Who Are You? One of the Millions Who Gets Crushed, or One Who Thrives?

Larry Edelson

Please read this column carefully, for if you don’t, you are destined to be one of the millions of investors who are soon going to learn about the markets’ next moves the hard way: Through giant losses.

Why? Because in a nutshell, most analysts and investors are confusing normal times with abnormal times.

More specifically, we are approaching a sovereign-debt crisis that will soon cripple the socialist-style Western governments of Europe, Japan and the United States. The ramifications and consequences are going to be felt far and wide. Even in interest rates.

For instance, no one knows for sure if Janet Yellen will raise rates come September or October. But let’s say she does indeed raise rates. Many are predicting some sort of Black Friday, where virtually all markets crash as a result. Gold, commodities in general, stocks, and of course, real estate prices.

Most investors are not making the appropriate distinction between normal and abnormal times. And these are not normal times.

And in normal times, that may be true. But these aren’t normal times.

First, we’re coming out of the lowest interest rates in the history of the country. A period that was fraught with financial dislocations, even the near total collapse of the monetary system, and a period where the Fed deliberately kept its short-term interest rates at record lows.

Second, a sovereign-debt crisis is rapidly approaching. It’s already hitting Europe. Soon, it will migrate to Japan, one of the most indebted economies on the planet, And then it will hit Washington, D.C. — the most indebted government in the history of the world.

Third, most investors are not making the appropriate distinction between normal and abnormal times. Nor have they studied history in detail.

Why do I say that? Because when a sovereign-debt crisis starts to hit, almost no one recognizes it.

Moreover, when a sovereign-debt crisis lurks right around the corner, rising interest rates have nothing to do at all with economic growth or inflation. Nothing to do with what analysts are calling “normalization” of interest rates.

Instead, rising rates in a sovereign debt crisis cycle have everything to do with the fact that governments are going bankrupt.

And what does that mean? It means that when interest rates start to rise, so will some of the biggest bull markets you have ever seen.

Simple logic explains why …

FIRST, rates were at record lows because almost nobody wanted to borrow. The demand for credit simply wasn’t there. It’s been a “risk-off” mentality for some time.

So as rates and the cost of money and credit rises, guess what happens. Demand goes up too. All the potential homeowners out there and businesses looking to borrow, for instance, will want to suddenly borrow again, before interest rates go any higher. And that in turn will stoke all sorts of demand, from housing, to commodities, to corporate earnings and to the stock market.

SECOND, interest rates negatively impact indebted governments. Unlike you, indebted governments don’t have the ability to hedge against rising interest rates. They don’t have the ability to reduce their interest-expense burden. All they can do is sit idly by while the cost and burden of their debts explode higher.

THIRD, there will come a time — in the not-too-distant future — when our foreign creditors, knowing fully well our government is broke, start to sell U.S. sovereign debt hand over fist, as they are already starting to do in countries like Greece, Portugal, Spain and in fact, most of the European Union and in Japan.

And that’s when — also not too far off in the future — the resulting rocket ride higher in U.S. interest rates that will occur will be the direct result of our country’s patently unpayable debt of well over $200 trillion.

When that moment comes, when investors begin to realize that it is Washington that is going broke and that Washington’s debts are really the force driving rates higher — they will then start to buy commodities, stocks, prime real estate …

And anything else they can find that is a hedge against collapsing governments.

This is how sovereign-debt crises have unfolded before, time after time. If you study the history of empires like Rome, Byzantium, the Spanish Empire, the British Empire and more.

Almost all of those collapses saw interest rates liftoff from abnormally low levels, to soar to abnormally high levels, and along with the rate ride higher came some of the biggest bull markets the world has ever seen.

All because government was collapsing. Not because of inflation. Not because of high economic growth. But because those empires had run out of ways to fund their patently unpayable debts.

Savvy investors are no dummies. When they see governments failing, they buy certain assets. Portable wealth shines bright: Diamonds, gold, silver, platinum, palladium, art and other collectibles.

