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America's Broken Promises Are Giving Us a Once-In-a-Lifetime Opportunity

By Jeff Clark
Tuesday, June 7, 2011

We are in the early stages of a tectonic shift in human philosophy.
It's a shift that occurs maybe four or five times a century. If you're a student of history, you'll recognize it's a shift that precedes the decline of every empire and every civilization since time began.
Think about it this way...
Several decades ago, a man's word was his bond. His promise was written in blood. Corporate titans made million-dollar deals on the basis of a handshake. Deliveries promised by Tuesday showed up on Tuesday.
If someone said, "I'll be there by noon," they showed up by noon. And when a couple promised before God, friends, and family, "Until death do us part..." it truly meant "until death do us part."
Words and promises meant something back then. You had to live up to your words or risk being ostracized by society. There was a stigma to going back on your word... to not meeting a deadline... to not sticking to a commitment.
But then, maybe four decades ago... the philosophy shifted. We became an "ish" society.
"We'll make the delivery by Tuesday-ish"... "I'll be there around noon-ish"... "We promise to love, cherish, and honor until death do us part-ish"...
Society gave everyone an "out." You could make a promise but be excused from your commitment so long as you gave it your best shot.
A man's word was no longer his bond. It was his best quote. And as long as he came close to fulfilling it, it wasn't a problem. Society said, "We really didn't expect you to deliver it by Tuesday. But as long as you get it to us by the weekend, there's no problem."
Divorce? Hey, it happens. You can't expect anyone to take the "until death do us part" stuff seriously. "Give me a break here and I'll get it right next time. I promise."
Then, maybe 20 years ago or so, society eliminated all obligations... as long as we heard what we wanted to hear. It didn't matter if we knew the person was lying to our face.
"I did not have sex with that woman, Ms. Lewinski."
"No, I have never knowingly taken steroids."
"The United States is committed to a strong dollar policy."
We knew we were being lied to, but it didn't matter. It didn't really affect any of us anyway. So what was the harm?
Now we've shifted to the final stage. Let's call it the "realization" philosophy...
In this stage, everyone knows the promises made are baloney. Everyone knows they're being lied to. Everyone knows they're standing on the edge of the abyss. And everyone knows there will be serious consequences. But... nobody knows yet what they're supposed to do.
Look across the Atlantic and see the Greek citizens protesting. They were promised retirement at the age of 50 with a full pension paying 100% of their salary.
The realization is... that isn't going to happen.
Look at the Italian farmer who worked his land for decades and was promised top dollar for the crops he produced. That's not going to happen either.
Look at the firefighters in Vacaville, California. The city and the state are virtually bankrupt. So any promises made for pensions, medical care, and housing supplements are all but null and void.
I hate to be the bearer of bad news, but this is the state of our nation. Promises made will not be kept. There's no money to pay for them all.
The good news, however, is this creates a genuine once- or twice-in-a-lifetime investment opportunity. It's an opportunity to profit off the lies told by otherwise respected members of the Wall Street community. It's stuff you already instinctively know you need to do. But maybe you haven't pulled the trigger just yet.
I'll tell you more about it on Thursday.
Best regards and good trading,
Jeff Clark

Further Reading:

Read more from Jeff here:
"Last week's breakdown is bad news for long-term China bulls."
"The stock market is like a car stuck in neutral with the gas pedal pressed to the floor. It's using a lot of fuel, but going nowhere."
"The company is the 800-pound gorilla in the technology room."

In The Daily Crux
Market Notes
S&P 500 sinks to 12-week low.
Natural gas approaching highest levels in 10 months.
Bank of America touches fresh 52-week low.
Small biotech companies Complete Genomics and GTX hit 52-week highs... Both up more than 100% in three months.
Market Watch
Symbol Price
S&P 500 1286.17 -1.1% +20.8%
Oil (USO) 39.00 -1.7% +19.3%
Gold (GLD) 150.48 +0.2% +26.3%
Silver (SLV) 35.71 +1.1% +109.4%
U.S. Dollar 73.73 -0.8% -16.4%
Euro 1.46 -0.4% +21.8%
Volatility (^VIX) 18.49 +3.0% -47.9%
Gold Stocks (^HUI) 521.77 -2.9% +17.4%
10-Year Yield 3.00 +0.0% -6.0%

World ETFs
Symbol Price
S. Korea (EWY) 64.06 -1.2% +44.9%
Taiwan (EWT) 15.67 -0.5% +44.1%
S. Africa (EZA) 70.33 -2.2% +36.5%
Singapore (EWS) 13.86 -1.4% +30.4%
Israel (ISL) 16.93 -0.6% +29.7%
Russia (TRF) 21.26 -1.1% +23.8%
USA (SPY) 129.04 -1.1% +23.2%
Canada (EWC) 31.32 -1.7% +23.2%
Lat.America (ILF) 50.35 -2.5% +22.4%
China (FXI) 43.28 -1.0% +14.5%
India (IFN) 29.35 -1.0% +13.6%
Japan (EWJ) 9.96 -1.0% +7.5%

Sector ETFs
Symbol Price
Oil Service (OIH) 147.18 -3.4% +59.4%
Basic Mat (IYM) 76.16 -1.5% +40.9%
Internet (HHH) 72.04 -1.5% +34.5%
Semis (PSI) 16.92 -0.8% +33.7%
Telecom (IYZ) 24.53 -1.1% +31.9%
Real Estate (IYR) 60.03 -1.4% +31.9%
Industrials (IYJ) 67.61 -0.8% +28.9%
Biotech (PBE) 22.16 -1.1% +26.7%
Big Pharma (PPH) 70.40 -0.4% +26.5%
Health Care (IYH) 72.63 -0.8% +25.7%
Transportation (IYT) 93.51 -1.3% +25.5%
Big Tech (QQQQ) 55.89 -0.8% +24.9%
Utilities (XLU) 33.04 -0.5% +22.6%
Consumer Svcs (IYC) 70.38 -1.2% +22.5%
Media (PBS) 14.58 -2.0% +21.7%
Retail (PMR) 20.09 -2.0% +21.4%
Water (PHO) 18.76 -1.3% +20.6%
Software (PSJ) 25.35 -1.2% +20.0%
Insurance (PIC) 16.31 -0.2% +19.0%
Defense (PPA) 19.49 -0.3% +17.1%
Construction (PKB) 12.82 -1.6% +14.2%
Financials (IYF) 54.90 -1.8% +9.1%
Alt. Energy (PBW) 8.96 -1.9% +6.0%
Nanotech (PXN) 8.82 -2.2% -1.2%

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