One of the world’s leading industrialists describes inflation and the energy crisis as “two freight trains crashing into each other”. In a little while.
But first, I’d like to remind you of a saying attributed to Mark Twain: “History doesn’t repeat itself, but it often rhymes.” If you’re an investor of a certain age, you might feel like it’s the 1970s.
It was the last time America faced a combination of an energy crisis with inflation.
But the reason is the same…Government Expenditure.
In the late 1960s, President Lyndon Johnson began spending heavily on the Vietnam War and his “Great Society” benefits: Medicare, Medicaid, head start, urban renewal, environmental issues, and new immigration policies. , to name a few.
Sure sounds like today, doesn’t it?
Except today, the Biden administration is spending money on a “green new deal” that has less to do with climate change and more to fundamentally reshape the American economy.
But let’s go back to the 1970s for a moment. Especially when OPEC banned oil exports to the US in October 1973.
Gas prices quickly rose 37 percent. Gas was rationed. Many stations have run away. Others locked their pumps at night.
The embargo on oil exports to the United States lasted only five months — a minor problem compared to what is happening in energy markets today — but by then the wheels of the crisis were already in motion.
By 1974, inflation was over 11 percent and the stock market (as measured by the Dow Jones Industrial Average) collapsed.
However, after a few months, the worst seemed to be over. Since November 1974, the stock has risen about 48 percent.
But the bear market boom didn’t last.
This time it fell by more than 50 percent, before stocks began to fall again.
In total, this bear market will bring the stock market down by more than 72 percent.
Sounds like 2022, doesn’t it? But the problem is; Worse is yet to come.
That’s because some investors have considered the historical impact of tying inflation to the energy crisis—which is what we’re seeing now.
This is what Bill Bonner calls “two freight trains running into each other like two freight trains running on the same track.”
Bonner says: “These two inevitable trends will bring about a collision The most difficult years in American history.”
He calls this looming scene, “America’s Nightmare Winter.”
But predictions come and go. Why ask? This is Male?
Bonner is the co-founder of one of the world’s largest independent financial research firms. He is a successful entrepreneur, owning real estate on four continents and business interests in 12 countries around the world.
When Bonner speaks, he also deserves to be heard. You see, he made three major macroeconomic predictions in the past and all came true.
Not that there aren’t critics. Indeed, in each case, Bonner was ridiculed by the mainstream financial press.
Now Bonner makes his call: “The fourth and final prediction.”
He has Prepare an analysis Looks at history and parallels today in a unique forward-looking way.
Get the facts yourself. Learn what you can do to protect your family and your money.
Bonner’s full analysis is available, including his own Here are four recommended steps you can take right now.
You can watch Bill Bonner’s full episode for free. Click here to view.
In this special presentation, we look at stocks that investors should sell now. When the market falls, there is an incentive to buy and hold deeply discounted stocks. But buying the dip is a strategy that applies to stocks with a proven track record of earnings growth and — more importantly — earnings.
But if a stock isn’t doing well on either of these fronts, it’s time for investors to challenge the reason(s) why they hold the stock. If the stock no longer fits that thesis, it’s time to sell.
This doesn’t mean you can’t find hidden gems that fly under the radar for whatever reason. But even in those cases, you need to look at the business case that supports holding the stock. If that case no longer exists, loyalty to that role is a one-way proposition.
This strategy applies to both bull and bear markets. Because some sectors are better to buy at different times. The end of the year is a good time to review your portfolio and get rid of stocks that are no longer serving you well. If you own any of the following stocks, they may be candidates for selling.