Debt and More Debt

[Cycles Trading With Phil Anderson]( Welcome to Cycles Trading with me, Phil Anderson. My aim with this three-day-per-week e-letter is to introduce you to the most powerful knowledge for building wealth. And that’s the 18.6-year real estate cycle and its key relationship to stocks. Every 18.6 years, property, economy, and stock markets move through a repeating series of peaks and troughs – like clockwork. And the market has followed this cycle for over 200 years. Using this knowledge, I’ve been able to forecast every major market move over my 34-year career. If this is your first time tuning in, catch up on my[background]( how I [predict the markets]( and how I’ll help you avoid [false alarms]( from the mainstream media. Debt and More Debt By Phil Anderson, Editor, Cycles Trading with Phil Anderson As the 18.6-year real estate cycle nears its peak, markets become more creative. Some call it “financial engineering.” Creating complex structures based on debt, equity, and derivatives, all intertwined in a way that even their creators don’t understand how dangerous they are… Until they explode, like mortgage-backed securities did in 2007-2009. I’m not saying that markets are about to crash… not in the near term, at least. But I am seeing signs that the 18.6-year cycle is about to reach its peak over the next couple of years. Recommended Link [Available for a limited time only: Mason Sexton Is Sharing the Next Part of His “Prophecy”]( [image]( Earlier this year, an event 30 years in the making took place… Mason Sexton, the man who famously called the crash of 1987… Went live with his first public prediction in decades… He warned that the top was in. And revealed how to take advantage of the falling market he believed would follow. What happened next was uncanny. The market peaked. Just as he warned. And those who listened to his unusual prediction — what some called his “prophecy” — had the chance to profit… With potential gains as high as 208%, 263% – and even as much as 847% – from a series of leveraged plays. But now Sexton is coming forward with the next part of his prophecy… A “Second Insight” that will catch even the most sophisticated investors by surprise… [Watch it here.]( -- A Recent Financial Invention You may have heard about private equity… It’s an industry that, in broad terms, invests in companies, restructures them (while riddling them with enormous amounts of debt), improves their operations, and then tries to resell these companies to other investors. Private equity funds are quite a formidable force. Some of them, such as Blackstone, have $1 trillion or more in assets under management. And they have come up with a new scheme… guess what, it involves creating more debt. Typical late-cycle behavior. Some of the companies they invested in are struggling because interest rates are higher. So these funds borrow against their overall portfolios to finance these laggards. In other words, they put the health of their “good” investments at risk while financing the struggling ones. It’s called “defending the portfolio.” And everything would be okay if, as a group, private equity didn’t manage trillions of dollars of investors’ money. But it does, which means that the amount of debt in the system could quickly balloon to hundreds of billions of dollars if not more. Why is it important? Leverage Has a Role in the Cycle Remember 2007, when mortgage-backed securities got AAA credit ratings? Well, history repeats itself… These private equity funds are issuing debt against a portfolio of mostly good companies to support the bad ones. This debt is risky, but it will be pitched as safe because it’s backed by a fund, not a single company. We’ve been there. This “layering” is nothing new. It’s always about covering bad investment decisions with other people’s debt. It may be fine for some time, but eventually, the truth comes out. For now, though, I see this trend accelerating. Just this week, U.S. inflation numbers came in lower than expected. (I’ll discuss them in more detail soon.) But the signal is clear: the economy seems to have stabilized, so central banks can take a break from tightening. Stocks and bonds jumped. Markets are happy. More growth, more debt, and the 18.6-year cycle continues. Just as I expected. The party isn’t over yet… and you really want to take advantage of it while it lasts. Regards, [signature] Phil Anderson Editor, Cycles Trading with Phil Anderson --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=RE: Cycles Trading Feedback). IN CASE YOU MISSED IT… [How to profit from Google’s $200 billion AI investment]( Google has spent more money on AI than any other company. $200 billion so far. (And counting.) Now, they’re launching a new AI project. It’s 5X more powerful than ChatGPT. And tech expert Colin Tedards says it’s all thanks to a little-known firm supplying Google with a key piece of technology. Google is about to roll out this new AI to their 4.3 billion customers, which could send shares of this little-known firm skyrocketing. [Click here for the full story.]( [image]( [Rogue Economincs]( Rogue Economics 55 NE 5th Avenue, Delray Beach, FL 33483 [www.rogueeconomics.com]( [Tweet]( [TWITTER]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Rogue Economics welcomes your feedback and questions. 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