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2018: The Year Everything Changed

Long-time trends are breaking down
Friday, April 13, 2018, 3:42 PM

Over the past week, Chris and I have had the luxury to steep ourselves in non-stop exploration of the current prospects for the financial markets and global economy.

We've been presenting at The Investor Summit At Sea, in close quarters with several hundred investors as well as such notable other macro commentators as Peter Schiff, Simon Black, Doug Duncan, Brien Lundin and Robert Kiyosaki (you can read our notes from a number of the presentations and panels here and here).

It's been pretty much "all economy, all the time" over the past week.

If I were forced to summarize my takeaway from the experience so far, it's this: 2018 will be known as the Year Everything Changed.

Since the rescuing of the financial system in the wake of the Great Financial Crisis, the world has enjoyed a steady upward trajectory of ""prosperity"" (note the extra quotation marks reflecting my skepticism of this term).

After bottoming in March 2009, stock indices have more than quadrupled. Bonds and real estate rose to record highs. Market volatility essentially disappeared. The unemployment rate dropped to the lowest levels in memory. It's been nearly a decade now of smooth sailing and easy returns.

That's all now changing.

From the many excellent presentations and conversations I've had over the past week, I see these very important puzzle pieces snapping into place together:

  • Over-extended markets -- Everyone here is in violent agreement that asset prices cannot sustain their current levels for much longer. Lower, not higher, prices are ahead. That in itself will make 2018 very different than the past 5+ years.
  • Tightening central banks -- The biggest trend reversal IMO. We've had the mother of all sugar highs over the past decade from the injection of $15+ trillion of stimulus into the system by the world central bank cartel. With the central banks now committing to reducing liquidity, we're about to experience what a junkie in withdrawal feels like.
  • Rising interest rates -- The 30+ year era of falling interest rates is most likely over at this point. With the central banks tightening, rates will go up. But the market is pushing rates higher, too, for several reasons -- some of them outside the central banks' control. We hardly have any investors or traders left who have any experience with a rising interest rate environment.
  • The end of the Fed "put" -- The US Fed has already undergone its changing of the guard, and the ECB will soon follow suit. The new Chairs are much less likely to rescue the markets at every small dip. In fact, there are many reasons why the new leaders would like to see as much of the excess as possible be bled out of the system in order to have more room to maneuver when the next recession hits.
  • Growing global protectionism -- As economic growth continues to remain lower than desired while resources appreciate in strategic importance, the happy expansion of globalization will slow and then reverse. Alliances will strain and fragment, as countries place greater short-term priority on tending to their interior interests. We're already seeing signs of this in the US' trade friction with China and its increasingly pugnacious relationship with Russia.

I just don't see our society ready to enter a new phase of falling asset prices, tightening credit, recession/job losses, and heightened conflict/competition among nations. We're still being told "everything is awesome" and hoping for more of the same easy money, loose job markets, and government backstopping that we've acclimated to over the past decade.

In short: 2018 is going to deliver us a very rude wake-up call from our cozy slumber.

Calling All Denver-ites and Austin-ians

This is why it's increasingly important to orient yourself to the many changes 2018 is ushering in, and to position yourself prudently for what's most likely to come next.

If you're not one of the folks attending next month's annual Peak Prosperity seminar in Sebastopol CA, then join us at one of our city Summits.

The next two are scheduled to take place in Denver, CO (May 19) and Austin, TX (May 20) provided we're able to get a minimum of 15 people at each location. We're still under that threshold for both right now, though Austin is close.

So if you live in travel distance to either of those cities, please register now:

So if you live in traveling distance and are interested in joining us, please sign up by clicking one of the blue buttons below (cost: $275/person):

Saturday, May 19, 2018 -- 10am-4pm MST

Sunday, May 20, 2018 -- 10am-4pm CST
 

The Summit Experience

Make no mistake, with the trend reversals we're seeing in 2018, the pace of falling dominoes is accelerating. From the geo-politically destabilizing regime change in Saudi Arabia, to the ending of the central bank liquidity bubble, to the largest species extinction wave in millennia, to the bursting retirement dreams of the Baby Boomer generation, to the fast-worsening net energy predicament -- change is afoot. The relative calm of the false 'recovery' that the world's central planners engineered in response to the Great Financial Crisis has reached its terminus.

