What
2013 Means For You, Your Portfolio and the Economy at Large
http://albertpeia.com/bad2013.htm
‘Now that Obama has
been re-elected, the BLS and other Government entities have begun to revise all
of the positive data from before the November election downward. New
jobless claims are back over 400,000. The amazing new home sales of 389,00 from
October has been revised back down to 369,000. And a new record has been set
for food stamp usage.
Things are only
going to get worse for the following reasons:
1)
Increased taxes
2)
Increased regulation
Both of these items
will result in people parking their cash rather than investing in the economy.
Case in point, last week $132 BILLION was suddenly parked in
bank savings accounts. That’s $132 billion (nearly 1% of US GDP) leaving the US
economy and plunking into savings accounts
To put this number
into perspective, this is more than the amount of money that fled to
the safety of savings accounts when LEHMAN FAILED.
In simple terms
capital is going into hibernation. Without the investment of capital, the US
economy will continue to weaken. Between this, the fiscal cliff, the earnings
disaster for corporations and more, the market is set for a truly horrendous
2013.
Economic
bell-weathers such as Caterpillar (green), Fed EX (red) and McDonalds (purple)
are already discounting this in a big way.
However, we’re not
quite there yet. Unless things come unhinged sooner due to some event in
Europe, it will probably be the end of December (when the fiscal cliff will be
hitting) before things really get messy in the markets.
I want to alert you
to all of this in advance because I believe 2013 will be the year in which the
BIG Collapse happens. As I’ve explained in earlier articles, it almost
hit last summer. It was only through the ECB and Fed promising to buy everything
that the system held together. But now even the Fed has stated outright that it
cannot contain the impact of the fiscal cliff.
Please prepare
well in advance. What’s coming next year will be worse than 2008. There is
literally nothing positive I have to say about what I see. At the very least, we’ll
face an economic slowdown on par with that of 2008 accompanied by a market
crash. And this will happen at a time in which Central Banks will be totally
out of ammo.
We get additional
signs that those in charge are out of ideas in Europe. There the latest
proposal for Greece is a debt buyback plan through which Greece would use €10
billion to buy some €30 billion worth of debt. Greece doesn’t have €10 billion
lying around so it would likely tap a bailout fund (the EFSF or ESM) to do
this. This means Greece would need (you guessed it) another bailout
in order to buy its own debt.
It would also need
to convince Greek bondholders to sell their stakes, which was a huge issue
during the Second Greek bailout earlier this year.
So once again, we
have yet another non-solution (the goal of this plan is to help Greece get its
Debt to GDP to 120% by 2020) which will require a great deal of arm-twisting
and political machinations to accomplish almost nothing.
The same idiocy is
playing out in Spain. The latest plan there is for the country to cut the
balance sheets of three nationalized banks by 50% sometime in the next five
years. How will they do this? By dumping their toxic property assets into a
“bad bank.”
The idea here is
that somehow someone will want to buy this stuff. Spain already had to postpone
the launch of the bad bank by a month because no one wanted to participate in
it (despite the mainstream media claiming that the idea was popular which is
untrue).
So, here we have
Spain proposing that it can somehow unload a ton of garbage debts onto
“someone” even though there is no “someone” to buy them. And the whole point of
this exercise is to meet conditions so that Spain would qualify for another €40
billion in aid.
€40 billion in aid.
On an annualized
basis, Spain has experienced portfolio and investment outflows of more than
€700 billion. And the latest plan to address this situation (as well as the
implosion of the Spanish banking system) is to dump toxic bank assets into a
bad bank to free up €40 billion in aid.
Oh, and Spain needs
to issue over €200 billion in debt next year.
Again, a
non-solution which doesn’t fix anything.
As I mentioned
before, without a doubt 2013 will be a disastrous year for the global economy
and for the financial markets. Things could get ugly before then due to any
number of issues that are boiling just beneath the surface… but barring any
sudden developments, most of the key players will try to hold things together
into year end.
At that point,
there’s really not anything to look forward to (compared to this year when many
pinned their hopes on the US elections or on more intervention from the Central
banks). And that’s when things will get really ugly.
If you’re an
individual investor (not a day trader) looking for the means of profiting from
all of this… particularly the US debt bubble bursting, then you NEED to check
out my Private
Wealth Advisory newsletter.
Indeed, 76 out of
our last 90 trades have made money for Private
Wealth Advisory subscribers. That’s an incredible 84% success rate on our
investments.
And we’re not
getting complacent by any means. In fact, I’m about to alert Private
Wealth Advisory subscribers to several trades that will all produce HUGE profits
when the US debt implosion picks up steam in the coming weeks.
You’ll find out what
they are the minute you subscribe to Private
Wealth Advisory. You’ll also gain immediate access to my Protect Your
Family, Protect Your Savings, and Protect Your
Portfolio Special Reports outlining how to prepare these areas of
your life for the coming Great Crisis.
These reports
outline:
1) how to prepare
for bank holidays
2) which
banks to avoid
3) how much
bullion to own
4) how much
cash is needed to get through systemic crises
5) how much
food to stockpile, what kind to get, and where to get it
And more…
To take out an
annual subscription to Private
Wealth Advisory now… start profiting from the market’s gyrations (again we’ve made
money on 76 out of 90 trades in the last 18 months)… and gain access to all my
Special Reports…’
Best Regards,
Graham Summers