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Beat Runaway Inflation By Unlocking the Trading Secrets of the World's Wealthiest Investors

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My name is Sean Hyman, and as the editor of the Ultimate Wealth Report newsletter service, my goal is to help members protect and grow their wealth in these high inflationary times in which we’re living.

I’ve been in the investing trenches for over 20 years. I’ve been a stockbroker at Charles Schwab, a trading course instructor for foreign exchange market maker Forex Capital Markets (FXCM), and a financial writer for Newsmax and other outlets.

Now, had I been writing the Ultimate Wealth Report newsletter a decade or more ago, it may have been much different. That’s because, early on in my investing career, I was able to accomplish what so many others have done over the years, building an appreciable amount of wealth through buying and selling stocks. Working at Schwab, within a few short years I’d worked my way up into management and racked up a number of financial licenses (Series 7, 63, 9 and 10, to be specific).

Editor's Note: Sean Hyman’s Guide to Ultimate Wealth. Click Here to Read More

Oh, it was a wonderful “boom” from 1982 to 2000. You could hitch a ride to any number of sectors and companies and enjoy double-digit growth, year after year, if you played your cards right. At that point in time, those who recommended stocks and assembled portfolios had it relatively easy — when the tide rolls in, it lifts all boats, as they say.

But that was then, this is now. The NASDAQ reached its all-time high of 5,132.52 intraday on March 10, 2000. The Dow Jones last set a fresh high on Oct. 9, 2007, when it hit 14,164.53. Those are lofty levels we haven’t seen for awhile, and I think it’s going to be a very long time from now that we ever touch such levels again.

The severity of the dot-com bust and tech crash after that 2000 high point was prime indication to me that the party had come to an end. The U.S. stock market, long a wealth-generating machine, was no longer a compelling place to battle against the continuing rise of inflation.

Real Estate Becomes Unreal, Goes from Boom to Bust

A few years later, in the mid-2000s, another frothy market emerged, one that seemingly was minting millionaires overnight. That boom? Real estate. And it was a great inflation fighter from an investment standpoint, because of the steep upward trajectory of prices.

Everyone was getting in on the action. Aggressive buyers were flipping multiple homes at a time, and people with lousy credit — who in more prudent times wouldn’t be trusted with a credit card by many banks — were getting exotic mortgages in which the interest rate was only set for a limited period of years, and were getting approved for hundreds of thousands of dollars worth of loans without any documentation of income.
Those taking out the loans didn’t need to worry, because with the prices shooting up, they wouldn’t have to ever worry about those higher rates coming due. They could refinance or sell at a large profit.

And banks, they didn’t have to worry, because they were taking the mortgages they sold, bundling them up, and reselling those on the market to shareholders. They got their money back (plus a premium, of course), and eliminated the risk of defaults from their books.

And the government, it didn’t have to worry. Just keep the interest rates at super-low levels and the economic engine would keep churning. Homeowners would always be able to find that next sucker, the cash would keep changing hands, and the music would never stop, so no one had to worry that there weren’t enough chairs to support everything that was going on.

But then, the music did stop. A 2007 panic turned into a 2008 recession so deep it was more akin to depression. Housing unraveled quickly, and foreclosures mounted. Liquidity in the banking markets froze. Lehman Brothers went belly up, shocking the system.

Now, with two asset bubbles deflated — stocks and housing — investors were left to wonder, is there anywhere I can turn to safeguard and grow my savings? Is there any safety left at all in this highly volatile economy?

These days, it’s much more challenging to recommend a portfolio that can weather such financial storms. But the good news, if you’re willing to really dig into the markets, and pry loose the information while applying in-depth analysis of facts, figures and trends, you can indeed survive and thrive in this post-bubble atmosphere.

It’s in this environment, in fact, that I feel the most comfortable choosing investments. Why? Because with the “irrational exuberance” clubbed out of the markets, we don’t have the same level of unpredictable noise skewing the realities. We can apply technical analysis and in turn get the polished data we can rely on to make prosperous investing decisions.

Closing the Wealth Gap


These days, there are assets that will still prevail in their race against inflation: commodities and currencies.

That was the conclusion that I came to about six years ago, actually, when the real estate bubble was in full bloom. It was then that I transitioned my career from the stock market and secured my Series 3 license so that I could operate in the commodity and forex (aka currency) market. That’s when I went to work on the inside of a market-making firm, FXCM, for five years — that allowed me to immerse myself in the in’s and out’s of these complicated markets.

What did I see in commodities and currencies at that point? As you know, throughout world history there have always been the rich and poor. It’s a fact, and no government system — socialism, communism, monarchy, democracy — has altered that reality.

These days, however, the “wealth gap,” otherwise known as the unequal distribution of financial assets among the U.S. population (including homes, businesses, savings and investments), is widening dramatically. It has been estimated that the top 10 percent hold 80 percent of all financial assets, meaning the other 90 percent split the remaining 20 percent (unequally) among them.

