By Tony Treece
The crash is in motion. The S&P 500 has been going up for the last four years since the last minor correction in 2011. Our clients have loved the indexing options we’ve used, but they will not feel one iota of pain when the stock market drops. Our clients participate in the gains of the stock market while never experiencing the losses. Clients explain to me that it is a liberating way of saving for retirement, because they lock into their gains each year.
It’s better to get out of the stock market sooner than later, because when the market cracks it’s going to shatter many people’s dreams. This week we released a new video presentation about the bubble economy. Go to ExitTheStockMarket.com to view it.
To understand what is starting the chain reaction of the economic implosion we must understand the bubble in China’s economy. The typical Chinese person saves 50% of their earnings, and it’s not uncommon for the wealthy to save 75%. Most American’s save less than 4% of their earnings. So what are they dumping their savings in? Real estate. Since 2000 China’s real estate has gone up 650% whereas in America our real estate values went up 130% before the mortgage meltdown.
So how are they doing this?
The Chinese have over built by at least ten to twelve years, and they have condos and high rises in their major cities that have never been occupied. When values were going up nobody believed real estate values could fall. It’s much like the euphoria surrounding the U.S. stock market. People do not believe that the Dow Jones is going to lose 10,000 points. We frequently have people in our office who look like a calf staring at new gate when I tell them what they are doing is going to cause them to lose 50% of their money. The only thing the masses believe is pain.
And when the market drops 50%, you’re stuck. You’re riding it to the bottom, because nobody will be buying it. So the garbage stockbrokers repeat about having you diversified and balanced is hogwash. I’m tired of dancing around it. This is further exacerbated by the fact that the there is $60 trillion more debt globally than there was in the last crash in 2008. Worldwide there is at least $210 trillion of debt, and worldwide there is in excess of $230 trillion in financial assets. I would not be surprised if $100 trillion of financial assets disappear. And do you know what your stock peddler will say when you call him after the Dow drops 10,000 points? He’ll say, “Nobody could have seen it coming. You haven’t locked into your losses until you sell. Hang in there. It will come back. It always does.s We have bull years and we have bear years. Let’s rebalance, and get a new game plan.” Mark my words.
The implosion will not happen in one quick crash. It will be staggered as it was during the Great Depression and most other major market crashes. Remember during the Great Depression the stock market was closed for four months. Talk about not having control of your financial dreams. You don’t want to sit through this implosion, and now is not the time to buy and hold stocks and mutual funds. Unload them like your life depends on it!
The Wall Street system of retirement is setup to make each of us losers!
We are trying to reach as many people as we can, but we realize that we won’t reach most people with this message of preparation. The runaway train is already barreling down the track with a drunken conductor. However the people reading this newsletter have the ability to get out and make their assets safe. Why are you waiting?