Fed Rate Shock Next Week!

Next week will mark the beginning of one of the greatest interest-rate
moves of our lifetime.

That’s when the Federal Reserve will meet in Washington DC
to decide on what to do about its official rates.

It’s a foregone conclusion that the Fed will raise rates.
They’ve done precisely that six times in a row. But those
rate hikes were a mere quarter of a point each. Now, the Fed is
going to have to jack up rates much more quickly, lifting the lid
on a pressure cooker that’s been building up for months.

They have no choice. The dollar has been falling, and events are
now coming to a head. I’ll explain why in just a moment. But
…

First, Let’s Talk About The Huge
Investment Potential In This Situation

Most of the investments that I have recommended are designed for
safety, protection and modest gains. With the right timing, they
can double your money in a few years.

But in this situation, I’m inclined to be more aggressive.
I can see using some leverage, taking some more risk, and doubling
my money in 5 to 7 months, or even weeks.

Right now, for example, for just $1,000 to $1,500, you can control
$100,000 of investments that are tied directly to interest rates.
That’s as much as 100-to-1 leverage.

Moreover, since I’m talking about options, there’s no risk beyond
your $1,000 to $1,500. No margin calls or forced liquidations are
possible.

You can lose money. But even if I’m totally wrong, your loss is
limited to the amount you invest, plus any commissions you pay your
broker. This is an investment that lets you sleep at night, yet
can make you a genuine fortune.

With any decent move in interest rates — say, about 1 or
2 percentage points — I calculate these options could be worth
$4,800 to $5,400. And with a truly MAJOR interest-rate move, such
as I see coming, options like these could be worth as much as $15,000
to $20,000. If you had three of them (your cost: approximately $4,500),
suddenly you’d have about $50,000.

Why Interest Rates Are
About To Move Up So Sharply

The dollar has been falling nearly nonstop for almost three years,
and the largest holders of U.S. dollars are foreign investors and
central banks which are getting sick of swallowing continual losses
on their holdings.

So now they’re getting ready to cease buying U.S. dollars
and U.S. dollar bonds.

That alone is a disaster in the making because of the trade deficit
which, according to a report that just came out on Friday, now stands
at nearly $60 billion per month, or $2 BILLION A DAY. That’s
what we have to borrow from foreign investors and central banks
to cover the trade deficit!

The way we borrow is by getting them to buy our bonds. And until
recently, buying our bonds was pretty much the only thing they could
do with the extra billions they earned from all the goods they exported
to the United States.

But now, they have virtually zero incentive to buy our bonds. Other
choices, like the strengthening euro, are becoming increasingly
attractive.

The big danger: As soon as they STOP buying and begin shifting
their money elsewhere, our bonds will immediately fall in value,
driving interest rates higher.

The Day Of Reckoning Has Arrived

Last month, China’s central bank was the first to hint at
reducing their purchases of U.S. bonds. That alone was enough to
trigger a mini-panic in our bond market.

Two weeks ago, it was South Korea’s central bank that caused
another mini-panic when they said they might begin moving away from
the dollar.

Then just last week, it happened AGAIN — this time with one
of America’s closest allies, Japan. Just the HINT by Japan’s
central bankers that they were THINKING about a MINOR shift away
from U.S. dollar bonds sent our bond market into a tailspin.

And for good reason: These three countries alone hold a huge chunk
of the trillions in U.S. dollars and bonds held by foreigners. Even
if they hold on to every penny of their current holdings, the mere
fact that they’re slowing down their purchases of new U.S.
bonds is an instant calamity to our bond markets.

But with so much of their current holdings at risk, they’re
not only looking elsewhere for new purchases, they’re also
thinking about SELLING some portion of their massive U.S. dollar
holdings.

Greenspan Is Between A Rock And A Hard Place —
No Matter What He Decides Next Week, Bonds Will Plunge

The only way Fed Chairman Greenspan can convince foreign investors
to continue buying U.S. bonds is by paying them more — much
more — in interest.

He doesn’t want to raise U.S. interest rates sharply because
U.S. bonds will naturally fall sharply in price to adjust to the
higher interest-rate levels.

But if he DOESN’T do that, foreign investors are ready to
stop buying U.S. bonds — or even start selling. And then,
you won’t just see a mini-panic in U.S. bonds — you’ll
see an all-out uncontrollable PANIC in U.S. bonds.

Here’s What I Want You To Do …

FIRST, get out of the way of falling bond prices
and rising interest rates. If you own any long-term bonds, get rid
of them — immediately. Bonds are ALREADY beginning to fall
in value. After the next Fed rate hike — no matter how small
or large — they’re going to fall a lot more.

SECOND, if you must borrow, then gosh darn it,
you’d better make sure you lock down a fixed rate. Avoid adjustable-rate
loans like the plague!

THIRD, thanks in large measure to the dollar decline
I’ve been telling you about, the gold and energy investments
we’ve recommended in Safe Money Report are going
through the roof. Stick with them.

Plus, if you have money you can afford to risk, I have a fourth
recommendation …

Use Those Powerful Interest-Rate
Options And Give Yourself The Chance
To Build $4,500 Into $50,000

I would love to put powerful, highly leveraged interest-rate options,
like these, in my monthly newsletter. But I have to keep them out.

Options are extremely time sensitive, and interest-rate options
even more so. You simply can’t put them in a monthly newsletter.
With options, we really have to be on top of them daily —
even hourly.

So I decided it was time for me to tell you about a special service
to take advantage of the coming move in interest rates.