Blue chip-like publicly traded stocks shine bright too, as do AAA corporate bonds.

So beware: The Fed’s first rate hike may seem like it’s overdue. Analysts may call it “normalization” of interest rates. Savers will jump for joy that they can get a better yield in CDs and money markets.

But in reality, any rate hike that is forthcoming will merely be the first subtle signs that a sovereign-debt crisis is right around the corner.

Don’t be one of the millions caught off guard with huge losses. Don’t be one of the millions who don’t understand what’s happening or about to happen.

Instead, think out of the box and act out of the box to protect and grow your wealth.

Best wishes and stay safe,

Larry

Larry Edelson, one of the world’s foremost experts on gold and precious metals, is the editor of Real Wealth Report and Supercycle Trader. Larry has called the ups and downs in the gold market time and again. As a result, he is often called upon by the media for his investing views. Larry has been featured on Bloomberg, Reuters and CNBC as well as The New York Times and New York Sun.

Comments 59

Marilyn S. August 12, 2015

So are AAA bonds good or bad? Herer it says they shine bright, but previous times you say get out of all bonds. Can you explain? Thanks.

Will August 12, 2015

Larry: As you say when interest rates start to rise bull markets will form; here the key word is "start" to rise. You then mention that people will start to buy commodities, stocks and prime real estate; and subsequently say that when investors see governments failing then portable investments shine bright. I agree, however, I would avoid real estate (except for owning your own home) as it is not portable and won't be liquid for many years, since population demographics will not provide sufficient buyers or even renters. Overbuilding will not be limited to China and other parts of Asia when that time comes.

Heidi August 17, 2015

That is so weird what Larry says ....real estate will go up ? Armstrong has a peak for real estate ---globally ! A 7 yr. cycle for real estate 2007 low - 2015 high .

Robert P August 12, 2015

Folks on CNBC and FOXB lead the viewer to believe that the Fed must hike rates in order to “fill their arsenal” with bullets to shoot at the next (inevitable) recession….a .25 hike is “filling their arsenal”…?? And then “one and done” is the prevailing thought, because the Fed doesn’t want to undo whatever positive effect all this bond buying may have done…??? It’s like putting a pea in your shooter to ward off a grizzly bear attack!! Good luck with that FOMC!!

Robert P August 12, 2015

History tends to repeat itself. Right now, oil is down, gold has sold off, and we’re coming up to an election year on the heels of an 8 year democrat presidency...It’s just an almost identical situation to 1998 and 99!! The only thing missing is the "irrational exuberance" speech from Greenspan… and then look what happened with all of it in 2000 and the next couple of years thereafter!! It reminds me of the movie “Terminator.” After watching the cyborg tear apart the steering column of the car to “hot wire” crank it, the boy, John Connor, turned down the sun visor and the keys fell into his hand….”Are we learning yet….???” But this time may be different....

Marie G August 12, 2015

Ok, I admit it, I don't get this. So, with armeggedon around the corner and if we don't want to be one of the "millions who get crushed" is Larry saying to get out of stocks or to stay in stocks? The gist of this article seems to say stocks will soar, along with gold and real estate. Are we to sell stocks now and buy back in post-crash or stay in???

mephisto August 12, 2015

welcome to the one who talks with forked tongue. Don't bother asking him questions. He has never answered a single question appearing in the comments. This site is for entertainment value only. You will get no answers.

BFD August 12, 2015

Yea! Mephisto - who speaks only the truth!!!!! I stopped commenting because this Weiss' crap is so utterly fear-mongering and actually stupid. But, when Mephisto speaks the truth to the "new to Weiss" potential-followers, I must stop and applaud him. Notice 'Heidi' and 'were' no longer comment much. Weiss just keeps trying to suck in new people to buy prescriptions -- it's all just BS. Yah, I used to read this crap, too. It actually took me a year to figure it out. I guess I'm a slow-learner, but at least I did learn. Some of these characters that comment here, like Larry really knows what he's talking about, still haven't learned. So what, who cares . . .

