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December 2017
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Stock market a bubble

                The US stock market is obviously a bubble.  In a hedge fund meeting on Monday it was said that all managers believed that the market was overbought yet at the same time they were still long the market.  When asked why are you long when you believe it’s overbought, they say because all the money that was on the side line is now forced to chase the returns.  Apparently, if they don’t chase the returns, they will be fired. 

                This bubble is not an accident, it is fueled and orchestrated by government, Fed and Goldman Sachs working together to inflate asset prices.  The government has put in place safety nets (subsidies) for the auto industry, energy industry, banking system, farming, housing and practically everything else.  Nearly all of these safety nets have one thing in common, they reward people for spending and borrowing.  The Fed has kept the borrowing rates for bankers at 0.12% indefinitely, are buying long term treasuries, and have numerous programs designed to grease up the credit market.  With Bear Stearns and Lehman Brothers out of the way, Goldman Sachs has a virtual monopoly on money flow.  Nothing can stand in their way of front running stock transactions and trade huddles designed to get enough players to move the market whatever way they want it too.  Obviously, this means that the stock market is heading higher even if that is not what it should be doing.  Just keep an eye on changes in policies to indicate a change in market direction. 

                Our advice is simple; if you’re not in the inside than you’re in the outside, so therefore stay outside the market and buy the physical assets.  Gold is the obvious choice as a safe bet against either the inflation or a recovering economy or deflation caused by shrinking economies.    Another very safe investment is cash flow positive foreclosures that can be purchased at affordable levels and rented out.

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