All The Fed’s Men...

The Fed is falling for the age-old sunken cost fallacy. Its members want to dig themselves deeper to dig themselves out. You are receiving this email because you subscribed to Outsider Club. [Click here]( to manage your e-mail preferences. [Outsider Club logo] All The Fed’s Men... [Adam English Photo] By [Adam English]( Written Mar. 26, 2019 It looks like the Fed has finally reached the point where it should admit that, despite all its efforts, it can’t put the economy back together again. All of its efforts and actions over the last 10 years need to be second guessed right now. Economic indicators are flashing red. We’re looking at a significant moment with yield curve inversions, and there are few tools left for the Fed to deploy. The question is, will the Fed admit the errors of its ways, that it did too little too late, and that its window of opportunity is gone? Or will it double down and dump gasoline on the fire? [An Urgent Warning About Your Portfolio]( Stocks are about to take a serious dive... Investing legend Mr. James Dines has identified [five looming global events]( that are creating an economic “Perfect Storm.” If you thought the financial meltdown of 2008-2009 was a bad time for the NYSE and NASDAQ, wait 'til you see what's coming! All signs point to the fact that we’re on the verge of a global currency collapse that will soon jeopardize scores of U.S. banks... topple hundreds of American and international corporations... and slash the values of Americans' 401Ks, IRAs, and savings. You already know you can’t trust your well-being to the financial media, Wall Street, or the Fed. It’s time to do something different. As the crowd continues to put their hopes (and savings) into traditional stocks, I urge you to join a small group of investors who have already started down a better path... I’m talking, of course, about gold. Gold will soar because it’s the only shelter against the storms ahead, and history proves that gold is the only truly safe place to keep your wealth. Let me show you startling new evidence of a coming gold spike... And why those who invest correctly right now could thrive during the coming crisis. Not only will you protect yourself, but you could make 7 to 10 times your money in just 18 months — [click here to read Mr. Dines' urgent warning right now.]( A Giant Red Flag Signs of economic slowdown are flashing across the board, with none being bigger than the yield curve inversion. The two-year Treasuries yield is now higher than the five-year Treasuries. Now the three-month notes offer more than the 10-year notes for the first time in over a decade. Simply put, a lender gets less money by locking their money into U.S. debt in the long term than in the short term. To put it another way that is more illuminating, consider this — debt is simply a way to take money from the future and use it now. Saving or buying bonds is the opposite. Investors are collectively convinced that debtors will have a hard time creating enough growth and revenue in the near future to support all their future money they’ve already spent. That increased risk is expressed through a higher short-term yield. Even without all the world’s woes — trade wars, Brexit, cyclical slowdowns, etc. — there is certainly reason to believe it. As spectacular as “growth” has been, we’ve borrowed more money from the future over the last decade than we’ve been able to create or reasonably expect to create. According to the Institute of International Finance, total world debt is near $250 trillion, or 320% GDP through 2018. The (relatively) responsible categories were households, who saw debt grow by over 30% to $46 trillion, and the financial sector, where debt rose 10% to around $60 trillion. Total government debt went over $65 trillion in 2018, up $37 trillion from a decade ago. Non-financial corporate debt went over $72 trillion last year, now near an all-time high of 92% of GDP. The two largest categories, government and non-financial corporate, went on a debt-fueled spending spree thanks to the Fed’s artificially-low yields. Now the thing that created a decade-long bull market also created the very thing that will kill it. [Tiny Company Owns Most Valuable “Pot Patent” In History]( In September 1928, Alexander Fleming discovered Penicillin. It was the world’s first effective antibiotic, and it revolutionized medicine. He’s credited with saving over 200 million lives. And, I’m telling you now — the “Molecule of the Century” is a much bigger deal. It makes medical marijuana up to 80x more effective. It can tackle health markets worth up to $297 billion. Now one $84 million stock owns the most valuable “pot patents” in the world. [Get the facts on the “Molecule of the Century” now.]