AND THIS STRAIGHTF ROM THE HORSE’S MOUTH
"The Market’s “Sick Secret” Revealed!
Interest rates are clawing upwards... consumer spending is slowing... global markets are sliding at the threat of inflation... Dubai, down 58%... FTSE, down 10%... Germany, down 17%
Oil prices have hit a record high of $70... Gas and electricity bills are soaring... The dollar is in a seemingly unstoppable nosedive... while property and debt levels on both sides of the Atlantic are at bursting point...
We reveal the truth of why this is REALLY happening... plus how to protect yourself with a safe asset that could make you 2,000% richer in the coming money crisis...
Dear Concerned Investor,At the heart of the global economy lies a sick, sick secret.
It’s the reason why so many supposedly “healthy” global markets are inflated right now... from UK property... to public sector spending... to the Indian stock market...
And why every penny you’ve invested and saved is under threat.
Do gains of 900%, 472% and 340% in less than five years seem normal to you? No, because these aren’t healthy markets at all. These are grossly inflated bubble markets. And they’re coming thick and fast, one after the other.
At the source of them all is the secret I want to tell you about...This secret is about to change the entire investment landscape for the next 10–20 years... and shatter market bubbles across the globe.
Almost ALL the asset classes that have prospered in the last decade will start to collapse...
... On the other hand, three types of asset that have done terribly over the last 10 years will start to prosper, making a handful of early investors very, very rich.
At MoneyWeek, we’re already taking advantage. Our core portfolio is up 99% in the last three years, without buying a single share! But the best is still to come. If we’re right, you could invest just £10,000 pounds today... and within five years, it could be worth £200,000!
Let me explain...
A tidal wave of money surging through the world’s markets
A huge flow of money is sweeping through the entire global economy, courtesy of the U.S. Federal Reserve... aided and abetted by Wall Street and the City of London.
Since 1987, the central banks have pumped billions into the world’s economy. Not that you’d ever hear the word “inflation” to describe it. According to the City, Wall Street, our government, our mainstream press – there is no such thing.
You see, in order for us to accept this deeply sick monetary system, inflation MUST stay hidden. If the public discovered the truth, there would be chaos and uproar. So central banks keep up their propaganda, claiming inflation is under control.
But the reality is quite different.
The truth is, over the past 25 years, the US money supply has surged from $302 billion in 1959 to over $10 trillion today. An explosion of over 3,000%! During the same period, the US dollar’s purchasing power has collapsed by 85%.
And it’s no different over here. The Consumer Price Index (CPI) stands at 2.5% – the highest level since it was introduced nine years ago – while growth in the British money supply hit its fastest pace in six years in January 2006.
If this isn’t inflation, then I don’t know what is.
Money itself is in a bubble!
Thanks to this wave of money washing around the world, people no longer get rich by making things... but by spinning money around. The rich are no longer the captains of industry – railroad builders and steelmongers. They are now people like the 26 top hedge fund managers who earned an average of $363 million last year... up 45% from 2004.
Like Steven Cohen of SAC Capital Advisors, who took home $1 billion in the last two years... and Eddie Lampert of ESL Investments who earned almost $1.5 billion in the same period...
... Or the senior managers of Goldman Sachs, who take home a $600,000 salary and then take an equal split of 30% of $1.65 billion profits... pushing their pay towards $2.6 million!
There’s just too much money pouring through the system for fund managers, brokers and financial bigwigs to stop. They’re like crazed drug addicts with easy access to the next fix.
Everyone’s getting high on the money markets – except regular investors like you and me
All this money and credit has to go somewhere. But it certainly doesn’t benefit everyone. The bubbles are great for the City and a few speculators. But they come at the expense of the average citizen, who goes deeper and deeper into debt.
On the Forbes magazine’s annual list of rich people, you’ll find hedge fund managers in droves... but, I can guarantee you, not one hedge fund investor.
