Update From Jamaica
/VRA Update... From Jamaica
We are at the WMI m3 Private Wealth Group in Jamaica this week. This is our 3rd m3, which are our International events, and we have also had 10 m2 Wealth Conferences, which are held domestically.
This event is at the Ritz Carlton in Montego Bay, and as I write this I am sitting on our balcony overlooking the turquoise Caribbean waters...just breathtaking.
I began publishing the VRA in 2002, and in 2005 we formed Wealth Masters. Both companies exist for one reason; to empower people with the highest level of true knowledge and wealth accumulation strategies in existence. It is what my Co-Founder and partner Karl Bessey and I work on pretty much 24/7, and I cannot imagine doing anything else.
The Chinese are famous for the quote "may you live in interesting times", and it is safe to say that these are certainly qualify as interesting times. More like upside down times. The world is awash in record levels of debt at all levels...government, corporate, and individual...yet the prescription is MORE debt. Clearly a recipe for catastrophe. It's like a train wreck in slow motion. Everyone can see it coming and it's impossible to take your eyes off of it.
And, more than ever before, it's becoming a world of the haves and have nots. The ultra wealthy and elite have the playbook in advance...their own crystal ball...and are busy preparing for the oncoming carnage. But what they are preparing for more than anything else is the resulting opportunity that presents itself during economic calamity. Because just as I'm certain that the water here will be turquoise again tomorrow morning, I am certain that the global economic crisis that began in 2008 is only in about the 2nd inning. Unfortunately...at least for 99% of the planet...the last 7 innings are going to be awful.
Money backed by nothing cannot last. Corrupt government and financial markets cannot last. We know how the last chapter will read, the only question now is one of timing.
Market Update
While most stock markets are still down 10% in just the last month, last weeks rally raised the hopes of the bulls that maybe the worst is behind us. After all, 2nd quarter earnings are expected to be strong (at least for the largest companies) and historically this news has been positive for stock prices. The problem as I see it is that this rally is taking place on VERY light volume, and its also concentrated in only the biggest blue chips. Most stocks continue to tread water or continue in their decline. And while I would not be surprised to see earnings reports take the market a bit higher, if earnings fail to impress then the next big move will be sharply lower. Remember, the markets anticipate 6 months out. And in 6 months time, these are the news stories that I expect to see:
- Unemployment breaks 10% in the US by a considerable margin, with no reversal in site. Census workers are now unemployed (again), and with states laying off hundreds of thousands of workers in order to try and balance their budgets, the battle is being lost.
- Foreclosures reach record levels as the "shadow inventory" of 4 million homes finally hits the market, combined with fresh foreclosures of 3-5 million homes, brings the total for 2010/11 to nearly 10 million.
- Europe declines into a severe double dip recession, which brings several well-known economists to begin forecasting a Global Depression for the first time.
These, and many more reasons, are why I believe the last half of 2010 will look very much like the last half of 2008...specifically the late 3rd and 4th quarters. If I am anywhere close to being correct, is there any scenario where you can imagine global stock prices rising? If nothing else, this is a great time to raise cash. In addition, the unintended consequences of untold trillions in freshly printed money worldwide, not to mention the 15 trillion+ in government loan guarantees and artificially low interest rates will bring on the next shock to the system...higher interest rates at the worst possible time. When lending begins to shut down completely worldwide (as is happening now throughout Europe) the competitive demand for fresh debt funding at all levels will lead us into global hyperinflation. This is the runaway freight train that few are talking about, at least publicly, but that everyone is scared to death of.
Signing off from Jamaica....looking forward to seeing many of you this week!
Kip
