Lombardi: Stock Market Commentary & Forecasts, Financial & Economic Analysis Since 1986

Municipal Bonds

Municipal bonds are bonds issued by an American county, city, publicly owned airport, seaport, school district, or utility. The bonds are issued to improve the said cities or counties, or are tied specifically to a project within a county or city. Therefore, the bonds are backed by the county, city, or specific project. One general aspect of municipal bonds that makes them attractive is that they provide income with great tax benefits. Usually, municipal bonds are completely exempt from federal taxes. Municipal bonds trade in the bond markets, much like most of the other major bonds in the U.S.

Another Flashing Red Light: Investments in Stocks by Households and Nonprofits Reach Record High

By for Profit Confidential

key stock indicesThe general consensus among stock advisors is that the key stock indices will continue to go higher. Each day, I hear about another “bear” throwing in the towel and turning bullish on key stock indices.

“Don’t fight the fed or the tape; just buy stocks, and you’ll do fine” has become the norm again. Sadly, this worries me a lot because the fundamentals that drive the key stock indices higher are becoming weaker with each passing day.

As an example, for the third quarter, the corporate earnings growth rate for the S&P 500 companies was only 2.9%. To some, this might sound great, but look at these three facts: 1) corporate earnings were up 2.9% in the third quarter, but the stock market is up about 13% from the beginning of the third quarter; 2) corporate earnings growth so far in 2013 is running at its slowest pace since 2009; and 3) only 52% of the S&P 500 companies were able to beat revenue estimates for the third quarter. (Source: FactSet, December 6, 2013.) This suggests corporate earnings aren’t really coming from companies selling more, but rather from stock buyback programs and cost-cutting.

Troubles for corporate earnings don’t just end there. Corporate earnings are expected to be weaker in the fourth quarter. So far, of the 103 companies in the S&P 500 that have issued corporate earnings guidance, 89% of them have issued negative guidance!

And aside from corporate earnings, there is another problem brewing for key stock indices…

The chart below shows the dollar amount of stocks owned by households and nonprofit organizations. At the end of the third … Read More

Detroit Bankruptcy Approval: A Green Light for More to Join?

By for Profit Confidential

Detroit, the “Motor City,” has been approved for bankruptcy. In making the ruling, Judge Steven W. Rhodes, who sits in the United States Bankruptcy Court for the Eastern District of Michigan, said, “This once proud and prosperous city can’t pay its debts.” He added, “It’s insolvent. It’s eligible for bankruptcy. But it also has an opportunity for a fresh start.” (Source: “Detroit Ruling on Bankruptcy Lifts Pension Protections,” New York Times, December 3, 2013.)

In his ruling, the judge also made it very clear that the pensions of city employees might be at stake. He said, “Pension benefits are a contractual right and are not entitled to any heightened protection in a municipal bankruptcy.” (Source: Ibid.)

Looking at what happened to Detroit, I question if we are going to see a spree of municipal bankruptcies in the U.S. economy.

You see, Detroit was a prime example of a city registering budget deficit after budget deficit, year after year. It borrowed to pay for its expenses. It came to a point where it had to tell its municipal bonds holders, “Sorry, we can’t pay you,” and its pensioners, “Sorry, your pensions are non-existent.”

After the housing bubble burst in 2007, cities across the U.S. economy started to register budget deficits as they continued to spend at the same pace despite the decline in property tax revenue.

As it stands, across the U.S. economy, there are a significant number of cities that are struggling to control their budget deficits. Mind you, it’s not just smaller counties that are struggling with this problem. Major cities in the U.S. economy, like Chicago, Los … Read More

Three Key Indicators Say U.S. Economy in Trouble

By for Profit Confidential

 budget deficitThe mainstream and politicians tell us the “wounds” of the financial crisis are over and the U.S. economy is in recovery mode. This simply isn’t true.

A few of the key indicators I follow to see where an economy stands are personal income, consumer demand, and businesses’ activity. All three of these indicators are telling me the U.S. economy is definitely going in the wrong direction.

First of all, the income gap in the U.S. economy continues to grow. The top earners make more, while the lowest income earners make less. According to the Wage Statistic from Social Security, in 2012, 23 million of the lowest wage earners earned a total of $47.0 billion in the U.S. economy. But those who earned $10.0 million or more annually in the year 2012 earned $64.3 billion! Here comes the kicker: there were only 2,915 wage earners in this category in the U.S. economy last year. (Source: Social Security, November 5, 2013.) Yes, you read that right. Less than 3,000 people cumulatively made more than 23 million people.

