VRA Update: If This Isn’t a Depression, What is?? Plus, VRA Just Booked Gains of 135% and 70%...In Less Than A Week

Before I get to this investment update, I have to share something that is shocking to even me…and increasingly, it’s becoming much more difficult to shock me.

The Eurozone's youth unemployment rate (18-25 years old) was just released and it is beyond terrible. Figures out today put this rate at 23.3%...and remember folks, this is the EU “official” rate….I have read credible sources that place the actual unemployment rate at 35-40% How bad does it have to get before Europe is actually forced to call this what it is…a depression!

Incredibly, this figure has not even dropped by a percentage point since its peak in February of last year, even with the trillions put to work in Europe’s own version of Quantitative Easing, or QE (nothing more than fiat money printing and debt issuance/debt purchases). This is a nightmare for the Eurozone's governments, and the future of their economies. 

As Eurostat reports, “youth unemployment in some countries is actually off the charts. Greek unemployment for people aged under 25 is still at 51.5%, it's now second to Spain, which comes in at 53.7%. 

The long-term effects of youth unemployment are brutal…it's hard to see any hope for the Eurozone here. The incredibly weak growth the bloc is seeing at the moment is just not enough to significantly reduce youth unemployment, and this is a comparatively good period for the area — better than the preceding years of crisis and recession, at least.”

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This is just another reason why the ECB meeting this week will almost certainly result in additional rounds of US style QE. Importantly, this is what’s supporting global markets to a large degree…everyone knows the meeting is coming, and it has been the primary reason for the markets ability to stay afloat. Again, if this is the best news that stock market bulls can muster, then we could be in real trouble here. Keep the end of this week in mind…more to follow on this at the end of the update.

Here are the biggest concerns that I have right here right now…these are the reasons that this week could bring massive losses going forward.

1)   The protests in Hong Kong continue to be huge….and these will only grow. This mornings reports have more than 200,000 in the streets already! Wednesday is National Day in Mainland China and Hong Kong, and an official holiday. Everyone is off from work and the crowds are enormous…and this worries China’s communist leaders more than anything else. If they allow this to spread to the Mainland, they could likely become the next Middle East…just not the Arab Spring kind…instead, the current Middle East, with those that have little to lose rioting in the streets. Wonder how many ghost cities they plan to announce to quiet this uprising??

2)   Russia just announced that they either get paid the more than $3.5 billion they are owed from Ukraine, or they will cut off their gas for the winter…a real problem since more than 90% of Ukraine’s gas comes from the Russian Bear. In addition, fighting has broken out again on the Russia/Ukraine border…it’s highly doubtful that things get better here. The fact that the sanctions against Russia aren’t working, but in fact, making them even bolder, is not a good sign for the West or their economies.

3)   Speaking of both Russia and Europe, the impact on global economic growth is already being felt. Ford just preannounced earnings yesterday and their stock plummeted. Ford announced that their earnings will be a billion dollars lower than expected…due mostly to guess what…slowing global growth due to Russia, Europe and South America. In fact, Brazil’s stock market is getting slammed hard. As oil prices drop, their most profitable industries are suffering big time, with 18% plus stock market losses in just the last 30 days.

4)   U.S. co’s begin reporting earnings for the 3rd quarter in the next few days, and here’s what we should look for; instead of their earnings for this most recent quarter, let’s watch closely for what company’s project going forward…this is exactly what the smart money will be watching, and so should we. Regardless of good numbers from the 3rd quarter, the stock market will be projecting numbers out 3-6 months. I believe this is exactly why the markets have been dropping…and it’s why things will only get worse.

The market lost over 230 points today….again, everyone is hoping for great news from the ECB and additional QE.

How crazy is this. The markets head higher due to such massive amounts of economic weakness, that it’s actually good news that trillions more in QE will be necessary? Talk about an upside down world.

Finally, Ebola is now officially here.

As I’ve been writing, the fears of an Ebola outbreak…beyond just a few people…are scaring traders as much as anything we have seen recently. The governments medical experts continue to tell us that this will be contained…and it most likely will…but this is the definition of “fear and greed” controlling investors emotions. The fear of the unknown taking over.

Our illustrious Governor (tongue in cheek for “sometimes embarrassing”) here in Texas, Rick Perry, just said something quite interesting. Apparently, Texas is just one of 13 states that actually test for Ebola. Surely this can’t be true….??

Important point: while everyone is talking about Ebola, there’s another virus that will kill up to 50,000 in the US this year alone…and we have all had it at some point. Yep…the flu. Does help to put things in perspective. However, I will NOT be taking an annual Ebola shot each year.

Finally, the VRA just booked over 200% in gains, just this week. If you count yourself among the millions that are fed up with losing money via so-called Wall Street guru's, you owe it to youself to subscribe to the VRA. For the next 3 days, the VRA has a special offer for new Subscribers. Simply email us at: verticalresearch@mindspring.com and we will share this info with you.

Make no mistake about it....dark days await the vast majority...they are simply not prepared for what is coming.

At the VRA, you will not only lock in massive profits as stocks collapse, but you will be prepared for the most important NEW recovery that will follow. It's about much, much more than just making money.

Until next time, thanks again for reading.

Kip