John S August 12, 2015

You seem to read a lot of the articles here BFD. When I read articles from websites that I think are BS, I stop going there. I don't go there and Comment. People will believe what they choose / want to believe, even if they are Wrong.

BFD August 12, 2015

Lovely . . .

J Lively August 16, 2015

Dear BFD....The last time I followed Weiss advice I lost $35,000 in interest for the year. I put all my cash in T Bills as Weiss said the sky was falling, I believe this was 2001 or there abouts. What I should have done is locked it in CD's paying 5% or moreas those rates diminished and seemed to be gone to date. So much for all this guru stuff. Suggest novice people like myself educate them-selves as much as possible and do what makes sense to youi. Diversification amoungst hard assets seems like the key. Perhaps a stable currency like the swiss franc? JL

Heidi August 17, 2015

John S. - you know why we still come here ? We are trying to save a few souls NOT to get stuck with Larry . Is it working ? No idea but it's worth it to try . Read J Lively's story below who now believes that the Swiss franc is a stable currency but it is not . He should read Martin Armstrong . I have no idea why Larry is so different from Armstrong when all he has to do is listen to him and write the same . Larry has not been good to his subscribers - why ? Real Estate is at the peak - period . Yes, the " collapse " in stocks will be a fake - out - just remember 2008 - same stuff just on steroids . Will be back before the crash .

mike August 12, 2015

Hi were, congratulations on your great call on gold (uptick around mid August)! When do you expect the downtrend to resume and till when should it last please?

BFD August 12, 2015

Oh, please. This guy has been wrong for more than a year! Now you're going to give him accolades? Really? After all of the specific calls he's made wrong since March? Yes, his errors go back further, but Larry could not give a rain forecast in the middle of a thunderstorm. Please, please, please tell me you were just being sarcastic and don't really believe this stuff.

BFD August 12, 2015

Oops, sorry; you were talking about 'were', who I respect. I thought you were talking about Larry; "my bad". Forgive me!

mike August 12, 2015

:-D

were August 12, 2015

Thanks. The current uptick some could consider as wave 4 up and then a final wave 5 down starting by August 17. So not much upside potential here - haven't reached the low yet. There's still 3 turning point lows scheduled for this year with the October one coinciding with other longer term lows. But the Sept low would be end of wave 5 so that seems like it would be the major low - just don't see how it could be though. Keep those surf boards waxed.

uno August 13, 2015

sounds like elliott wave, were. looks like you counted wrong. one more major up wave to go before ending in a recession at least a couple years down the road. new market highs coming in the months ahead.