The bottom line: while Wall Street and big business has boomed again, the average working American family is struggling under an after-inflation personal income that is lower than it was in 2009—four years ago. In 1999, real median household income (that’s adjusted for inflation) in the U.S. economy was $56,030. By 2012, that number was $51,017. (Source: “Real Median Household Income in the United States,” U.S. Department of Commerce, September 18, 2013.)

Next, American consumers are pulling back on their spending—something that’s not supposed to happen when an economy is recovering.

One indicator of consumer … Read More

Municipal Debt Crisis Far from Over

By for Profit Confidential

We have seen cities like Detroit and others in California tell their municipal bonds investors, “Sorry, we can’t pay you.” The reason behind this? Their budget deficit was out of control, they reached the breaking point, and they filed for bankruptcy.

But the troubles of municipalities and cities aren’t behind us. In fact, they are marching forward with full force. And it’s not just rural cities and counties that are struggling to fix their budget deficit; major ones are doing the exact same thing. And truth be told, they are failing at it.

Take Fresno, California, for example. In the fiscal year 2014—which began on July 1, 2013 and ends on June 30, 2014—Fresno, one of the largest cities in California, will register a budget deficit of $6.0 million. If the city is unable to reduce its budget deficit in the fiscal year 2014, then its budget deficit can grow to as much as $32.2 million in the next five years. (Source: “FY 2014 Adopted Budget,” City of Fresno, California, May 29, 2013.)

And Fresno has worked very hard to keep its budget deficit under control. In the last four years, the city has decreased its workforce by 1,200 employees (25% of the city’s workforce), reduced or completely eliminated the maintenance and replacement of equipment, and now relies on volunteers for parks maintenance, community centers, and for different functions in the police department. The city has also reduced the number of employees working in public safety. One would assume that after this many cuts, the budget deficit would be controlled; but that’s certainly not the case for Fresno, California.

While … Read More

Hundred-Thousand Investors Told “Sorry, We Can’t Pay You” Just the Beginning?

By for Profit Confidential

municipal bondsMajor cities across the U.S. economy are struggling. Yes, we saw great cities like Detroit go bankrupt. But don’t for a second believe it’s all over. The reality is we will have more situations like Detroit.

Take the City of Los Angeles, for example. In his budget proposal to the city council, the mayor of the city, Antonio Villaraigosa, said Los Angeles will have a budget deficit of $216 million in the current fiscal year. (Source: City of Los Angeles, April 20, 2013.)

But Los Angeles isn’t the only problem city in California. When I look at San Francisco, it shows even more trouble for the municipal bonds market. The city’s controller says the budget deficit will increase from $283 million last year to $829 million by fiscal 2015/2016. (Source: City of San Francisco, Office of the Controller web site, last accessed September 16, 2013.)

Minneapolis, Minnesota was downgraded by Moody’s Investors Service recently. This puts the city’s $679 million worth of general obligation municipal bonds on the line. (Source: Moody’s Investors Service, July 29, 2013.) A couple of the reasons for the downgrade by Moody’s were that property values in the city have declined and it has a pension liability of 4.3 times the operating revenue it received in fiscal 2012!

Risks are growing in the municipal bonds market. Let’s not forget: in Detroit, over 100,000 municipal bond investors were told, “Sorry, we can’t pay you.”

What we are seeing with U.S. cities sinking in debt should alarm us, but just like other crisis situations, like auto loans and student debt, no one wants to talk about it.

Municipal … Read More

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Another Flashing Red Light: Investments in Stocks by Households and Nonprofits Reach Record High

By for Profit Confidential

key stock indicesThe general consensus among stock advisors is that the key stock indices will continue to go higher. Each day, I hear about another “bear” throwing in the towel and turning bullish on key stock indices.

“Don’t fight the fed or the tape; just buy stocks, and you’ll do fine” has become the norm again. Sadly, this worries me a lot because the fundamentals that drive the key stock indices higher are becoming weaker with each passing day.