Look around you. While the people who play with our money get richer, life for the average person has never been tougher. Fifty years ago, families could survive on one income and debt levels were low. These days, the average household needs two incomes, people are working longer, and everybody is up to their eyeballs in debt.
Sure, your home may have shot up in value. But it’s not actual money in your pocket, is it? It’s wealth that could VANISH when the property bubble bursts.
It’s all because the banks on both sides of the Atlantic have practically been giving money away, making it cheaper and cheaper for governments and ordinary people to borrow.
Total US debt (individuals, businesses and government) has soared 344% since 1987. The average American household has nearly $9,200 in credit card debt alone.
No wonder people are going so heavily into debt! No wonder there’s a credit bubble. And no wonder assets – houses and shares – have soared so high so fast.
And the effect of this surging money supply (or “inflation”) has been to create enormous, unstable bubble markets wherever it goes.
After the Japanese stock market imploded in 1990, US tech stocks took off... then the Kuwait stock market ballooned in the next five years... Bombay stocks took off in 2003...
The money gushes from the central banks and bubbles up in one sector after another. And each time, after the bubble, there is an INEVITABLE collapse.
But the biggest collapse of all is still to come...
This deadly secret is already wreaking havoc
The reason we’ve released this urgent report is that our analysts believe the end is in sight. The idea that you can just “buy it and forget it” – whether we’re talking shares or property – is wrong.
And why? Because the free and easy money that has been fuelling property and asset booms everywhere is drying up FAST. In November 2003, the Bank of England raised interest rates from 3.5% to 3.75% – the first rise in four years. On 30 June 2004, the US Fed followed suit. Interest rate rises have come at regular intervals ever since.
Now the world is anxiously expecting US interest rates to rise yet again in the coming months.
Make no mistake, the era of easy money is over. And just look at what’s happening:
· The dollar is in a seemingly unstoppable nosedive while the property and debt bubbles on both sides of the Atlantic are at bursting point...
· The housing bubble hasn’t popped, but it is clearly hissing. Consumer spending is slowing. Debt is hitting critical levels.
· Markets across the globe are sliding with the threat of serious inflation. The Middle East situation is fraying badly at the edges, and Middle Eastern markets have already crashed in Dubai... down 58%... Saudi Arabia, down 43.3%...
And it’s only going to get worse...You could face a 1987-style crash all over again
When interest rates rise further, property prices will tumble as many people try to sell houses they can no longer afford. The stock market will also be hit as investors realise the money they borrowed is now needed to pay off their debts.
In fact, all the asset classes that have prospered over the last decade will start to collapse.
While nothing is guaranteed, at MoneyWeek magazine we believe we could be lining up for a 1987-style market crash all over again. Even with the mildest outcome, the investments most people will make this year are certain to be disasters. In this report, we’ll show exactly what they are, so you can avoid them.
"https://info.moneyweek.com/signup30.php?full=subscribe&skip=1&msprg_id=1&mspd l_id=0&jlnk=cit0020"
But listen carefully...
And this is the REAL secret...
Most bubble markets are caused by the wave of cheap money. They just inflate wherever the money appears, and then collapse. These you want to avoid at all costs.
After all, who wants to be the last fool who buys into a bubble?But there are other rising markets which have nothing to do with this tidal wave of money. They are rising because demand is higher than supply. To the pros and insiders, these long-term trends are known as “super cycles”.
Most investors wouldn’t be able to tell these apart from bubble markets. But they are, in fact, major, long-term trends... trends you can buy into and hold for 10 years or more.
Every decade, a handful of investors become spectacularly wealthy by spotting the next big trend and making just one, life-changing trade.
Back in the 1990s, it was stocks. Back in the 1980s it was Japan. Back in the 1970s it was gold. Get into these long-term trends before most investors realise the tide has turned, and you can make some serious money.
In this report, I’m going to show you how to invest in the three assets that could make you rich. They’re all part of a super-cycle that will almost CERTAINLY keep rising in the next decade, no matter how many short-term bubbles explode... no matter what happens to property and the stock market.
One of them is gold.
