This phrase has been painfully obvious to us here at Smart Investing Daily. Heck, the unstable economy and the U.S. dollar make this phrase crystal clear. And remember when all of those countries holding hundreds of billions in U.S. debt started talking about ditching the dollar?
But it felt like the Federal Reserve — and even the markets themselves — ignored this idea for years.
Now, Bernanke finally gets it.
We have two questions… Is it too late? And will the markets like Bernanke’s newfound enlightenment?
We can hazard a guess for the first question. In short, yes. It’s too late.
It’s too late, and too little. Here’s what I mean. That life preserver MarketWatch.com was talking about is the easy monetary policy that’s been in place since the financial crisis. Absurdly low interest rates are considered part of the Federal Reserve’s “accommodative monetary policy.”
In the Fed’s mind the economy needs access to cheap money in order to start growing again. And Bernanke said, “Accommodative monetary policies are still needed. Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.”
This means we won’t see a hike in interest rates.
It also means that we’ll be paying more for gas and bread by the end of the year. Inflation, folks. I don’t see a way around it.
And, we know the answer to the second question.
A MarketWatch.com article reports:
Federal Reserve Board Chairman Ben Bernanke threw financial markets a life preserver, but the markets have thrown it back, disappointed that the U.S. central bank was not preparing another quantitative easing ocean liner to come to its rescue, Fed watchers said Wednesday.
The Dow Jones Industrial Average ended down for the sixth day in a row. Same for the Nasdaq and S&P 500 (barring the 0.02 point green day for the S&P on Tuesday).
But does the market really understand what’s happening?
I want to share with you an excerpt from Jared’s service WaveStrength Options Weekly. This article went out to his readers on Tuesday.
Jared wrote:
If you were to put the news and economic data from this past week in a time machine and send it back to just about any period in time, you probably would have created a market crash. No news was good last week, but the market didn’t crash.
One of the reasons why the market hasn’t completely rolled over and died, ironically, is because of the U.S. dollar. The weaker the dollar, the higher the price of things bought with dollars — like gold, oil and yes, markets.
It should be said, then, that you can still make money. For example, Jared’s WaveStrength Options Weekly subscribers recently made back-to-back gains… around 20% each in about a day.
(If you want to learn more about Jared’s service and these kinds of gains, click here.)
There will be a tipping point, however, where the weak U.S. dollar undercuts gains. Inflation is like an infestation of termites, eating small chunks of your savings and retirement fund until your gains are riddled with holes.
Remember that retirement stress test we told you about back on May 9? Try working those numbers with 5% or 6% inflation, and see how long your nest egg lasts.
It’s time to get into survival mode.
I told you on Wednesday that we’re preparing for our annual summit meeting. I gave you a link to a special Webinar. This Webinar is designed to help you weather the coming “money crisis.” It should be the first thing you put into your survival kit.
This year’s summit meeting will equip you with other tools for your survival kit, but as with any kit, you need to make sure you’re fully supplied.
This free Webinar comes with an exclusive report that only Webinar attendees will get. It’s a vital tool you’ll want in your “Money Crisis Survival Kit.”
If you haven’t signed up for this event, make sure to reserve your spot today. I’ll be there, listening in to make sure we’re all well-equipped, but I can’t give away the exclusive report.
You’re on your own to get that, so follow this link to get access to the report.
Editor’s Note: No need to get a second job, go back to school or work extra hours to potentially collect weekly income tips. This secret could consistently earn you extra money. Read on for the full details…
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