{"id":53029,"date":"2014-06-19T11:28:30","date_gmt":"2014-06-19T15:28:30","guid":{"rendered":"http:\/\/countingpips.com\/?p=53029"},"modified":"2014-06-19T11:28:30","modified_gmt":"2014-06-19T15:28:30","slug":"the-us-economy-is-still-in-the-high-danger-zone","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/06\/the-us-economy-is-still-in-the-high-danger-zone\/","title":{"rendered":"The US Economy Is Still in the High-Danger Zone"},"content":{"rendered":"<div id=\"inves-729201485\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">June 19, 2014<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><h4><span style=\"font-size: small;\">By Dennis Miller, <a href=\"http:\/\/www.millersmoney.com\/go\/v8pkv-2\/PIP\">millersmoney.com<\/a><br \/>\n<\/span><\/h4>\n<p>I hate being the bearer of bad news.<iframe loading=\"lazy\" src=\"http:\/\/trk.caseyresearch.com\/f\/?content_id=898&amp;code=PIP&amp;editorial=the-us-economy-is-still-in-the-high-danger-zone\" width=\"1\" height=\"1\" frameborder=\"0\"><\/iframe><\/p>\n<p>I remember the one and only time in my life I agreed to umpire a Little League game behind the plate. My youngest son was on the mound, and his older brother came to bat. The count went to 3-2, and I realized I had a huge knot in my stomach.<\/p>\n<p>I said to myself, \u201cGod, please let him swing and hit the ball!\u201d And he did. I don\u2019t even recall where it went; I was just thankful I didn\u2019t have to make a call that would have meant bad news for one of them.<\/p>\n<p>Calling it the way you see it may be a good way to live your life, but it isn\u2019t always fun.<\/p>\n<p>I have been harping on the Federal Reserve policy of artificially keeping down interest rates since it started over five years ago.<\/p>\n<p>Nothing has changed; in fact, you could make the case that things have gotten worse. Although there are rumors that the Fed may end QE in September or October of this year, I am not holding my breath. Right now, they are still flooding the banking system with billions of dollars per month, and finally the baby boomers\u201410,000 of whom are turning 65 every day now, for the next 16 years\u2014are starting to understand what we already know.<\/p><div id=\"inves-173562624\" class=\"inves-in-content inves-entity-placement\"><hr style=\"border: 1px solid #ddd;\">\r\n<div id=\"inpost_ads_header\">\r\n<p style=\"font-size:10px; float:left; color:#666;\">Free Reports:<\/p><\/div>\r\n<div id=\"inpost_ads\"> \r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/1ApBOV\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2018\/06\/graph_techs_PD.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t     <a href=\"https:\/\/goo.gl\/1ApBOV\"><b><u>Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p><br><br>\r\n<br>\r\n<br>\r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/f3RrHX\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2019\/01\/cot_pie_80.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t    <a href=\"https:\/\/goo.gl\/f3RrHX\"><b><u>Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p><br><br>\r\n<\/div>\r\n<hr style=\"border: 1px solid #ddd;\">\r\n<br><\/div>\n<h3><strong>Low Interest Rates Are Killing Savers\u2026<\/strong><\/h3>\n<p>In a recent\u00a0<em>Bloomberg<\/em>\u00a0article, Bill Gross of PIMCO (the world\u2019s biggest bond fund) calls the minimal returns that savers and income investors have seen from bank deposits and fixed-income securities a \u201cfinancial repression.\u201d<\/p>\n<p>\u201cI hate to be gloomy,\u201d said 69-year-old billionaire Gross, \u201cbut, yes, for the next 10 years, the oldsters, and I\u2019m in that camp, are going to be disappointed in terms of the policy rate.\u201d<\/p>\n<p>Former President of the Atlanta Fed William Ford chimed in, saying that current low US Treasury yields reduce conservative investors\u2019 income by at least $280 billion annually.<\/p>\n<p>\u201cThe costs of low interest rates are being ignored,\u201d Ford said. \u201cIt is killing savers, elderly savers who are living on life savings that have been conservatively invested.\u201d<\/p>\n<p>Can it get any more depressing?