( Out Of Time The Fed had the capacity to slow down the accumulation of this unprecedented level of debt over the last several years. It didn’t just fail to heed the warning signs. It failed to resist pressure to treat the stock market and the economy as one and the same. As a result, it fed around $2.5 trillion through bond purchases alone into the system by using what really amounts to balance sheet tricks. It borrowed from itself in a roundabout way to make borrowing easier and cheaper for corporate interests. While the tools to do this were new this time around, the trend has been in place for decades. [fed fund rate and balance sheet] With lower and lower interest rates going into recessions, the Fed finally hit the point where it had to resort to an untested and risky method. One that has only just begun to unwind. Now there is no room to use the Fed Funds Rate in an effective way to stimulate short-term growth without plunging it well into the negative, making things even weirder. Death of the Dollar Donald Trump just signaled the end of the strong dollar policy! "This is the first time we have a president-elect say the dollar has gone too far. He's saying things and doing things that no president has ever done before." — Marc Chandler, chief foreign exchange strategist, Brown Brothers Harriman When the market finally cracks, you don’t want to be holding the bag. [Here’s how the rich are playing it.]( The Fed just embarked on its version of a PR tour to defend this system. President of the Federal Reserve Bank of Boston Eric Rosengren just became the third policymaker in two days to talk about bond buying. He even went a bit further by supporting buying shorter-term bonds and exchanging them for long-term bonds to manipulate rates out of inversion. The “double down” crowd is already speaking up and has an upper hand over those who advocate for a tempered response rooted in what we know works better for long-term stability. Make no mistake about it, this is the Fed falling for the age-old sunken cost fallacy. Its members want to dig themselves deeper to dig themselves out. The clarity of hindsight will show that the Fed created this crisis. It will become painfully clear that it set out the spiked Kool-Aid at the behest of corporate interests, utterly failed to wean them off, and abandoned its core responsibilities to keep the party going. A drug addict is to blame for their actions, but the dealer bears a greater responsibility. Take care, [Adam English] Adam English [follow basic]( [@AdamEnglishOC on Twitter]( Adam's editorial talents and analysis drew the attention of senior editors at [Outsider Club](, which he joined in mid-2012. While he has acquired years of hands-on experience in the editorial room by working side by side with ex-brokers, options floor traders, and financial advisors, he is acutely aware of the challenges faced by retail investors after starting at the ground floor in the financial publishing field. For more on Adam, check out his editor's [page](. *Follow Outsider Club on [Facebook]( and [Twitter](. Enjoy reading this article? [Click here]( to like it and receive similar articles to read! Browse Our Archives [A Mountain of Mexican Gold and Silver]( [Mr. Dines: The Latest On Gold]( [Killing Machines: The Army Wants Robot Warriors]( [Can Synthetic CBD Disrupt the Cannabis Sector?]( [New Jersey Gets Legalization Right]( --------------------------------------------------------------- This email was sent to {EMAIL}. It is not our intention to send email to anyone who doesn't want it. If you're not sure why you've received this e-letter, or no longer wish to receive it, you may [unsubscribe here](, and view our privacy policy and information on how to manage your subscription. To ensure that you receive future issues of Outsider Club, please add newsletter@outsiderclub.com to your address book or whitelist within your spam settings. For customer service questions or issues, please contact us for assistance. [Outsider Club](, Copyright © 2019, [Angel Publishing LLC]( & Outsider Club LLC, 111 Market Place #720, Baltimore, MD 21202. For Customer Service, please call (877) 303-4529. All rights reserved. [View our privacy policy here.]( No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned. Angel Publishing and Outsider Club does not provide individual investment counseling, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. Subscribers should not view this publication as offering personalized legal or investment counseling. Investments recommended in this publication should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company in question. This letter is not intended to meet your specific individual investment needs and it is not tailored to your personal financial situation. Nothing contained herein constitutes, is intended, or deemed to be – either implied or otherwise – investment advice. Neither the publisher nor the editors are registered investment advisors. This letter reflects the personal views and opinions of Nick Hodge and that is all it purports to be. While the information herein is believed to be accurate and reliable it is not guaranteed or implied to be so. Neither Nick Hodge, nor anyone else, accepts any responsibility, or assumes any liability, whatsoever, for any direct, indirect or consequential loss arising from the use of the information in this letter. The information contained herein is subject to change without notice, may become outdated and may not be updated. Nick Hodge, entities that he controls, family, friends, employees, associates, and others may have positions in securities mentioned, or discussed, in this letter. No part of this letter/article may be reproduced, copied, emailed, faxed, or distributed (in any form) without the express written permission of Nick Hodge or the Outsider Club. Unauthorized reproduction of this newsletter or its contents by Xerography, facsimile, or any other means is illegal and punishable by law.