We are the home of the LEADING investment forecaster in the world. This claim is backed by a $100,000 guarantee. Have you ever heard of anyone back their claim with $100,000? So, who is the leading expert on the economic collapse? MIKE STATHIS, Author of America's Financial Apocalypse (2006) and Cashing in on the Real Estate Bubble (2007). as well as the Wall Street Investment Bible (2008). Those who followed the advice in these books made a fortune. We are #1 in Market Forecasting Mike advised investors to get out of the market before the collapse. In fact, he predicted the Dow would collapse to 6500 in his 2006 book. On March 9, 2009 Stathis recommended buying into the stock market. That would end up being the EXACT bottom. NO ONE else in the world made that call. Since March 2009, Stathis has kept his research clients in the US stock market. Mike has also nailed every market sell off since the financial crisis. Mike Stathis and AVA Investment Analytics... #1 in Distressed Securities Analysis #1 in Currency & Commodities Forecasting, #1 in Macroeconomic Analysis, #1 in Precious Metals Forecasting Yet, Stathis continues to be banned by the media...Why? Because the media intentionally airs jug heads and charlatans since they have been bought off by Wall Street. The "experts" in the media have terrible track records. By airing clowns and extremists, Main Street will be misguided. This will make it much easier for Wall Street to take your money. So if you pay attention to the media, you are going to get screwed. FACT: if you do not have our research, you are behind the curve.
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U.S. Treasuries Worse Than The Dollar
Tuesday, July 29, 2008, by Stathis

That’s right. You read it correctly. Now why would I say something that even most “experts” would laugh at? 

Because I want to point out once again how so many out there are in the dark, even the so-called experts; you remember, the guys who missed this entire meltdown.

Of course, now with so many banks in a dangerous position, I’ve seen many advisers change face and jump on the doom bandwagon. Some have advised investors to remove their money from banks and buy U.S. Treasuries as a safer investment. The rational goes as follows. “U.S. Treasuries are backed by the full faith and credit of the U.S. Government and they have never defaulted.” 

The first point I’d like to make is this….there’s always a first time. Prior to the present, the MBS market never blew up either. And it’s obvious to any sophisticated investor that the credit risk for U.S. Treasuries continues to increase. While it could take some time, the fact is that the FDIC will cover all bank deposits that do not exceed the $100,000 limit. After all, the FDIC is a government agency.

So can we not say that it too is backed by the full faith and credit of the U.S. government? Sure we can because it’s a fact. So as far as safety of principal, the FDIC is equal to U.S. Treasury securities.

Now let’s look at the disadvantages of buying U.S. Treasuries.

First you are dealing with interest rate risk…a very big risk given the fact that coupons on U.S. Treasuries are very low and are almost certain to rise much higher in the coming years. When rates go up, those holding bonds will see the value go down. This will force them to hold the bonds longer, perhaps even until duration. Therefore, I would not consider U.S. Treasuries to be particularly liquid for individual investors.

The next point I want to make is that bonds get hammered during rising inflation due to purchasing power declines. Bond values also decline in value when rates rise as a result of rising inflation. So you get a double-whammy.

While the dollar also gets hit with diminished buying power seen during rising inflation, you don’t get the double-whammy seen in bonds. Most important, your dollar deposits are liquid. If your bank fails, you will lose some temporary liquidity, but nowhere near what you could see from U.S. Treasuries. While waiting for rates to go back down, those in U.S. Treasuries might be stuck holding them for many years.

Finally, as the credit risk of the U.S. government continues to increase, U.S. Treasury bonds will decrease in price, causing investors to hold them longer – i.e. even less liquidity. So as far as my bank money, I’m sticking with my dollar deposits because I want liquidity. If liquidity is important to you, you should do the same. 

The real problem is trying to save your money from the damaging effects of inflation. One solution to this would be to invest in foreign currencies like the Yen and Swiss Franc. Sure, you may not have the liquidity of a U.S. bank deposit (although you might depending, on how you invest in these currencies) but at least your buying power will be preserved and will most likely increase.

Always question the advice of those who write about investments for which they try to sell you, because most of the time the only interests being served are theirs.  


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