Never google your symptoms, they say.
A query about some minor pain will send you down a rabbit hole at the bottom of which there’s inevitably an article on how it could be cancer.
Never trust mainstream media to talk about the economy, either.
Much like Google’s algorithms, mainstream financial media will take any piece of new data, project the worst possible outcome, and present you with a four-minute clip on why a disaster of historic proportions is imminent.
Here’s an example…
On Wednesday, the U.S. Federal Reserve Chair reported that the Fed is “almost done” hiking interest rates.
After a series of rapid rate hikes over the past 18 months, the Fed can now “proceed carefully,” Mr. Powell said – a sentiment he repeated at least a dozen times during his press conference.
Cue an avalanche of so-called economic experts and market commentators coming out of the woodwork to offer their opinions and views.
Even though the [Fed officials’] dot plot [prediction] shows another hike this year, we see a number of potential adverse shocks to growth between now and end-year that could derail that plan.
Economic uncertainty and disruptions from the UAW strikes and looming government shutdown may push the Fed to postpone a hike to 2024 – or even nix it completely.
Stuff like this makes my eyes roll…
Here’s the thing…
The way I see it, you, as a taxpayer, homeowner, and investor, have two choices really.
One, you make the decision to stay behind the curve, react to the news, and not make decisions until you get confirmation from whoever is today’s most prominent TV authority.
Or… you learn the history of the 18.6-year real estate cycle and start making decisions that work for you.
This Will Create Unprecedented Wealth
Since the first letter I sent you, I have been pounding the table on the fact that the single greatest wealth event in history is ahead…
…that the U.S. economy would lead the world into this amazing time of financial growth and investment fortunes.
Have I been wrong on this so far?
Talk of a recession in the U.S. over the last 12 months did not conform with the timing of the cycle.
So we didn’t have one… just as I predicted.
Instead, we focused on indicators of the economy’s strength, the U.S. consumer, and the expansion of bank credit.
We analyzed the seeds of strong economic growth… massive government spending… and eventually, the private and banking sectors contributing to massive consumer-led economic growth.
So I must ask you, did you see the economic data that preceded Jerome Powell’s speech?
It absolutely backs up my thesis…
The Evidence Is Screaming, But Few Are Listening
The U.S. economy has so far been resilient against the Fed’s historic tightening campaign. Interest rates went from nearly zero in March 2022 to 5.5% in July, a 22-year high.
Despite that, consumer spending remains strong and the labor market has been steady, though job growth is starting to moderate.
However, this moderation is, in fact, what the U.S. Fed wanted all along.
But again, look closer at the facts. Despite this record interest-rate hiking spree, the U.S. economy has shown great resilience. Which is the result of U.S. government stimulus and rampant consumer spending.
Resulting in an astonishing forecast of 4.9% annual GDP growth for the third quarter, according to GDPNow.
But…what about the inverted yield curve? It’s looking bad, right?
What about national debt? It’s too high, isn’t it?
The real estate cycle told me that it wasn’t time to be overly concerned by either, so I wasn’t.
Where everybody saw a recession, I saw growth.
And the data shows that I was right.
Can you now see “why” I was right to trust the cycle history and not the media-led narratives?
There’s more data confirming my thesis…
The average U.S. mortgage holder is still paying 3.6%, half the going rate on new mortgages. This keeps house prices high and leaves households with enough money to keep spending…
Some pandemic programs remained surprisingly active, including tax credits of up to $20 billion a month to help companies retain and insure employees.
Early on during the pandemic, the government suspended student loan payments, putting up to $8 billion a month in the pockets of recent graduates. Note this program only runs out in October.
This created a more than $2 trillion boost to savings, which consumers have been gleefully spending.
Most significant of all, total post-pandemic expenditure by Biden amounts to the most ambitious expansion of government since Franklin Roosevelt.
Of the nearly $8 trillion in new spending since 2021, some $6 trillion went to the military, entitlement programs, and the president’s “new American industrial policy,” subsidizing U.S. companies to compete with China.
Companies are jumping at the subsidies. The computer and electronics industry alone announced $100 billion in new construction plans in the second quarter, up tenfold from the same quarter two years earlier.
This Is Incredibly Bullish
And it’s all coming in on time, according to the timing of the 18.6-year real estate cycle.
Here’s a sneak peek into the future for you.
Once all those consumers spend all their stimulus savings, they will continue spending. Why?
They will replace savings with borrowed funds – still affordable, and, given that interest rates could start declining over the next several quarters, credit could become cheaper still.
So they will keep spending, the economy will keep growing.
And this will accelerate as we reach the final stage of the real estate cycle.
So, I ask you… are you receiving your fair share of all this wealth?
If not, I suggest you join me in picking the right stocks at the right time in the cycle. I’ll show you how to do that right here.
Editor, Cycles Trading with Phil Anderson
Like what you’re reading? Send your thoughts to [email protected].