March 24, 2020
‘This Week, It’s Going to Get Bad’
By Steven Longenecker
Are you prepared for what’s next?
“This week, it’s going to get bad,” says the U.S. surgeon general.
In the coming months, the unemployment rate may soar to 30%, according to the Federal Reserve Bank of St. Louis President James Bullard… and gross domestic product may drop as much as 50% in the second quarter.
That’s as the Federal Reserve announced it will buy corporate bonds for the first time in history… after slashing interest rates to zero and vowing to buy hundreds of billions, if not trillions, of Treasury securities.
The government and military plans for martial law in case urban violence and riots begin in major cities around the nation is described in detail in the latest Newsweek magazine.
And through it all, the nation’s economy is essentially shut down as politicians in Washington D.C. prepare to “bail out” select companies… and let others go bankrupt, banned from doing business under threat of imprisonment.
Will you and your family survive? What about your portfolio?
For many American investors, this is an unrecoverable disaster. Once-safe retirement plans have been upended. Blue-chip, formerly stalwart businesses will fail. Dividends will be slashed… and then zeroed. Certain stocks will drop faster and farther than you ever thought possible… and many will ultimately go bankrupt.
And yet, other companies will mend from this unprecedented disaster… they will get better. In fact, some will be stronger than ever before.
These are the “forever stocks” that every investor should own as the bedrock of their portfolio.
You may think you know their names…
But we suspect that many of the names you’re thinking of right now are actually the very companies that will fail to emerge from this coronavirus-spurred crisis intact.
This Thursday afternoon, the founder of Stansberry Research, Porter Stansberry, is unveiling a brand-new prediction. And if it’s anything like his major predictions in recent years, we encourage everyone to listen in. As a reminder…
- In 2000, he predicted the dot-com bust and which companies would survive it.
- In 2008, he predicted the collapse of Fannie Mae and Freddie Mac…
- And in 2015, he predicted that within five years we’d see a “new crisis of epic proportions.” He added that the way we live, work, travel, retire, invest… everything is going to change. Some of it in ways we would never expect.
That’s exactly what we’ve seen in the past month.
And on Thursday, he’s airing a special update that details where he’s putting $1 million of his own money right now… and why he recommends you do the same.
As you well know, Porter has been a frequent contributor to American Consequences… and he has been warning about the shaky footing that many debt-burdened American companies have found themselves in since we launched the magazine.
He described the global economy as an “Escher economy” in our inaugural issue…
Today, as stocks rise by huge amounts all over the world, investors are cheering these [near-zero interest, easy money] central-bank moves…
But they may rue them tomorrow. After all, if these investments sour, how will investors flee to safety… when inflation forces central banks to stop the inflation and to increase interest rates… how will investors find safety?
His foresight was early, of course… but prescient.
The past week has shown that there is no such thing as “safety” in this market. All assets – from stocks, bonds, even gold and cryptocurrencies – have plunged as investors sell everything in a desperate bid to raise cash and weather the storm.
He concluded that article with this:
Like an Escher maze, there may be no conventional way out of the next crisis. There may be no way to get to level ground…
Whatever happens next, just remember… the soaring stock prices you’re seeing aren’t real. They’re just stairs – in a giant financial Escher print.
But if you’re like many American Consequences readers – you’ve prepared for a crisis. You have bonds, stocks, and most importantly, cash.
For the past month, we’ve recommended again and again that you prepare for a panic… exactly like the major sell-off event we’ve seen.
And now, it’s finally time to start looking for the right opportunities. We recommend thinking about “forever stocks” – the type of business that you can buy today and essentially never look at again for the next 20… 30… even 50 years… secure in the knowledge that they can survive anything.
On Thursday afternoon, Porter will reveal what he believes is coming next for the market… and detail exactly what you should be doing with your money today to prepare. But the ONLY way to get an invite is to click here.
Now here are some of the stories we’re reading…
Washington Is About to Pick Which Companies Survive
Two ugly truths about any epic economic crisis are that not all businesses will survive, and government interventions help determine which businesses will survive.
The Federal Reserve just pledged asset purchases with no limit to support markets
The Fed also will be moving for the first time into corporate bonds, purchasing the securities in secondary markets and through exchange-traded funds in an effort to smooth a space that has seen considerable turmoil since the crisis has intensified and market liquidity has been sapped.
Breaking down this sell-off, among the most extreme and rare Wall Street has ever seen
Everything that’s not cash has been redeemed for cash – even ordinary money-market funds have been liquidated in favor of safer Treasury money funds. The Fed is now buyer of last resort in Treasuries, commercial paper and municipal debt. Fixed-income exchange-traded funds have strayed from their underlying net asset value as investors throng the exits faster than funds can sell assets.
Exclusive: Inside the Military’s Top Secret Plans if Coronavirus Cripples the Government
The officer jokes, in the kind of morbid humor characteristic of this slow-moving disaster, that America had better learn who Gen. Terrence J. O’Shaughnessy is. He is the “combatant commander” for the United States and would in theory be in charge if Washington were eviscerated.
Photos: Public places stand abandoned in time of virus
When the world’s public places empty out as humanity cocoons in self-protection, Earth’s human-built and natural landmarks are freed to reveal some of their less frequently shared secrets.
And let us know what you’re reading at [email protected]
Publisher, American Consequences
With P.J. O’Rourke and the Editorial Staff
March 24, 2020