The U.S. Appears to Be on the Verge of War
The U.S. appears to be on the verge of war... Don't forget about gold... Another one of Sjug's bold predictions is playing out... Mobile payments are booming in the U.S... In the mailbag: More on George Soros and bitcoin...
Is the U.S. on the verge of war?
If recent statements from two senior U.S. government officials are any indication, the possibility could be far more likely than you realize.
Speaking at a national-security summit in Washington D.C. last Thursday, Central Intelligence Agency director Mike Pompeo said he is "deeply worried" that North Korea's nuclear capabilities are growing quickly... and warned that the country could be just "months away" from reaching targets in the U.S.
"We ought to behave as if we are on the cusp of them achieving that objective," he said. "They are so far along in that, it's now a matter of thinking about how do you stop the final step."
Later that day, U.S. National Security Adviser H.R. McMaster echoed that sentiment, and went even further. "We're not out of time but we're running out of time," he said. "Accept and deter is unacceptable."
This is a big deal. Senior government officials typically don't make statements like these off the cuff. And we now have two of the most senior security officials in public agreement that North Korea must be stopped... and soon.
As always, we have no crystal ball – and we certainly hope we're wrong – but it sure looks to us as if the government is laying the groundwork for war.
What should you do with this information?
First and foremost, if you don't already have a small percentage of your wealth in gold and silver, consider buying some today. You might also consider a tiny speculation in cryptocurrencies. And finally, we'd urge you to take another look at our colleague Dr. David "Doc" Eifrig's research on the defense sector.
As regular Digest readers know, Doc has recommended a handful of the highest-quality defense stocks to his Retirement Millionaire subscribers. He believes these stocks are likely to move much higher in the coming years as U.S. military spending ramps up again. But if a new conflict breaks out, they could absolutely soar.
A little more than a year ago today, Steve Sjuggerud made a bold prediction...
As he wrote in the November 2016 issue of True Wealth...
In less than five years, money as you know it will have completely changed... In less than five years, your kids won't carry wallets. They won't carry cash. They won't carry credit cards.
In place of all of this, they will carry just one thing: their mobile phones. It won't just be your kids, by the way... In less than five years, you will use your phone to pay for almost everything.
Now, if you've been with us for long, you know Steve is known for his contrarian calls. But this was among his most contrarian to date. After all, while this trend had already taken hold in China, it was all but unheard of in the U.S. at that time. But Steve was convinced.
The reason was simple...
Mobile-payment technology is too safe and too convenient not to catch on. More from Steve...
Think of this in reverse... What if the old way we paid each other was by mobile phone? What if you were already used to paying by simply holding your phone out for a second or two?
Then someone came up with the invention of a credit card... Would you switch to a credit card? Of course not. Think of what you'd say...
- You mean I have to carry this piece of plastic around with me in addition to my phone? Why?
- Then I have to stick it in the chip reader and waste 10 SECONDS of my life waiting? Are you kidding?
- What? That's not all? Then I have to sign a little screen, too? Really?
- And I have to give away my name and credit-card number to anyone I want to pay?
- And then that information could be hacked?
That sounds like a terrible deal. If we were already paying with our phones and someone invented the credit card, it would be dead on arrival. Nobody would use it. It wouldn't make any sense.
In about five years, I believe, nearly everyone will prefer paying with their phone. I realize that's hard to believe, when basically nobody in America is doing this now.
Now, we aren't there yet...
Many Americans still don't use their phones to pay for anything. But mobile payments are quietly booming in the U.S. And there's no better example of this trend than the recent performance of online-payment company PayPal (PYPL) and its popular mobile-payment app Venmo.
With Venmo, friends can quickly send each other money using their smartphones. They can reimburse for a coffee or beer – or even pay rent – within minutes.
What's more, Venmo doesn't charge users transaction fees.
PayPal, which acquired Venmo about five years ago, just reported dramatic third-quarter growth for the service. Venmo processed about $30 billion in transactions in the past year, up 106% from the same time period a year ago. In the third quarter alone, it processed about $9 billion, up 93% from the third quarter of 2016.
More important, Venmo's reach is now spreading beyond friend-to-friend transactions...
Until now, Venmo's most attractive feature – the fact that it has no fees – meant that it also doesn't make money for PayPal. But that's changing...
PayPal just announced that Venmo is starting to connect with a long list of retailers like Foot Locker, Forever 21, and Lululemon Athletica. These merchants are rolling out Venmo as a payment option for customers making purchases through their websites.
