Michael Lombardi’s Prediction of Critical Warning Number Six

In the present scenario, the American economy is having its way over thin ice and insecurity is at its every step. Some disagree and say that American economy is benefiting and recovering but this doesn’t seem to be true as there is no such sign as neither the employment rate has increased nor the rate of profit. US housing sector is going through a desolation phase and new sales have to agree with the present low rate since 1963. It is assumed that the prices of housing will continue to be low in coming days too.

US are still experiencing unemployment of 15%. The American banks are not showing any better results. The banks are getting affected by the debt crisis prevailing in Europe by $1 trillion. These facts indicate another recession befalling in the United States. As per estimation, budget deficit in US is expected to be $1.3 trillion. The official national debt is also predicted to reach $20 trillion excluding some off balance sheet items like Medicare, old age security, etc. the US national debt is considered to be about $100 trillion. Politicians have added trillions of dollars to government spending since the year 2008 as they believed that the present economic problems would be fixed. However, the problem may be more severe as the national debt may become about 150% of the GDP. The condition was similar to that during the World War II. The credit rating of USA has been downgraded.

The US rates of interests were lowered in the year 2004. As a result it leads to good amount of borrowing and investing of the same in the real state. This led to inflation in the country. The price of gold has escalated almost 500%. An expectation of a high rate of inflation in near future might be possible. The second session of recession that is expected to come may lead to even more worse condition in comparison to the 2007-08 economic instability and the great depression of the year 1929. During those years, the Wall Street led to a sudden crash and brought severe effects word wide. Poverty and high unemployment were some of the outcomes of the fall in the economy. The economic condition of the country was not expected to get good in future and therefore. The consumer debt amount increased and the burden on the US economy also increased. The companies that worked in sectors like shipping, mining, construction, agriculture, automobiles and other appliances were very badly hit by the downfall of the economy. This condition went on worsening till the year of 1933. Many of the businesses were closed and the banks went in deep loss. The incomes that came from farms became almost half in 1929. By the year 1933, a huge mass of people got under unemployment.

The value of the stock dropped to about one fifth of the value it had in 1929. The rate of unemployment continued till the year 1937. There is confusion in people that will the country come out of this recession soon and if it comes out, will the country be in a state to withstand another recession. This is a big question as it may almost shatter the country vigorously and stretch it towards the grave. Since last three years, the Federal Reserve was trying to display that the condition of the American economy is good and it is not experiencing any problem. If this display was not provided to the common men, US would not have been called as a bankrupt country. The interest rates have been already lowered to zero and now it cannot be lowered more. The money printing by the Fed is going to pump in more air in the balloon of inflation. This may lead to a very hapless economy.

Critical Warning Number Six

The future of the US economy is something to be well thought of. The US national debt has increased by about $5 trillion since Obama became the president. This was the condition after 4 years of presidential rule of Obama. The size of the balance sheet of the Federal Reserve was increased by $2 trillion. The value of the US dollar has been getting lower since then. About 70% of the world central banks have US dollar as their official reserve currency. The financial imbalance in Europe has made the investors to push themselves back from euro and the dollars are still considered better by them today. However, the inflation and the debt show a possibility of further lowering of the dollars. This all is to take place just because of the US Federal Reserve’s trick of printing more and more money. The time is not far when the foreigners may let go the US dollar and look ahead for some more reliable currency.

The price of gold is rising continuously and this may lead to an increase in the demand of the gold mining stocks. The price of the gold bullions may come across ups and downs but at the end of the year, it always starts at a higher price. This trend has been followed by gold since last eleven years and so is considered to follow it for the rest of the years too. When the Federal Reserve continues to print money and the value of dollar drops, the prices of gold are expected to go on rising. On the other hand, the crisis of the euro zone also continues and thus has been weakened. This has led to the weakening of the euro against the US dollar.

In the present scenario of the stock market, the bear market rally in stocks is expected to lose its set-direction and may reach to the March 2009 lower figure. This condition would for sure bring down the Dow Jones to about 52% from its present state. During the phase I of the bear market, the stock prices experienced a sudden fall. The Dow Jones Industrial Average got shattered down to about 54% and reached to 6,440 from the previous value of 14,164. In the Phase II of the bear market condition, the bear may ensnare the investors back to the stocks, thus giving them a false view of security. The market may look as in stability and good for any investments but this is just a false belief that you are provided with. As an effect of the bear, Dow Jones scrambled up above 12,000. Making a comparison of the condition during 1934 to 1937, Phase III is expected to come in few months and may finally bring the stock prices below their March 2009 lows.

At present you are in the above discussed state. Michael Lombardi has these views regarding the economy of United States at present and in future. Michael writes for Profit Confidential. To bring front some facts about him some past predictions of him are mentioned below form which “all” of them came to be true. Following were those predictions:

  1. He advised to invest in gold in 2002.
  2. He advised to get out of housing market.
  3. He predicted the recession of late 2007.
  4. He advised to get out of stocks in the fall of 2008; and
  5. He advised to get back into stocks in the March of 2009.

His readers have always benefited from the priceless advice that he has been providing and now he comes up with a prediction of the sixth major event that bears the title:

Critical Warning Number Six

If you have query regarding what should be your approach considering the present situation and what should an investor and consumer must do to make them stay protected from the fast approaching economic upheaval. What should be your portfolio so that you can gain more out of the present situation by utilizing your portfolio and your new view? Get answers for all the queries that you have in your mind from our Michael and make a profitable investment. Michael gives you suggestions so that the stocks you invest in goes up even when the market goes down. The suggestions by Michael Lombardi will help you to

  • Look through the declining value of the US dollar
  • Pay no attention to the collapse of euro
  • Disregard the price fluctuation and rise in the price of gold
  • Smile even in the speculative stock market condition
  • Go brave even through the inflated economy
  • Be in profit even in adverse conditions

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