When everything from stocks to cryptos to NFTs to collectibles to property is in a boom, it’s not fashionable to mention that it’s all based on sand. And that groupthink may be at play. And to be fair, Vern has been predicting a great reckoning in the old broken finance game for years. But a doomsayer is wrong…until he is right… The old game is cracked beyond repair. And these cracks first started showing back in 2009, says Vern, courtesy of the US Federal Reserve’s intervention in artificially inflating the US, and thereby global markets. The result is the gap between value and return has never been wider. Says Vern… ‘Investors — like they did in the 1920s — are buying into the idea this is a permanent plateau from which returns of 10–12% per annum will be consistently delivered. ‘Since 2014, the value line has been warning the US market — over a 12-year period — will likely deliver (at best) 0–2% per annum. ‘The most recent 12-year forecast — from Jan 2021 to Dec 2032 — is for MINUS 4% per annum. ‘Investors have been seduced by this market…and I can’t blame them. When something good like this goes on for so long, you want some of it in your life. ‘It’s only natural. ‘Fighting the temptation is hard…real hard. ‘Mathematically it is not possible for these past returns to be repeated. ‘Share prices are a function of Earnings Per Share (EPS) multiplied by a Price/Earnings ratio. ‘EPS have been goosed up by share buybacks and accounting trickery. The PE ratio has already expanded well beyond historic norms.’
Vern goes on to compare the current state of the stock market to the recently deceased Bernie Madoff’s Ponzi scheme… ‘Maths don’t add up…TICK. The longer the period of outperformance, the more likely it is people believe it’s true…TICK. Identifying the “con” early can be an exercise in frustration…TICK. ‘The Fed is doing its utmost to pump this market full of fillers to give it a youthful, seductive appearance. But in the cold light of day, it’s far from being an attractive proposition. ‘Those who are tempted into the warm embrace of this market will, in due course, experience the coldest of cold shoulders. ‘Heartache awaits. ‘Something no one is expecting — least of all the Fed — will expose this seducer for the cad it really is.’
Let’s say you agree the market is due a Madoff-like comeuppance. And that the financial system as we know it is broken. What do you do? There’s a growing school of thought that when the old horse starts to look dodgy… You back a NEW horse And I’m not talking about cryptocurrencies… Or gold… I’m talking about perhaps the single-smartest thing you could do right now to soften any blow a new global financial crisis may have on your wealth in 2021…2022…or 2023. All common sense tells you the old system is running on bought time. But what few realise is something new is emerging from the shadows. It won’t replace the old game. Not overnight, at least. But it’s in the process of disrupting it in ways few people can comprehend. You’re not hearing much about it. All the bandwidth is being taken up by roaring stocks. Or the mainstreaming of cryptocurrencies. You’re also not hearing about this ‘new game’ because, put simply, there are so many vested interests in maintaining the status quo that these topics are just not being discussed in polite circles. Next Wednesday, in a free event six months in the making, we aim to change that. At the core, we’re in a stage where we now have two systems operating in tandem. The new, young, still-working-itself-out, free market, decentralised system that’s evolving. And the centralised one. Tied to the old world. Totally dependent on central authorities propping it up. What we’re going to try and do is chart a smart path for your wealth between these two conflicting systems. To see exactly what I mean in a bit more colour, watch this invitation event trailer now… Regards, James Woodburn,
Group Publisher, The Daily Reckoning Australia | 
