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The Only Trend That Matters

March 4, 2011 by  

The Only Trend That Matters

We call it "the only trend that matters."

It is the most important financial idea we could ever give to you. The fate of millions of Americans rests in a single market, where just one financial instrument trades, and…

This market is collapsing. Its downfall began, as we predicted at the time, in late 2008.

This single market determines our standard of living, our role in the world and our prestige as a nation. It directly influences the price of food and oil. And that’s not all…

Most of the world’s other markets depend on this market, too. The price of every fixed-income security in the world is based directly on this market. The prices of United States stocks depend on this market — not directly, but strongly in comparison.

Most important, the U.S. dollar depends on this market.

You see, foreign investors own trillions of this asset. As the market collapses, foreign investors will sell. As they sell, they will also unload dollars. This market is the key to the future value of bonds, stocks and the U.S. dollar. That’s why the decline of this market is the only trend that matters.

We’re talking about the collapse of the largest bond market in the world — the market for U.S. Treasuries.

The best illustration of this trend is the chart below. We urge — no, we beg — our readers to pay attention to this chart. Put a copy of it on your refrigerator. Update it weekly. Keep your eye on it. And make sure you truly understand what it means.

The chart compares the value of long-dated U.S. Treasury bonds (TLT) to the price of gold (GLD). When we say "long-dated," we mean U.S. government debts that don’t come due for more than 20 years. This chart shows the value of the bond market compared to gold since December 2008.

Whenever someone tells you he believes we are exaggerating the risks of our government’s debt load and its dependency on "quantitative easing" (aka printing money), show him this chart.

This chart demonstrates the collapse of the purchasing power of our currency as gold rises. And it shows the corresponding collapse in the credit of the U.S. government as bonds fall.

Just to be clear about this… We are not rear-looking experts. We have been warning about these issues frequently (almost continuously) since December 2008. Here’s what we wrote back then:

None of the government’s bailout plans will solve any of the problems. The government can only shift the burden of the failures. Instead of bondholders and shareholders being wiped out, taxpayers are put on the hook. These actions will temporarily resuscitate the economy — but cause a permanent decline in the value of the dollar… inflation will wipe out much of the value of long-dated U.S. government bonds, causing their prices to plummet.

In that issue, we told folks to "buy as much gold bullion as you can reasonably afford." We’re repeating these warnings again because the market for U.S. Treasuries recently "broke down" through an important level. The big government bond fund (TLT) just struck its lowest low in nine months. The decline seems to be accelerating.

When we began writing about the looming collapse of the bond market and the risks to the U.S. dollar, a lot of people called us "right-wing nut jobs" or "gold bugs." That’s not the case.

Our advisory was founded (in 1999) on the idea the Internet would change our lives in a profound way. We write about the biggest financial trends we can understand — whatever they happen to be. We have always striven to understand the facts and allow the facts to dictate our view. Now, three years after we first predicted the collapse of the Treasury market, more and more people have discovered these facts. They can look around and see with their own eyes what’s happening. Our ideas have gone from fringe to mainstream.

Despite the growing number of people waking up to these facts… and the considerable rise in gold over the past 10 years, it’s still not too late to buy gold and silver bullion. But I urge you to hurry. The secret is getting out… and precious metals are destined to skyrocket in the coming years.

Good investing,

Porter Stansberry

–Porter Stansberry with Braden Copeland

P.S. We tried to run a television ad warning about the risks to our country. As far as we can tell, nothing in the ad is even mildly offensive. But no large TV network in America has agreed to run it, not even Fox. You may believe you have the right to free speech, but not in any venue that matters. You can click here for a more detailed video on how I recommend you protect your family and your wealth from the dollar’s destruction.

Porter Stansberry

founded Stansberry & Associates Investment Research, a private publishing company based in Baltimore, Md., in 1999. His monthly newsletter, Stansberry's Investment Advisory, deals with safe value investments poised to give subscribers years of exceptional returns. Porter oversees a staff of investment analysts whose expertise ranges from value investing to insider trading to short selling. Together, Porter and his research team do exhaustive amounts of real-world, independent research. They've visited more than 200 companies in order to find the best low-risk investments in the world.

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  • ERIC

    WHERE I BELIEVE THE DOLLAR IS GOING TO CRASH SND BURN, AS IT HAS BEEN, I THINK STANSERRY UNDERESTIMATES IT! I FEEL THAT IN OUR LIFETIME; THERE WILL BE A WORLD CURRENCY CRISIS THAT EWILL MASKE TRAFFIC ON WALL STREET LOOK LIKE A MAD MAX MOVIE!!!!

    that being said- i also feel thsat thegovernment will confidcate gold, as Roosevelt did in the thirties asns thad investing in “paper gold”is as bad as bretting on Enron to come back!!!!!! I am a dying man with a decenerative neuro muscular disease, whsat am i gonna do, stuff it in my matress????!!

