Hey There Income Hunters,
As Congressman and noted fiscal watchdog Wright Patman growled way back in 1941, “The Federal Reserve bank buys government bonds without one penny.”
It’s pretty amazing that 80 years ago the Fed was doing the exact same thing it is today.
AND nobody really gets it!
Everyone talks about more stimulus, more printing …
Meanwhile, every nation that has gone down this route after accumulating so much debt …
… just kept printing money until they devalued their citizens’ wealth to save itself.
It’s called debasing the currency.
It’s a nice little trick that transfers wealth from the citizens back to the government so it can pay down its debt.
AND there is certainly plenty of debt to payoff.
A Massive Increase in US Government Debt in the Last 30 Years:
The figure above is seriously important for all investors to understand. I’m sure many people you know – and maybe even you – are holding so-called “safe haven” US Treasury bonds in retirement accounts thinking they could live off that income.
However, investors will be sadly disappointed unless they take appropriate action to protect their wealth.
You see, printing so much currency at the end of a debt cycle creates inflation …
And the Fed is purposely going down this route.
What they won’t tell you is inflation destroys investors’ returns.
Let’s take a look at what happened during the 1970s inflationary period:
Bond rates will rise just as fast as inflation rates, meaning bond prices will collapse.
For retirees and others with a large amount of bonds in their portfolio, this is detrimental to their wealth.
In the example above the 5-year bond rate rose 7.5% in the first five years.
Today, if 5-year Treasuries rise just 5%, an investor would lose 20% of their capital.
Time to Hunt Income
However, there are ways to protect your bond portfolio and capitalize on the tailwind of inflation …
CME Bond Futures provide a deeply liquid market and many products ideal for speculating and hedging interest rates. (CME Group is a global markets company.)
See the figure below:
All About YOU
The next few years will be interesting, to say the least.
My mission through Power Income is to build a community of Income Hunters who not only have the presence of mind to take advantage of the turmoil swirling around them, but the ability to prepare others as well.
The goal is to put you on the fast track to financial freedom.
And we can do it together!
To get there, I’ll teach you a disciplined, systematic approach applied to a defined universe of stocks, options and futures.
You’ll learn to maximize your leverage and minimize risk so you will only need a couple of hours a week to manage your portfolio.
Sound like a plan? Great!
I’d like to wish everyone a very Happy New Year, and I look forward to a happy, healthy and profitable 2021!
Live & Trade With Passion My Friends,
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