The Weekend Edition is pulled from the daily Stansberry Digest.
Imagine if we ignored the stock market…
I’m not talking about not investing in stocks or using the stock market as a wealth-generating tool.
But I am talking about ignoring the Federal Reserve-juiced benchmark S&P 500, the Dow Jones Industrial Average, and the Nasdaq – or whatever your preferred index is – when it comes to gauging the true story about our nation’s economic health and the health of all our people.
If we do that – and ignore anything about new highs while more than half of Americans don’t have jobs, people are rioting in the streets, and our leaders continue to fumble around Washington – the world suddenly looks, sounds, and feels a lot different.
Just like that, America’s financial reality is not what it seems. And through this lens, we might want to consider alternatives to the traditional ways of making, protecting, and growing money in this country.
What if the financial media, politicians, corporations from coast to coast, Wall Street asset managers, and I used another number to make our livings… and passed that information on to the general public instead?
This number shows what’s really going on for most Americans…
Call it the “Net Worth Index”…
You could calculate a measurement like this in a lot of different ways. But one way to see it is through a specific chart, which we published in our Battle for America book…
The chart below shows the percentage of income owned by the richest 10% in this country since the start of the 20th century. And as you can see, it has never been higher in the past 120 years than it is today…
Now, this isn’t precisely a “Net Worth Index,” since it doesn’t track what everyone is doing with their money once they get it.
But the point is, the richest people in this country have been increasingly getting a larger share of our wealth pie since the late 1970s… while most Americans have struggled with low wages and next to no savings.
At times like these in history, the frustrations of the American public have tended to boil over…
When the gap between the rich and the poor widens, an unexpected, panic-inducing event can spark trends of violence, political and financial upheaval, or even war.
Today, it’s happening with the pandemic and the government’s response to it – massive money-printing.
In 10 days in March, the Fed created trillions of dollars of free “fake money”… more than it had created in the previous 30 years before the financial crisis of 2008 and 2009.
As of this week, another huge round of “juice” – that is to say, debt kicked down the road to future generations – was introduced.
The price tag could be anywhere from $1 trillion proposed by Republicans in the Senate to $3 trillion suggested by Democrats in the House.
Direct deposits and extended unemployment benefits might ease some panic in the short term. But do they really help “we the people” and the health of our country in the long term? The simple answer is “no”…
The U.S. dollar has lost roughly 95% of its value since 1913, when Congress passed the Federal Reserve Act and “modern” central-bank policy began… And since then, the Fed has only increased its interventions over time.
Those with fewer dollars to their name get relatively poorer every time a new one is created… and more frustrated whether they know it or not.
Again, the “wealth gap” in the U.S. has been growing astronomically over the years…
Even before we all started living in a pandemic economy, the gap between America’s richest and poorest families had more than doubled from 1989 to 2016…
Middle-class incomes have grown at a slower rate than those of the rich for the past 50 years…
And the highest-earning 20% of families in the U.S. made more than half of all U.S. income in 2018. Yet the stock market hits new highs…
If we’re honest, our society is in chaos… Trust in our institutions is broken.
When it comes to the major industrialized Group of Seven (G-7) nations, data from the Organization for Economic Cooperation and Development show that the wealth gap is greater here than in the United Kingdom, Italy, Japan, Canada, Germany, and France.
And amid a once-in-a-generation pandemic outbreak, the government decided – without any public debate – that shutting down the economy while creating $6 trillion (and counting) from nothing and mailing stimulus checks was the best thing to do.
Sure, $1,200… or another $1,200 apparently on the way should cover it, right?
Not even close. Real people are feeling real pain…
We saw recently that nationwide drug overdoses – another relatively unreported indicator of health – have risen significantly over the past few months.
Neil Howe, co-author of The Fourth Turning and the demographer who coined the term “Millennials,” wrote last weekend…
According to [the Overdose Detection Mapping Application Program], a federally run program that collects data from local police and hospital records, overdoses nationwide increased year-over-year in March by 18%, in April by 29%, and in May by 42%.