I know... to most people it sounds strange to invest in this old fashioned metal. But buy into it today, and you could end the period far richer than you ever imagined...
About 2,000% richer, is our guessI can say this with some confidence, because I am privileged to work with some of the most dedicated writers, analysts, market and financial experts in the UK.
My name is Toby Bray, and I’m the publisher of MoneyWeek magazine. We specialise in scouring every single news source across the world to find the most important investment trends, and help you profit from them.
Time and time again, we’ve stuck our neck out with reports like this one... usually going 180 degrees against common opinion. But it’s been well worth it for our readers, who’ve profited from our most recent predictions.
... When everyone thought gold prices would go down in 2005, we said they’d go up. And they did. Gold was the TOP performing major asset last year.
... In fact, the price has DOUBLED in the last four years in which we’ve favoured gold.
... When everyone was certain UK stocks were overpriced and going down, we said the exact opposite. Last year we said it was a GOOD time to buy shares in Britain.
Subsequently, the FTSE soared from 4,800 in 2004 to break the 6,000 point mark at the beginning of this year.
And how about this for an investment opportunity...
We even helped some readers to a 160% return on their investment
Way back in October 2001, we reported big opportunities in oil when it cost $23 a barrel. We knew that energy was in a long-term bull market, so when oil dipped below $20 a barrel in January 2002, we didn’t panic... we knew that a good opportunity had just got better and recommended oil-related shares.
And sure enough, by September 2005, oil reached $67.80 – a 245% increase in three and a half years. And some of our readers won out, big time.
MoneyWeek contributor Richard Tonkinson, of Williams de Broe, suggested that our readers look at Heritage Oil Corp... which made 160% gains in 2005 alone!
And we’re not selling oil just yet. The kind of changes needed to reverse this trend will take many years, if not decades.
One trend we’re looking at right now is of a similar ilk. One of the safest investments you could make today, it could help you become between 684% and 2,000% richer in the coming years.
And that’s our most conservative estimate!
In the 1970s, under similar conditions, this same investment rose by 2,328%. We’ve already made our first 71% in this one, and we’re holding on for more. (I’ll explain all about this recommendation in a moment.)
But don’t call your broker and ask his advice. Don’t bother to discuss it with your neighbours and friends. They’ll all tell you you’re crazy.
They’ll tell you we’ve been in a bull market for three years... that the Dow and FTSE have made gains year-on-year... that the housing boom is still going strong... that there’s been no bust so far, so there won’t be one in the future.
But just because something hasn’t happened yet, it doesn’t mean it WON’T happen. In fact, history tells us that the downturn is most likely to happen now, not later. I’ll even explain why this is so urgent...
Why this bull market could end in the next 6-12 monthsDuring the 20th century there were 18 big bear markets in the world’s mature stock markets. Each was followed by a bounce-back rally. And NOT ONE of those rallies ran for longer than 30 months.
So when you think that the present recovery has gone on for 32 months in Britain, and 38 months in America, the boom is looking very long in the tooth.
In fact, we may well have just passed the peak. At the beginning of May, the “MSCI All Country World Index”, a measure of world markets, hit a record high of 349.06. The previous record high of 349.04 was set in March 2000... the same month as the tech bubble peaked!
By the end of that week in 2000, global markets slumped. The FTSE 100 fell 3%, shedding 129 points on Friday alone to end the week at 5,912. Japan’s Nikkei 225 shed 3.2%, and in Europe, the Paris Cac 40 and German Dax both fell 3%.
And it happened again last month...
A WEEK after the index highs, on 15 May, the FTSE 100 ended down 70 points at 5,841, its worst two-day loss for three years.
This is just the beginning of the slide...
History is repeating itself all over again. The easy credit bubble is over. The money supply is drying out. The boom is finished. And NOBODY is warning investors. The newspaper headlines are full of stories about the World Cup, ads for cheap credit and political tittle-tattle.
