Getting Rich From US Fed Policy

I have so much on my mind that I want to share and I often find that when I have too much to share I end up not sharing at all. It is a bad habit of mine and one I want to break today.

My bad habit got me to thinking about habits and specifically investor bad habits.

One of the most dangerous habits (or thoughts) for an investor is, “I don’t” know what to do so I won’t do anything.” If you are experiencing this today, I think I’ll be able to help you.

I do not have room to share everything with you today, so what I do not cover here I will cover tomorrow night in my Insiders Club meeting.

What is bothering me the most is the US policy of print, stimulate, print, stimulate and print some more.

I know I cannot change it and you probably cannot either. And here is the good news, we can profit from what Bernanke and Co. and Obama and Co. are doing to the United States.

Let me explain.

Profit from the US/Fed Policy

Right now, Ben Bernanke (one of the most dangerous people in the world) wants the US stock market to go higher. He believes that if the US stock market goes higher than people will “feel” richer. And if they “feel” richer than they will spend money on more stuff.

And if they spend money on more stuff then the price of that stuff will go up and then Bernanke will have his inflation. And then I guess, everything will be fine, right??? Wrong.

Does anyone else find it really weird that the US celebrates, tracks and measures consumption as close as they do? Don’t you think measuring wealth and savings would be smarter?

The US closely tracks the CPI (consumer price index). And if you own a TV or a radio or a computer you are guaranteed to hear about this number multiple times a month.

Shouldn’t the US be tracking the CWI (consumer wealth index) daily, weekly and monthly?

And this is the core problem.

The United States has hit the end of the line. The United States actually needs to start building stuff again. And I don’t mean stuff like the Chevy Volt or fancy financial products. I mean stuff that the world actually needs/wants

So, how you can profit from what is happening today?

There is a saying on Wall Street, “Never Fight the Fed”.

Meaning if the Fed wants the stock market to go up, it will probably be able to move it up even if this means more bubbles and bigger crashes in the not-too-distant-future.

Ben Bernanke has placed the Federal Funds rate at zero and has already printed $3 trillion dollars.
The results of this have been rather disastrous. People who save and have saved are being forced to put their money in risky assets.

Evidence:

1) Savings accounts pay 0% interest

2) Muni bonds are crashing as you read this

3) CD’s pay a very small interest rate

4) Basically “Safe” investments are paying nothing or getting crushed.

Yes, it should be just the opposite but in today’s world of “pretend and extend” the Fed is going to get their way over the short-term.

So what can you do today with your money?

1) You have to own gold and silver. Inflation is nothing more than an increase in the circulation of government-backed-currencies like the US dollar.

All these dollars are making ‘dollar-holders’ poorer and poorer. So if you do not already own gold or silver you owe it to your family and your future to have at least 5% of your portfolio in it.

Let me help you.

The easiest way to own gold/silver is through a closed-end fund based in Canada called Central Fund of Canada. This closed-end fund holds both gold and silver and they have a very good track record of having (in their vault) what they say they have. Something GLD and SLV cannot say.

I’ve been recommending my clients to own CEF since 2004 and still do today. Think of gold & silver like your own central bank. Think of gold & silver like the People’s Central Bank.

The banking industry has The Fed and Bernanke working for them and you must have someone working for you. The person(s) who best can help you is called Mr. Gold and Mrs. Silver.

Hire them today.

2) You have to be long the stock market right now. You may not want to be, you may not think it should go up but Bernanke and Obama want it higher – even if it all comes crashing down six months from now.

But here’s the thing, markets can move much higher than “they should” or than we can imagine.

Yes, the stock market is already overvalued and getting more overvalued each and every day it moves up. BUT the market can stay overvalued for years. And since we do not have a crystal ball, the next best thing is to go with the trend.

And the trend is clearly up.

The US Stock Market has been trending up since August 6th 2009 when my “M-P Indicator” turned bullish…and it’s still bullish today.

My suggestion is go long the market with a trailing stop loss.

We are experiencing what trillions and trillions of dollar printing and stimulus packages do.

It creates inflation.
It creates incredible volatility.
It punishes the savers and rewards the spenders
And it creates once in a lifetime opportunities.

If you are like me and sometimes let your [bad] habits get the best of you, perhaps today you can shift just enough to take action in a place where ‘no-action’ was just before.

Tomorrow at the Insiders Club meeting I will talk about where specifically your money should be and how to know when the market is about to move against you.

I will also be inviting a guest to speak about the gold and silver coin market.

If you are looking to grow your money better then raising the power of your [investment] peer group is where you might want to start. Do you have what it takes? Find out.

The location for tomorrow’s meeting:
Hotel Sofitel
223 Twin Dolphin Drive
Redwood City, Ca 94065

The meeting starts at 6:30pm and the presentation starts at 7pm. See you there.

Together, we growing and protecting your wealth,

RC Peck, CFP

2 Comments

  • Debra Hellman

    July 2, 2011

    I was just re-introduced to the concept of investing in gold and silver this week.  I had heard about the idea back in 1997, but at the time they didn't have a way to buy a little at at time.  I have definitely been one of those people affected by inflation in a big way.  I didn't realize it was as bad as a recent quote I came across "If you made $30K last year, in 5 short years you'll have to be earning $50K a year just to have the same purchasing power you have today."

    I have just found a way to buy it in small increments on layaway.  I am very excited about the chance to hedge against inflation.  You have the same idea that a few people are catching onto.  I agree that we are a global economy now and should think that way.  I want to put it out there for any readers that might want to find HOW I am able to buy bullion at a 40% discount, make money by telling a few others at the same time call me at 707-347-9054.

    Again, thank you for a great article and definitely advice that I am going to listen to.

  • Debra Hellman

    July 2, 2011

    Hi again,
    After much frustration, I finally figured out what the captcha was asking for–the sum of numbers only.  duh? on my part.
    FYI–Please put an easy way for people to contact you on your blog so communication can be 2 way and on another topic–I have a friend that has learned to build Facebook business pages fairly reasonably and has done one for me if you have a Facebook acct–I will send you to it to look.
    You have very valuable advice that I would like to increase people's awareness so anything I can do to help, I am on board with. You don't need to post this.  I just wanted to get a message out to you.  I just followed you on Twitter–please follow me back. Thx