- Published on Tuesday, 14 August 2012 13:54
- Written by Andrew Snyder, Editorial Director, Inside Investing Daily
- Hits: 610
This is what we warned you about. This is what we are so afraid of.
This is what will destroy your wealth...
"Too many folks still don't have a sense that tomorrow will be better than today. And so, the question in this election is which way do we go?" our campaign-focused president asked on Sunday.
"Do we go forward toward a new vision of an America in which prosperity is shared?" Obama continued. "Or do we go backward to the same policies that got us in the mess in the first place?"
Which way do we go, dear reader? Do we continue with a bastardized version of capitalism... or do we wave the white flag of defeat and allow a bloated government to lead us to "better days" with a "new vision" of America?
Do we turn a blind eye to the coercion and corruption that so often spoil a free market? Or do we succumb to the path of least resistance and trudge forever in a land of stagnation where the only thing that grows is the government?
Lots of complex questions... with very few simple answers.
My advice, however, is easy to understand.
We all know how Washington plans to spread the wealth in our New America. It is all we've seen in the headlines for the last four years. Washington wants to raise taxes on the rich and squash debt by eliminating the dollar.
The chart tells our story:
The chart shows that the supply of greenbacks flowing through the American economy is growing anywhere between 5-20% annually. It is almost entirely thanks to Bernanke's high-speed printing machine.
If you're familiar with the "Rule of 72," you should feel a slight shaking in your boots.
If we assume monetary supply will continue to grow at an average pace of 10%... in just seven years, today's $9.9 trillion M2 figure will swell to $20 trillion.
It's great news for Uncle Sam and his pile of unpaid bills. Debt that's worth dollars today will be worth dimes in just a decade.
But it's horrible news for Joe Sixpack and his half-cocked 401(k). If the dollars he's stashing away today don't find a way to grow by 10% each year... he will be worse off than he is today.
The herd is ignorant of what's happening. So far, most of that freshly printed money is working to plug the hole left by an implosion of bad loans. But as Bill so often reminds us, "deflation today... inflation tomorrow."
That's why I say get out. And get out now.
Get out of any investment that doesn't have tangible value. If you can't hold it and measure it... you will never overcome that critical 10% figure.
While shares of companies like Facebook (FB:NASDAQ) and Groupon (GRPN:NASDAQ) spit and sputter as investors try to put their thumbs on intangible values, shares of companies with "real" products are steadily moving forward.
A perfect example is the mining company we added to the Unconventional Wealth portfolio last month. It's up 15% in a little more than four weeks. Better yet... its value is rock solid. As long as our monetary supply continues to grow, the market can accurately adjust the mine's value.
We can't say that about Facebook or Groupon. Heck, most investors can't even tell you what these companies sell. These investments have been a stab in the dark... and their charts prove it.
Stay away from anything you can't measure.
There is no doubt we already live in an America that's far different than our daddies' America. The mere fact that our president is touting the idea proves we are in uncharted waters.
As the theme grows, it will be harder and harder to make (and keep) a buck. It will be more difficult than ever to successfully invest.
This is what we've warned you about. It is what will destroy your wealth.
It is here. Tomorrow won't be better than today. Welcome to the New America.
From the Inside,
P.S. Want to see a snapshot of what life looks like in the New America? Here's a link.
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