Winter Storm Warning

Dress Accordingly Were you forwarded this email? [Sign-up to The Daily Reckoning here.]( [Unsubscribe]( [Daily Reckoning] If there’s anything you’ve missed as part of your membership to The Daily Reckoning, make sure you check out our website where you can find archives, updates, and everything else that's included in your subscription. You can access it by [clicking here now](. Winter Storm Warning - “To everything there is a season”… - Are we in for a 20-year stock market winter?… - We live in some of the most tumultuous times of the past 500 years… Recommended Link [**Urgent Note From Jim Rickards – Response Is Requested By 02/08**]( [Read more here...]( I’ve just made a [massive change]( to Strategic Intelligence. This is one of the biggest changes to a newsletter in the history of our business… As far as I know, nothing like it has been done before. What’s going on? In short, I’m adding 3 exciting new additions to [this all-new “Pro level”]( of Strategic Intelligence. And as a current subscriber, I don’t want to see you miss out. That’s why — for a very limited time, until the timer below hits 0 — you’ll be able to [upgrade your subscription to this new “Pro level” by clicking here.]( Seriously. [Just click here now to see how to claim your upgrade.]( Once the timer hits 0, however, it’ll be too late… you’ll miss out. I’d hate to see you left behind. [Click Here NOW]( Annapolis, Maryland February 9, 2022 [Brian Maher]Dear Reader, “To everything there is a season,” Ecclesiastes informs us — winter, spring, summer, autumn. We must assume economies, stock markets — perhaps civilization itself — offer no exceptions. They too must roll in rhythm with the cycling seasons. A season may run for months. Or Years. Decades. Centuries. Today we turn our focus from the passing weather. It is the long view, the overall view — the seasonal view — that commands our attention. Economies and stock markets sprout, blossom, fade — and die. Sometimes summer extends far into autumn before letting go. And sometimes winter holds its iron grip deep into calendar spring. Stock Market Seasons The stock market winter of 1929 — for example — was so fierce the ice held 25 years. Only in 1954 did stocks thaw to pre-freeze levels. The years 1982–2000 — conversely — were extended summer for the stock market. Between August 1982 and December 1999, compounded real returns on the Dow Jones ran to 15% per annum. Chill northern gusts occasionally blew on in — as in 1987. But they blew out as rapidly. Investors believed they had discovered something approaching perpetual summer. Yet summer yields inevitably to winter. Indian summer may delay winter’s onset, it is true. But soon or late, Mr. Jack Frost pays his visit. An arctic gale came barreling in, 2001–2002. Another — even icier — swept through in 2008–2009. The fiercest blast of all tore through in 2020, out of China. But the Federal Reserve dialed the furnaces to blistering levels… Record Heat Its record heat soon broke the ice. And today — despite recent chills — the stock market posts record warmth. Is it summer once again for the stock market? Or is it heading into a 20-year winter… similar to the 25-year winter of 1929–54? Consider: By spring 1930, the stock market had made good many of its October ’29 losses. Thawings extended through 1931. As Jim Rickards notes: Stocks rose 28.6% from Nov. 17, 1929–April 20, 1930. They rose 13.2% from June 22–Sept. 7, 1930. Stocks rallied again by 17.5% from Jan. 18–Feb. 22, 1931. Finally, stocks rallied 22.2% between May 31–June 28, 1931. Yet these proved fleeting thaws between deep, deep freezing-overs. Overall, the Dow Jones plunged 89.2% from 1929–32. Perhaps this post-pandemic recovery is merely a transient, artificial thaw. Recommended Link [BOMBSHELL: James just stunned EVERYONE]( [Read more here...]( Available to the public for just hours... This just-released video is already causing quite a stir. That’s because James Altucher just went live on camera and dropped a BOMBSHELL on our readers that no one was expecting... If you do one thing today, take five minutes to see this. You’ll be very happy you did. [Click Here To Learn More]( Prepare for a Freeze Mr. Raul Elizalde of Path Financial, writing in Forbes: The stock market has been very generous in the past 13 years. The S&P 500 is six times higher than the financial crisis low of 2009 and every decline since proved to be an opportunity to buy. But the market generosity may have reached its limits. Historically speaking, U.S. stocks as an asset class are as expensive as they have ever been… Adjusted for inflation, the price of the S&P 500 index is… in fact higher than during the “irrational exuberance” days of the late 1990s’ dot-com boom, which was followed by a two-year dragged-out 50% slump from its peak. Are you prepared for a 50% stock market freeze? If you are retired — or nearing retirement, you likely are not. Here is a warning of ice: And if one were to look for a reason why the next likely direction is not upward, it would be that the regime that supported increasingly expensive stocks is no longer in place. That is, the Federal Reserve is preparing to work the furnace settings back. Rate hikes and quantitative tightening are in immediate prospect. Can the market warm itself, spark its own flame? We are not confident it can. A 20-Year Winter? Given present stock market valuations… how long might winter last? Mr. Michael Carr instructs technical analysis at New York Institute of Finance. Says he: “Starting from this level, stocks are likely to disappoint over the next 20 years.” Twenty years? That is correct: When the P/E ratio is near all-time highs, as it is now, the S&P 500 delivers annual returns averaging about 5% over the next 20 years. When the P/E ratio is near all-time lows, returns are about three times higher, averaging 15.4% a year over the next 20 years. Yet as we have stated before: Climate is what you can expect. Weather is what you actually get. Perhaps the Federal Reserve will back off, perhaps it will extend the summer season, perhaps it will hold the sun up in the sky a bit longer. Yet all indications run the other way… Recommended Link [Trump’s Final Gift To America]( [Read more here...]