 It’s early morning here in Bangkok, and I am writing you now so you can act before Sunday night. But first, let me tell you what I see happening right now, and why it’s so important.
This is the quietest time of the day. The streets are emptied of bustling traffic. Pious Buddhist monks walk serenely to temple for morning prayers. In the park below my hotel room, senior citizens gather for the dawn Tai Chi. So I’m struck by the contrast between this peaceful moment and the rapid jumble of events around the globe. Looking to the West, I can see this week’s rioting in France … Thursday’s bombings in Baghdad … and Wednesday’s triple suicide attacks on American hotels in the capital of Jordan, the Arab nation most friendly to the U.S. and Israel. Here in Asia, I see the aftermath of last year’s tsunami and the devastation from last month’s earthquake. And when I call home to Florida, my wife and children tell me repeatedly about the mess in South Florida from Hurricane Wilma, not to mention the six major hurricanes that came before it. I cannot tell you if these events are related. Some are not. Some may be. But I can tell you this: In the Wake of These Natural and Man-Made First, the governments of the world are overwhelmed. Even in rich, modern nations like the U.S. and France, the bureaucrats are trained to push paper — not to pull strings. So their response to large emergencies is painstakingly slow and inevitably inadequate. In poorer countries, even that level of response is impossible to achieve. Second, faith in government is fading fast. The approval rating of France’s Chirac, already low before the riots this week, is sinking further. British Prime Minister Blair has just lost a major battle with Parliament and may be forced to resign. Germany’s entire new government has little popular support and is splintered in half. President Bush’s approval ratings have plunged to new lows. Third, government bonds are falling. When voters lose faith, approval ratings go down; when investors lose faith, government bond prices go down. The two trends are often the mirror image of the other. They go hand in hand. And when they feed on each other, the consequences can be explosive. Bond investors are asking: Why entrust your hard-earned money to a government that you wouldn’t even vote for? How can you have faith in the promise of government officials to return your money if you can’t even count on them to protect your life? And why should you invest your good money now if they’re going to pay you back with devalued money in the future? No Wonder Bond Prices Have In the United States, government bond prices are locked in a steep decline, with little more than brief rallies such as the one we saw this week. In Europe, government bonds have fallen even more sharply. And in Japan, government bonds have taken some of the biggest beatings of all. So this is a worldwide phenomenon. Clearly, bond investors all over the world now harbor growing fears of inflation and have diminishing faith in government. And clearly, this is a unique mix of forces that brings greater danger … but also greater opportunities. Our Recommendations First, safety: Continue to keep most of your cash short-term and invested conservatively. As interest rates rise, you’ll be able to earn the higher yields promptly — almost as soon as they become available. Second, stay out of the bond market no matter what. Government bonds are in trouble. So are corporate bonds. General Motors’ long-bonds, for example, have plunged precipitously. Ditto for Ford’s, and those of dozens of other companies loaded down with debts that are facing rising interest payments. This is part of the “The Big Squeeze†that I’ve referred to in my recent reports. Third, maintain your core positions in select natural resource investments. Energy. Gold mining. Select agricultural companies. Copper. Aluminum. And more. These are companies that deal in tangible assets that go up with rising inflation (not to mention the huge demand from Asia). The modest decline we’ve seen in oil, including this weeks, is little more than a blip on the screen in comparison to recent — and future — rises. Fourth, reduce your exposure to the riskiest stocks. Especially interest-sensitive stocks like banks, credit card companies, construction and real estate companies. Fifth, Aim to Build $4,500 into When the mood turns sour on government … and when inflation starts to surge … bonds can fall faster than at virtually any other time. In the past, to regain control over inflation and falling bonds, the Fed was forced to jack up its official rates by a half point … a full point … and even as much as two or more full points at a time. That was the only way they were able to attract investors and, eventually, restore their confidence.
In the past, in order to finally restore stability, the Fed raised its interest rates by as much as FIFTEEN full percentage points.
In the past, to quell the surging inflation, the Fed pushed interest rates far up above the inflation rate.