Now, more than ever in recent years, understanding where events are headed next is critical to preserving your wealth and well-being.

Being keenly aware of this, Chris and I focused much of our attention last year on addressing the question: How can we better arm people with the insights and answers they need to take informed action in their lives?

We combed through reams of reader feedback, listening to what folks are hungriest for. And we eventually noticed an important theme that kept recurring. So many of you have said to us: I just wish I could sit down with you guys and pick your brains for an entire day about all this...

And that's why we designed the new Peak Prosperity Summit experience.

It's an intimate 6-hour discussion, primarily focusing on our forecasts for the Economy and the financial markets, with special emphasis on the biggest threats that could trigger a major correction, as well as the key indicators Chris and I are watching most closely. Detailed updates on the Energy & Environment sides of the story are also provided.

But it's not a 1-way presentation. The Summit is intentionally formatted to be a fluid conversation, where participants can guide the discussion in whatever direction they care about most. Every Summit is unique in that the material is customized in real-time to the specific personal needs of the audience members.

In fact, asking us about your personal situation is not only allowed, but encouraged. This is your chance to get your most burning questions answered -- don't waste it!

What To Expect: Feedback From The West Coast Summits

We asked the attendees of our recent Summits in San Francisco, Portland and Seattle to share their thoughts on the experience.

Here's what they had to say:

San Francisco

I found the Peak Prosperity Summit an excellent source of real big picture information and analysis of very key economic, and energy trends for considering our near term futures.

Not only have Chris and Adam pulled together information essential for understanding the big picture of where we are, but the other attendees were thoughtful and insightful, making the interactive meeting a not-to-miss event.

Chris and Adam's Peak Prosperity summit was a fantastic experience to hear a distillation of the three E's and a engage in discourse with like-minded individuals. An event not to be missed!

I am very fortunate to have been able to attend the summit. The information that was presented and the people I was able to talk to reaffirmed the direction we are going in whereas that was somewhat lost in my day to day life.

Attending the Peak Prosperity Summit in San Francisco allowed me to meet smart engaging people in my area who have complimentary and diverse skill sets. Meaningful high quality new contacts like these are invaluable in life.

Portland

This is where you come to meet your tribe.

Just what everyone needs to know to understand the future and be ready.

Loved the six-hour summit with Chris and Adam. The time flew by. Having them live and in person to tell us their views and present their data was magnificent in itself. But even better was having instant answers to our burning questions.

Wonderful experience! It was fun to finally meet Chris and Adam, and delve into crash course updates. Best of all, it provided an opportunity to build community in the local area with like-minded people.

I attended the Portland Summit and would highly recommend it to anyone who's ever wondered what's going on, where are we headed, and what can I do? For those that haven't asked those questions - you need to attend a summit SOON.

The breadth of knowledge and understanding Chris & Adam have is very hard to find. The information is presented in an easy and understandable format.

I've read nearly every article and listened to almost every podcast posted in the last six years on Peak Prosperity's site. However, there is no substitute for speaking with Chris and Adam in person and diving into this information TOGETHER. I highly recommend this event and others like it!

Seattle

An incredible chance to meet and talk with the PP pioneers, and discover local like minded thinkers that can grow into a community.

Six hours from zero to one hundred on the economy, energy, and the environment. Buckle your seatbelt!

Attending the Seattle Summit was my first opportunity to speak freely among well-informed people about my concerns, frustrations, and general philosophizing about the state of our economy and the environment. It was somehow both energizing and calming. I could have spent days doing that. Thank you Chris and Adam for opening minds and hearts.

