VRA Update... From Jamaica

We are at the WMI m3 Private Wealth Group in Jamaica this week. This is our 3rd m3, which are our International events, and we have also had 10 m2 Wealth Conferences, which are held domestically. 

This event is at the Ritz Carlton in Montego Bay, and as I write this I am sitting on our balcony overlooking the turquoise Caribbean waters...just breathtaking.

I began publishing the VRA in 2002, and in 2005 we formed Wealth Masters. Both companies exist for one reason; to empower people with the highest level of true knowledge and wealth accumulation strategies in existence. It is what my Co-Founder and partner Karl Bessey and I work on pretty much 24/7, and I cannot imagine doing anything else.  

The Chinese are famous for the quote "may you live in interesting times", and it is safe to say that these are certainly qualify as interesting times. More like upside down times. The world is awash in record levels of debt at all levels...government, corporate, and individual...yet the prescription is MORE debt. Clearly a recipe for catastrophe. It's like a train wreck in slow motion. Everyone can see it coming and it's impossible to take your eyes off of it.

And, more than ever before, it's becoming a world of the haves and have nots. The ultra wealthy and elite have the playbook in advance...their own crystal ball...and are busy preparing for the oncoming carnage. But what they are preparing for more than anything else is the resulting opportunity that presents itself during economic calamity. Because just as I'm certain that the water here will be turquoise again tomorrow morning, I am certain that the global economic crisis that began in 2008 is only in about the 2nd inning. Unfortunately...at least for 99% of the planet...the last 7 innings are going to be awful. 

Money backed by nothing cannot last. Corrupt government and financial markets cannot last. We know how the last chapter will read, the only question now is one of timing.

Market Update

While most stock markets are still down 10% in just the last month, last weeks rally raised the hopes of the bulls that maybe the worst is behind us. After all, 2nd quarter earnings are expected to be strong (at least for the largest companies) and historically this news has been positive for stock prices. The problem as I see it is that this rally is taking place on VERY light volume, and its also concentrated in only the biggest blue chips. Most stocks continue to tread water or continue in their decline. And while I would not be surprised to see earnings reports take the market a bit higher, if earnings fail to impress then the next big move will be sharply lower. Remember, the markets anticipate 6 months out. And in 6 months time, these are the news stories that I expect to see:

- Unemployment breaks 10% in the US by a considerable margin, with no reversal in site. Census workers are now unemployed (again), and with states laying off hundreds of thousands of workers in order to try and balance their budgets, the battle is being lost.

- Foreclosures reach record levels as the "shadow inventory" of 4 million homes finally hits the market, combined with fresh foreclosures of 3-5 million homes, brings the total for 2010/11 to nearly 10 million.   

- Europe declines into a severe double dip recession, which brings several well-known economists to begin forecasting a Global Depression for the first time.

These, and many more reasons, are why I believe the last half of 2010 will look very much like the last half of 2008...specifically the late 3rd and 4th quarters. If I am anywhere close to being correct, is there any scenario where you can imagine global stock prices rising? If nothing else, this is a great time to raise cash. In addition, the unintended consequences of untold trillions in freshly printed money worldwide, not to mention the 15 trillion+ in government loan guarantees and artificially low interest rates will bring on the next shock to the system...higher interest rates at the worst possible time. When lending begins to shut down completely worldwide (as is happening now throughout Europe) the competitive demand for fresh debt funding at all levels will lead us into global hyperinflation. This is the runaway freight train that few are talking about, at least publicly, but that everyone is scared to death of. 

Signing off from Jamaica....looking forward to seeing many of you this week!

Kip       

Here’s the bottom line. The bear market has returned in force and while financial manipulation from global central banks could stem the speed of the decline, make no mistake about it….2010 will likely go down in the history books as the year of the most shocking global financial collapse in history. 

Could the Federal Reserve, European Central Bank (ECB) and other central banks around the world prevent the coming collapse until 2011 or even 2012? While anything is possible, I assign odds of this at just 20%...this situation is just that grave. On top of this, the money is simply not there for “global financial system bail-out part 2”. The world is awash in tens of trillions in dramatically overpriced toxic debt and the smart money around the world smells blood. We have now entered a vicious negative news cycle which will look like 2008, but this time instead of simply having to deal with the subprime crisis and insolvent commercial and investment banks, the 2010 version of this financial Armageddon will bear down on the sovereign debts of every bankrupt entitlement country on the planet. Unfortunately, this includes every major country on the planet. And yes, this includes the US, Japan, China, every country in the euro zone, Eastern Europe and the UK. 

