There Are 'Two Very Different Americas'

Porter Stansberry on 'two very different Americas'... The root of the issue... U.S. debt tops $35 trillion... How to protect your money... The next chapter of 'disastrous monetary policy'...

'We're looking at two very different Americas today'...

Our founder Porter Stansberry wanted to make sure everyone who attended his free presentation this morning understood one thing...

So before he dug into today's markets, Porter shared a chart that illustrated "the story of the two different Americas" – that is, the difference between how life is going for "political insiders" and "savvy people" like U.S. Representative Nancy Pelosi or Federal Reserve Chair Jerome Powell and what life feels like for most everyone else in the country.

The chart showed how wages and productivity in the U.S. economy rose in tandem for decades. But about 50 years ago, the story changed. Many longtime readers may know the date that marked a catalyst – August 15, 1971. That's when President Richard Nixon severed the tie between the U.S. dollar and its gold backing for good.

We've described this point as the 'day the dollar died'...

Since then, inflation, driven chiefly by what Porter calls "disastrous monetary policy in our country over the last half a century" has eaten away at the once-healthy relationship between the value of a paycheck and real productivity. It has been easy to do with fiat currency.

You see, too often, millions, and now trillions, of dollars have been created from nothing – like during the great financial crisis or, most recently, during the COVID-19 panic – to benefit the political insiders in the "system." Meanwhile, these decisions have eaten away at the value of the dollar.

So while certain folks in society have taken advantage of their positions to become wealthy, tens of millions of Americans are struggling to keep up with a rising cost of living. It's two Americas...

The 40-year-high pace of inflation we've seen over the past few years has brought this dynamic to the forefront. But it has been happening for decades. Now, we're also seeing the consequences play out in an "accelerating cultural decline in America," as Porter said today...

It's really simple. If people can't earn an honest wage by going to work and doing an honest job because all of those gains to productivity keep being printed away by the Federal Reserve, then they're not going to believe in the social contract that underlies the integrity of our country.

Unfortunately, Porter doesn't see this dynamic changing...

He's "hopeful" the country will return to "sensible monetary policy," but not "optimistic." As he said today...

I'm very worried that America is heading off a financial cliff. And mark my words, that's happening. And it's happening really fast.

Last year's rescue of regional banks only widened the "two Americas" financial bubble. So has "reckless" government spending.

The Congressional Budget Office – a federal agency that advises members of Congress – projects the federal budget deficit – the gap between government revenue and spending – will be $1.9 trillion for the 2024 fiscal year.

Just yesterday, total U.S. debt grew to more than $35 trillion...

That's thanks in part to higher interest payments being made on America's debt with higher inflation (caused by monetary policy and fiscal spending). Uncle Sam's deficit was more than $1 trillion in the first half of fiscal 2024, with $522 billion coming from interest paid on the debt, a rise of more than 30% from the same period in 2023.

You can see the cycle at work. As Porter said today...

If our elected leaders continue to spend so recklessly and without any discussion in public at all about the threat of these debt levels, then it's possible that this train can run a lot further than anybody, including me, thinks.

Every time a new dollar is created, the value of each existing dollar goes down. Yet stocks can keep pushing higher... and on it goes.

So what can you do to fight this nonsense?...

How can you grow – and protect – your wealth when the U.S. dollar's erosion of long-term purchasing power seems inevitable? Porter has a few ideas.

If you missed the debut of his free presentation earlier today, be sure to check out a replay right here…

You'll hear more about Porter's take on the state of the economy, and much more, like his take on the incredible run-up of Nvidia (NVDA) stock... the artificial-intelligence boom... and why the market crash he predicted last year hasn't happened yet.

He also describes what he believes is the "only game in town" to protect yourself from the risks he sees to your money... as well as "the most dangerous investment in America today" and why you should stay away from it.

Don't miss it.

Now, as for that 'disastrous monetary policy'...

Tomorrow brings the conclusion of another two-day Fed meeting, where the topic of the day is expected to be when the central bank will "lower interest rates" – its suggested benchmark bank lending rate range – even while inflation runs above the Fed's supposed 2% annual goal.

You can see how the value of the dollar gets eroded over time with decisions like these.

Still, investors have been getting increasingly excited about the prospect of a cheaper cost of borrowing over the past few months. The market expects the Fed to lower the fed-funds rate by 25 basis points at its next meeting in September.

Traders and investors will be looking for clues in the Fed's policy announcement and Powell's post-meeting press conference tomorrow for confirmation (or not) of these prevailing expectations. We'll have a report on what's said in tomorrow's Digest.

Monitoring the 'dip'...

Since we last examined the market's daily moves last Wednesday, the "dip" we discussed has leveled off for the most part...

The benchmark S&P 500 Index, tech-heavy Nasdaq Composite Index, and small-cap Russell 2000 Index have been nearly flat over the past three trading days. The Dow Jones Industrial Average is up slightly.

In the very short term, tomorrow's Fed meeting and new inflation data and jobs numbers that will hit the market later in the week could serve as a catalyst for the market to move – one way or another.

If enough investors like what they hear – like continued "disinflation" and a central bank bent on easing monetary policy – stocks could march higher.

Of course, that reaction ignores the reason why the Fed might be cutting rates... like the economy weakening and the unemployment rate rising. At some point, that part of the story will become important to the majority of Wall Street. But it doesn't appear that we're there yet.

New 52-week highs (as of 7/29/24): Alpha Architect 1-3 Month Box Fund (BOXX), Colgate-Palmolive (CL), Electronic Arts (EA), Equity Commonwealth (EQC), Hologic (HOLX), Intercontinental Exchange (ICE), Lockheed Martin (LMT), Altria (MO), VanEck Morningstar Wide Moat Fund (MOAT), Procter & Gamble (PG), Revvity (RVTY), Seabridge Gold (SA), Sherwin-Williams (SHW), Veralto (VLTO), and Verisk Analytics (VRSK).

In today's mailbag, we received a few notes from folks who weren't able to watch the debut of Porter's event this morning and wondered if a replay would be available. As we mentioned above, you can watch a replay of the event for free here.

All the best,

Corey McLaughlin
Baltimore, Maryland
July 30, 2024