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It takes money to make money.
That old adage stems from the notion that if you have money to invest, and you invest it well, it will grow.
We believe that. But we also see a financial and economic landscape that is transforming fast. In this landscape, the nature of money is being altered by the nano-second.
Remaining nimble and strategic is critical. Trading or investing on emotion or hope isn’t a strategy.
Today and tomorrow, I’ll show you what that means for you. And I’ll give you a look into the top five sectors where you can grow your wealth in this transforming landscape.
Conjured Money Is Here to Stay
As I mentioned earlier, it takes money to make money.
But not all money is earned or even inherited. Some is concocted out of thin, electronic air and doled out to banks in return for bonds.
And this conjured money is at the heart of today’s changing markets.
Since the financial crisis of 2008 and through the Covid-19 pandemic, trillions of dollars have been fabricated by the planet’s largest and most powerful central banks.
That money, like a virus, has multiplied itself many times over as it flowed from central banks… to banks… to hedge funds… to financial assets like stocks, bonds, and crypto.
Most of it went toward lifting the markets. The real economy got shafted in the process.
In fact, since the 2008 crisis, the economy has only grown by one-sixth compared to the markets.
To me, this all means one thing: That the divergence of financial markets and the real economy is no longer a passing fad.
Seismic Rift Between the Economy and the Markets
This disconnect between the markets and the economy is not going to change because some central bank head is replaced by another one. The economy will not suddenly catch up with the markets. That ship has sailed.
Nearly 500 new billionaires were minted in 2020 alone. That’s equivalent to one born every 17 hours. And it’s all thanks to this seismic rift between economic growth and the wealth accumulation driven by the markets.
This has left our planet fragmented on economic, political, and societal levels.
And central banks are enablers of this market-economy distortion. Their policies have ignited bigger bubbles than ever before. And they are reinforcing perpetual economic fractures.
Financial institutions may be too big to fail, but the overall market has become too big to be left to its own devices.
At the Crossroads of a Paradigm Shift
Can this situation change? The short answer is “no.”
I used to think that at some point, central banks would have to fail to deliver the bounty of money the markets craved.
I believed that would cause a crash from which there would be no escaping. The market and the economy would suffer epic casualties.
But I don’t believe this anymore.
The behavior of central banks during the pandemic showed me, Wall Street, and the markets that there will always be a conjured money cushion from which markets can spring back higher.
Central banks aren’t bound by any laws or regulations as to the size of their books.
The good news is we can take advantage of this new reality. And the time to do so is now.
We’re at the crossroads of a paradigm shift.
This shift arose thanks to the gap between the markets and the real economy. And it is at these crossroads that the most promising trades exist.
Here at Inside Wall Street, it’s our mission to be at the crux of this evolution.
Tomorrow, I’ll give you all the details on how I see this playing out in the markets – including the top five sectors on my radar for 2022.
So stay tuned!
Editor, Inside Wall Street with Nomi Prins
Note From Rogue Economics’ Senior Managing Editor
Last week at Rogue Economics, we welcomed our new editor, Nomi Prins. Nomi is a best-selling author and financial journalist. But once, she was a Wall Street insider.
Nomi worked as a managing director at Goldman Sachs… ran the international analytics group as a senior managing director at Bear Stearns in London… and was a strategist at Lehman Brothers and an analyst at the Chase Manhattan Bank.
Now, Nomi brings her keen understanding of the world of money to Rogue Economics. In these pages, Nomi will show you why she left her career as a global investment banker… and set out to demystify the world of money.
She will also put you on the right side of a disconnect she sees between the markets and the real economy. She’ll do this with help from her team of global experts – including 20-year gold and natural resources investor and trader Eoin Treacy… and longtime metals, tech, and cryptocurrency investor Laurynas Vegys.
Of course, if you prefer not to get daily insights from Nomi and her team, you can unsubscribe at any time. You’ll find a link to do so at the bottom of every Inside Wall Street with Nomi Prins email.
Senior Managing Editor, Rogue Economics
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