Time to quote Shakespeare because all the world IS a stage.
In today’s episode I’m going to focus on how to separate fiction from reality and lock in astounding profits regardless of which way the ‘Fiscal Cliff’ resolves itself in the short term.
Beware, all is not as it appears in this show and the suckers in the audience who don’t know that are about to fall into a trap.
The show is underway and I suggest you watch it with me as an objective bystander, not as the rest of the audience caught up in the plot.
On stage right now are President Obama and House Majority Leader Boehner as the headliners in a production of ‘The Fiscal Shell Game’.
Along with their supporting cast of liars, cheaters and buffoons in DC and the media, they are playing their roles perfectly.
We are watching a suspense-driven dark comedy thriller – a genre tailor made for modern politics – and before it’s over you won’t know whether to clap, laugh, cry, or throw rotten tomatoes.
There are many sub-plots, too, like the partisan politics and the personal ambitions that drive these two A-List actors. But that’s a story for another time.
Today we’re focused on how to profit from this show, not on what the character’s motivations are.
Before I get to the profit strategy, let’s talk about the trap so you don’t fall for it.
Keep in mind that both these characters belong to the same political screen actors guild.
As Obama just proved, their reward is to be re-elected to the show and it doesn’t really matter to them whether you or I have a happy ending or not.
They are method actors and rarely if ever break character so don’t expect anything like the truth to come out of their mouths.
The show is about getting the audience to re-elect them and keep their fans from leaving the theater in disgust. That means the show is more important than reality to Obama and Boehner and whatever your politics, your bank account will thank you for remembering that.
See, what’s required of the American public is suspension of disbelief and the predictable response of an audience utterly blind to the ways that this charade is just like every other show put on by politicians throughout history – and the plot has been the same at least since Nixon cut us loose from the Gold standard.
But this sequel promises to be more exciting, as you’ll see, because of the fancy fiscal CGI special effects.
Keep in mind that since then the US Dollar has been a masterpiece of fiction in which we all agree to exchange blood, sweat and tears in the real world, in our real lives of limited duration, for what amounts to Monopoly money printed by the dynamic duo of the Federal Reserve and the US Treasury.
That is why since the 70’s the price of cars, houses, gas and everything else in Dollar terms has exploded while the same things priced in gold are about the same cost.
Off-stage you can see how this story ends if we keep following the same path to Euro-style welfare statism. The Eurozone just reported it’s highest unemployment rate since the region got that fancy name in 1995… now 11.7%.
If spending and debt and social welfare programs lead to prosperity and growth, Europe would be the Promised Land. Instead, it’s a disaster only eclipsed by our own which is larger.
Europe is like Thelma and Louise and we’re tailgaiting them off a very real cliff which is really just a repeat of the Roman Empire’s fate.
Don’t worry, these stories are measured in decades and centuries, so stock up on popcorn.
Remember that Europe – most famously the Weimar Republic in Germany – has already proven what happens when you print so much currency that it becomes worthless, but look at Germany now – they still have Oktoberfest, right?
Unless Obama and Bernanke and Boehner somehow magically defy all of human history, this show will play out as it always has before. Which brings me back to our story and how to profit from the inevitable.
In the time before a currency collapses, the financial markets soar because all the funny money finds its way into speculative assets like stocks and bonds.
Right on queue the US stock market is enjoying the Santa Claus rally, which can refer to the fact that Obama got re-elected despite all appeals to sanity, or that Bernanke is Obama’s pet money printing elf, or the seasonal tendencies ushered in by the jolly mythical figure in the red suit – take your pick.
Now that I’ve given away the ending of the movie, it’s worth pointing out that unlike in Hollywood, this movie never ends and that means things that these acts can keep playing out for some time. The forces at work are larger than the cast of actors, in fact, so don’t get too caught up in the long term picture.
Here’s where rational people with a brain get in a different kind of trap than the fools who fall for the show.
See, you’ve got play your role on stage, not just sit in the audience.
If you try to determine your trading and investing strategy by what should happen given the facts, you’re likely to lose just as surely as the fools who don’t know what’s coming.
Here’s what I mean…
We should still be on the gold standard.
We shouldn’t be $16 trillion in debt.
Obama should have been fired for gross incompetence.
Harry Reid should have passed three budgets and instead has passed none.
Bush and the Democrats shouldn’t have racked up $10 trillion in debt.
The markets should collapse on the absurd stupidity of our elected officials brazenly following Europe down the same path that leads to the insolvency Greece is facing (along with Italy, Spain, and the rest of them eventually).
We should notice that Detroit, Chicago, along with San Bernardino and the rest of California and most other Blue states are epically insolvent, but instead the stock market rallies like a helium balloon.
And Lethal Weapon 4 NEVER should have been made.
But things as how they ARE, not how they should be… and the show must go on.
Accept it. Stupid is the new normal.
The only challenge as this show plays out is whether the actors will pull a surprise ending and go off the fiscal cliff, or go with the more traditional ending and print more money to paper a bridge from the cliff to a higher plateau of debt than previously seen in human history.
Right now you’ve got to keep your eyes wide open and play along with the stage as it is set.
Now is the time to make as much as you can and make prudent decisions with your wealth to own more and more real assets which will skyrocket once the paper game collapses – as it always does, eventually.
So how do you profit from the paper game?
One of the best ways to win in this upside-down Mad Hatter market is to fight paper with paper.
While most investors will mistakenly sit on the sidelines out of confusion, others will make bold and potentially foolish predictions on which way the smoke and mirror show in DC will play out.
A smarter play is to not try to guess which way the market will go and instead set up a win either direction.
It’s time to consider a clever trading strategy recommended by Absolute Wealth contributor and financial genius John Carter.
The good news is that he’s got a free new video series that explains a risk-free trade to capture the next crash – and he nailed the last debt crisis crash in advance by the way.
You can get instant access to John’s video series here:
He’s a pro with 15 years under his belt and a frequent guest on CNBC and Bloomberg.
I highly recommend that you watch his video series today. The first video is only like 7 minutes.
Register today because then you’ll get access to the free training he’s doing online Dec. 1 Saturday at 2pm Eastern – which details how to maximize your profits from these crazy market swings while strictly limiting risk, too.
Here’s that link again for John’s free video series…
Stay tuned… we’re in for quite a show folks.
Take heart, the show must go on and you’ve got the best seats in the house with Absolute Wealth and guys like John Carter as your guide.
David K. Miller
Managing Editor, Absolute Wealth