May 4, 2012 By gpc1981
http://albertpeia.com/sharpcorrectioncoming.htm
‘The
following is an excerpt from my most recent issue of Private
Wealth Advisory. In it, I explain why the markets are heading for a
sharp correction due to the Fed and ECB no longer being able to make massive
monetary interventions due to their political consequences. To find out more
about Private Wealth Advisory and how
I’m preparing clients to profit from this mess (we’ve already locked in 12
winners based on Europe’s woes in the two months)… Click Here
Now!!!
As
many of you know, my primary forecast regarding
The
reasons for this are political, financial, and monetary in nature. In bullet
form they are:
1)
2)
3)
The ECB’s interventions in the European banking
system are now politically toxic (the markets punish those banks relying on the
ECB for aid) as well as monetarily impotent (the positive effects of spending
hundreds of billions of Euros are only lasting a month at most).
4)
The US Federal Reserve’s Operation Twist 2 Program ends in June. Currently
there are not new monetary programs planned at the Fed and it is unlikely they
will launch anything before the
In
simple terms, we have a confluence of negative factors hitting this month and
the next. Now, nothing in the political or financial worlds is static and we
could see any number of changes made to the above items (for instance,
Having
said that, while individual changes to the above items might temporarily delay the collapse I’ve
forecast, said collapse is
coming and will hit before the year-end.
The
reason for this is that we have reached the End Game for Central Bank
intervention: the time during which Central Bank interventions either result in
negative consequences that far outweigh their positive benefits (inflation/
increases in the cost of living vs. a rise in “good” asset prices such as
stocks) or have negligible impacts.
We’ve
already assessed the first one of these items in numerous past issues of
articles. The most obvious example of this was the Fed’s QE 2 program which
spent $600 billion, resulted in at most three months of upturned economic data
for the US, but also sent food prices to all time highs inciting revolutions
and riots around the globe.
Indeed,
as noted previously on these pages, as far back as May 2011, Fed Chairman Ben
Bernanke explicitly stated that QE was less “attractive” as a monetary option:
Q. Since both housing and unemployment have not recovered
sufficiently, why are you not instantly embarking on QE3? —
Michael A. Kamperman,
Mr. Bernanke: “Going
forward, we’ll have to continue to make judgments about whether additional
steps are warranted, but as we do so, we
have to keep in mind that we do have a dual mandate, that we do have to worry
about both the rate of growth but also the inflation rate…
“The trade-offs are getting — are getting less
attractive at this point. Inflation has gotten higher.
Inflation expectations are a bit higher. It’s not clear that we can get
substantial improvements in payrolls without some additional inflation risk. And in my view, if we’re going to have success in
creating a long-run, sustainable recovery with lots of job growth, we’ve got to
keep inflation under control. So we’ve got to look at both of
those — both parts of the mandate as we — as we choose policy”
http://economix.blogs.nytimes.com/2011/04/28/how-bernanke-answered-your-questions/
This
is critical as it indicates that the Fed, despite all of its verbal
interventions and posturing, is aware that its monetary interventions are having negative consequences that
outweigh their benefits.
The
same is occurring in Europe where the relationship between
German unions turn up volume on pay
rise demands
German
labor leaders urged May Day demonstrators on Tuesday to fight for big pay rises
after a decade of restraint that had seen wages in crisis-hit southern Euro
zone nations soar.
The
head of the powerful IG-Metall union, demanding a 6.5
percent rise, described an offer of 3 percent over 14 months as a farce…
“If
we don’t have a result (from talks) by Pentecost, then there will be a strike
ballot and strike,” said Berthold Huber, referring to the May 27/28 holiday…
IG Metall,
with a membership of 3.6 million, (Graham’s note: about 4% of German population) held warning strikes at
the weekend and is planning more for Wednesday in
There are signs German policymakers
are already starting to worry about inflation, although
it continues anchored around two percent. Last week, Economy Minister Philipp Roesler said the European Central Bank should refocus on
price stability.
http://www.reuters.com/article/2012/05/01/us-germany-mayday-idUSBRE8400VU20120501
Remember,
the core driving force in European policy-making is politics. Angela Merkel
faces re-election in 2013. If inflation is already becoming a political issue
in
With
that in mind, I’m already positioning subscribers of Private Wealth Advisory for
the upcoming EU collapse. Already we’ve seen gains of 6%, 9%, 10%, even 12% in less
than two weeks by placing well-targeted shorts on a number of European
financials.
And
we’re just getting started. Indeed, we just opened five new trades a few weeks
ago Friday. Already we’ve closed out three of them for gains of 6%, 6%, and 9%.
So if
you’re looking for the means of profiting from what’s coming, I highly suggest
you consider a subscription to Private Wealth Advisory. We’ve locked in 49 straight
winning trades since late July (thanks to the timing of our trades), and haven’t
closed a single losing trade since that time.
Because
of the level of my analysis as well as my track record, my work has been
featured in Fox
Business, CNN Money, Crain’s
So
this is the last day during which you can subscribe Private Wealth
Advisory at the soon to be old price of $249.
To do so…Click Here Now!!!Best Regards,Graham
Summers,Chief Market Strategist,