uno August 13, 2015

Five wave pattern Wave 1: Wave one is rarely obvious at its inception. When the first wave of a new bull market begins, the fundamental news is almost universally negative. The previous trend is considered still strongly in force. Fundamental analysts continue to revise their earnings estimates lower; the economy probably does not look strong. Sentiment surveys are decidedly bearish, put options are in vogue, and implied volatility in the options market is high. Volume might increase a bit as prices rise, but not by enough to alert many technical analysts. Wave A: Corrections are typically harder to identify than impulse moves. In wave A of a bear market, the fundamental news is usually still positive. Most analysts see the drop as a correction in a still-active bull market. Some technical indicators that accompany wave A include increased volume, rising implied volatility in the options markets and possibly a turn higher in open interest in related futures markets. Wave 2: Wave two corrects wave one, but can never extend beyond the starting point of wave one. Typically, the news is still bad. As prices retest the prior low, bearish sentiment quickly builds, and "the crowd" haughtily reminds all that the bear market is still deeply ensconced. Still, some positive signs appear for those who are looking: volume should be lower during wave two than during wave one, prices usually do not retrace more than 61.8% (see Fibonacci section below) of the wave one gains, and prices should fall in a three wave pattern. Wave B: Prices reverse higher, which many see as a resumption of the now long-gone bull market. Those familiar with classical technical analysis may see the peak as the right shoulder of a head and shoulders reversal pattern. The volume during wave B should be lower than in wave A. By this point, fundamentals are probably no longer improving, but they most likely have not yet turned negative. Wave 3: Wave three is usually the largest and most powerful wave in a trend (although some research suggests that in commodity markets, wave five is the largest). The news is now positive and fundamental analysts start to raise earnings estimates. Prices rise quickly, corrections are short-lived and shallow. Anyone looking to "get in on a pullback" will likely miss the boat. As wave three starts, the news is probably still bearish, and most market players remain negative; but by wave three's midpoint, "the crowd" will often join the new bullish trend. Wave three often extends wave one by a ratio of 1.618:1. Wave C: Prices move impulsively lower in five waves. Volume picks up, and by the third leg of wave C, almost everyone realizes that a bear market is firmly entrenched. Wave C is typically at least as large as wave A and often extends to 1.618 times wave A or beyond. Wave 4: Wave four is typically clearly corrective. Prices may meander sideways for an extended period, and wave four typically retraces less than 38.2% of wave three (see Fibonacci relationships below). Volume is well below than that of wave three. This is a good place to buy a pull back if you understand the potential ahead for wave 5. Still, fourth waves are often frustrating because of their lack of progress in the larger trend. Wave 5: Wave five is the final leg in the direction of the dominant trend. The news is almost universally positive and everyone is bullish. Unfortunately, this is when many average investors finally buy in, right before the top. Volume is often lower in wave five than in wave three, and many momentum indicators start to show divergences (prices reach a new high but the indicators do not reach a new peak). At the end of a major bull market, bears may very well be ridiculed (recall how forecasts for a top in the stock market during 2000 were received).

were August 13, 2015

elliot waves can be counted downward as well as upward. Obviously gold is in a bearish phase - hence the downward count.

uno August 13, 2015

we're in wave 4. prices meander sideways. the coming wave 5 will be the final up wave before a recession.

uno August 13, 2015

a recession is at least a couple years down the road.

uno August 13, 2015

what a nit wit.

uno August 13, 2015

another nit wit.

mephisto August 14, 2015

Thanks for revealing your true intentions. Note - no one give this troll the time of day in the future.

Frank August 15, 2015

Don't forget, the stock market ALWAYS predicts the economy by 6 - 9 months. Don't see the top yet, but we are in unprecedented times. So many of my indicators say top. So why isn't the market declining. Maybe we are in a wave 4. Prechter hasn't been right for the last 4-5 years.

rant August 16, 2015

gold is not about elliott wave, mr were. and the downward wave IS wave 4.

rant August 16, 2015

all i can say to bfd is ... bfd, big effing deal.

uno August 17, 2015

question BDF? like i need someone to give me the time of day? i'm not a troll. i don't even know what a troll is. but i do know someone needs to give you the time of day. you can't even comment to right person above. what a nitwit.

uno August 17, 2015

oops, sorry, i commented to BDF. i meant to comment to mephisto. i have the deepest respect for BDF. my bad. (everybody is using so many alias i'm not sure who i'm talking to anymore.)

Heidi August 17, 2015

Hi were thanks for sharing your " gold thoughts " here . Armstrong has a late Nov. - early Dec. low but he always stressed the point that the 2nd low won't happen until Mar./April 2016 . Maybe these are the dates for a low you are looking for ?

Heidi August 17, 2015

were - Just to let some current reader's know what you wrote before about the markets and I think you will be right on with the whole thing here : June 25 2015 " were " wrote ; My thoughts on where we are going - most likely all highs are in for the markets . Mid July downhill for sure - mayor slide by end of Sept.- mid Oct. but that is not the final low for the commodities - that'[s early 2016 " . If Larry would've written that he would have some friends but he didn't write that ....too bad for Larry - awesome for were .