As an example, for the third quarter, the corporate earnings growth rate for the S&P 500 companies was only 2.9%. To some, this might sound great, but look at these three facts: 1) corporate earnings were up 2.9% in the third quarter, but the stock market is up about 13% from the beginning of the third quarter; 2) corporate earnings growth so far in 2013 is running at its slowest pace since 2009; and 3) only 52% of the S&P 500 companies were able to beat revenue estimates for the third quarter. (Source: FactSet, December 6, 2013.) This suggests corporate earnings aren’t really coming from companies selling more, but rather from stock buyback programs and cost-cutting.

Troubles for corporate earnings don’t just end there. Corporate earnings are expected to be weaker in the fourth quarter. So far, of the 103 companies in the S&P 500 that have issued corporate earnings guidance, 89% of them have issued negative guidance!

And aside from corporate earnings, there is another problem brewing for key stock indices…

The chart below shows the dollar amount of stocks owned by households and nonprofit organizations. At the end of the third … Read More

Detroit Bankruptcy Approval: A Green Light for More to Join?

By for Profit Confidential

Detroit, the “Motor City,” has been approved for bankruptcy. In making the ruling, Judge Steven W. Rhodes, who sits in the United States Bankruptcy Court for the Eastern District of Michigan, said, “This once proud and prosperous city can’t pay its debts.” He added, “It’s insolvent. It’s eligible for bankruptcy. But it also has an opportunity for a fresh start.” (Source: “Detroit Ruling on Bankruptcy Lifts Pension Protections,” New York Times, December 3, 2013.)

In his ruling, the judge also made it very clear that the pensions of city employees might be at stake. He said, “Pension benefits are a contractual right and are not entitled to any heightened protection in a municipal bankruptcy.” (Source: Ibid.)

Looking at what happened to Detroit, I question if we are going to see a spree of municipal bankruptcies in the U.S. economy.

You see, Detroit was a prime example of a city registering budget deficit after budget deficit, year after year. It borrowed to pay for its expenses. It came to a point where it had to tell its municipal bonds holders, “Sorry, we can’t pay you,” and its pensioners, “Sorry, your pensions are non-existent.”

After the housing bubble burst in 2007, cities across the U.S. economy started to register budget deficits as they continued to spend at the same pace despite the decline in property tax revenue.

As it stands, across the U.S. economy, there are a significant number of cities that are struggling to control their budget deficits. Mind you, it’s not just smaller counties that are struggling with this problem. Major cities in the U.S. economy, like Chicago, Los … Read More

Three Key Indicators Say U.S. Economy in Trouble

By for Profit Confidential

 budget deficitThe mainstream and politicians tell us the “wounds” of the financial crisis are over and the U.S. economy is in recovery mode. This simply isn’t true.

A few of the key indicators I follow to see where an economy stands are personal income, consumer demand, and businesses’ activity. All three of these indicators are telling me the U.S. economy is definitely going in the wrong direction.

First of all, the income gap in the U.S. economy continues to grow. The top earners make more, while the lowest income earners make less. According to the Wage Statistic from Social Security, in 2012, 23 million of the lowest wage earners earned a total of $47.0 billion in the U.S. economy. But those who earned $10.0 million or more annually in the year 2012 earned $64.3 billion! Here comes the kicker: there were only 2,915 wage earners in this category in the U.S. economy last year. (Source: Social Security, November 5, 2013.) Yes, you read that right. Less than 3,000 people cumulatively made more than 23 million people.

The bottom line: while Wall Street and big business has boomed again, the average working American family is struggling under an after-inflation personal income that is lower than it was in 2009—four years ago. In 1999, real median household income (that’s adjusted for inflation) in the U.S. economy was $56,030. By 2012, that number was $51,017. (Source: “Real Median Household Income in the United States,” U.S. Department of Commerce, September 18, 2013.)

Next, American consumers are pulling back on their spending—something that’s not supposed to happen when an economy is recovering.

One indicator of consumer … Read More

Municipal Debt Crisis Far from Over

By for Profit Confidential

We have seen cities like Detroit and others in California tell their municipal bonds investors, “Sorry, we can’t pay you.” The reason behind this? Their budget deficit was out of control, they reached the breaking point, and they filed for bankruptcy.

But the troubles of municipalities and cities aren’t behind us. In fact, they are marching forward with full force. And it’s not just rural cities and counties that are struggling to fix their budget deficit; major ones are doing the exact same thing. And truth be told, they are failing at it.