    • Al Sieber

      ERIC, I think it’s underestimated also and sooner then we think, sorry about your medical condition.

      • http://Illinois'17th Old Henry

        Al:

        I did the Google thing this morning on the Abiotic Oil. It left me confused as part of the information said that it had been discounted and part of it said that it was looked at as being valid.

        As I understood what I was reading there has not been any Abiotic Oil discovered.

        Is that correct?

        • Al Sieber

          O Henry, I’ll find you a website, I don’t think dinosaurs died for our sins (oil), even though they lived for 65 million years there still wasn’t enough. Abiotic oil is formed through pressure in the earth and other elements and is a is a hydrocarbon that is found on other planets in our solar system, were there dinosaurs on other planets also? thanks for showing the interest because most people don’t care because its boring.

    • libertytrain

      I’m sorry Eric. Best Wishes.

    • Boston Blackie

      Eric,
      - Forget the dollar, treasuries and gold. Find a beach with warm sand and hot sunshine and start walking – just your swim suit. Walk down to the store and buy some organic vegetables. Then Juice and Walk the rest of your life. When you start to feel better get you some grass-fed beef and organic fruit.
      - Are you still here – start walking.

  • Tazio2013

    IMCA, today’s posting by Porter Stansberry is a bit understated re the consequences of the accelerated devaluation of fiat currencies in general and in particular the US$ and Euro. For a more pessimistic and radical POV re the rapidly changing socio-politico-econo-financial reality, readers having an “objective reality” metaphysics will want to read this March 2011 Economic Rant:

    campaign.r20.constantcontact.com/render?llr=bsb4hfcab&v=001cHaZO6NvI5VZUL0DE5xRuPsmQMZ48QCuvRem
    KILDOBt2BHUvz93UPXS36xEwB0xSoVl8d8tf0
    _rOOZanfocHgpFZCq-kZZRYTYfOxYwjLN4%3D

    And for those relatively few who are interested in knowing more re the “Big Picture”:

    http://www.thedailybell.com/1820/Bail-Out-Europes-Banks.html

    The revolution will be televised!

    • Al Sieber

      Tazio, thanks for the links.

    • http://MSN.com Alice

      Hopefully we still have free markets. Our country has many smart businessmen who can have many new ideas. It will be better to increase taxes on China’s products. Therefore, it is important that Obama shouldn’t touch or changes policies. Obama should stay away from any business and we need to do smarter businesses.

  • home boy

    stansberry believes more of what man thinks than what GOD said would happen to gold and silver . read ezekiel 7;19. short term anyone can be right but long term(more than 2years) trust in GODS words.

    • Richard Pawley

      Trusting in God is neither for the short run or the long run. It is simply the way to go. It is not the gold or silver that is evil but what men do to get it and how they live in general. While I believe a time is coming when those few who have gold and silver may find it useless, 98% of Americans have never even held a gold coin much less owned one, we shouldn’t take a single verse and make a mantra out of it. The cults do that. If we accept the Bible as God’s written word then we have to take the whole of it, not pick and choose what we like and don’t like. God gave us gold and silver to use as money but it is government and the banks that have taken it away and substituted the paper and cotton coupons we call money. Famine, by the way is God’s traditional way of punishing people when they simply won’t learn any other way, and while I think you may be saying that the United States is going to be punished, I would say it is more likely the whole world this time. A believer should neither be for nor against gold because they are a believer. What counts is what God wants for you. I know of believers who have bought gold and done well and I know of others who have refused to buy it even when they could afford to do so. God’s plan for people is individualized. What is good for one may not be good for another. Some people thrive on being a vegetarian and others will become weak and sickly if they refuse all animal protein. That’s just the way we are. We are all important to God but WE ARE ALL INDIVIDUALS. In God’s plan for us one size does not fit all although the basics as outlined in the Bible are the same for everyone (and there are some parts that are very difficult to understand but if you are concerned about them you can always pray and if you are following the others God will give you the wisdom you need to understand what you need to understand, and it may not always agree with others. God cares about the individual and about individual salvation and individual justice. It is not God who promotes the “collective” and “social justice”. That is a perversion of the truth. Jesus Himself said that there would be those who would say at the end of time, “Lord, didn’t I work miracles in your name?” and Jesus would reject them, not because of their great faith but because of their great EGO, their misuse of power, their belief that they were somehow God. To much to explain here but since gold and silver have already gotten so expensive I would suggest you learn about food as an investment in your own survival. Of course gold will go higher and silver will too, and so will taxes and inflation, but non-perishable food is still cheaper than both and I have a hunch that it will increase in price more than gold in the future. Even today you can buy five large containers of coffee for the price of one ounce of silver. That means that either coffee is really cheap or silver is high. I cannot remember coffee being that cheap (priced in silver). I wish I had some silver to sell. I wish I had some silver to sell. You can’t go wrong trusting in the real God of the Bible, but that doesn’t mean you should throw out your common sense when you do. If gold is an idol then for you it is not good but that does not mean it is bad for someone else. It is only bad if they think it is the end all or the goal of life. I can think of many things I’d rather have than gold. Just remember you can pray about anything. God only wants what is best for us and he loves you and all who are reading this.

