An Ivy League Education and They STILL Can't Think for Squat

Phoenix Capital Research's picture

The US Federal Reserve has bet the farm… and the Republic on the idea that they can
inflate us back to a recovery.

 

In plain
terms, Bernanke and pals believe that if they can make the stock market rise,
people will feel richer and will start spending money again, insuring that the
US economy (which is 70% based on the consumer) will come roaring back to life.

 

The problem
with this sort of thinking is that it’s so superficial as to be laughable,
especially for those claiming to have an advanced education from a top university.

 

Indeed, the
fact that the S&P 500 goes from 1,000 to 1,330 DOESN’T mean that those who
own stocks are that much wealthier. This
is because the nominal price of stocks (what the S&P 500 is priced at) IS
NOT the same as the PURCHASING POWER of stocks.

 

Here’s the
S&P 500 priced in US Dollars. Looks like investors are getting a lot richer
in a hurry doesn‘t it?

 

 

Now, here’s
the S&P 500 priced in Gold: a currency that the Fed CAN’T turn into toilet
paper and a real measure of purchasing power:

 

 

In simple
terms, those who own stocks have not actually increased their wealth in anyway
since March 2008. All they’ve done is owned an asset that increased in nominal
terms ONLY when it’s priced in a rapidly devaluing currency (the US Dollar).

 

The fact
that our monetary system is run by guys who believe that “stocks rise = WEALTH”
should give you the chills. Using this level of intelligence, you could rack up
$500,000 in debt buying fancy clothes and then claim you’re wealthy cause you
look like you have money (which by the way is something many people have done).

 

This is
nothing new for the financial world. Research from the London Business School shows that when you account for
inflation, stocks have often LOST money for DECADES despite rising
substantially in nominal terms.

 

A great example of this is France where investors saw NO increase in
purchasing power from stocks (as in ZERO) from 1912 to 1977.
That’s right, nearly THREE
GENERATIONS of investors LOST wealth by owning stocks in France during the 20th
century.

 

So if you want to buy the
whole “I’m missing out by not owning stocks” BS which is slung around like it’s
true, you’re being conned into the biggest scam of the century (literally). You’re
also actively voting for Ben Bernanke (more on this in another essay) by
supplying him with more phony evidence to claim that his insane monetary
policies are working.

 

On that
note, if you’re getting worried about the future of the stock market and have
yet to take steps to prepare for the Second Round of the Financial Crisis… I
highly suggest you download my FREE Special Report specifying exactly how to
prepare for what’s to come.

 

I call it The Financial Crisis “Round Two” Survival
Kit
. And its 17 pages contain a wealth of information about portfolio
protection, which investments to own and how to take out Catastrophe Insurance
on the stock market (this “insurance” paid out triple digit gains in the Autumn
of 2008).

 

Again, this
is all 100% FREE. To pick up your copy today, go to http://www.gainspainscapital.com
and click on FREE REPORTS.

 

Best Regards,

 

Graham
Summers

 

PS. We ALSO
publish a FREE Special Report on Inflation detailing three investments that
have all already SOARED as a result of the Fed’s monetary policy.

You can
access this Report at the link above.