Kudos to S&P... Food stamps are stimulus... Watch Porter on Yahoo Finance... Wal-Mart worried about its U.S. customers... Make 200% on this gold trade... Porter is 'loosing' it...
Yesterday, we highlighted the blowback Standard & Poor's is getting after it downgraded the United States' credit rating. Despite our country's obvious fiscal problems, analysts and investors – mired in the belief the U.S. dollar will never fall – constantly lambaste S&P for speaking the truth. Well, Standard & Poor's is fighting back…
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The markets' violent swings in early August resurrected fears of the market meltdown, such as the one in 2008 when Lehman Brothers went under and Reserve Fund broke the buck. Currently, the crisis is considered to be much more severe, with U.S. sovereign debt at risk of default. The low Treasury yields indicated that markets were expecting Congress to come to its senses and reach a deal. |
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However, the wait and the last-minute deal, which left a lot to be desired, only increased worries that the government will do more harm than good. Confidence in the recovery and in U.S. policymaking has hit new lows. After U.S. sovereign debt lost its triple-A status and financial markets unwound, consumer confidence hit a 31-year low and manufacturing sentiment readings contracted. |
The above snippet is from a report S&P released today titled "U.S. Economic Forecast: Still Treading Water." In addition to comparing the U.S. debt crisis to that of 2008, S&P also cut its growth forecast for the nation…
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While July data finally showed a slight improvement in the U.S. economy, it's not enough to support expectations that the second half of the year will see a bounce in growth. We now expect to see an even slower recovery than the half-speed we earlier expected. |
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We now expect just 1.9% growth in the third quarter and 1.8% in the fourth, to bring 2011 calendar year growth closer to 1.7% instead of 2.4% we earlier expected. We also downwardly revised growth expectations for 2012 and 2013, as a more drawn-out recovery is factored into our forecast. |
Kudos to Standard & Poor's for having the nerve to publish the truth. We've been warning you of this crisis for years (and, much like S&P, battling naysayers the entire way). When we first released our End of America video, we drowned in hate mail. We were accused of being unpatriotic, crazy, stupid, etc... But the numbers are there. The U.S. cannot afford its debts.
In the time since we've released our video, the U.S. debt was downgraded by China and S&P. Gold is at $1,800 an ounce. Our theses are proving correct. Eventually, the world will realize this.
And with a government that makes claims like food stamps are "the most direct stimulus you can get in the economy during these tough times," we bet the awakening will be sooner rather than later. In an interview with MSNBC, Secretary of Agriculture Tom Vilsack was singing the praises of food stamps. (Food stamps fall under the Department of Agriculture.) In addition to the above quote, Vilsack says, "Well, obviously, [food stamps are] putting people to work."
How anyone can truly believe this astonishes us. Redistributing funds from the productive to less productive is the opposite of stimulus. It's burning cash. If you really want to get your blood boiling today, watch the full video here.
Porter appeared on Yahoo Finance yesterday to debate market bull James Altucher. I don't want to spoil the debate, so simply click here to watch.
While most of us here at Stansberry & Associates are bullish on gold for the long term, only one of us has nailed the recent volatility on the metal. In the past few months, Jeff Clark has booked gains of 80% in a day off Gold Fields (GFI), 80% in a week off the gold miners exchange-traded fund (GDX), and 55% in a week off Kinross Gold (KGC). (Not that he's a one-trick pony… Jeff's also recommended several big winners outside of the gold market.)
Today, Jeff sent an update to his Short Report readers with another gold trade... A trade he believes will return 200%. Jeff's worried gold has run too far, too fast, and he thinks it's time for a correction. "Parabolic moves always end badly," he warned.
You see, Jeff saw the exact same pattern set up in silver from February to late April this year. Calls for $100 silver abounded. New money was rushing into the metal. But silver peaked at $48 an ounce at the end of April…
It then collapsed more than 30% in the next two weeks. Take a look at the chart…
Since late June, gold has rallied from less than $1,500 an ounce to more than $1,800 an ounce. Take a look at this gold chart. Do you see any similarities?
Jeff is calling for a gold correction. And if his thesis is correct, S&A Short Report readers will triple their money in a short period of time. To access the S&A Short Report and learn more about Jeff's gold trade, click here...
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New 52-week highs (as of 8/16/11): None.
More venom from Porter in today's mailbag. Send us a letter, if you dare... feedback@stansberryresearch.com.
"Porter says, 'Look out below!' and doc Elfrig says this is the opportune time to buy and not to listen to the fear mongers; which makes Porter a fear monger, I guess... And the doc is writing this in his 'retirement' letter no less. Which one of you is smokin' crack??" – Paid-up subscriber Rob B.
Porter comment: Doc is.
"Porter, Please get your facts right. You are loosing your credibility attacking Prechter. Prechter does not recommend Treasury Bonds. He recommends T-Bills. And by the way stop repeating ad nauseam that ''Either my ideas are right, or they are wrong.' Maybe you are too young or have not faced enough hardships to know that life is not black and white but all sorts of shades of gray.
"When one needs to attack others to make his point, maybe his arguments are a bit weak. Prechter is wrong on some stuff and right about some other stuff, just like you and any other analyst. But Prechter is a gentleman and maybe you could learn from him." – Paid-up subscriber Normand Jolicoeur
Porter comment: Well... I can't have my credibility loosening, now can I?
Regards,
Sean Goldsmith
Baltimore, Maryland
August 17, 2011