You are receiving this email because you signed up to receive our free e-letter the Wealth Whisperer Why High Interest Rates Wonât Work 04/15/2024 Does it feel like, despite the markets hitting record highs, youâre spending more and more of your paycheck just to get by? Every day, inflation chews up a bigger chunk of your paycheck, giving you less and less to put toward retirement. Itâs sending a whole generation of Americans into [The Retirement Dead Zone]( -- a place where you save money just to avoid losing your wealth. Fortunately, itâs not too late to turn things around. Contrary to popular wisdom, high-interest rates havenât and wonât stop inflation. So, we need to craft a strategy that anticipates the Fedâs next moves and the likely results. What weâre about to describe goes against EVERYTHING youâve been taught about economics. Because the strategy weâre going to offer you is built on something better: common sense. SPONSORED CONTENT [Forget Oil and Solar ⦠This is the Future of Power]( This single, one-half inch pellet of fuel contains more power than 120 gallons of oil ⦠17,000 cubic feet of natural gas ⦠and one ton of coal. Itâs safe, efficient and best of all⦠itâs 100% clean. [For the full story, click here!]( [Click Here to Read More...]( Not All Debt Is Created Equal The theory behind the high interest rate strategy can be explained using the following example. Low interest rates
- I have $12,000 a year to spend after expenses.
- Interest rates are 0% annually.
- If I take out a loan that I pay back in one year, I can borrow a maximum of $12,000
High interest rates
- I have $12,000 a year to spend after expenses.
- Interest rates are 10% annually.
- If I take out a loan that I pay back in one year, I can borrow a maximum of $10,909.
Higher interest rates decrease the amount of money I can borrow to spend. Less money to spend means lower demand. Lower demand with the same amount of supply means prices need to decrease to find an equilibrium. In old-school economics, theyâll model this in a graph like the one below. When the Fed raises interest rates, the cost to service debt (interest payments) increases. This hits things like home loans, credit cards, vehicles and other big ticket items. So, why isnât this working? Sponsored Content [A.I. Pioneer Warns: "I thought we had more timeâ¦"]( A radical new A.I. development is about to blindside millions of Americans. This early A.I. pioneer just issued an urgent warning explaining everything. [Click here to see his new video for yourself.]( [Click Here to Read More...]( Take a look at the ratio of private debt to GDP. This ratio compares the debt you and I hold relative to the economy. It climbed right up into the housing recession when the average individual's leverage was the highest it had ever been. Since then, it has been on a steady decline. In fact, despite higher interest rates, we spend very little of our disposable income on debt, as shown in the chart below that graphs household debt payments as a percentage of disposable income. Meanwhile, this is the graph of public (government debt) to GDP. Federal debt as a percentage of GDP spiked in 2020 when the government borrowed trillions for its stimulus program. After a natural decline, the ratio has begun to tick higher. And it will keep going higher. Despite record debt levels, higher interest rates arenât impacting demand because they donât affect the government in the same way they hit you and me. When the government wants to, it can simply borrow more. And when no one wants its debt, it can buy its own debt (monetizing it). It can also raise taxes to increase revenues. On the rare occasions when thereâs an adult in charge, it can decrease spending. We canât do that. We canât simply borrow more and more to pay back old loans. Nor can we magically increase our salaries or spend less money on food we need to live. This is exponentially increasing the burden on our children and future generations. [Learn to Trade Like Interest Rates Don't Matter]( As April overflows with interest rate headlines, hereâs a fresh perspective for you: Learn to trade like interest rates donât matter. Whether you're a stock trader, options trader, swing trader, or day trader, this A.I. âBrainâ is predicting market movements days in advance. [Donât Miss This FREE Live Class to Learn How >]( [Click Here to Read More...]( The Inevitable Where is this all leading? Good news and bad news. First, the bad news: interest rates arenât going down anytime soon. In fact, they might go even higher. Or, the Fed will need to decimate the economy to the point where demand falls because weâre in a recession. Donât think they wonât do it. Paul Volker pushed rates up over 15% in 1980 to break the back of oil, driving the U.S. economy into a deep but swift recession. So, whatâs the good news? There is only one solution to this problem -- cutting spending. Too much debt has built up on government balance sheets. That either needs to shift back to the private sector (which wonât happen) or be curtailed. Cutting government spending is the only way to reduce demand meaningfully, which will finally bring inflation under control. Itâs a medicine long overdue and sorely needed. However⦠thereâs a catch. To get to that promised land weâve got to go through a lot of pain. Tax hikes are coming swiftly and fiercely. Imagine having even less of your paycheck to take home now, even as the price of basic goods keeps climbing. And thatâs just the start because Congress is dead set on taking money from one group in particular -- the middle class. Recent changes to retirement accounts, including 401Ks and IRAs, are making living our golden years in peace seem like a fantasy. Thankfully, Bob Carlson, editor of Retirement Watch, has put together a comprehensive blueprint called the [NEW AMERICAN RETIREMENT PLAN](. In it, youâll find:
- A way to get 76% MORE on your Social Security payouts
- How to collect TAX-FREE payouts every month for life
- The doâs & dont's of IRA investing in 2024
â¦and much more, including nine Special Reports from the members-only library. Donât let your retirement slip away. Act now and pick up your copy of the [NEW AMERICAN RETIREMENT PLAN!]( To Your Wealth,
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