Finally, I was surrounded by people who understand & share my concerns for the future! Also, it was helpful to chat with locals who are facing similar regional challenges.

Seeing Chris and Adam live and get the chance to ask them questions was worth my time and admission fee. I look forward to the next presentation

An honest, frank and up-to-the-minute summary of where we are in the nested economic, energy and environmental predicaments. If you find yourself confused by the main stream narrative and yearning for a coherent framework to better understand unfolding events, a Peak Prosperity Summit is exactly what you need.
Meeting the PP team in the flesh was a real treat. There was ample opportunity to ask questions both formally and during breaks.

Chris is a brilliant person who cuts through all the BS and distillate the essential information. He is someone whose opinions I unequivocally trust.

Take Action

So if all this resonates with you and you live in travel distance to one of these cities -- Denver, Austin, Chicago, Columbus -- register now:

Saturday, May 19, 2018 -- 10am-4pm MST

Sunday, May 20, 2018 -- 10am-4pm CST
Saturday, June 2, 2018 -- 10am-4pm CST
Sunday, June 3, 2018 -- 10am-4pm CST
We're looking forward to meeting you in person!

cheers,

Adam & Chris

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4 Comments

macro2682's picture
macro2682
Status: Platinum Member (Offline)
Joined: Sep 3 2009
Posts: 545
Contrarian...

“Everyone here is in violent agreement...”

 

isnt that concerning?  The majority is almost never right...

cowtown2011's picture
cowtown2011
Status: Bronze Member (Offline)
Joined: Sep 12 2011
Posts: 45
Interest Rates

I'd argue rates are more likely to go to zero before they hit 4%. Once SHTF, CB's will only move rates in one direction, down! I think we'll get a meaninful correction before we see another 2-3 CB rate hikes.

Grover's picture
Grover
Status: Platinum Member (Offline)
Joined: Feb 16 2011
Posts: 818
No Worries
macro2682 wrote:

“Everyone here is in violent agreement...”

isnt that concerning?  The majority is almost never right...

macro,

I'd hardly call us the majority by any stretch of the imagination.

Grover

pokjbv's picture
pokjbv
Status: Member (Offline)
Joined: Sep 9 2017
Posts: 3
Real rates....

I say rates are already below zero and have been since 2009.  For one thing they were paying the wealthy/corporations to borrow mountains of cash, till very recently anyway, but the real interest rate is still below zero because is inflation is far higher than they will admit.  I have a degree in Finance and am on a fixed income so I watch closely, every penny, and I can say with certainty that inflation in the last 5 years has been a lot closer to 8% than 0 or 2.  Rents alone are up in my region by 70% just since 2014.  And in case you have not noticed gasoline which they used to prove there was no inflation is up about 40% in the last 7 months or so.  Crude up more than 50% since mid 2017.  If you do not discount rates by a REAL inflation rate then you do not know what REAL rates are.  All I know is inflation is far higher than they report meaning real interest rates are far lower.  

Prosperity, with the equity markets driven to over 400% increase since the 2009 low, great, but the VAST majority of Americans are worse off than they have been in a long time, none of that wealth trickled down to us.  It is a fact that 63% of Americans could not cover a $500 check if they had to write one in an emergency, at least not without going to payday loans.  

I also know that my fixed income at $48,000 take home was middle class as recently as 2010, but I now classify my living standards as working poor at best.  It takes at least two such incomes to sleep well at night now, and I would say middle class lifestyles as we have always thought of them requires no less than 100k per year in MOST markets, there are some where 100k means living in your car.  Of course there are also places where if you have the fortitude to survive the locals and their exceedingly narrow views you can live okay on that 48k unfortunately I am not one of them.  I had to move away from Oregon because housing is now so unaffordable there, had I stayed it would be only because I set up house in my vehicle.  

This is reality, if you are not seeing it then perhaps you are living in a bubble.  

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