John S August 12, 2015

OK, so what if we happen to have 90% of our Assets in a 401k, in which we have only a choice of Blended funds, Bond funds, Stock funds, and a Money Market fund? Should we put it all in MM and wait for the Dung to hit the Fan? Or Maybe 60% in MM and 40% in Stock or Bond funds? Many of those in the $40k - $70k annual have a House (most carrying a mortgage), a few weeks of Savings and the rest in their 401k. Is there someone out there who will tell Us people how we should allocate these assets, based on where we are at right now? Should we get out of Emerging Market stock funds? European (mostly) stock funds? U.S. stock funds? I am 95% - 97% OUT of Bonds. That is what I am looking for, a site where I will get someone, like Larry, Martin, Mike to give ALLOCATION Advice for the state of the world today. Now, after reading This and other Articles, I am leaning towards Selling all my holdings and putting in the Money Market Fund, until the wipe outs begin, settle and start the next Bull Run.

Heidi August 17, 2015

John S " That is what I'm looking for , a site where I will get someone like Larry - did you say Larry ? PLEASE read J Lively's story above how he lost BIG money with Larry.

#1 August 12, 2015

why get crushed when you can be part of the crushers

Folly August 12, 2015

Sorry Larry I am not convinced. Raising interest rates is going to create a bull market ? Not likely. The cost of running a business goes up, than profits go down. The value of the business goes down, share price goes down. Thats the laws of commerce.

Jerry August 12, 2015

Weiss Research and Associates represent a highly educational resource for investors of every flavor. Hats off to each one of them for their outstanding efforts. For those who have not yet seen the reality of real reality ... I ask how many of you have yet started your very own self sustaining businesses ... i.e. one in which you could conceivably leave and take a vacation from whenever you wish? Get started building and RETHINK YOUR SHORT TERM AND LONG TERM PLANS before its too late.

Reader August 13, 2015

What are you selling Jerry ?

Heidi August 17, 2015

Reader............licking envelopes ............lol

Robert P August 13, 2015

The Weiss guys put out their predictions with instructions for us, the readers, to “act immediately!” However, the truth be told, what they’re forecasting often DOES come true….BUT it may happen 2 days, 2 weeks, or 2 months….or even 2 years… from the time of their prediction!! It’s up to us to figure out the time frame and/or often, the price level…and try not to go broke in the meantime! ….And then, once their prophecy does come true, they shower themselves with many, many accolades! They say how that they knew it, they foretold it, and now it has proven that they are “right as rain!!” The pieces and parts of their predictions they choose to mention at the time (regardless of how contrary to their other predictions) are happening “in spades!!!” …at least, that’s been MY observation of their writings for the last 15 years…… BUT, the site does give me ideas of what to watch out for..........

J Lively August 16, 2015

Good Point...especially the accolades!

Heidi August 17, 2015

Robert P. You got a good point there and it was Martin Armstrong who just recently talked about that too TIME and PRICE have to meet . That is one of those things why you always have to stay connected to an " advisor " - a good one of course . That is the reason Armstrong has 2 benchmark dates for the low in gold - mentioned to " were " above already .

Corky August 15, 2015

Larry, Although I appreciate what you are trying to do, I am unable to subscribe to your new service. I was trying to decide one way or another, when the notice came yesterday concerning PVD (which you promoted upon my originally subscribing 7/4/14). PVD lost its ADR back in September of last year. I have had to wait until yesterday to receive any money back. Lost almost 40% of my investment (almost amount you are charging for your latest subscription), as a result I'm sorry to say I can only afford your regular service. Also too many stop outs (DDC etc.). God bless all.

John T August 15, 2015

But what about GOLD

leonard August 15, 2015

The advice is too generalized and self-congratulatory. I still don't know what to do -- I'm cowering in 80% MM Why not just give us short-attention span people a simple gold yes/no, emerging yes/no, etc. -- I don't even if I'm supposed to be in blue chip or not And what happened to Weiss's dramatic one million of his own money thing with that German who has disappeared without trace?

mephisto August 16, 2015

exactly. I could get no answer from Weiss about this several times I emailed them.

