The Inevitable Crash Landing of the U.S. Economy ,Dr. Kurt Richebächer (Jan 13, 2001)
gold-eagle.com
(Not sure if this has hit the thread or not, I supply it for those who maybe interested. Its ultra bearish source makes its rather strident nature no surprise.
I will not try and adjust this text as the editor and previewer are, in my opinion not functioning properly)
The Man Who Accurately Called the Asian Crisis... The Collapse of Brazil's
Currency... and the Internet Tech Wreck... Has Just Issued An Important Warning for
ALL Investors ... You Can Safely Protect Yourself and Profit from...
The Inevitable Crash Landing of the U.S. Economy
Dr. Kurt Richebächer has been described as 'the man who predicted the Asian crisis' by the French
national newspaper, Le Figaro, Paul Volker, Chairman of the Federal Reserve Board under Ronald
Reagan, proclaimed, 'Sometimes I think that the job of central bankers is to prove Kurt Richebächer
wrong.' Unfortunately, that's a very difficult position to be in. Dr. Richebächer has developed one of the
most amazing track records in the world for predicting economic trends.
'We view the U.S. Technology, Internet, and communications bubble as one of the greatest manias of all
time, and manias simply do not end with a whimper.' --The Richebächer Letter , November 1999.
Microsoft down 55%
Dell down 54%
Intel down 47%
Lucent down 72%.
'While Internet companies...scramble for market share and to live up to the lofty expectations of their
investors. Next Christmas, very many of them will not be around.' -- The Richebächer Letter, January
2000.
Autoweb.com down 96%
Egghead.com down 95%
FinancialWeb.com down 97%
TheGlobe.com down 97%
TheStreet.com down90%
DrKoop.com down 96%
E-loan down 95%.
Now Dr. Richebächer is predicting 'doomsday for the dollar...'
'Just about everything is astronomically worse today than it was in 1987... Reaping the whirlwind of a
crashing dollar, in particular against the euro, is meanwhile the mutual nightmare of policy makers in
both America and Europe. For investors, it is an unbeatable opportunity in the making.' --Dr.
Kurt Richebächer, 2000.
Dear Reader,
The landing approach has begun. The flaps are down. A moderate slowdown has hit the U.S. economy.
Investors are still optimistic. But consumer spending is way off. Still... it seems that everyone believes that
Alan Greenspan will engineer a soft landing for the formerly high-flying tech bubble.
But according to one of the world's leading economists, it's worse
than blind faith. It's 'high-octane 'new paradigm' propaganda, in
which no one indulges more than Mr. Greenspan.' Take a quick
look at the facts.
Almost everyone believes that the U.S. economy is better than it's
ever been. If that's so... then why is real disposable income
falling? Why is the buying power of U.S. consumers falling?
You may be surprised to know that the U.S. inflation rate is the
highest in the industrialized world. That's a big part of the
problem. The other critical part is phony statistics called the
'hedonic deflator.' It's a statistic trick that Greenspan and his
cronies have cooked up to create the high-tech miracle economy.
Using 'hedonic deflators,'
government economists can
increase the value of the high
tech industry by 4 or 5 times
without anyone spending or
making a dollar. It's voodoo
statistics.
Ask yourself this. If
productivity is up. And
efficiency is up. And setting
new records... then why are
corporate profits falling and
personal disposable income
down?
The answer is VOODOO STATISTICS - the hedonic deflator. Menacing trends show exactly what is
coming in the months ahead.
The monstrous growing trade deficit is increasing at astronomical
rates. It severely limits the ability for the U.S. economy to grow.
The combination of these three fa ctors: the current account
deficit, the collapse of personal savings and the fall in personal
disposable income... all point to the same thing.
According to Dr. Kurt Richebächer, 'It will come as a great
surprise how fast the U.S. economy will weaken in the near
future.' But wait, there's more...
Three Powerful Reasons To Read This
Carefully
When Dr. Kurt Richebächer talks... intelligent investors pay attention...
In September 1996, Dr. Richebächer began warning that the Asian Tigers were 'teetering on the edge of
a cliff.' In March 1997, he alerted his readers: 'given the 'hot money' inflows from abroad, this could
trigger tremendous currency turmoil.' He repeated his warnings until July 1997, when the currencies fell
like dominoes across Asia.
In July 1998, Dr. Richebächer predicted developing problems in Brazil. His research indicated that Brazil
was suffering from rising inflation, experiencing serious difficulty servicing its external debt and that its
currency, the real, was seriously overvalued. The real crashed in early 1999 and holders of Brazilian
stocks and bonds were badly burned.
In November and December 1999 and into 2000, he warned repeatedly about the coming crash in
Internet and high tech stocks. Smart investors were out of those sectors BEFORE they crashed. Some
investors willing to take more risks shorted that overvalued sector for quick, easy profits.
His insights in the past have saved savvy investors millions of dollars by steering them clear of
disaster...
The Crisis Almost No One Sees Coming
It seems that no one is watching. Not here in America at least. Most investors don't have a clue about the
dangers that lie ahead. Even more dangerous... they don't care. But worst of all, they are being set up
for what could be the greatest economic disaster in 70 years.
The last time the dollar fell... it wasn't long before the stock market came down too. And a recession that
was the worst in the last 25 years. Unfortunately, many investors today hardly remember it. Most stock
brokers and fund managers today have never seen a bear market, let alone have managed investments
when a bear is devouring portfolios. The coming crisis will be much more devastating than 1987. The
imbalances are far worse... and there are fewer options for dealing with it... because financial markets
have changed dramatically.
Europeans are beginning to understand and worry about the dangerous extremes building up in the U.S.
financial system. 'Soaring share prices and the massive U.S. trade deficit are the most worrying
threats to the stability of the British financial system,' said the Bank of England in its semiannual
Financial Stability Review.
The Bank for International Settlement made the following remark in its 2000 Annual Report: 'Looking
further ahead, the biggest policy challenge could be coping with a sudden reversal in the
fortunes of the dollar.'
The most recent warning has come from the International Monetary Fund. In a just published report, it
says that 'the widening of the U.S. current account deficit could shake investors faith in the economy
triggering a withdrawal of investment that could endanger global markets... Financial shocks can
propagate across institutions and markets in new and surprising ways.'
The warnings are there. But they get little publicity and few investors pay attention. It's unfortunate,
because it will prove to be a very costly mistake. I'll explain this in moment, but first let me introduce
myself and then tell you about one of the most brilliant and insightful economists in the world today.
Dr Kurt Richebacher, a former central banker, is the world's preeminent living Austrian Economist. For
more information on his monthly insight into global credit and currency markets, please visit
dailyreckoning.com
To read more contrarian commentary on hard money and the fate of the stock market bubble go to
dailyreckoning.com |