Take Fresno, California, for example. In the fiscal year 2014—which began on July 1, 2013 and ends on June 30, 2014—Fresno, one of the largest cities in California, will register a budget deficit of $6.0 million. If the city is unable to reduce its budget deficit in the fiscal year 2014, then its budget deficit can grow to as much as $32.2 million in the next five years. (Source: “FY 2014 Adopted Budget,” City of Fresno, California, May 29, 2013.)

And Fresno has worked very hard to keep its budget deficit under control. In the last four years, the city has decreased its workforce by 1,200 employees (25% of the city’s workforce), reduced or completely eliminated the maintenance and replacement of equipment, and now relies on volunteers for parks maintenance, community centers, and for different functions in the police department. The city has also reduced the number of employees working in public safety. One would assume that after this many cuts, the budget deficit would be controlled; but that’s certainly not the case for Fresno, California.

While … Read More

Hundred-Thousand Investors Told “Sorry, We Can’t Pay You” Just the Beginning?

By for Profit Confidential

municipal bondsMajor cities across the U.S. economy are struggling. Yes, we saw great cities like Detroit go bankrupt. But don’t for a second believe it’s all over. The reality is we will have more situations like Detroit.

Take the City of Los Angeles, for example. In his budget proposal to the city council, the mayor of the city, Antonio Villaraigosa, said Los Angeles will have a budget deficit of $216 million in the current fiscal year. (Source: City of Los Angeles, April 20, 2013.)

But Los Angeles isn’t the only problem city in California. When I look at San Francisco, it shows even more trouble for the municipal bonds market. The city’s controller says the budget deficit will increase from $283 million last year to $829 million by fiscal 2015/2016. (Source: City of San Francisco, Office of the Controller web site, last accessed September 16, 2013.)

Minneapolis, Minnesota was downgraded by Moody’s Investors Service recently. This puts the city’s $679 million worth of general obligation municipal bonds on the line. (Source: Moody’s Investors Service, July 29, 2013.) A couple of the reasons for the downgrade by Moody’s were that property values in the city have declined and it has a pension liability of 4.3 times the operating revenue it received in fiscal 2012!

Risks are growing in the municipal bonds market. Let’s not forget: in Detroit, over 100,000 municipal bond investors were told, “Sorry, we can’t pay you.”

What we are seeing with U.S. cities sinking in debt should alarm us, but just like other crisis situations, like auto loans and student debt, no one wants to talk about it.

Municipal … Read More

Detroit’s Bankruptcy Bad News? Not Until You See Who’s Next

By for Profit Confidential

 budget deficitDetroit, once the emblem of the growing U.S. economy, had no other options than to file for bankruptcy. Other cities in California, and cities like Jefferson County, Alabama, have done the same for very similar reasons: registering a budget deficit year-after-year as revenues declined and costs rose—especially pension costs.

Municipal bond investors are crushed when cities file for bankruptcy. But that’s old news. Unfortunately, there could be many more bankruptcy situations at the city and municipal level going forward.

Cities across the U.S. economy are experiencing rising budget deficits, and contrary to popular belief, it’s not just smaller cities; major cities are in the same situation. In fact, two major American cities are in big fiscal trouble.

Chicago, the “Windy City,” is expected to incur a budget deficit of $338.7 million next year. By 2015, this budget deficit will increase to $1.0 billion, moving up to $1.15 billion by 2016. The city is in deep trouble as pension liabilities are soaring—police and fire pensions are in a cash crunch. (Source: Chicago Sun Times, August 1, 2013.) The city has received credit rating cuts and warnings from credit rating agencies. It owes billions of dollars to its suppliers and it can’t pay them.

Baltimore is in a similar situation. In February of this year, the city’s long-term budget deficit was projected to be $750 million. In a desperate attempt to fix the issue at hand—to reduce the budget deficit—the city cut about 2,200 dependants from the health insurance plan it provides to its employees. (Source: Baltimore Sun, August 2, 2013.)

When a city is faced with a budget deficit, … Read More

Fall-Out from Detroit’s Bankruptcy Far Too Underestimated

By for Profit Confidential

Fall-Out from Detroit’s BankruptcyBy now, we all know Detroit, once a notorious manufacturing hub in the U.S. economy, filed for bankruptcy. The city defaulted on its municipal bonds simply because it didn’t have the money to give its creditors. The city had three main reasons for filing bankruptcy: out-of-control budget deficits, declining revenues, and staggering pension liabilities.

Municipal bonds investors beware.

