Tax & Financial Tips Archive
[Back to Archive]

 

Date: January 7, 2013
Subject: Don’t let the Fed Destroy Your Savings


This is
G&G Associates
Tax & Financial Consulting Services
e-Newsletter

Don’t let the Fed Destroy Your Savings


Akwaaba (Welcome) G&G Readers,

Imagine a drunk driver who has lost all his sense of direction. He not only has no idea where he’s going, but is also controlling his speed by looking at a broken speedometer. How would you feel being a passenger in that car?

Unfortunately, that’s the reality we’re facing. We’re all passengers in that car.

Our economy is under the control of a drunk driver, who is now making decisions based on broken metrics. I’m talking about the Fed. It has announced its newest plan to boost the economy. And the plan is based on two key, terribly flawed numbers.

This is likely to end in disaster and here’s why…:o(

-------------------------------------------------------------
Internal Sponsorship:
Watch Your Money Folks

Since the announcement of QE3 until 2015 by the Fed Chairman this week, the dollar is in free fall against most currencies in the world right now … perfect time to make moves while your dollar has some reasonable value left to it.

And if you get paid in dollars and hold the majority of your assets in U.S. stocks or bonds, your wealth is in significant danger (401K’s, TSPs, 403Bs, Mutual funds, etc).

To become a member of the G&G Investment Society (GGIS) newsletter subscription to learn how to take advantage of some of our suggestions so you can protect your wealth and portfolio against a fallen dollar, send an e-mail to GGIS@gngassoc.com and/or visit our website at www.gngassociates.net and click on the “Products & Services” link and we’ll get you signed up right away.

DON'T WAIT ANOTHER DAY!

- 1 year subscription - $149
- 2 year subscription - $269
- Lifetime subscription - $699 {50% off tax prep & 25% off consulting services for life}

*** Membership Guarantee *** If you don't make your money back from being a GGIS member by the end of your subscription...we'll refund 100% of your subscription fee back. That's how confident we are that this will be one of the best financial moves of your life.

-------------------------------------------------------------

Why the Fed’s Measure of Inflation is Meaningless

The Fed has recently announced it will print $85 billion every single month until inflation rises above 2.5% or unemployment drops to 6.5%. Printing money in itself is a dangerous activity. When you decide how much you print based on two flawed metrics, then it almost ensures disaster.

The numbers the Fed uses to measure inflation and unemployment are useless. Let’s take a look at inflation first. Besides ignoring food and energy costs, which are big parts of our daily lives, the Fed uses other tricks to keep reported inflation artificially low.
I wrote about this in an article last year. {See G&G website newsletter archive April 19, 2011 issue}

Since 1980, the government has implemented several changes in the calculation of inflation. Because of those changes, the reported inflation is much lower than the true rate of inflation.

According to www.shadowstats.com, which calculates inflation by using the original methodology, inflation is now close to 10%. Meanwhile, the Fed keeps telling us it is below 2%. How can the Fed control inflation by using a meaningless measure of inflation? It can’t.

And it gets worse.


Why the Fed’s Measure of Unemployment is Useless

The Fed has also said it will only stop printing money when the unemployment rate drops below 6.5%. That threshold is also terribly flawed. Just like the reported inflation doesn’t really measure loss of purchasing power, the reported unemployment rate doesn’t really measure the health of the labor force.

You see, the Fed doesn’t count those who are not looking for a job as unemployed. As a result, when people give up looking for jobs, the unemployment rate goes down. This gives the impression things are getting better when they’re not.

In fact, that’s a big reason why the unemployment rate has been falling recently. Millions of Americans have dropped out of the labor force. In November alone, 540,000 Americans dropped out of the labor force.

This is important because a significant improvement in the economy will encourage more people to start looking for a job. This influx of people into the labor force could push the jobless rate UP because more people would be officially looking for work. The Fed would start counting those as unemployed.

An improvement in the labor market could push the unemployment rate up, not down. Under that scenario, the Fed would keep printing money, despite the improvement in the economy.


Why This Will End Badly

Because of the artificially low reported inflation, the Fed will keep printing money. And if the economy improves, a higher unemployment rate will give the Fed another excuse to keep printing.

The Fed can control how much money it prints. But it can’t control where that money goes.

All this money-printing will result in asset bubbles. There’s already a massive bubble in the bond market… and stocks wouldn’t be trading at current levels if it wasn’t for all the money-printing. The problem is bubbles always end badly. The booms are always followed by massive busts.

Investors who follow a “buy and hold” strategy will be crushed by the next Fed-induced crash just like they were in 2000 and 2008. If you want to reach your retirement goals, you don’t have the luxury of time to ride out another major crash. It’s time for a new approach --- one that avoids catastrophic losses, while keeping you in bull markets.

I’ve spent the last few months developing a strategy that does exactly that. It’s a revolutionary way to save for retirement that has averaged an annual return of double digit return over the past decade. It could be the safest and perhaps only shot you’ll have at securing the retirement you deserve.

For more details about this strategy, if you are not a GGIS subscriber already, we stop procrastinating and signup now. Your savings could be in jeopardy if you don’t.


G&G Associates
is on Twitter

Join “G&G Associates” on Twitter. If you have a smart phone or online twitter account you can sign up to receive tweets from us. This will keep you in the know with current market moving updates, let you know when we have changes to our website, inform you of recent newsletter postings, and it will also be a good medium for improving your tax & financial IQ.

You can find us on Twitter by searching for the handle "GG_Associates."

As always…feel free to pass this information on to anyone you think is interested in increasing their tax & financial IQ.

If you need a one-on-one consultation to learn how to implement these investments or any other tax or financial strategy mentioned in these newsletters, feel free to contact my office to setup an appointment.

Meda Ase p (Thank You Very Much),

Asar Maa Ra Gray
Tax & Financial Consultant, RFC
G&G Associates
757-271-6068 office
866-361-3872 toll free fax
www.gngassociates.net

Become a Fan of G&G Associates and G&G Travel on Facebook & Twitter.

P.S. If you are looking to Travel and looking for steep discounted travel, visit www.gngassociates.net, click on the “G&G Travel” link and let your travel planning begin. Let us know where you want to go and we’ll do our best to find you the best deal your money can buy. Become a Fan of G&G Travel on Facebook.



LEGAL NOTICE: This work is based on what I’ve learned as a financial researcher and analyst based SEC filings, current events, interviews, corporate press releases and what I've learned as a financial consultant. It may contain errors and you should not base investment decisions solely on what you read here. It’s your money and your responsibility. Nothing herein should be considered personalized investment advice.

 

Tax & Financial Tips Archive
[Back to Archive]