<\/p>\n<p>Yes: according to the Department of Labor, due to lack of yield from savings and investments, workers 65 and older are the only group of Americans who are increasingly employed or looking for jobs.<\/p>\n<h3><strong>\u2026 and Keep the US Economy from Recovering<\/strong><\/h3>\n<p>In a March 10\u00a0article in\u00a0Gold-Eagle, author Ian Gordon joins the critical voices. \u201cThis is unprecedented,\u201d he writes; \u201cthere has never been a time that the entire world has been subjected to such dishonest money that can be created at the whim of unelected bureaucrats acting on behalf of their private shareholders.\u201d<\/p>\n<p>And legendary investor\u00a0Jeremy Grantham told the\u00a0Sydney Morning Herald\u00a0that the US Federal Reserve is killing the recovery of the world\u2019s biggest economy:<\/p>\n<p>\u201cMy view of the economy is not principle-based. Higher interest rates would have increased the wealth of savers. Instead, they have become collateral damage of Bernanke\u2019s policies. [\u2026]<\/p>\n<p>There is no evidence at all that quantitative easing has boosted capital spending. We have always come roaring back from recessions, even after the mismanaged Great Depression. This time we are not. It\u2019s anecdotal evidence, but we have never had such a limited recovery.\u201d<\/p>\n<p>As you can tell, I could keep going and going.<\/p>\n<p>If it weren\u2019t so sad, I would have been tempted to laugh when I read an\u00a0RT\u00a0article titled \u201c\u2019Too big to fail\u2019 status gives US banks a \u2018free pass\u2019\u2014Fed Study.\u201d<\/p>\n<p>According to the article (emphasis in original): \u201cThe new research shows\u00a0<em>\u2018it is improper to ask the taxpayer to underwrite the non-commercial banking operations of a complex bank holding company,\u2019\u00a0<\/em>Dallas Fed President Richard Fisher told Reuters in an interview.\u201d<\/p>\n<p>Boy, are these folks slow on the uptake. I could have told them that even before the 2008 crash, and without spending millions of dollars on a high-falutin\u2019 study.<\/p>\n<p>The top 10 banks in America, says the article, now have combined assets of about $9.72 trillion (that\u2019s compared to a total GDP of $15 trillion in 2012).<\/p>\n<p>\u201cThe banks are still gambling with FDIC-insured money,\u201d says Ted Kaufman, a former US Senator from Delaware. \u201cThe JPMorgan Chase \u2018London Whale\u2019 fiasco was just the latest proof that there has been no change in the casino speculation of Wall Street banks.\u201d<\/p>\n<p>\u201cNo one has gone to jail,\u201d Kaufman predicted. \u201cAnd no one will. There are many examples of criminal behavior during the meltdown, but not one megabank executive has been jailed. Without that deterrent, white-collar crime is not just profitable but inevitable.\u201d<\/p>\n<h3><strong>Enough Already!<\/strong><\/h3>\n<p>We all get the point\u2014the Federal Reserve is bailing out the banking system. And to do so, it\u2019s keeping interest rates suppressed, forcing American savers and income investors to put more money at risk than we should have to.<\/p>\n<p>And that\u2019s not going to change with the new Fed Chair Janet Yellen, who flat-out tells us that \u201cthe Fed still thinks rates should remain low to stimulate borrowing, spending, and economic growth. I think this extraordinary commitment is still needed and will be for some time, and I believe that view is widely held by my fellow policymakers at the Fed.\u201d<\/p>\n<p>Of course there is no evidence that any of the policies have actually worked\u2026 so we\u2019re on our own to maintain and\/or enhance our standard of living.<\/p>\n<h3><strong>High Danger of Wildfires<\/strong><\/h3>\n<p>I am generally considered a pretty positive guy, but even I have been wondering if this artificial propping up of the economy and stock markets will ever stop.<\/p>\n<p>Last month, my wife Jo and I were staying in Arizona. A couple of days after a heavy rainstorm, we drove through Tonto National Forest. There was a Smokey the Bear cutout next to a meter with color-coded markings outlining the danger level of a forest fire, and it was at light yellow.