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It’s interesting to see what has happened in Japan approximately over the past two decades. They have literally been in a 20 year long depression that they just haven’t seem to get out of. Most Americans, westerners, and conventional thinkers that really aren’t in the know with economics and global finances would most likely not know about their recession and otherwise assume that Japan is booming considering a number of their largest companies have thrived here in the states over the same period including Toyota, Honda, Sony, and Canon. A positive stereotype that Americans have of the Japanese is that they are hardworking, smart, and successful. Although this may be true on the individual level, events in their economic condition has not reflected this.

Japan is America’s most recent example of what not to do to recover from an economic downturn, but have we learned anything from them? Japan’s perfect storm occurred during a simultaneous real estate and stock bubble, and of course the recovery was prolonged with Keynesian interference and to this day, Japan is still suffering. Lately they’ve had to endure the global financial debacle and their recent unfortunate natural disasters, but all of that did not explain why they artificially lowered interest rates from 6% to 0%, implemented over 10 stimulus packages adding over 1 trillion dollars, bank bailouts, etc. We’ve recently written an article detailing the event of the Great Depression and why it took America so long to recover. It’s the same thing that happened to Japan and the same thing that’s going on now virtually throughout the world.


Japanese Depression

  

On a side note, the only thing that we would advocate for is the government cutting taxes, but it’s really not something that we get excited about. Really it’s like telling a captured slave that he has the day off when in reality the whole thing is an outright injustice specifically in regards to the income tax. Stay tuned for our income tax rant NEXT WEEK!!! 

 

 

We’ve seen gold do its thing over the past 6 months and we’ve seen it skyrocket over the long-term. Each time it hits new highs it sets the tone for how much further it can truly climb, especially as more investors buy in at that price and establish a new floor. Seeing gold correct this week was not a shocker and neither was the media talking about the bubble that is popping in the metals markets. Expect to hear the same thing when gold hits 2000, 3000, 5000, and beyond. As much as we discredit the government, politicians, and leaders, in reality they really are in the know and understand what is going on behind the scenes. But, they are positioned in a place to keep the public in an illusion and brainwashing everyone into continuing to have blind faith in their fiat currency mess. Considering the fact that central banks are the primary holders of gold, and when we say primary, we mean majority by far, they have the power to literally crash gold if they really wanted to just by flooding the markets. They would accomplish the task of restoring faith in paper money and their phony scheme they call “government economics.” Well no government has opted to do this and in fact, the opposite is true. Central banks are purchasing more gold and trying to get their hands on something that will be stable and endure the run on paper money. We saw that with the news from Venezuela and the lack of faith that they had in other countries holding on to their gold.

 

Jackson Hole  

 

We are anticipating what will be announced after the gathering of the minds and what news will be released when the Fed meets in Jackson Hole. Considering the stage was set for QE2 at this location in 2010, the markets will be anticipating what will come from this years’ meeting. Government numbers show that the economy is arguably better than where we were one year ago. But in reality, with more debt, more spending, and a currently contracting economy, we would argue that the Fed is in a position where they are going to be forced to act in some way. Either this will happen now or in a matter of a few months if they allow the markets to continue to correct downwards.

 

 

It will be interesting to see how the events and aftermath of the economy will affect the outcome of the election in 2012. We’ve seen much of the country go hard right after an overdose of government spending and stimulus voting in Tea Party politicians etc. When former President Bush took office, who by no means was a true fiscal conservative, the national debt was around 5.8 trillion which doubled during the time he was in office. Already President Obama has racked up nearly 4 trillion dollars and will by far be the biggest  spender the country has seen up until now, especially if he gets a second term in office. He is clearly losing his supporters which is evident with his current 40% approval rating. Because economics and politics are tied so closely hand in hand, we anticipate a gasp for breath to occur in time and assist in the attempt to stabilize the economy for Obama’s reelection. Time will tell if more stimulus and further debt will do anything for the economy considering QE2 has proven to be an absolute failure and more and more investors will be pricing in the ineffectiveness of government interventions when they are revealed during the next act.

 

 

It’s amazing to see how the media contorts and manipulates information to align themselves with government agendas. As we’ve pointed out in prior emails, Ron Paul is being shunned and being treated as a senile old man who rambles on and on about nonsense when what he has been proclaiming has been spot on. His insight and understanding about the economy has shown and proven to be incredibly accurate. Recently, a columnist did a story on Ron Paul and his investments over the past one year and three years. Of course Ron Paul owned a great deal of gold and silver stocks that have increased his portfolio dramatically. However, they took a time frame that was intended to show his returns as modest and lacking recognition to bring him down. Considering the fact that 3 years ago August, gold was hitting new highs before the market and virtually everything crashed in the next few months. What is interesting to note is that if you were to actually note his returns from the time he purchased his stocks years ago, he is up hundreds percentage wise. Of course when you understand the economy in the way that he does, anticipating where the money is going to be made is not that hard of a task. 

 

Peter Schiff has an excellent rant on this story that we’ve posted on our front page, CLICK HERE TO VISIT!!! 

 

 

We will be presenting 2 gold companies to our members in September. We are anticipating these companies to potentially breakout. DETAILS TO FOLLOW!!!

 

 

Visit CrushTheStreet.com for news, metals pricing, and featured videos!!! 

 

 

“Truth is the most valuable thing we have. Let us economize it.” Mark Twain

 

 

Opt-out of conventional wisdom!!!

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