With the Right Investments, Even Tiny Let me give you some examples. One interest-rate investment recently jumped in value by 60%, in just 7 days … Another, with a bit more leverage, soared 94% … And still a third surged from $531 to $1,428 in just 4 days! You don’t have a time machine to go back and grab those gains, and nor do I. But as you can see, those all took place on just relatively small interest-rate increases! Now, however, the interest-rate rise is about to accelerate as bond prices tumble. On top of the social mood turning so negative, we now have … The worst trade deficit in history — expected to top $706 billion this year … AND The worst inflation in a quarter-century — a sudden jump in the Consumer Price Index of a whopping 1.2% in September. If bonds continue to fall and interest rates skyrocket, as we expect they will, a single investment of as little as $1,000 to $1,500 could be built up into $15,000 to $20,000. If you started with three of them (your cost: no more than $4,500), you’d have as much as $50,000. If we’re just halfway right, you could still see excellent gains — such as the 60%, 94% and that $531 investment that surged to $1,428 in 4 days I just told you about. And even if we’re completely wrong about interest rates, the most you can lose is the amount you invest, plus any commissions you pay your broker. Are losses possible? Absolutely! You cannot swing for home runs without also accepting the possibility of strikeouts. But this is an investment that lets you sleep at night and yet can make you a genuine fortune. You’re at the Doorstep of One of the Greatest Because of the extremely low interest rates in the United States, the largest holders of U.S. dollars — overseas investors and central banks — are getting very impatient holding dollars. Many are now getting ready to cease buying U.S. dollars and U.S. dollar bonds, and that alone is a disaster in the making. According to the report from this past Thursday, the U.S. trade deficit just jumped to $66.1 billion in September, the largest on record. That’s an annual pace of $706 billion … or nearly $2 BILLION PER DAY. That’s the amount we have to borrow from overseas investors and central banks to cover our trade deficit. And the only way we can borrow that money is by getting them to buy our bonds. But now, because of surging U.S. inflation, the declining purchasing power of our dollars, and the fading faith in all governments, overseas investors have virtually zero incentive to buy our bonds. China, South Korea and Japan have already hinted they’re going to STOP buying and start shifting their money elsewhere. As soon as they do, our bonds will immediately fall in value, driving interest rates higher. How Martin Weiss Can Help You Use This Convergence My colleague and publisher, Martin Weiss, has been tracking and analyzing interest rates for nearly four decades. And before him, his father did the same for nearly four decades as well. Today, Martin is leveraging his vast knowledge and experience with interest rates to help investors make money. Here’s how: First, Martin will send you a detailed explanation of those remarkable interest-sensitive options that you can use to build $4,500 into $50,000 as rates go up. For optimum profits, he generally recommends a variety of closely related — but different — options with varying expiration dates and strike prices. He explains what they are, how to buy them, and how much to pay for them. (In case you’re not experienced with options, he includes 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. Martin tells 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, he’ll tell you, ahead of time, the reasons he thinks this is a great opportunity for you, what the risk is, and what your profit potential is. Then he’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 — we can’t have you waiting around for the U.S. mail to reach you. Second, he’ll send you new recommendations as soon as he spots new opportunities. You’ll get a minimum of 15 recommendations per year, probably more. Right now, interest-rate options are his main focus because major fortunes are going to be made there relatively soon, and it’s going to start happening within days. But interest rates reach directly into other markets, such as interest-sensitive stocks. So some of the recommendations may be “put†options on a major bank that’s about to get clobbered by rising rates. For example, shares in J.P. Morgan are on the brink of collapse. This bank is loaded with bonds and mortgages that are already falling in value. It’s also got the largest portfolio in the world of high-risk investments called “derivatives.†And many of these are taking a beating as bond prices fall. Martin’s subscribers have already seen a long string of nice, hefty profits with put options on smaller banks and lenders that have taken hits in recent weeks due to rising short-term rates. Now, as long-term rates rise, impacting home lending rates as well, it’s going to be the big banks’ turn to see their shares get clobbered. Another major opportunity is coming in options on currencies. This is one of the markets that’s most directly impacted by changes in interest rates, especially changes of this magnitude. So for occasional diversification and some other great profit opportunities, Martin’s service also covers this area. His goal: To use his knowledge of interest rates to help you make money. Third, timing. You get the recommendations precisely when — and only when — Martin sees a major, first-rate opportunity for you. When the opportunity pops, you have to grab it then and there. That’s why the 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 they’re recommended, 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 Bond prices are already falling, just as Martin has been warning you. Interest rates are already rising. And subscribers to his interest-rate specialized service are already cashing in. Recently, Martin has been giving investors the opportunity to subscribe at half price — two years for the price of one. But that offer ends this coming Sunday at midnight. After that, normal pricing resumes. In the meantime, bond prices remain locked in a steep, slippery slide and should continue falling as rates rise.
With the upward pressure on interest rates now so powerful, moves that normally take years could be over in a matter of months. So to take advantage of the situation, you must have your options in place, ready before the market starts to move more rapidly. This Is Your Last Opportunity The name of the service is “Interest Rate and Currency Trader.†The regular price is $5,000 per year. However, if you respond before midnight Sunday, you can still get two years for the price of one. Subscribe at the regular rate of $5,000 for the first year, and you will get the second year free. That cuts your cost in HALF. And no guarantees, but we expect the first recommendations to pay several times the cost of the service. Here’s what we CAN guarantee: If you wish to cancel at any time in the first year, for whatever reason, you will receive a pro-rated refund on the balance of your subscription. Don’t miss out on this. If you want to join Martin’s inner circle of members at this special low rate, it’s critical that you send in your subscription fee now, before the Sunday night deadline. You get two years for the price of one, saving you $5,000. You get loads of profit opportunities, including the strategy to turn a modest investment of as little as $4,500 into as much as $50,000. Call Cindy or Alberto at 800-815-2917. They’ll be here all day today and until midnight Sunday. Or, order online using our secure website. Best wishes, Larry Edelson About MONEY AND MARKETS MONEY AND MARKETS (MAM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Larry Edelson, Tony Sagami and other contributors. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MAM. Nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MAM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical inasmuch as we do not track the actual prices investors pay or receive. Contributors include Marie Albin, John Burke, Michael Burnick, Beth Cain, Amber Dakar, Scot Galvin, Michael Larson, Monica Lewman-Garcia, Julie Trudeau and others. © 2005 by Weiss Research, Inc. All rights reserved. |
The Consequence of Catastrophes, Natural or Man-Made
Previous post: Worst Trade Deficit Ever! Now What?
Next post: Red-Hot Canadian Natural Resources