But dig deep into serious newspapers and financial magazines and the truth becomes clear. Nervous tremors are rippling through the US and UK markets. Many economists believe that the recent downtrend in the FTSE and DOW is not only a market adjustment... but it is also a market recognition that things are going to severely change.
It could be six days, six weeks or six months before things really begin to fall apart. Our markets could even rally again before that point. So what do you do in these turbulent times? Should investors wait? What should you do with your money?
Well, for starters, you can no longer buy houses or shares and count on a bull market to make your money grow. Now you will have to think a little more “out of the box” to make sure you aren’t following the herd to enormous losses.
But with this report, you’re already on the right track
As I said, every 10 years a handful of investors become wealthy by spotting the next big trends. I would like to show you what these are. It’s one of the best ways you’ll be able to protect and increase your wealth during the coming down cycle in stocks and property.
I’m happy to give you this information for FREE in this report. But I also hope you’ll decide to make MoneyWeek a regular part of your reading. As you’ll see, it brings you all the practical financial news you’ll ever need. All in a format that’s quick to read and easy to understand.
More of that in a minute or two. First, let’s get down to business. Here’s where your money should be going NOW...
RECOMMENDATION 1: Buy goldNow, you might think it’s a bit strange, old fashioned and unconventional to buy gold. But hear me out. I think you’ll be intrigued by what you read...
MoneyWeek first started suggesting readers buy gold four years ago. Now the yellow metal is twice the level it was in 1999, but the great gold bull market has only just begun. We believe gold will go substantially higher.
Let me explain why...
First off, gold is the best insurance money can buy. The sceptics can call it a “barbarous relic” as long as they like. They can’t deny that any time there is a global crisis, or the threat of one, the gold price rises. It’s the world’s back-up reserve currency, and with inflation, plus a falling dollar, it’s hard to see it halting in price, never mind falling.
The fundamental case for gold is also perfect. Demand is soaring. The Chinese have become the second largest consumer, while gold sales in India rose 47% last year.
But the most important reason gold will fly is because of the sick secret I’ve already told you about.
Back in 1980, a combination of factors resulted in a “big bang” for gold, sending the price soaring to over $850 an ounce in a matter of weeks. The factors? Unsustainable debt levels... all-time highs in the oil price... inflation...
Sound familiar?
US investment manager, John Hathaway, who manages the Tocqueville Gold Fund, sees the price of gold heading towards the $1,000 an ounce mark in a few years. Merrill Lynch predicts the yellow metal will hit $725 by 2010.
But we believe that inflation could far surpass what happened in 1980. MoneyWeek correspondent and veteran gold investor Doug Casy writes, “Sticking my neck out, I think we could see gold prices surpass US$3,000 before the decade is over.”
So our advice is simple...
If you don’t own gold, buy some. If you DO own gold – buy some more!
Sometimes holding physical gold itself is both costly and awkward for the private investor. That’s why we bring our readers, on a regular basis, dozens of inventive and cost-effective ways to add gold to their portfolio.
We’ll also send you regular information on one of the Super Cycles that we know for CERTAIN won’t be going away any time soon...
How you could have been in on the oil bull all the way back in August 2002
It continues to astound us here at MoneyWeek that many people still don’t accept that expensive oil is here to stay. Especially considering we broke the story to our readers all the way back in August 2002. As the oil price edged up slightly, we said that supply and demand constraints would NOT cause the oil price to ease.
Accordingly, we recommended Eastern Bloc oil equities which we considered way too cheap – including Sibneft, Surgutneftegas, Lukoil and Premiere Oil.
By the end of 2005, oil prices had soared 115%. And these four companies had risen by 100%, 236%, 275% and 300% respectively. But we haven’t seen the last of oil gains like these. In fact, our analysts are predicting a “superspike” for oil this year that could make last year’s $70 a barrel look positively cheap.
Which brings us neatly to our second recommendation...