If Mr. Greenspan decides NOT to raise interest rates sharply very
soon, foreign central banks are going to start selling their dollars
and dollar bonds. And when they do that, I believe there’s
going to be a panic in the market of such dramatic proportions that,
over time, you’d have a chance to build a $4,500 initial investment
into six figures.

But I don’t think Greenspan is going to be that stubborn.
He sees the handwriting on the wall. He knows how close to pulling
the trigger the foreign central banks are.

So the more likely scenario is for Greenspan to finally step up
to the plate and start raising interest rates more aggressively
— to help prevent an all-out panic.

If that’s what he does, I’m confident the options I’m
recommending will still do great. But in the absence of an all-out
bond market panic, you can’t count on the same windfall. I
figure the opportunity in that scenario will be to build the $4,500
into about $50,000, which I don’t think you’d mind too
much.

Only 1,000 Slots Available

I’m restricting this service to a maximum of 1,000 subscribers.
This is absolutely essential because of the liquidity of the market.
I want to make sure you get good fills on your buys and sells.

The name of the service is “Interest Rate and Currency Trader.”

The price is $5,000 per year or $450 per month with convenient
monthly billing. No discounts. If you can’t afford to spend
that sort of money — without worrying about it or jeopardizing
your liquidity — you shouldn’t be investing in these
high-powered, interest-sensitive options.

And no guarantees, but I expect the first recommendations to pay
several times the cost of the service.

What You Will Get As A Subscriber
To My Interest Rate and Currency Trader

FIRST, I will send you a detailed explanation
of those remarkable interest-sensitive options that you can use
to build $4,500 into $50,000 as interest rates go up.

For optimum profits, I generally recommend a variety of closely
related — but different — options with varying expiration
dates and strike prices.

I’ll explain what they are, how to buy them, and how much
to pay for them. (In case you’re not experienced with options,
I’ll include an explanation that begins with the basics and
covers everything you’ll need to make this really work for
you.)

Most analysts give a recommendation but don’t do the necessary
homework to make sure you can really act on it. I will tell you
when to get in, when to get out, and when to “roll over”
your positions to give you more time if you need it.

On each and every investment, I’ll tell you, ahead of time,
the reasons I think this is a great opportunity for you, what the
risk is, and what your profit potential is.

Then I’ll keep you posted on any changes so you’ll
always have specific instructions. This is an elite service that
has no ambiguity, ifs, buts, wherefores or other weasel phrases
so many analysts use to protect their you-know-whats.

It always goes out by e-mail because instantaneous communication
is essential for good fills in these fast-moving markets. When it’s
time to buy — or take profits — I can’t have you
waiting around for the U.S. mail to reach you.

SECOND, I’ll send new recommendations as
soon as I spot new opportunities. You’ll get a minimum of
15 recommendations per year, probably more.

Right now, interest-rate options are my main focus because I’m
convinced major fortunes are going to be made here relatively soon,
and I think it’s going to start happening within days.

But interest rates reach directly into other markets, such as currencies.

So my next recommendation may be call options on the euro or the
Japanese yen. Wherever I think you’re going to make the most
money from interest rates, you will get my TOP, number one recommendation.

THIRD, timing. You get my recommendations precisely
when — and only when — I see a MAJOR, FIRST-RATE opportunity
for you. I believe that when the opportunity pops, you have to grab
it then and there.

That’s why my recommendations do not conform to a regular
publication schedule. You will get a wrap-up issue every week no
matter what. But the recommendations can come out at any time on
any day of the week.

The recommendations will be sent to you by e-mail, complete with
a detailed explanation of why I’m recommending it, how to
buy it, how much to pay for it, what special warnings — if
any — are necessary and, of course, when to take profits and
sell.

Interest Rates Are Not
Going To Hang Around For You

The Fed meeting is on Tuesday of next week.

And as we approach the meeting, Fed Chairman Alan Greenspan has
been increasingly blunt in his warnings.

Just last week, in his testimony before Congress, he was emphatic
that the trade deficit and the budget deficit had to be cut back
sharply.

But Congress’ hands are tied because a huge portion of the
budget is entitlements, such as Social Security and Medicare, and
the war in Iraq that cannot be cut.

One way or the other, interest rates are going to start moving
up. Either Greenspan starts raising them at a faster rate …
or foreign central banks are going to stop swallowing losses on
their dollar holdings and start selling.

Years ago, in a previous situation like this, it took only 7 months
for the Treasury-bill rate to surge from 6% to 16%. I don’t
think rates will go up that quickly this time around. But even if
they go up only half as fast, the opportunities in interest-rate
options are tremendous.

With the upward pressure on interest rates now so powerful, interest-rate
moves that normally take years could be over in a matter of months.
To take advantage of the situation, you must have your options in
place, sitting there BEFORE the market starts to move more rapidly.

Once The 1,000 Slots Are Gone, That’s It!

I’m sending this information out to more than 100,000 subscribers.

So I fully expect the remaining slots will be sold out very soon.
Once these are gone, that’s it. Unless you want to be placed
on a waiting list, any additional checks will be sent back.

I don’t want to disappoint you. If you want to become a subscriber,
it’s critical that you send in your subscription fee now,
before we run out of the available slots. To make sure, I suggest you pick up the phone right now and call Zoe at 800-815-2917.

Or you can order online — either a one-year
subscription or monthly
billing.

Good luck and God bless,

Martin D. Weiss, Ph.D.
Editor, Safe Money Report
Chairman, Weiss Ratings, Inc.
martinonmonday@weissinc.com

Martin Weiss
and “Martin on Monday” are non-partisan. Third-party ads do not necessarily
represent their opinion and should not be interpreted as an endorsement.