In Chicago alone, the Cook County medical record shows 656 overdose deaths for May. In 2019, Chicago only reported 473 overdose deaths from the period of January to June.
For others, there’s simply not enough time in the day to make all ends meet…
Leaders who haven’t been in a classroom in years are now debating whether to reopen schools around the country. And this decision has massive short- and long-term consequences on our economy and culture in general.
Millions of work-at-home parents – if they’re fortunate to still have a job – are deciding how best to manage the responsibilities at home in order to stay sane and solvent.
You can be a parent and teach school part-time at home. Or, you can work in a broader economy that has mostly encouraged an “everybody must work” life and could experience inflation in the years ahead. As this article from Politico published last weekend said…
The Bureau of Labor Statistics estimates that both parents work in two-thirds of families where married parents have children – as do the majority of America’s 13.6 million single parents. For all of them, there are major long-term financial repercussions of dropping out of the labor market, even temporarily.
“When you talk about upward mobility,” [Betsey Stevenson, a labor economist at the University of Michigan] says, “this puts families on just a completely different trajectory that’s not about losing two or three years of income; it’s about being on a lower earnings trajectory for the rest of your life.”
This is a big, underreported reason why only a little more than half of Americans of working age have a job right now (which is different from our unemployment benefits number).
Yet stocks go higher.
In other words, the rich get richer and the poor get poorer…
As our founder Porter Stansberry and many of our editors have said for years, while this may be good for the portfolios of folks with access to Wall Street, the American economy is largely unsustainable.
The problems that Porter has described over the years – and that we’ve touched on today – will catch up with everyone’s wealth eventually… no matter how well-off you are or where you live.
Porter has said for years that 2020 would mark a pivotal time for America…
Before knowing any of the specific players or events involved today, like the COVID-19 outbreak, he said this was the year when the country would have to face its problems. Specifically, it would have to face the consequences of its decades of debt creation and misplaced government interventions.
He has written books on this idea. As he notes, these periods of crisis and converging financial, societal, and political factors have happened roughly every 30 to 40 years – with the last one coming the 1970s.
And specifically, Porter has said a “Debt Jubilee” – wiping the slate clean of Americans’ debts – is our only way out of this collective mess. This would lead to a national “reset” in our financial system.
Today, Porter says we’ve reached a tipping point for a “reckoning”…
As we know, the COVID-19 pandemic has exposed a lot of the issues in our economy and markets…
And as Porter predicted, calls for a Jubilee have only grown. The government has obliged with endless money-printing, socialist policies, and growing debt… future generations be damned.
Steps like erasing millennials’ student debt and instituting a universal basic income – which have both been on the table this presidential election cycle – sound great to those who need it. But how do we reconcile socialist policies with a democratic system?
Somebody has to pay. And don’t think for a second that a massive amount of wealth won’t be lost or gained. That’s why it’s so critical and wise to prepare for the inevitable fallout of what we’re talking about today.
Porter has been urging subscribers to do that for years, just like he did in advance of the financial crisis in 2008 and 2009… including the blowups of Fannie Mae, Freddie Mac, and General Motors.
Then, in March, as stocks were cratering, Porter called the bottom in the stock market almost to the day on March 26. He also predicted we’d reach new highs by the end of the year, which the tech-heavy Nasdaq already has.
As this wild year treks on and the Fed continues to create money out of thin air, Porter is warning of the coming “reckoning.” He recently sat down for a special video event to tell subscribers how best to prepare for it.
We urge you to watch the replay right here if you missed it. Porter’s latest ideas on how to protect and grow your wealth… and the smartest bet to make with your money today outside of traditional stocks… is vital to survive today’s pandemic economy.
All the best,
Editor’s note: As the government pumps trillions’ worth of “fake money” into the economy, the wealth gap widens, and the economy grows more unstable. That’s why Porter held a special event this week to address the state of the markets… and to reveal the nontraditional opportunity that could grow your money by 1,000% or more. If you missed Porter’s critical message, you can catch the replay here.