<\/p>\n<p>I\u2019ve never seen it light yellow before, very close to the green that signals \u201call clear.\u201d Late last summer, when we last visited, it was way over in the red with a high-danger signal.<\/p>\n<p>Unfortunately our economy is still in the high-danger zone. I hope to live long enough to tell everyone that I see the threat moved back to Smokey pointing at light yellow. I just don\u2019t see it, despite what we read in the mainstream press. As I said, calling them the way I see them is not always fun\u2014but there is a silver lining\u2026<\/p>\n<h3><strong>Here\u2019s One Big Positive for All of Us<\/strong><\/h3>\n<p>Good friend Chuck Butler of EverBank writes a terrific report each day called the\u00a0<em>Daily Pfennig<\/em>. In a recent issue he wrote:<\/p>\n<p>\u201cI do believe that quite a few people in their 50s and 60s are about to find out that the money they\u2019ve set aside for retirement is too meager to support the standard of living they\u2019d hoped for, and then the forecast for a retirement system crisis will become reality, and then it will be too late!\u201d<\/p>\n<p>Chuck would be the first to agree that none of us has to be in that group\u2014that is, the people who wear their rose-colored glasses until it is too late to change anything. His readers and our subscribers are some of the best-informed people on the planet. We simply refuse to fall in the category of helpless citizens that are termed \u201ccollateral damage.\u201d<\/p>\n<p>Intelligent investors who can see the truth are inherently problem solvers. Tell us the rules, and we will figure out a way to survive. We\u2019ll do much better than the masses who may not be as well informed or, worse yet, may be listening to those who don\u2019t have their best interests at heart.<\/p>\n<p>Personally, I have never felt as confident as I do today, even though the economy is in terrible shape. We have a plan in place\u2014a solid diversification strategy coupled with position limits and stop losses\u2014and I\u2019m proud of our track record of great yield as well as our safety measures to limit risk.<\/p>\n<p>There\u2019s one strategy in particular that I recommend for every conservative investor: I call it my \u201cPaychecks\u201d strategy because it\u2019s like getting a steady paycheck\u2014without having to work for it. If that sounds too good to be true, it\u2019s not; the secret is a special way to invest in dividend-paying stocks. It\u2019s all laid out in my special report <strong><em>Money Every Month<\/em><\/strong>, which also includes my favorite stocks that you can use to implement this simple strategy.\u00a0 <a href=\"http:\/\/www.millersmoney.com\/go\/v8qwt-2\/PIP\" target=\"_blank\">Click here to read <strong><em>Money Every Month<\/em><\/strong> now<\/a>.<\/p>\n<p>&nbsp;<\/p>\n<div id=\"xvMdV95u77zU\" style=\"clear: both;\">The article <a href=\"http:\/\/www.millersmoney.com\/go\/v8qzu-2\/PIP\" rel=\"permalink\">The US Economy Is Still in the High-Danger Zone<\/a> was originally published at <a href=\"http:\/\/www.millersmoney.com\/go\/v8pkv-2\/PIP\">millersmoney.com<\/a>.<\/div>\n<div style=\"clear: both;\"><\/div>\n<div style=\"clear: both;\"><\/div>\n<div style=\"clear: both;\"><\/div>\n<div style=\"clear: both;\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>By Dennis Miller, millersmoney.com I hate being the bearer of bad news. I remember the one and only time in my life I agreed to umpire a Little League game behind the plate. My youngest son was on the mound, and his older brother came to bat. The count went to 3-2, and I realized [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-53029","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/53029","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=53029"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/53029\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=53029"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=53029"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=53029"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}