On Friday, while the US stock market was dropping over 300 points following a absolutely horrible unemployment report, our good ole granddad Warren Buffet was testi-lying before Congress, having been served a subpoena to appear. You would think that the Oracle of Omaha would have seen the financial tsunami headed our way back in 2007, but as he told our incredulous looking lawmakers, “I just missed it….I screwed up”. I guess losing $50 billion (45% of all assets under management at Berkshire Hathaway) in 9 months qualifies as at least a pretty decent screw-up. He went on to say that “I don’t think anyone really saw this coming”, which makes you wonder if he is entering the early stages of senility or simply learning the game of liars poker from his good buddies at Goldman Sachs (where Buffet has invested huge money) and Moody’s. Speaking of Moody’s, the ratings agency that Buffet owns, they also seemed to be a bit late figuring out that the largest housing bubble in the history of mankind was upon us. I began warning about the subprime crisis and coming debt meltdown in 2005, yet somehow one of the worlds premier ratings agency couldn’t get their arms wrapped around the problem until 2 months before the Lehman Brothers collapse in September of 2008, when they officially began downgrading the debt of subprime mortgages. They only missed the onset of the crisis by a full year….NICE call! Even today, Moody’s has Triple A ratings on the government debt of just about every bankrupt European country. I’m pretty certain that the 500 or so “world-class” economists that are on the payroll at Moody’s have sold their souls…which puts them in good company with Buffet and the criminal enterprise that is Goldman Sachs.   

The playbook for the rest of 2010 looks to be set. The debt and fiat currency collapse that began in 2008 will now transcend to massive global defaults of sovereign country debt. In the media you will hear of “coordinated monetary support” between all major countries, but these will be a mere smokescreen to reality. The dominos have begun to fall and the surprise of the collapse will be shocking, at least to most. 

Gold and silver are well on their way to being viewed as the only true currencies on the planet, so continue to buy coins and bars. Unfortunately, mining stocks are just that….stocks…and for the time being their shares will be hit as well. In the future these will be the very best of investments, but for now they will most likely go down in price with the overall stock market. The US is responsible for unleashing the exact toxic debt instruments, not to mention the corrupt to its core concept of central banks, that caused this financial disaster in the first place. Karma will get the last laugh here.

I know that much of what I have written here, and over the last couple of years, has been negative. I am an optimist at heart, and you should believe me when I tell you that it’s not easy for me to take these positions. But I am also a realist, and I believe deep down that we truly need to hit the reset button when it comes to government, corporate and human corruption. The free market system will eventually win out…it always does…which is why financial bubbles never last in the long run. 

Those that hold gold and silver….those that hold growth stocks with bright futures….those that make smart financial decisions…and those that learn to think on their own, will be the new wealthy in the years to come.  

 Kip                         

As of today, every economic and market indicator that I follow is flashing bright red. Europe is witnessing the beginning of the end of their common currency, the Euro. This currency collapse will bring trillions in new bank losses globally, and cause economic devastation throughout the continent.

In the United States, trillions in taxpayer funded bailouts have done little to get the economy on its feet again, and in hindsight will be shown to have done nothing more than contribute greatly to our more than $100 trillion in total debt. Debt that cannot, and will never be repaid.

This is it. We are officially crossing the line that we have warned about since the inception of WMI in 2005. To most, events in the world economy will now begin to unfold in seemingly uncontrollable fashion. Clueless governments still don’t understand that it was their ruinous actions that created a credit infested, fiat currency based, bankrupt world. They didn’t learn this lesson from their mistakes of the 1930’s and now it’s too late to prevent a similar lost decade this time. Trust me, they will continue to prescribe the same remedy that caused the problem in the first place, specifically more government bailouts and more printed money. The consequences are clear; we will soon see hyperinflation, economic crisis, and in many parts of the world, social unrest…similar to what we are seeing in Greece and Thailand today.

Never in history has the world been in a situation when virtually all industrialized countries are bankrupt at the same time. And many feel that because there is really no precedent for what will happen in the next few years, that our future can only look bleak, and possibly even frightening.

Were I still stuck in my old Wall Street mindset, I might share in this dark and pessimistic view. Sure, I am concerned about what is headed our way, and I am extremely concerned for those that remain unprepared. However, there is a big flip side to this coin. You see, it is times just like these where massive wealth is created. For many this concept may be difficult to comprehend, but economic upheaval brings with it a new beginning, and through this new beginning, untold opportunities to build generational wealth. Many of you have heard me state the fact that “more wealth was created coming out of the Great Depression than existed before it began”. But how can this be? Doesn’t money just disappear when the stock market…and the real estate market…and the currency markets… collapse?

And this is where the most important point I can make comes into play. Energy and money share an absolutely similar trait. Like energy, money never disappears. And, just as energy “transfers” throughout the universe, money “changes hands” as it moves from the ill-informed to the well-informed.

And this is the purpose of my update to you today. The economic uncertainty unfolding will cause many to be scared and unsure of what their future holds. And while some of you reading this may go through periods where you share those same concerns, the most important thing you can do is to maintain a laser like focus on the opportunities that exist all around you. You see, entrepreneurs and independent thinkers will be the biggest winners of all in the years to come.  And, when combined with your WMI education and your connection to our community of like-minded visionaries, you will find that everything you need… you actually already possess.