And unlike its individual users, PayPal will charge merchants fees for each transaction, just as credit-card issuers do.
Venmo's popularity has helped drive PayPal shares higher. The stock is up nearly 80% so far this year, and currently sits at record highs.
But Steve says it's not too late to profit from this trend...
You see, while PayPal is dominant today, he isn't convinced it will remain the leader by the time this trend really catches on. More from Steve...
PayPal is the leader in mobile payments in the U.S., by far. However, PayPal's big risk is that it's not part of an already existing "ecosystem."
This "ecosystem" concept is incredibly powerful. WeChat is the dominant "ecosystem" in China. People do EVERYTHING within WeChat. WeChat's payment system didn't really get going until 2013. And now it's massive... I expect WeChat's parent company, Tencent, will become the world's largest company within five years – all because of the "ecosystem" that it has built.
Here in the States, we don't have a big winner like WeChat, yet... But the dominant players are obvious...
Rather than try to choose the winner, Steve recommended buying a basket of all the potential winners in this trend...
The best way to do that is through the PureFunds ISE Mobile Payments Fund (IPAY)...
The fund breaks down like this:
- 34% Payment processors (including Square and Fiserv)
- 29% Infrastructure and software (including Verifone)
- 19% Card networks (including MasterCard)
- 18% Solutions (including FleetCor)
IPAY is the safe way for us to play this trend. We are not picking winners. We are investing in the whole sector.
Today in the U.S., it would be darn difficult to exist without a wallet, cash, and credit cards. But in China, nobody wants to go back. And it only took about three years.
If my thinking is right, then mobile pay will explode in the U.S... Cash and traditional credit cards are basically done for, in the long run.
Folks who took Steve's advice are already up 35% in a little more than a year... But if Steve is right, we're just scratching the surface.
New 52-week highs (as of 10/20/17): AllianceBernstein (AB), AMETEK (AME), Boeing (BA), Becton Dickinson (BDX), Berkshire Hathaway (BRK-B), CBRE Group (CBG), WisdomTree SmallCap Dividend Fund (DES), iShares Select Dividend Fund (DVY), WisdomTree Japan Hedged Equity Fund (DXJ), Intel (INTC), iShares U.S. Aerospace and Defense Fund (ITA), iShares U.S. Home Construction Fund (ITB), Johnson & Johnson (JNJ), JPMorgan Chase (JPM), Microsoft (MSFT), AllianzGI Equity & Convertible Income Fund (NIE), NVR (NVR), Overstock.com (OSTK), PowerShares High Yield Equity Dividend Achievers Portfolio Fund (PEY), PNC Financial Warrants (PNC-WT), ProShares Ultra Technology Fund (ROM), ProShares Ultra S&P 500 Fund (SSO), Stanley Black & Decker (SWK), Travelers (TRV), ProShares Ultra Financials Fund (UYG), VF Corporation (VFC), and Wal-Mart (WMT).
Oh boy, we've done it this time. In today's mailbag, a flood of feedback on Porter's controversial Friday Digest... and several more subscribers weigh in on bitcoin and cryptocurrencies. As always, send your notes to feedback@stansberryresearch.com. Good, bad, or ugly, we read them all.
"'Reflexivity.' I've read this term many times over the years in many different sources. Porter, in his short essay, is the first one to ever explain it in a way that makes sense to me. Something to think about!" – Paid-up Stansberry Alliance member Mark Larsen
"Thank you. This was fascinating reading. Perhaps everyone might find at least one sentence offensive in it, but I loved reading it. First of all, I love to learn and hear different viewpoints that help me grow as a person. I've found Soros an interesting person from the few times I've seen him on TV, and worth listening to his thoughts.
"The way Porter draws all these related stories together about Soros, reflexivity, cryptocurrency, and action you can take today to help make it happen is quite fascinating to someone like me who's a lifelong student of psychology and behavior, economics, history, the natural sciences, and my own profession, information technology. It all makes sense now! 🙂 Keep up the great work; what a talented team you have!!" – Paid-up subscriber Tim Gilbert
"'I (Porter) would wager that no politician is more despised by our subscriber base than Hillary...' That is the most ridiculous statement you've ever made. I don't like Hillary either, but Trump is truly despised/hated/etc. by far more people I know (from both parties). I won't cancel my memberships, but get real." – Paid-up subscriber Arnold Marsh
"I can't tell you how much I enjoyed Friday's commentary. And let me be clear. I despise Hillary Clinton and all those who support and enable her, aka George Soros. Now I know why. Soros believes that no one is capable of 'knowing truth.' Inevitably those who purport to know it, use force to move people to accept their version of it. This is the perfect definition of today's Democrat Party in America, and in particular those philosophies they espouse. Climate change, endemic racism, and a big controlling government are perfect examples. If you disagree you are a flat earth cretin, or worse a bigoted racist, a homophobe.
