As I write this newsletter, we’re in a time of economic & financial euphoria. The stock market is at all-time highs, real estate prices are booming, and even the cryptocurrency markets are skyrocketing!
This is a time for great excitement! But even more so, I believe that this is a time for all of us to proceed with real CAUTION.
Why? Stocks, bonds, real estate, commodities, and even digital currency are all being manipulated by the powers that be so that they will not have to deal with the REAL underlying problems the world faces (and will continue to face in the future). Many economists, advisors, and experts believe that these markets are in a huge bubble created by the printing of money and government tampering.
I believe we are facing four major crises. Let me be clear, the information I am sharing about these crises oversimplifies problems that are much more complex. The purpose of this information is NOT to scare you, or bum you out, or fearmonger you; it’s to inspire you to think, to ask your own questions, to review your current strategy, and to take positive corrective action if need be.
Here are the 4 Crises:
Economic Crisis
I’ve talked about this a lot, so I won’t repeat too much of it here. The economic crisis is caused by many problems but is exacerbated by how poorly the government is run.
People are living longer and longer, and there are more and more people. This population shift of the Baby Boom demographic is going to cause some serious strain on the social security and government health care systems. This will be very expensive.
Then the questions will arise: Where will the government get this money? Will they get the money they need from people who don’t have money or people who do have money?
Of course, they will start by going after people who have money. The current administration just told us to our faces that they will be raising taxes.
If you have the bulk of your money in tax-deferred qualified retirements plans, this may be you! They make it sound like they’re only going to raise taxes on the wealthy, but as you’ll see below, that’s not the case.
But even if the government raises taxes, will that provide enough money? Will it even be close? We’re nearly $30 Trillion in debt!
Or will they have to continue printing exorbitant amounts of money? $1.9 Trillion was already delivered as Covid Relief. Now they are talking $3-4 Trillion MORE for an infrastructure plan. Won’t that eventually lead to massive inflation? The recent CPI numbers showed the greatest quarter-over-quarter growth since 2018.
And isn’t inflation also referred to as the “Stealth Tax?” Won’t that decrease the purchasing power of your money? And doesn’t that Stealth Tax affect every American, whether they are rich, poor, or middle class? But because they have a smaller pool of resources, to begin with, doesn’t this stealth tax actually hurt the poor and the middle class the most?
Isn’t it important that we find effective and efficient ways to help EVERYONE?
This crisis is bad enough. But the other three major crises will dramatically increase the danger of the economic crisis.
Social Crisis
The second crisis is the Social Crisis. There are obvious issues nationwide, with differences in race, religion, color, nationality, and gender. There is added awareness of social injustice in our country. There will continue to be protests, riots, violence, and enormous emotion. This is an oversimplification of a complicated issue. I have no answers to these issues, I only ask questions. But since this is a financial blog, the important point for us to discuss in this business is:
What will be the financial cost? And who will pay that cost?
COVID-19 Crisis
Have you seen the reports on the huge medical bills associated with Covid-19 complications? I’ve seen stories of medical bills in the 6 figures!
How will the Covid crisis affect health insurance? What impact will all of this have on Medicare and Medicaid? Where did the governments of the world get the money to purchase the vaccines from the drug companies? What will be the financial cost of this?
I am repeating this again. This is an oversimplification of a very complex subject. I hope that this will inspire you to ask your own questions in addition to mine about these issues and what their FINANCIAL costs will be to your financial future. If you’re not sure, the ultimate goal is to inspire you to take action.
Climate Crisis
I’m not going to launch into a doom & gloom prediction about global warming. However, this area has the potential to be the biggest, most dangerous, most expensive crisis of all.
In just the last six months, we have had record forest fires; not only in California but in Arizona, Wyoming, New Mexico, and Colorado as well.
We have seen dramatic heat waves, with temperatures reaching 120 degrees in some places. Conversely, we have also seen record cold as far south as Houston, Texas, where there was massive destruction – pipes froze, water mains burst, and many were left without safe and clean drinking water. The damage to Texas was greater than the damage caused by Hurricane Harvey.
Then we had Mississippi, Alabama, Tennessee and Georgia see around 100 tornadoes. We have had flooding, fires, mudslides, droughts, and dangerous rising ocean and lake levels.
We have had—and will continue to have—unpredictable weather events: hurricanes, tornadoes, rainstorms, and snowstorms. These “Black Swan” events, which we really can’t predict, will continue to hit and continue to cause damage that must be repaired.
The cost for all of this is almost incalculable. How will we deal with all of this? Where will all the money come from? And who will the money come from?
Market Correlation & Manipulations:
Finally, I want to discuss market correlation. Other than the insurance industry, there really are no safe havens any longer. Remember when we were taught that it was important to invest in non-correlated assets? Here are some examples:
– Invest in gold as a hedge in case the stock market goes down.
– Buy international and foreign stocks to offset downturns in the American stock market.
– Own bonds because when the stock market goes down, the bond market returns increase.
But now, because of all the money printing & market manipulations by the government, banks, and Wall Street, this traditional economic reality no longer exists. When stocks go up, gold goes up, and bonds go up too! Conversely, when this manipulation causes markets to go down, they all go down.
In the Great Recession, we saw stocks and bonds decline at the same time. So if we are in a bubble – whether it’s stocks, bonds, real estate, digital currency, or a combination, etc. – and it finally hits the fan, it’s quite possible that all these markets will get slaughtered. Insurance products are the only hedge left.
That’s why I’m so passionate about building the foundation of a financial and retirement plan with insurance products and then building out an intelligent investment & money management platform upon that solid foundation.
Conclusion:
If history has taught us anything, it’s that good times tend to lull people to sleep. They get complacent; they stop paying attention; they think the market will always go up, and that every investment they get involved in will produce huge returns; it also causes many people to begin “speculating” instead of “investing” with the hopes that they’ll get rich quick.
And doesn’t it seem like right when everyone gets too comfortable and too extended, that’s when the bottom falls out, crushing the goals and dreams of millions of Americans?
Have you ever been fooled before? Is it possible that it’s happening again?
Do we truly understand the enormous changes we are taking with our retirement futures?
As we explore solutions to these problems, I hope it becomes clear that we as financial professionals don’t sell life insurance, or annuities, or mutual funds, or long-term care, or critical illness coverage, or any certain stock, bond, or other investment.
What we do is provide solutions. We sell positive futures & positive outcomes. We provide certainty where none previously existed. That is our ultimate goal and ultimate mission – to help our customers achieve financial and retirement success!
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