      • Walter Fisher

        Thank you for sharing your wisdom, sir.

      • ceejay

        Awesome & true MR Pawley- thank you

  • Tazio2013

    And for those of you who may have missed the recent article from MarketWatch re the time bomb that will explode Wall Street:

    http://www.marketwatch.com/story/story/print?guid=E745AE10-4376-11E0-ADFE-00212804637C

  • http://go2prosperity.com Dr, H. Glenn Davis

    Every signal I see confirms Porter Stansberry’s observations. What everyone should know is that 99% of the money in this USA is controlled by less than 1% of the people. We are along for the ride like it or not. That is the reason I am creating as many streams of income as I can. We surely cannot rely upon this administration to be prudent with either expenditures or indebtedness. Therefore, it appears that the fall is inevitable. I am a young 75 year old Texas who may live to the ripe old age of 100. I sure as heck hope it is not what my father and mother experienced during the great depression. I was born in 1935 and know full well what it took to dig out of that hole. Some say we would still be in that hole if not for WWII. Likewise Eric, sorry about your medical condition. God bless.

    • Al Sieber

      Dr,good point, the next war could very well be on our soil.

      • Teresa

        Its coming, and its already planned.

      • Dan az

        Hey Al
        There is no way that it isn’t going to happen and soon.I just wish it would hurry up I’m not getting any younger!I cant believe that know one has started by impeaching this terrorist and all of his czars to try and stop it before it got worse,but greed by wall street was just the plan that the federal reserve needed and the puppet to push it though was their plan all the time just like the last depression.This time they aren’t just going to buy up the land and buildings they are going to take it all and we will become the slaves of the NWO.So yes the revolution like know other is in the makings and its going to get ugly!

    • Richard Pawley

      Glenn, you say, “I sure as heck hope it is not what my father and mother experienced during the great depression,” but I feel led to tell you that it is going to be a lot worse than that. When we go down we will take the world with us, no matter what anyone says. While I cannot tell you how long this will take, I recently updated my 2006 autobiography, LEAVING SOUTH CAROLINA, wherein I had an entire twenty five page chapter called the “The Day After Tomorrow” in which I warned of the coming stock market crash and I told about the danger of derivatives, and I suggested that gold at 500 to 600 was cheap. I can’t tell you what is best for you but the government is already eyeing 401K’s as a source of income (I told my wife to stop putting money into her’s when I discovered that) and much of what I wrote five years ago has come about. Mr. Stansberry says “We have been warning about these issues frequently (almost continuously) since December 2008″ – well I published a 16 page paper in 1990 called “The Coming Financial Crisis” but it was way ahead of it’s time. I don’t have Mr. Stansberry’s money or expertise but I have been warning of what is coming for a long time. I begged all I knew to buy gold when it was 300-350 and most laughed and a few prayed (and bought). Of course, along came 9/11 and then Homeland Security, and their many thousands of pages long manual – I haven’t read it but I’ve been told it contains information on what gold will be exempt when the time comes to confiscate it again (supposedly collector gold that is worth twice the price of gold). Well, if gold is $2000 an ounce then only a few pieces would be worth $4,000 an ounce, but I don’t know how true this is. Since our governmenet is less a government of laws than it has ever been (the president and the Department of In-Justice are now just choosing what laws they like and will enforce – well government can pretty much do anything they can get away with). The minority has ruled this country for a long time now but the majority seem to be waking up. I do know that we are in for some serious hard times in the future and that is what my latest book is all about. My suggestion: First pray about all your big moves. You are lucky to be situated in the mostly free state of Texas but all are going to be affected by what it is coming. My mom died at age 92 a few months ago and my dad the following month at 97 and they did not take care of themselves as well as they could so I expect to see some of what is going to happen. The point is that you can pray about ANYTHING, but I would suggest that if you have enough money you make sure you have land, a source of water, a great garden, and a good non-perishable food supply. It is my belief that only the prayers of God’s people (by whatever cloth or denomination) has held back the destruction of Los Angeles another three years until the summer of 2014 – our scientists say it is overdue – and the collapse of our dollar and the economy, and eventually all the currencies on earth. Will that be in three years, five or another decade I cannot tell you. I hope it doesn’t happen for 20 years but the numbers seem to indicate it will happen in this decade and there are some who believe before the next election. God doesn’t tell us everything, even when we ask. He tells us what we need to know and what will build our faith. He is for us all and His Justice will ultimately prevail no matter what man does. You definitely want to be on His side and not on the side of so many who now inhabit this planet. God is no respecter of persons. We are living in some of the times that were written about in the Bible and if the Isaac Newton Bible Code Research Society can acquire the money to continue research (it is made up of volunteers) they will continue to discover what God has given us, hidden in His Hebrew scriptures, well, you will be amazed at all they have found already if you are not familiar with it. What is coming is not likely to be the end of the world but it may well seem like it, and as I said in both my books, what is coming “will make the Great Depression seem like a walk in the park.” Ignore all this at your own peril but know that God loves you and it is never to late to turn to Him for guidance and direction on what you, as an individual, should be doing. There is no one He loves more than you but there are people who know that more so they are in the right place at the right time and luck has nothing to do with any of it. “Seek and Ye shall find!” May God bless you and all who read this.