"That Soros funds the people that push these ideas, and will continue to do so well after his death, shows the purest form of hypocrisy. He's funding what he professes to hate. You helped us unmask a dangerous force in our society and Eric just 'popped' his grave." – Paid-up subscriber Frank R.
Porter comment: Frank, Soros holds a progressive political view personally. But the overwhelming bulk of his fortune didn't go to U.S. politicians. It's gone toward setting up and protecting civil institutions in places that have none.
I happen to agree with you, by the way... I think the Democrats are the party of "big government" in America and of trying to force everyone to accept its view. (Classic example: gun control, despite what the Constitution clearly says.)
But I don't believe for a minute that the Republicans are really any different. Even at times when they controlled both the presidency and Congress... did they work to extend freedom in our country, or did they mostly try to reward their backers and retain power?
Duh.
The idea of an Open Society is that humanity benefits from competing ideas... because no one philosophy has a patent on the "truth." The "good life" evolves, and so should our institutions and our government.
I believe in that concept, even when the results don't match my ideas. And accepting that... well... that was the real lesson Soros taught.
"Soros sucks." – Paid-up Tom Wagner
Porter comment: Jeez. Why didn't I think of that?
"I want to know what is so bad about Soros. I keep reading posts that say 'yada, yada yada, Soros is evil, yada yada yada.' But I haven't yet seen a single one that points out something specific that Soros has done evil. He donates to the Democratic party? In which world is it evil to donate to a political party?" – Paid-up subscriber Randall Bryan
Porter comment: In the world where you demonize everyone else with different opinions as being "evil." In a world that Soros himself has tried to banish. That's the irony. I'm not sure you got it. But maybe you did.
The guy spent his fortune trying to give other people the right to oppose his ideas.
That's rare.
"Porter, all the patter I'm reading about bitcoin and other crypto currencies reminds me a lot of the South Sea Bubble. Go back and read 'The Madness of Crowds' – it's a true market classic and just as pertinent today as it was back then. When the eventual crypto crash comes – and it will – might it also spill over to other markets?" – Paid-up subscriber Gene S.
Porter comment: Maybe you're right, Gene. I hold no more claim to the "truth" than the next guy.
But I have to tell you, I don't think the South Sea Bubble ever promised an end run around the need for corporations to raise capital, endorse profit margins, or distribute wealth.
The idea that people – via the Internet and open-source software – can readily build a more secure and more private currency that's universally accepted online (bitcoin) should at least awaken you to the idea that they might also challenge JPMorgan... the New York Stock Exchange... Facebook... and any other business that relies on massive human interaction.
Just a thought. I could be wrong.
"You guys seem to be paying much more attention to Bitcoin than gold. Do you think gold is a currency relic? It sure seems that way much to my dismay." – Paid-up subscriber Peter G.
Brill comment: Absolutely not, Peter. In fact, if we had to choose between owning gold or bitcoin, we'd choose gold every time. The reason is clear: Gold has been money for more than 5,000 years, and its value has stood the test of time. No matter how big bitcoin gets, it will never be a replacement for gold. Even Tama himself agrees. But you don't have to choose... Why not own a little bitcoin, too?
"Just wanted to comment that Tama has put together what I really needed as a final nudge to take this [cryptocurrency] space more seriously. I dipped my toe in about a year ago in one of the bigger crypto assets, and have done very well just holding on to my initial investment, up from $20 to current prices around $300. What I was struggling with was a source of reliable and credible information.
"Tama's Crypto Capital is the full package. Admittedly, I hesitated to make another investment in research being an Alliance member but I am confident that the initial cost will be recovered in short order. As soon as I subscribed and read through all the materials I was certain I made a wise investment in my future. Thank you." – Paid-up Stansberry Alliance member Scott H.
Brill comment: We couldn't agree more... As we mentioned last week, Tama's new Crypto Capital advisory is among the highest-quality cryptocurrency research we've seen anywhere and at any price. But don't take our word for it... Take advantage of Tama's 100% risk-free offer and see for yourself. Click here to sign up now.
Regards,
Justin Brill
Baltimore, Maryland
October 23, 2017