Your friend,

Kip



I'm sure that many of you could care less about what is happening 5000 miles away, and might find my updates and warnings over the last year or so about Greece boring and insignificant. But what if I told you that your tax dollars are now going to bail Greece out, and that in the coming days and weeks, it will not just be Greece, but that your tax dollars will also go towards bailing out Portugal and Spain, and ultimately the entire Eurozone as well?

I probably have your attention now....because this is exactly what just happening. Whether you live in the US, Canada, Norway, Australia, or another country that contributes to the IMF (International Monetary Fund) you just contributed to the $144 billion bailout of Greece. This deal should be called "Fleece" because markets around the world woke up to the fact that not only will $144 billion not be enough, but that the European Union (EU) just used all of the borrowing capacity that they had on a single country with just 11 million people.

Here is the only fact that you need to know, when it comes to the problem that Greece faces today. After the bailout was announced over the weekend, interest rates on 2 year Greek debt dropped from 14% to under 10%. This was a somewhat encouraging sign that the bailout might just work to restore the confidence of the many lenders that will be needed to continue to fund this tiny, but economically important and insolvent country. So, where are the rates on that same 2 year debt just 24 hours later? BACK TO 14% PLUS!

Thats right folks. 2 year debt is still at a 14% interest rate AFTER a $144 billion bailout!

And here's why. It did not take long for people to figure out that this incredibly huge sum of money would only paper over the problem in Greece for 12 months. Thats it....12 months. The EU was hoping that the bailout would work a miracle, but instead, they once again have to deal with pawn-shop like interest rates...and on short term government debt no less!      

This is why I have been saying that Greece is the canary in the coal mine. And it will soon become 2010's version of the Bear Stearns implosion, as well as the subprime crisis that started the worst global economic collapse since the 1930's. And, this is ultimately why bailouts never work. Sure, lots of supposedly smart people think that the worst is behind us. Soon, we will see what their answer will be to the implosion of the Euro, and along with it, the next stage of the Greatest Depression. 

I implore everyone reading this to remain as debt free as possible, and to sell all long term government, corporate and municipal debt that you own (as investments). Also, make sure and limit your exposure to real estate if it is heavily burdened down by debt. In addition, keep less than 10% of your assets in the "equity"  markets (in investments such as mutual funds and 401k's, etc). Instead, move those dollars to the "cash" or "short term money market options" in these types of investments. It is highly likely that we have reached the end of the bear market rally that began in March 2009, and that before its all over we will see the Dow Jones below 5000.  

And finally, make sure that you own precious metals....gold and silver. In 2003, when gold was under $300/ounce,  I wrote "when gold and silver really begin to explode in price, it will be because they are viewed as currencies instead of commodities". And while its anyones guess exactly when that might happen, the situation in Greece, and throughout the largest countries in Europe, tells me that 2010 is the most likely year. Gold might look expensive at $1160/ounce...but it's actually over $1000/ounce below it's inflation adjusted highs.       

Kip     

Wealth Masters International (WMI) opened up its 2010 World Tour in Oslo, Norway to a packed house of 367 excited Scandinavians (citizens of Norway, Sweden, Denmark and Finland)!

Attendees braved the snowy, frigid Norwegian air to hear the WMI story at the historic and classically European Edderkoppen theatre. Among this group were over 150 existing WMI Members and Consultants, along with scores of interested entrepreneurs, each eager to learn about WMI’s host of financial, health and personal empowerment solutions.

Conducted by WMI’s CEO and Co-Founder, Kip Herriage, the event served as a full-on business demonstration of Wealth Masters’ diverse product suite. The day included a screening of WMI’s powerful documentary, “The Conspiracy Against Your Money”. Event Coordinator, and Norway’s very first WMI Consultant, Per Gunnar Hoem offers perspective; “Kip got right down to business and started off the day with a bang! The crowd was electric and the momentum never seemed to die. They knew right from the beginning how these products could benefit them and their families.”

Throughout the day-long event attendees were introduced to WMI’s inventory of world class solutions designed to educate and empower users through wealth, health, and wisdom, while also offering our unmatched entrepreneurial opportunity. Over the next two days, participants were invited back for personal sessions with Kip, Per Gunnar and his incredible team of Scandinavian leaders. “When Karl and I founded Wealth Masters we knew we wanted to deliver a truly International impact. Since that time the worldwide response has been massive and we are resolute in our commitment to supporting it by any means necessary,” said Kip.

WMI Opens Our First European Office

To service the growing Scandinavian Member base WMI also announced the launch of a dedicated office in Norway scheduled to open in March. The office will be staffed and managed by WMI Consultants and recognized financial experts throughout Norway. Wealth Masters will now continue its 2010 World Tour with appearances in Australia this week and Canada in early March.

As the global economic outlook becomes increasingly uncertain, individuals across the globe continue to turn to Wealth Masters International for guidance. The Company looks forward to seeing you at one of our International events in 2010 and beyond!