Numerous arguments and theories have been set forth regarding this gap. But one thing is clear to me: It’s caused in large part by U.S. Federal Reserve’s continued attack on the value of the U.S. dollar, which in turn has created a huge rise in the cost of goods. Yes, when there are more and more of something released into the market — in this case, dollars — it means each one is worth less, and inflation results.

It’s because of loose monetary policies that the purchasing power of the average American peaked all the way back in 1973, and has been on a long-term slide ever since.

It all began when President Richard Nixon took the country off of the gold standard on Aug. 15, 1971. Before that, our money supply was backed by gold. After that date, it was merely backed by the “full faith and credit of the government. Or, to put it bluntly, it was backed by “hot air,” since there was nothing physically backstopping the greenback anymore.

That shortsighted action gave the U.S. central bank, i.e., the Federal Reserve, the ability to literally “print money” whenever it saw the need. No longer did the amount of money in circulation have to equal what we had stored away in gold, which served as an excellent lever of restraint on the system.

The problem with that is, you put the ability to print money — and artificially boost markets in the short-term — in the hands of politicians, indirectly. Of course, in political circles, taking the easy way out is usually preferred, because it keeps the voters happy and thus helps those in power continue to win elections.

With the gold standard erased, the printing presses forged ahead full steam, and purchasing power peaked soon after.

Stand Up for Your Standard of Living!

As I explained, more money in circulation dilutes the purchasing power of the dollars already in your wallet. When more of anything is produced, it’s more abundant and less valuable. Scarcity, on the other hand, increases value of a desired object.

When this happens, “a dollar isn’t a dollar” anymore. What a dollar can purchase shrinks over time. That’s because there are only a finite number of goods out in the world — only so much oil, gold, copper, sugar, coffee, etc. So when there are more dollars out there chasing a limited amount of goods, inflation gallops forward at a faster and faster pace.

In short, Nixon’s fateful decision put the wheels in motion to lower the average American’s standard of living, because all of our purchasing power has been reduced.

Take a look at the following chart and you’ll see what’s happened to the dollar over the past 30 years:

graph1-(1).jpg

This is what’s causing a “great divide” between the rich and the poor — inflation that erodes your dollars. Most importantly, it’s what’s sinking more and more of the middle class into poverty. The government has found a way to legally rob its citizens by diluting the value of their dollars, which in turn continually increases the cost of living as a far faster pace than most anyone could hope to get raises to offset the rise. Goodbye, standard of living!

Of course, if elected officials admitted to this situation freely, they wouldn’t be in office for long. No, they need to deflect the blame for such tactics. What do they do? They point to Wall Street as an easy scapegoat.

Outwitting the Government’s Dollar-Damaging Schemes

In the Ultimate Wealth Report, the goal is to help you stem the tide. While other peoples’ purchasing power and standard of living decrease, we’re going to direct you toward the things that get inflated in such a scenario: commodities. We’re also going to attack the dilution of the dollar head-on by investing in foreign currencies.

Now, by linking our U.S. dollars to foreign currencies — which we will do by purchasing Exchange-Traded Funds, otherwise known as ETFs — we’ll retain purchasing power and de-link ourselves from the dollar-dilution game the Fed is playing.

By linking our dollars to foreign currencies (through purchasing ETFs through your stock brokerage account), we’ll retain purchasing power and delink from the “dollar diluting” game.

Also, by investing in assets that inflate, like gold, copper, oil, etc. (again, through ETFs), we’re actually going to ride the wave of inflation set in motion by Nixon’s roll of the dice and continued by every administration since, rather than be victimized by it.

Get Ready to Profit from Higher Food, Oil and Gas Prices

Thus, in this commodity and currency investing service, we won’t necessarily have to fear higher oil or gasoline prices — we’ll be profiting from them. The same goes for food costs, because we’ll be profiting from them too.

Yes, while others are suffering from rising costs, while you’ll also have to purchase that tank of gas and that cart of groceries the same as everyone else, you’ll also know the secret the “haves” understand and the “have nots” don’t: That you can get your share of rising prices by investing in the commodities people can’t do without.

Editor's Note: Sean Hyman’s Guide to Ultimate Wealth. Click Here to Read More

As a member of the Ultimate Wealth Report, you’ll be empowered to take charge of your future and look inflation square in the eye, outsmarting the government’s reckless policies regarding the dollar.

In closing, I’m confident you’ll find the Ultimate Wealth Report to be a valuable resource as you save toward your goals of retirement and financial freedom.

Sincerely, and God Bless!

SeanHyman.jpg

Sean Hyman
Editor
Ultimate Wealth Report

Related to Sean Hyman: Sean Hyman Discusses The Ultimate Wealth Report Newsletter and Sean Hyman: How to Build Your Fortune on Obama Administration Policies

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2013-46-06
Tuesday, 06 Aug 2013 02:46 PM
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