RECOMMENDATION 2: Buy oil stocks before oil hits $105 a barrelAt the end of last year, the oil bears were feeling particularly pleased with themselves. Having hit $70 a barrel in August, the oil price had pulled all the way back to $56 a barrel. The bears thought it would keep falling. There was, they said, lots of oil about and the huge spike in price was just down to speculative hysteria.
Since then, oil has NOT fallen. In fact, the price remains robust above $60.
And if you think that price will get significantly lower this year, you’re going to be in for a rude awakening. The short-term correction is over. After a 20% pull-back, we believe the oil bull will resume in a matter of weeks.
The fact is, there just isn’t enough oil for prices to stay low – however much the oil bears, the petrol-guzzling public and the head-in-the-sand government wants there to be.
Production of oil pretty much everywhere on the planet has peaked. And while the Saudis claim to have endless reserves, we have only their word for it. Saudi reserves haven’t been audited by anyone other than themselves since the late 1970s.
The same can be said of almost every other OPEC country. And according to Forbes magazine, OPEC is pumping at full capacity right now, with Barclays Capital expecting supply from non-OPEC states to fall short of expectations this year.
Unfortunately, an unlimited supply of oil is exactly what the world needs. Developing countries are quickly catching up in energy consumption terms with their developed world counterparts.
Right now, the world produces a mere 1.5 million barrels a day more than it consumes. Heavily increasing demand from India and China means that consumption will go up by near on two million barrels a day this year alone. So to meet this growing demand without the price going sky-high, we’re going to have to magically find A LOT more new and easily accessible oil, and get it out of the ground IMMEDIATELY.
And that is a very unlikely scenario indeed. Add it all up and it’s hard to disagree with the recent suggestion from Goldman Sachs that the oil price could hit $105 a barrel by next year. But here’s what you might be wondering...
If the fundamentals behind a high oil price are so compelling – why has it pulled back in recent months?
Every bull market, no matter how entrenched, has the occasional correction. While demand is high and supply is low, oil must keep rising. Simple as that. The oil dilemma is down to basic economics.
The question is: If you’re wise enough to see an even higher oil price on the horizon – what do you do about it today?
The soaring price of crude is going to stoke inflation, cause pain at the petrol pump, harm some industries and completely ruin others.
But it’s also going to make a few far-sighted investors some absolutely outstanding gains in 2006 and the years ahead. And that’s because profiting from expensive oil is relatively simple: if you think oil is going to keep going up in price, you invest in oil and oil related companies.
At MoneyWeek, we have made it our remit over the last two years to uncover such shares – “moneygushers” that have excellent growth prospects, low valuations and, most importantly, whose share prices move in tandem with the oil price.
Our most recent recommendations to readers back in December were oil giant Chevron – which last year earned more than most Third World countries – and ConocoPhillips – which is still incredibly cheap with a p/e ratio of only 6.49.
You’ll also get information on what we believe will be the trade of the decade. It’s going to surprise you, because most investors don’t have a clue about how to make money from this. But this is the secret must-have for any investment portfolio in 2006.
You see, the same forces that are pushing up gold and oil are also pushing up coal, base metals and precious metals. All these materials are part of the same sector – commodities.
RECOMMENDATION 3: Buy commodities
After a 20-year bear market and up to the start of the year, commodities haven’t featured on the investment radar of most people. They think these are just for super-wealthy professional traders in red braces.
But they’re wrong. You could buy into this market today easily and make a lot of money.
You see, demand for raw materials is escalating at an astonishing rate and there simply isn’t enough supply to meet demand. Coal has tripled in price in the last two years alone. Uranium is up 74% in the same period... gold is up 62% since 2001, steel has doubled in just 12 months.
Here at MoneyWeek, we’ve been watching these developments closely. What’s clear is that these price hikes mark the beginning of a sustained upswing. We’re in no doubt that investors who act now, could end the decade spectacularly richer than they are today.
If investors in the 1980s kicked themselves for missing the gold rush of the previous decade, and investors in the ‘90s wished they’d got into the Japanese bull market before it became a bandwagon, then 10 years from now investors will seriously regret not having bought these key commodities back in 2005.