  • http://www.personalliberty.com PacificRim

    So what do we do:
    1. stock up on food and water for 6 months supply.
    2. buy precious metals…no matter what the price is now.
    3. have a means to protect yourself and family.
    4. pray that the Lord will spare us the effects of what is coming.

    • Cawmun Cents

      any or all of the above is a good start…..But as for 4.,One should pray for God to get us through the difficulties,not to spare us from them.Otherwise we may become arrogant and start living above our means…..

      • Richard Pawley

        True, and I do not believe that there will be a single person on this planet who will not be affected by what is coming. It is truly going to be awesome, a major change in how life is lived and things are done, but praying for direction, guidance, and help, is always a good move.

  • s c

    Like it or not, America’s mess and the world’s mess started with Adam and Eve. They had a choice between listening to God (God’s government, so to speak), or they could try it ‘their’ way.
    When two people can’t get it right (as opposed to 6 and a half billion), there’s no reason to expect that what we have [the best government that money can buy] will work. In a way, I’m surprised it has lasted this long.
    Does anyone think things will get better if we’d only trust our leaders and do what they want us to do? Some of you won’t understand the question. Folks, a large chunk of this “stuff” is due to the fact that we’re ruled by people who have no use for common sense. So much for the best and the brightest, eh?
    Oh, for a dollar’s worth of real, old-fashioned common sense in government. If we had that much
    (common sense), we might be able to justify the idea that God is “on our side.”

    • Richard Pawley

      God is not on anyone’s side. God is GOD! It is up to us to be on His side, but I think you know that. Our Founding Fathers had a grasp of that, though not completely. Sadly, many today do not, but the hard times that are coming may teach us all (that He is ever present and that He loves us, although He has, at times, to even discipline nations, as well as individuals. We need to pray for our leaders, that God will rule in their lives, from Washington to Wisconsin, and everywhere else. We need Godly wisdom in our body politic and not some of those we have over us now. God can change them or replace them but we need His grace and power over our nation as it once was.

  • chuckb

    our problem started on oct.17,1917 in russia.

  • Moonsi

    PacificRim has a good plan for preparation. I will add to that list is to pray for all of us. The next 18 months , it’s not a very pretty reality.

  • s c

    Here are two open-ended questions. If this single market is that important, then is it one of Soros’ favorites? Since our so-called leaders decided that we need to suck up and bow and scrape to China, I’d think old George is on more than simple speaking terms with China.
    After all, if you plan to ‘rise above’ and outperform Lord Rothschild, it make sense to have both hands around America’s throat. One hand, so to speak, just won’t do.
    It would make for a most interesting scenario, to literally gain the whole world one moment, only to see all that power and money slip through your fingers. The best laid plans o’ mice and men, as the expression says.
    Even the best and brightest crowd never seemed to understand that nothing human lasts forever – no matter how much power, money or clout you think you may have – or what your religious beliefs are or what think tanks say and do to “guide” history.
    Homo sapiens is such a vague term.

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