A major Jubilee is coming to America... soon. Lots of people will be excited about this once-in-50-years event. The crowds will cheer. And politicians will promise new and better prosperity. But what will actually happen is a national nightmare. Americans are suffocating from overwhelming student-loan, auto, and credit-card debts. Meanwhile, wages have remained stagnant (or fallen) compared with inflation. Low-income households don't have the funds to service the money they owe. And politicians will never allow tens of millions of our poorest citizens to go bankrupt. There's only one way out: a chaotic and potentially violent financial revolution. We're already seeing the early signs that this uprising is underway – race riots… violent protests… radicalized politics like the alt-right and "Black Lives Matter" movements… As in any crisis, the wealthy will make a fortune. But for many, it will mean huge losses. All your hard-earned savings could be wiped out. That's why Porter Stansberry wrote The American Jubilee. In it, he explains how this shocking event is likely to play out... how it will affect you and your money... and most important, a few simple, but crucial steps you can take now to not only survive – but prosper – as it unfolds. The Jubilee is coming. And you'd better get ready for it.
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Published by Stansberry Research Edited by Fawn Gwynallen Designed by Lauren Thorsen Copyright 2019 by Stansberry Research. All rights reserved. No part of this book may be reproduced, scanned, or distributed in any printed or electronic form without permission.
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About Stansberry Research
Founded in 1999 and based out of Baltimore, Maryland, Stansberry Research is the largest independent source of financial insight in the world. It delivers unbiased investment advice to self-directed investors seeking an edge in a wide variety of sectors and market conditions. Stansberry Research has nearly two dozen analysts and researchers – including former hedge-fund managers and buy-side financial experts. They produce a steady stream of timely research on value investing, income generation, resources, biotech, financials, short- selling, macroeconomic analysis, options trading, and more. The company’s unrelenting and uncompromised insight has made it one of the most respected and sought-after research organizations in the financial sector. It has nearly 200 employees operating in several offices in the U.S. plus one in Asia, and it serves 350,000 customers in more than 120 countries.
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About the Author
Porter Stansberry founded Stansberry Research in 1999 with the firm’s flagship newsletter, Stansberry’s Investment Advisory . He is also the co- host of Stansberry Investor Hour , a broadcast that has quickly become one of the most popular online financial radio shows.
Prior to launching Stansberry Research, Porter was the first American editor of the Fleet Street Letter , the world’s oldest English- language financial newsletter. Today, Porter is well-known for doing some of the most important – and often controversial – work in the financial advisory business. His string of accurate forecasts has made Stansberry’s Investment Advisory one of the most widely read financial newsletters in the world, and has helped his readers both avoid catastrophe and make incredible gains. For example, his dead-on prediction of the mortgage meltdown got the attention of Barron’s, who said Porter’s work was “remarkably prescient... Nothing, as far as we can see, has happened to contradict his dire prophecy...” At Stansberry Research, Porter oversees more than a dozen of the best editors and analysts in the business, who do an exhaustive amount of real-world, independent research. Together, his group has visited hundreds of publicly traded companies to bring Stansberry Research subscribers the safest, most profitable investment ideas in the world, no matter what’s happening in the markets.
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– Introduction –
A major Jubilee is coming to America... soon.
Lots of people will be excited about this once-in-50-years event. The crowds will cheer. And politicians will promise new and better prosperity.
But what will actually happen is a national nightmare.
Americans are suffocating from overwhelming student-loan, auto, and credit-card debts. Meanwhile, wages have remained stagnant (or fallen) compared with inflation. Low-income households don’t have the funds to service the money they owe. And politicians will never allow tens of millions of our poorest citizens to go bankrupt. There’s only one way out: a chaotic and potentially violent financial revolution. We’re already seeing the early signs that this uprising is underway – race riots... violent protests... radicalized politics like the alt-right and Black Lives Matter movements... As in any crisis, the wealthy will make a fortune. But for many, it will mean huge losses. All your hard-earned savings could be wiped out. What’s coming next in our country will be a lot worse than the tech crash. It will be a lot worse than the mortgage crisis. No matter how sound your financial footing, this is the most important issue facing you and your money today . That’s why Porter Stansberry wrote The American Jubilee .
This book explains in great detail how we got to where we are today.