Heidi August 17, 2015

leonard Why not look for better help with your investment ? By the way CASH is king for now - so you are doing great . No gold - no markets - end of year is a better time to go back into selected markets - just quoting Armstrong here . Now I'm reading mephisto below who has the same problem that Weiss gives no answer AND YOU GUYS ARE STILL HERE AND WAITING for an answer from Larry ? Do you all have a brain damage ? I don't believe this !!!! You shouldn't even invest in anything - really .

J Lively August 16, 2015

Well spoken Leonard!

Tom August 16, 2015

It is all a very tiring, confusing and any other appropriate verb you can come up with. I have been following economics since the early 60's and managed to learn a few things along the way. If you want to sleep at night, with the obvious upcoming World depression, here is the way to make it happen, IMHO. Buy gold and silver NOW. Here is why. When the dollar crashes, which it is going to do sometime in the not to distant future, it is going to take a lot more dollars to buy precious metals. Some of you may think gold will be cheaper in the future and it may but if you hold it you haven't lost a thing. I firmly believe that anyone holding precious metals when the crash comes will have the means to make some ridiculous cheap purchases of real estate, stocks, etc. Trying to time investing today is just plain crazy and dangerous and the rewards in most cases minimal, if any. Again, this is just my humble opinion.

fred August 16, 2015

so your premise to buy gold is the dollar going down.. Right now its in a STRONG uptrend...So why buy it........... What is your bases for it going down..............?.... and soon you said...... Buy and hold ..........and you don't loose a thing you said............Now that.s over the top......................... Where are you getting you information from..............Buying real estate and stocks on the cheap...........They are at all time HIGHS............... Doom and Gloom sometime in the future............

Heidi August 17, 2015

TOM NO - don't buy gold / silver now - buy it when it's low and sell it when it's high - 2016 - 2020 - . Another one who is wrong - the USD is NOT crashing now just the opposite . But that will change later - 2017 . I wish I could collect 10% from all the money that people lose in the markets - even just from this Weiss site . I would nbe rich ...lol So far I met only 2 people who sound like they know what they are doing - that's were and BFD

Tom August 18, 2015

This is for both FRED and HEIDI. I believe that GOLD is very close to a bottom right now. I do not see the U.S. dollar going much higher. When just one of the major economies, such as Spain, Italy or Japan for example, collapses the domino effect is going to happen very fast. Anyone who waits for the collapse to happen before buying precious metals is going to be left out in the cold. The demand for gold/silver is going to far outpace availability and prices will reflect that. Heidi - You say don't buy now, buy low and sell high. I bought the vast majority of my gold in the low $300 range. I am buying again now. Everyone has a different opinion on this subject. I am just giving you two mine, based on 73 years of experience. The vast majority of us do not have the knowledge to play this upcoming disaster on a daily basis. That is why most people loose money in the stock markets of the World. Make your own decisions, as I know you will and I wish you good luck.

uno August 18, 2015

were, heidi and bfd are all the same person. don't be confused.

were August 21, 2015

Funny. News to me.

Mike S. August 16, 2015

What a horrible article, I wish they had a rating system so we could warn others not to waste their time reading this one. I hate when Larry tries to do too much. I see him as a good gold market analyst, and that's it. There's nothing wrong with being good at one thing though. I don't know if management pressures him to write about everything under the sun, but it makes him look stupid. I think on a few points above he will be right for the wrong reasons. More accurately he takes some real, known, issues above and does a bunch of arm waving about why and what to do about it.

mephisto August 17, 2015

Larry and Weiss getting called out again by Armstrong: "Yes people are stealing our forecasts, track record, war cycles, you name it. All pretending they have previously forecast this for decades. They are about the most dishonest people you will ever meet and it is all about hype and there will be this huge crisis – the worst in history – so you better hurry up and send them your money."

Fred Ferdelberger August 22, 2015

This is the biggest load of codswallop I have heard for years. This crowd are nothing short of shysters.

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