Detroit isn’t the first city to file for bankruptcy due to a budget deficit and default on its municipal bonds. We have already seen multiple cities in California and Jefferson County, Alabama do the same thing. Unfortunately, we might see similar troubles going forward—more cities are headed into a downward spiral due to budget deficits and pension liabilities, resulting in severe scrutiny for municipal bonds investors.

A senior fellow at the Brookings Institution (a public-policy not-for-profit research organization), Alan Mallach agrees with this notion. He said, “None of the other cities are far along, but there are dozens, if not hundreds of cities that have similar issues… Every other industrial city has problems that could send them down the same path.” (Source: Selway, W., “Detroit’s Bankruptcy Reveals Dysfunction Common in Cities,” Bloomberg, July 21, 2013.)

Chicago just witnessed a downgrade in its municipal bonds by credit reporting agency Moody’s Investors Service. The main reasons for the downgrade? Its budget deficit and rising pension liabilities. Analysts at the credit rating firm said, “The current administration has made efforts to reduce costs and achieve operational efficiencies, but the magnitude of the city’s pension obligations has precluded any meaningful financial improvements.” (Source: “UPDATE 1-Moody’s cuts rating on Chicago’s bonds, cites pensions,” Reuters, July 17, 2013.)… Read More

Gone Are the Days When the U.S. Bond Market Was the Place to Be

By for Profit Confidential

U.S. Bond Market Was the Place to BeIn 1980, the total outstanding debt in the U.S. bond market was about $2.5 trillion—this included municipal bonds, Treasury bonds, money market instruments, corporate debt, and asset-backed securities. Fast-forward to 2012, and the U.S. bond market stands at $38.13 trillion—an increase of more than 1,400%! (Source: Securities Industry and Financial Markets Association, March 7, 2013.)

The chart below shows how the U.S. bond market has ballooned over time.

Outstanding U.S.Bond Market Debt stock chart

              Chart copyright Lombardi Publishing Corporation, 2013;
Data Source: Securities Industry and Financial Markets Association (SIFMA)

As I have written in these pages before, I expect the coming sell-off in the U.S. bond market to start slowly; nothing like what we saw when the key stock indices plummeted in 2008 and 2009. It will be slow and steady, gradually picking up speed.

Bond investors are facing two risks in the U.S. bond market: interest rate risk and credit risk.

The Federal Reserve has been keeping interest rates artificially low since the financial crisis began, while printing an unprecedented amount of new paper money in its efforts to boost economic growth. The Fed will eventually have to raise interest rates to tame inflationary pressures. When that happens, bond investors could face extensive losses. A simple rule of economics: bond prices fall when interest rates rise. The U.S. bond market will be no different.

The U.S. government is spending with two hands. It has been posting budget deficits of more than $1.0 trillion for the last four years. It won’t surprise me to see another year with a U.S. budget deficit of more than $1.0 trillion. The U.S. national debt is headed well above $17.0 … Read More

America: A Mirror Image of Japan 15 Years Later?

By for Profit Confidential

A Mirror Image of JapanWe need to learn from this example…

Similar to the U.S. economy, only years earlier, the Japanese economy also burst following a boom in real estate prices. To help revive its economy, the Bank of Japan brought interest rates to near zero in 1999 and has done several rounds of quantitative easing since. The central bank of Japan has increased its balance sheet to 166 trillion yen. (Source: Wall Street Journal, March 21, 2013.)

But all this monetary stimulus—interest rates near zero for years and lots of money printing—has helped the Japanese economy. In fact, global exports from the Japanese economy fell 2.9% in February 2013 from February 2012. This is important because it shows how the Japanese economy is struggling even after implementing unheard of monetary policy intended to bring economic growth to the country—similar to what the Federal Reserve is doing now in the U.S.

February marked the eighth consecutive month of slowing exports and an increasing trade deficit (more imports than exports) for Japan—the biggest streak of trade deficits since 1980. (Source: Bloomberg, March 21, 2013.)

Japan’s national debt to gross domestic product (GDP) stands at about 204% of GDP—this shows you just how easy monetary policy has been in Japan.

The Japanese economy should be looked upon as a good example for the Federal Reserve to see how its monetary policy will play out in the U.S. economy.

What has this done for the Japanese economy with all its paper money printing? Not much, to say the least. Since 1998, wages in the Japanese economy are down seven percent, property prices are down 51%, and … Read More

Beware Municipal Bond Investors: Storm Ahead

By for Profit Confidential

Municipal bonds investors might be headed towards a storm, which may cause significant damage to their portfolios. Cities within the U.S. economy are in distress—they are struggling to keep their spending in order to not increase their budget deficit.

