Stand Back: The Fuse Is Lit
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- Published on Tuesday, 17 July 2012 15:55
- Written by Andrew Snyder, Editorial Director, Inside Investing Daily
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The nation's fate is in the hands of our dear elected leaders. We all know this cannot turn out well.
Our great nation faces its biggest test yet. In fact, even our blessed idea of democracy could fail if we don't get all the answers right.
For America and the system that built her... the next six months are vital. We've got tough choices to make. And no matter what we choose, somebody gets hurt.
A generation's worth of political ignorance has lured today's leaders (perhaps the worst in our history) into a trap. The only way out is to gnaw off a limb.
We all know the two choices: Severe economic pain today or a loss of superiority tomorrow.
If Washington does what's right and fixes its fiscal mistakes, anybody who works in the public sector or is connected to it is in trouble.
If Washington doesn't do something to change the across-the-board cuts scheduled to go into effect on Jan. 1, a report that hit the wires this morning shows our country will lose some 2 million jobs.
Everybody from teachers to bomb builders will face the pain.
The report goes on to show the cuts will slash $215 billion from the economy -- not to mention the horrific psychological effects on job-wary consumers.
The alternative, though, is not much better.
We can keep spending. But it, too, comes with a price.
At the same hour the big spending cuts are scheduled to kick in, you and I are likely to see our tax rates jump higher. Unless Congress finds a miracle compromise, Washington is on target to lift another $494 billion from taxpayer pockets next year.
Of course, we're looking at the two ends of the spectrum... and we're assuming politicians have backbones.
We all know what's going to happen between now and the start of next year. What I told Unconventional Wealth readers a month ago is just as true today:
Over the next six months, as Congress fights for a solution to the big trouble ahead, we'll hear all sorts of rhetoric. There will be debates. Some low-level staffer will get fired... a sacrifice to the media gods. And we might even see the president take "historic" action. Before it's over, the fight will reach a hyperbolic peak... and then at 6:30 on a Friday night, we'll get a watered-down, deadline-shaving piece of legislative crap called compromise.
Ultimately, that compromise won't do anything more than boost a few swing-state polls. Kicking the can will only increase the pain of tomorrow. But this class of politicians doesn't care about you or the nation. All that matters are the votes.
Your financial success is irrelevant.
The quote above comes from the monthly issue in which I show readers how to take advantage of the tax battle that's brewing. I focused on the idea the tax on dividends is about to more than double.
This play on corporate payouts is my clear favorite way to take advantage of the debate. The gains are easy to calculate and the play is very simple.
But this trillion-dollar debate offers us more than one opportunity.
If you are part of the growing mass of investors disillusioned with Wall Street (... I pray you are), you will love what this debate has done to the value of alternative investments.
As Congress plays chicken with a trio of "economic suicide bombs" I am watching a slew of unconventional investments surge in value.
In fact, this morning I got an email from a subscriber who outlined his success with five alternative assets. He admits he still owns stocks, but he is strategically overweight in assets that provide ownership of tangible assets -- companies like mines and energy producers.
But he knows Wall Street is no longer the wealth-building center of the world... and it has rewarded him handsomely. But the best part is he's now able to hand his wealth to his grandchildren with virtually no tax consequences.
Washington knows nothing about his alternative-investing success.
In other words, he doesn't care what re-election scheme our leaders hash out over the next few months. He's removed from it all.
If you want to follow in his footsteps, here's a link to my full-length report on what's happening and how you can profit from it all.
From the Inside,
Aaron
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