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It explains the history of financial Jubilees in America and elsewhere around the world. And most importantly, it explains everything you need to know and what to do to prepare for the first Jubilee in our country in nearly 50 years. But Keep in Mind… What you’re about to read here is only a sample of The American Jubilee . The full picture is so complex, it took us nearly 300 pages to discuss. And even that wasn’t enough. You see, this is an ever-evolving story. And Porter wants to do more than just give you a summary of the major financial and social crisis facing America today. So he also wrote a letter designed to keep you updated each step of the way… As you’ll see, huge losses are coming. Economists know it. Most of the senior leaders in Washington know it too. But what can our leaders do? The crowds are only going to get angrier and more violent. A Jubilee that wipes out the debts of millions of the working poor and resets the financial system is the only answer. Get the facts for yourself. Learn what you can do now by reading Porter’s letter and accessing his complete book on The American Jubilee here. The Jubilee is coming. And you’d better get ready for it .
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Part I
What Is the American Debt Jubilee?
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– Chapter 1 –
A Major Jubilee Is Coming to America
If you study American history, you’ll see that Debt Jubilees occur only in a unique type of extreme political environment.
After all, a Jubilee is a radical measure.
The government essentially steals money from one group and hands it to another.
In order for this to occur, four elements must be in place…
1. The wealth gap must be getting dramatically bigger. 2. There must be cultural threats from those with different values or from outsiders (in other words, minority populations and immigrants). 3. The government must be ineffective at providing solutions. 4. And there must be growing anger toward the “elites . ”
Sounds familiar, doesn’t it?
We have the largest gap ever between the rich and poor...
We have huge increases in violent protests about immigration and race...
We have a completely ineffective government...
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And we have extreme animosity toward the “elites” from both the left and right.
Check... check... check... and check.
There’s actually a name for this type of political and social phenomenon. It’s called “Populism.” And it emerges every 30 to 40 years. Populist movements are characterized by extreme anger at the government, at the wealthy, at the establishments, and at “newcomers” and minorities. As the director of an Alabama group that tracks violence and hate crimes around the country told Newsweek in June 2017: “There has been a massive explosion of violence across the country.” The hatred and anger is like nothing I’ve witnessed in my lifetime. And it’s coming from all sides. A member of my staff went to a book reading in Baltimore by one of the most famous left-wing authors in the country. The author told the crowd that he wished he could go back in time and smother Donald Trump in his crib as a baby... or convince Trump’s mother to have an abortion. From the protests and marches... to the refusals to stand during the national anthem... From Black Lives Matter to the anti-immigration movements... to the rejuvenation of White Supremacists... to the tripling of membership in the Democratic Socialists of America. It’s clear we are in the middle of an extreme “Populist” period in America . Ray Dalio, one of the richest men in America, studied the political environments of the past 100 years and concluded in March 2017… I’m sure you’ve seen this yourself. This epitomizes the political and social environment in America today.
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The last time that it [Populism] existed as a major force in the world was in the 1930s, when most countries became Populist. Over the last year, it has again emerged as a major force. Look at this chart. The big spikes show when Populist politicians got the most votes in America and abroad...
EXTREME RISE OF POPULIST MOVEMENTS IN AMERICA
10% 15% 20% 25% 45% 35% 40% 30%
Now at highest level since 1930s
WWII
0% 5%
1900 1910 1920
1970 1940 1950 1960 1980 1990 2000
2010
1930
www.stansberryresearch.com
Source: Bridgewater Associates, LP
So what does this all mean?
It proves that what we’re experiencing today is eerily similar to what happened in the 1930s… right before the biggest and most radical Debt Jubilee in American history.
The economic comparison is stunning.
Interest rates hit zero leading up to each of these periods...
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SHORT-TERM INTEREST RATES HIT ZERO
20%
15%
10%
5%
0%
1955
1925 1935 1945
1995 1965 1975 1985 2005
2015
www.stansberryresearch.com
Source: Bridgewater Associates, LP
The government went into mega money-printing mode during both periods...
MONEY PRINTING STARTS DELEVERAGING
24%
20%
16%
12%
8%
4%
0%
1925 1935 1945
1995 1965 1975 1985 2005
2015
1955
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Source: Bridgewater Associates, LP
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Printing money caused the stock market and other risky assets to boom during both periods... boosting the wealth of the rich, but doing nothing for the poor...
During the 1930s, just like today, the wealthy acquired a much higher than normal percentage of our nation’s wealth...
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INCOME SHARE OF RICHEST 10%
55%
50%
45%
40%
35%
30%
1960
1900
1920
1940
1980
2000
2020
www.stansberryresearch.com
Source: Bridgewater Associates, LP
And in both the 1930s and today, the percentage of the population who were foreign born was higher than normal... causing animosity among the “common man.”
FOREIGN-BORN POPULATION SPIKES
16%
14%
12%
10%
8%
6%
4%
1900
1920
1980
2000
1940
2020
1960
www.stansberryresearch.com
Source: Bridgewater Associates, LP
Just like today, the economic conditions of the 1930s caused extreme income inequality.
