The Fed Has Set Us Up for a Massive 50% Stock Market Collapse

By: Graham_Summers

The Fed is running a virtual repeat of 1937.

The common narrative is that the Fed “didn’t do enough” during the Great Depression. This is used to justify the Fed’s use of non-stop extraordinary monetary policy post-2008.

But it’s a total lie.

The Fed went bananas in the aftermath of 1929, expanding its balance sheet by 300%. On a relative basis, the Fed’s balance sheet grew from 5% of US GDP to 23% of GDP.

This is an expansion relative to GDP is IDENTICAL to that which the Fed has accomplished since 2008. And the outcome is looking to be the same.

In 1933, CPI began erupting higher. By 1937, CPI was 3.6%. The Fed was forced to hike rates to halt inflation, kicking the weak US economy in the teeth and triggering a particularly nasty recession.

Today, the same issue is occurring. Core CPI hit the Fed’s alleged target of 2% in November 2015 and has remained above it ever since. Inflation is rising.

The Fed might be able to put off hiking rates for a time, but eventually this will become a REAL issue. Particularly since CPI cleared 2% when Oil and most commodities were 40% off their highs.

Eventually the Fed will be forced to hike. And when it does, it will kick an already recessionary US economy into a severe contraction. Remember in 1937, the stock market HALVED after the Fed was forced to hike rates.

Indeed, based on this, we’re looking at an incredible set up for some HUGE winners in numerous asset classes.

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However, I cannot maintain this kind of track record with thousands of investors following our recommendations.

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Best Regards

Graham Summers

Phoenix Capital Research

http://www.phoenixcapitalmarketing.com

Graham also writes Private Wealth Advisory, a monthly investment advisory focusing on the most lucrative investment opportunities the financial markets have to offer. Graham understands the big picture from both a macro-economic and capital in/outflow perspective. He translates his understanding into finding trends and undervalued investment opportunities months before the markets catch on: the Private Wealth Advisory portfolio has outperformed the S&P 500 three of the last five years, including a 7% return in 2008 vs. a 37% loss for the S&P 500.

Previously, Graham worked as a Senior Financial Analyst covering global markets for several investment firms in the Mid-Atlantic region. He’s lived and performed research in Europe, Asia, the Middle East, and the United States.

© 2016 Copyright Graham Summers - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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