150 points. The S&P 500 was down 11.60 points — the first time it has closed in the red for January since 2010. The Nasdaq composite dropped 19.25 points.
Since January usually sets the tone for the rest of the year, this is indeed a bad omen. Could the Fed-drunk market finally be sobering up? Like the wealthy passengers on the Titanic, investors have been enjoying a five-year cocktail party courtesy of the Fed’s easy money policies. We’ve seen the market hit all-time high after all-time high.
Now it looks like that party is coming to an abrupt end.
As with any disaster-in-the-making, there is writing on the wall… should you choose to stop and read it. We’ve been telling you about it for a few years now. While stocks were running up, so was out national debt, our “unofficial” unemployment figures, and our income inequality.
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Quantitative Easing, or QE, has added $85 billion a month — over $1 trillion a year — to our national debt in order to keep this doomed ship floating.
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The true unemployment and underemployment rate is actually as high as 25% if you factor in short-term discouraged workers and those forced to work part-time because they cannot find full-time jobs. Half of all U.S. households receive some form of government “benefits.”
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In the U.S., the wealthiest one percent captured 95% of post-financial crisis growth since 2009, while the bottom 90% became poorer. Right now, over 60% of American workers have less than $25,000 in total savings!
Good luck trying to run a luxury cruise on that foundation…
The smart money is already catching on. Investors are dumping money into bonds faster than you can say “life-raft.” U.S. Treasury prices rose on the last day of the month, setting safe-haven bonds on course for their strongest gains in 20 months. Investors are also yanking their money from emerging markets in droves; they have abandoned emerging market ETFs at the fastest rate on record.
“Fear indexes” are also lighting up like a flare gun…
The NSE Volatility Index (NYSE: VIX) gained over 10% to notch its highest gains in 7 months.
Less than a month ago, CNN’s Fear and Greed Index was cruising firmly in the green, signaling confidence and greed in the market. This week, it has completely reversed course and is sitting at “Extreme Fear.”
It is at this critical point in the QE voyage that Janet Yellen has taken the helm. It also marks the first time people are finally waking up to the giant Ponzi scheme that has been ruling the market since Bernanke took over in 2006.
The Fed has announced it will pull QE back by $10 billion more a month. But at this point, that move is akin to tossing a few suitcases overboard. It will not save the ship…
So what should the prudent investor do right now?
Grab a Life Boat
While it took the Titanic two and half hours to sink, it has taken the economy five years. But as we know from history, once the water has started flowing into the hulls, it is only a matter of time…
While many financial gurus and market makers have focused exclusively on ideas like the rapidly declining value of the U.S. dollar, the real reason the economy will sink is more complicated… and one rarely discussed in the mainstream financial news.
You see, there is one key economic factor that will completely change everything: the way you spend, save, and invest your money.
And I mean EVERYTHING. Starting right now…
Smart investors do not have to go down with the ship. There are a few simple steps you can take right now that can not only protect your existing wealth but can also give you the opportunity to DOUBLE or TRIPLE your financial net worth.
The details are in a groundbreaking report by Nick Hodge and our newest Outsider, Steve St. Angelo (exclusive to our Like Minded People subscribers).
This report has been years in the making, and it is now being heralded as a must-read for any investor — large or small — who wants to make sure his or her life savings and retirement accounts won’t be decimated when this ship goes down in flames.
I urge you to read it now. Like the Titanic, there simply won’t be enough life boats for everyone…
