Executive Summary

• The latest outlook from our endorsed financial advisor, New Harbor Financial
• My recent portfolio changes & the rationale behind them
• 6 strategies for positioning your portfolio for the next market downturn
• Deciding which strategies are most appropriate for you

If you have not yet read Part 1: Hair-Trigger Markets, available free to all readers, please click here to read it first.

As we take close note of the “coiling” of the markets, we supplement our own analysis with that of other experts we respect. Are they seeing similar signs of mounting risk?

New Harbor Financial is an independent financial advisory firm that manages investor capital using a philosophy that takes many of the key trends within The Crash Course into account. We asked them for an update on their current market outlook, and here's their response:

“The stock market, particularly in the US, is completely disconnected from reality.  It’s clear to us that the global economy has been slowing, and various data series point to a deceleration of global demand, starting in late 2018. For many years central banks have been able to create the illusion of growth by creating trillions of dollars out of thin air and throwing the money into the financial markets, with the primary objective of pushing asset prices higher.  It is becoming clear that not only did central banks fail to create sustainable growth, but by stealing growth from the future, they likely have made the situation even worse.

The recent sharp rally of approximately 20% from the December low is not unusual in the context of early bear markets.  In fact, a “last gasp” rally often occurs in the early stages of stock market declines.  This rally often lures unwitting investors in due to their fear of “being left behind”, and keeps complacent participants fully invested.

Stock valuations remain near the highest levels in all of history. Returns from these levels, particularly in the US markets, are likely to be pitiful, perhaps even negative, over the next decade.  Of course, market retreats to more reasonable levels make all the difference in reestablishing valuations that can support healthy subsequent returns.  At New Harbor, our portfolio for most clients has minimal net exposure to the stock market and a healthy percentage of short-term Treasury bills. While we can’t predict the exact path of stock market returns in the future, we believe it is imperative to hold a significant amount of cash to be able to take advantage of lower prices ahead.

Based on the data, we can’t stress enough how historically overvalued these markets are. While many professional investors acknowledge the data, and how extreme it is, all too often many of these investors will…” (Enroll to read more)

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Executive Summary

• The central banks are the key players at this stage. When they fail, the system will fail.
• How today's Frankenmarkets are poised to collapse
• Where we see the most convincing signs that the global economy is now falling into recession
• Why we should expect bad times to lead to even worse decisions

If you have not yet read Part 1: We're Living In 'The Groundhog Show', available free to all readers, please click here to read it first.

The reason I still get angry and frustrated from time to time is because we’re just wasting very important time and resources that really ought to be dedicated to other pursuits.

As I watch the US electorate recklessly lurch from one emotional outrage to another, I truly wonder if this is really just the emergent outcome of how events spread virally — or if it’s not something more intentional and sinister. Is this all a program designed to keep people revved up but pointed in the wrong directions?

So if you find yourself increasingly feeling that things are really off track, that’s probably because you’ve also been paying close attention to the news. Whether by design or default, this doesn’t speak well to our ability to rally effectively to address the many massive predicaments society faces.

As an ex-Facebook executive said about the nefarious aspects of the social media phenomenon he helped to create, “No civil discourse, no cooperation, misinformation, mistruth; you are being programmed.”

That closely matches what I am seeing in the online world now. And it’s really unfortunate, because the stakes are so high. We really need to begin preparing for a very different future.   

Which is hard, if not nearly impossible to do in a fractured and polarized world such as the one that’s been emerging over the past few years.

The central banks are at the very center of it all.  The financial markets have taken on a new significance in the world and are now one of the prime, if not the prime, signaling mechanisms used by central planners to communicate with the world.

So it's critical to understand that the most important factor in play is…

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In this week's Off The Cuff podcast, Chris and James Howard Kunstler discuss:

• Zig-Zag Markets
  • There's a war going to keep prices propped up
• A Matter Of Desperation
  • The central planners are out of tricks
• The Masses Are Getting Angry
  • And are turning their ire on those in control
• Our Broken Political System
  • Furiously focusing on all the wrong issues

Jim Kunstler returns to share his views on what's ahead in 2019. Like Peak Prosperity, he sees the coming year as one when the forces of reality start to re-exert themselves after a decade of magical thinking.

Those in control of the system have juiced it as hard as they could for as long as they could, and now the limits to that 'extend-and-pretend' era are quickly becoming visible. And the bottom 99% is beginning to realize that not only was the “prosperity” of the post-GFC recovery largely fraudlent, but what there was of it went as spoils to the elites. Expect further social outrage like we're currently seeing in France to boil over into many other countries in the coming months.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com's other premium content.

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• 5 companies that spent lavishly on stock buybacks while pension funding lagged
• The Tells Of Fiat News
• America’s Ghost Legions of Idle Men
• Kremlin: Russia will 'restore balance' with new missiles if U.S. pulls out of treaty
• Dow Jones Futures Rise After More Leaders Break Support In Stock Market Correction
• GOLDMAN SACHS: Staying away from these 20 stocks could help you avoid the pain of Trump's trade war with China
• How Many People Have Lived on Earth?
• Things in the middle of the Arctic are getting really strange
• Brazil’s Offshore Boom Is Facing The Same Problem As U.S. Shale
• This scientist keeps winning money from people who bet against climate change
• The Greek Dark Age & Climate Change

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In this week's Off The Cuff podcast, Chris and Axel Merk discuss:

• The Trouble With Trade Wars
  • The uncertainty is whipsawing the markets
• Actions Have Repercussions
  • China's investment in the US plummets
• The Rules Of Brinksmanship
  • Chris & Axel give book recommendations
• Oil & Gold
  • Where to from here?

It's hard to keep one's head in today's world. Developments are changing at a pace the world just can't handle. As a result, the uncertainty and confusion makes it very difficult to 'surf' events as they unfold.

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