Detroit, one of the biggest cities in the U.S. economy, was handed an emergency manager by the state to take care of the city’s budget deficit. The city is running a deficit of $327 million and has $14.0 billion in long-term obligations—mainly municipal bonds backed by the city’s water and sewer systems. (Source: “Snyder Says Detroit Needs Emergency Manager to End Fiscal Crisis,” Bloomberg, March 1, 2013, last accessed March 21, 2013.)

Michigan’s Governor, Rick Snyder, explained the city’s situation, saying, “it’s a sad day, a day I wish never happened, but it’s a day of promise.” (Source: Ibid.)

If the state didn’t intervene, then Detroit would have been the largest municipal bankruptcy in the U.S. economy—leaving municipal bonds investors in misery. In November 2011, Jefferson County, Alabama was the largest municipal bankruptcy in the U.S., involving more than $3.1 billion in municipal bonds.

Municipal bonds investors have enjoyed tax advantages in the U.S. economy, but if there is a downturn in these types of bonds, then the benefits will quickly disappear.

What’s ahead for municipal bonds investors looks even more troublesome. Williston, North Dakota’s municipal bonds were downgraded by Standard and Poor’s from “A-” to “BBB+.” (Source: KFYR-TV, February 28, 2013.) The municipal bonds credit rating went from being in the upper investment grade to almost the non-investment grade.

Moody’s Investor Services has downgraded 11 municipalities in the U.S. from … Read More

The Severity of the Municipal Budget Deficit Situation

By for Profit Confidential

The Severity of the Municipal BudgetHow severe is the municipal budget deficit situation? In some cases, it is getting to the point of no return. And it’s not just Californian cities that are in trouble; other municipalities in the U.S. economy are struggling to keep up as well.

For instance, San Diego could face a budget deficit of $84.0 million in 2013, compared to a $5.0-million surplus anticipated by the city’s mayor. (Source: U-T San Diego, November 22, 2012.) San Diego’s bigger-than-anticipated deficit is mainly due to investment losses in the city’s pension fund, infrastructure repairs, and the shutting down of its redevelopment agency.

Similarly, the Michigan state treasurer has warned Detroit about troubles ahead. In August of this year, it was estimated that Detroit would have a cash deficit of $62.0 million by June of 2013, and by this November, that number increased to $122 million. (Source: Reuters, December 15, 2012.)

The scrutiny for municipal bonds investors doesn’t end here; they have more reasons to be worried. The main reason municipalities in the U.S. economy are faced with such large deficits is because they promised generous salaries and pensions to their employees, but the tax revenues that would pay for those promises have deteriorated.

After the housing collapse, their property tax revenues fell short, but the obligations of municipalities remained the same. Municipalities issued bonds to fill their pension funds, thus, today’s municipal bond concerns.

Now Moody’s Investor Services is warning municipal bonds investors about cities involved in the practice of raising money simply to fill pension gaps. The rating agency believes that the cities are simply adding more to their liabilities and … Read More

The Great Crash of 2014

A stock market crash bigger than what happened in 2008 and early 2009 is headed our way.

In fact, we are predicting this crash will be even more devastating than the 1929 crash…

…the ramifications of which will hit the economy and Americans deeper than anything we’ve ever seen.

Our 27-year-old research firm feels so strongly about this, we’ve just produced a video to warn investors called, “The Great Crash of 2014.”

In case you are not familiar with our research work on the stock market:

In late 2001, in the aftermath of 9/11, we told our clients to buy small-cap stocks. They rose about 100% after we made that call.

We were one of the first major advisors to turn bullish on gold.

Throughout 2002, we urged our readers to buy gold stocks; many of which doubled and even tripled in price.

In November of 2007, we started begging our customers to get out of the stock market. Shortly afterwards, it was widely recognized that October 2007 was the top for stocks.

We correctly predicted the crash in the stock market of 2008 and early 2009.

And in March of 2009, we started telling our readers to jump into small caps. The Russell 2000 gained about 175% from when we made that call in 2009 to today.

Many investors will find our next prediction hard to believe until they see all the proof we have to back it up.

Even if you don’t own stocks, what’s about to happen will affect you!

I urge you to be among the first to get our next major prediction.
See it here now in this just-released alarming video.

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