If you’d invested wisely in commodities this time last year, as MoneyWeek recommended to its readers, you’d now be sitting on some very handsome gains. (And it’s not complicated to profit from commodities... I’ll explain.)
The energy sector has had a stellar year, with oil and natural gas prices up 45% and 135% respectively. Base metals delivered as well: zinc has surged 63%, copper 55%, and gold, silver and platinum are all up over 20%.
But this information is no use to you now. To make the real money in commodities in the coming years, you need to go for the trends before they happen...
And I’m only too happy to help you out...
Where the REALLY big gains will be made in the commodities sector
Our analysts are convinced that the overall bull market in commodities is here to stay – fuelled by growth in emerging markets. But that doesn’t mean the same parts of the market will perform well this year.
As MoneyWeek Roundtable member and Partner at Diapason Commodities Management Stephen Wrobel points out: “2005 was the year of oil. 2006-2007 will be the year of soft commodities.”
According to investment and commodity guru Jim Rogers (interviewed in MoneyWeek), “Some soft commodities are still so far below their all-time highs it’s hard to see them falling.”
Now, I know “soft commodities” sounds obscure. But all it means is things like cocoa, sugar, coffee, cotton and orange juice. And you’ll see they’re really easy to buy into when we show you how.
Sugar, in particular, looks good. Demand from India, the world’s largest consumer, is on the rise – and they will need to import one million tonnes of sugar this year just to meet it.
China is developing a sweet tooth too – with demand set to climb from 11.8 million to 12 million tonnes in 2006. China’s middle class is forecast to grow 140% by 2010 – double the whole population of the UK. And increasing incomes go hand in hand with increasing sugar consumption.
But there is an even better reason to invest in sugar in 2006. High oil prices have spurred an interest in ethanol – produced from fermented sugar – which is a substitute for petrol. Brazil, the world’s largest producer, is reporting surging demand for flex-fuel vehicles which can run on ethanol – they outsold conventional ones for the first time last May. Brazil is stepping up investment in ethanol pipelines and refineries, and outside Brazil ethanol is starting to gain currency as a viable alternative to traditional fuel.
So, all in all, sugar is a great bet for 2006. And it’s worth noting that the price of sugar rose 47 times during the last commodities bull market.
Some traders see the price moving from its current 14c a pound to 25c within the next few months alone!
You see, it’s not enough just to know the big picture trends – you have to know precisely how to profit from them. And that’s exactly what you get with MoneyWeek...
We’ll show you easy ways you can buy into the commodity boom without any experience or professional know-how. We’ll tell you how and when to buy into the fastest movers, and show you the best funds to buy. And not just commodities either...
From water to Russia: spotting the most profitable trends before they hit the big time
MoneyWeek doesn’t just give you advance notice of the very latest trends. We also make sure you receive specific recommendations and analysis of the investments that will bring you the greatest returns.
Recent trends we’ve identified and helped readers profit from include:
· How to profit from the world’s water shortage. In April 2004, we highlighted the looming water crisis now threatening the world. Less than 1% of all water is fresh and accessible, yet our demand for it has quadrupled. Around this time last year we alerted our readers to the three top water stocks poised to profit. If you’d been with us back then, you could have already made gains of 23%, 25% and 44%. We’ll continue to monitor this hot investment opportunity over coming issues, alerting you on which stocks will profit – and which to avoid.
· Cash in on the new craze in gambling. In February last year, we covered the rapid explosion of the gambling industry. Thanks to increasing consumer demand and changes in legislation, this sector is predicted to grow by 165%. We identified Wynn Resorts as the must-have share that would soar and bring our readers maximum profits from this new trend. If you’d bought Wynn Resorts 13 months ago, you’d be sitting on a 115% gain by now. With government plans to relax legislation even further, the future for gambling looks even brighter – we’re monitoring this trend closely and will tell you exactly which investments could give you the best returns in this dynamic sector...."
· Yours sincerely
Toby Bray
Publisher, MoneyWeek