( There’s a little-known way Trump could – one day – have his revenge. It involves a Federal Ruling he oversaw in the final year of his Presidency that could change America forever… unleash an estimated $15.1 trillion in new wealth… and create countless ways for everyday Americans to benefit. What is this little understood decision? And how will it impact you? [Click Here To Find Out]( Entering the Winter Phase The Daily Reckoning’s Charles Hugh Smith argues winter may be closing in. Charles believes the world is now marked by “souring social mood, loss of purchasing power, stagnating wages, rising inequality, devaluing currencies, rising debt, political polarization and elite disunity.” “These are all characteristics,” Charles laments, “of the long-wave social-economic cycle that is entering the disintegrative (winter) phase.” Charles leans on the work of historian Peter Turchin. This fellow explores historical cycles of social disintegration and integration over 50-, 150- and 200-year cycles in his civilization almanac, Ages of Discord. Turchin identifies three primary forces pushing these cycles: an oversupply of labor that suppresses real wages; an overproduction of parasitic elites; a deterioration in state finances. These cycles are as natural as the seasons — and perhaps as inevitable. Real American wages have held essentially flat for decades. Evidence suggests the bottom half of American adults earn no more than they did in the 1970s. An overproduction of parasitic elites? We append no comment. A deterioration in state finances? The Treasury groans under a $30 trillion national debt that is growing — daily. We could continue… but mercy forbids it. How to Prepare? Yet we do not merely anticipate heavy weather. We do not merely shake our fists at the merciless gods. We would outfit you with the appropriate garments, to guide you to the safer places, to help see you through. How can you prepare yourself for approaching conditions? Mr. Mark Moss may hold the answers. This man is an accomplished entrepreneur and investor who has deeply studied the political, economic and social cycles of history — and how they all tuck together. From whom: You need perspective and clarity to understand where we're going and the world we're going into. It’s definitely not the world that we've left behind. And while all of this seems very random, like this is a black swan event, it's not. This is actually very predictable. We could tell from history that we knew we would end up here. And when you understand that, it makes it clear where we're going. And when you understand those things, then you understand how to navigate that with your money. You'll understand the areas you'll want to be invested in, and not be invested in. One of the Most Tumultuous Times in History This Moss fellow believes we inhabit an era as storm-turned as the American and French revolutions some 250 years distant… and as storm-turned as the Protestant Reformation some 250 years prior to that. The implications may flabbergast and astound you. This Thursday our co-founder Addison Wiggin is hosting Mark Moss for a “must see” interview. Mr. Moss will show you where we were… where we are… and where we will be tomorrow. And he will show you how to invest accordingly. [Go here]( to sign up for Thursday’s interview. It is 100% free. By submitting your email address, you will receive a free subscription to Wiggin Sessions and offers from us and our affiliates that we think might interest you. You can unsubscribe at any time. [Privacy Policy](. Summer, winter… we do not know which will prevail ultimately. The Horae — the Greek goddesses of the seasons — are fickle and capricious beings. We have our winter apparel ready. Do you? More tomorrow… Regards, [Brian Maher] Brian Maher Managing Editor, The Daily Reckoning Editor’s note: For about two years, our co-founder Addison Wiggin has been running a regular interview series, The Wiggin Sessions, in which he’s been picking the brains of some of the brightest minds in finance. They’ve been available only to a select group of subscribers. But no, Addison has decided to open up the advice to you at no cost. That’s correct: at no cost. The Wiggin Sessions aren’t dry talk about financial markets. In fact, they’re not about the markets necessarily. They’re conversations about the economy, politics, history, even pop culture – besides of course where you want to put your money. This Thursday, Addison’s having a conversation about the major historical cycles that have resulted in depressions, revolutions and world war. Addison’s guest is an entrepreneur and investor who has made and then lost a few million… then made a few more. Experience like this helps when going through paradigm shifts like what we’re going through now. According to this man’s research, political shifts, economic reversals, even technological breakthroughs follow set patterns. Are they happening all at once, right now? We invite you to listen in. Stay tuned for more details tomorrow. --------------------------------------------------------------- Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Brian Maher][Brian Maher]( is the Daily Reckoning's Managing Editor. Before signing on to Agora Financial, he was an independent researcher and writer who covered economics, politics and international affairs. His work has appeared in the Asia Times and other news outlets around the world. He holds a Master's degree in Defense & Strategic Studies. Add feedback@dailyreckoning.com to your address book: [Whitelist us]( Additional Articles & Commentary: [Daily Reckoning Website]( Join the conversation! Follow us on social media: [Facebook]( [LinkedIn]( [Twitter]( [RSS Feed]( [YouTube]( The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Paradigm Press delivering daily email issues and advertisements. 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