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Back then, the top 10% earned 45% of all income (compared with 50% today) and owned 85% of the wealth (compared with 75% today).
Even the political characters are the same...
The 1930s saw a popular socialist presidential candidate just like we had in 2016. Huey Long was a former governor of Louisiana and a U.S. senator. He proposed an income cap at $1 million... a 30-hour federal work week... and 100% income taxes at the highest level. Long even established 27,000 “Share Our Wealth” clubs around the country and had a radio show that was listened to by one in five Americans. So where did this all lead? It led to America’s most dramatic Debt Jubilee to date... How Americans Lost 69% of Their Savings In 1933 – in order to deal with mounting debts and print money to pay for dozens of new social programs – President Roosevelt made two extraordinary changes to the financial system. First, he closed banks for four days and forced Americans to turn in each ounce of gold they owned for $20.67 in paper money. Then the government raised the price of gold, wiping out 69% of the savings of anyone who followed these rules.
You’re probably familiar with that part of the story.
But that was only the beginning...
Roosevelt also eliminated the “Gold Clause” in all contracts, including loans, bonds, and other financial instruments. You see, at the time, people were worried the government might inflate away the value of their money. So they added a Gold Clause, which said repayments could be required to be made in gold.
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These Gold Clauses were not in federal loans, bank deposits, insurance contracts, and other private agreements. When Roosevelt outlawed the Gold Clause, he stole billions from investors. In fact, a Harvard paper estimates this rule took $700 million a year from private investors who bought government bonds. Billions more were stolen from folks who lost money from the elimination of the Gold Clause in private contracts, bank accounts, and insurance deals. Eliminating the Gold Clause was so controversial, investors sued the government. The case went to the Supreme Court. Roosevelt was terrified his Debt Jubilee would be overturned. He even drafted a speech saying he would ignore the court if it ruled against him. But his political pressure worked, and the court ruled 5-4 in Roosevelt’s favor. Tens of millions of Americans lost massive amounts of their savings . And after booming, the stock market soon fell 50% in a single year . Investor confidence was crushed. Supreme Court Justice Harlan Fiske Stone vowed he would never buy another federal bond. Starting in the late 1960s, we saw another Populist uprising... a combination of economic and social upheaval. If you’re old enough to remember, think about the anger and resentment of the 1960s. The Black Panthers’ slogan was: “Power to the People.” The idols of the day were people like Latin-American guerrilla leader Che Guevara, Malcolm X, and Muhammad Ali. Of course, there were consequences... We had another Debt Jubilee in America about 40 years later...
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All over the country, there was one clash after another...
Small farmers fought banks and railroads... union workers battled their bosses and federal judges. On college campuses, students fought anyone with authority. Election rallies routinely ended in violence. Things were so bad, Lyndon Johnson decided not to run for re-election. Martin Luther King, Jr. and Robert Kennedy were assassinated. In 1968 alone, there were violent uprisings in more than 120 U.S. cities. A few miles from where my company is headquartered today, thousands of National Guard troops and 500 state police officers were brought in to quell the violence and looting. The government had borrowed extraordinary sums, and we were having a hard time repaying creditors. That’s because at the time, every dollar was required to be backed by $0.25 worth of gold. So the government couldn’t print unlimited amounts of money out of thin air. Also, foreign creditors who owned U.S. government bonds were allowed to collect repayments in gold bullion instead of dollars... so our gold reserves were quickly disappearing. Get this: Between 1958 to 1968, 52% of America’s gold reserves left the country in the form of repayments for our debts. The government was scared. It knew there was only one way out... another Debt Jubilee. At the same time, a major financial crisis was brewing...
First, we eliminated the 25% gold backing of every dollar.
Then, in 1971, President Nixon completely defaulted on our promise to pay gold for dollars to our foreign creditors. Once again, the government simply wiped the slate clean .
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No one could redeem dollars for gold any longer.
This allowed the Fed to print as much money as it needed to make payments on our debts.
But once again, there were consequences...
In the 1970s, the U.S. dollar lost 30% of its value over a several-year period. Inflation more than doubled. And the stock market fell 48% in less than two years. Unemployment was around 10%. And, believe it or not, the Federal government got so desperate that it issued “Carter Bonds” denominated in Swiss francs because the U.S. dollar could no longer be trusted . That brings us to today .
Once again, the stage is set for America’s next Debt Jubilee.
We are living in a world of two different Americas. For the wealthiest 40% of the population, life is good. Asset prices are rising... and wages are finally starting to increase.
For everyone else, life is getting worse...
For the bottom 60% of America, consumer debt is high and wages are stagnant. Most of these folks would have difficulty raising even a few hundred dollars for an emergency. These folks have less than $20,000 on average saved for retirement. Physical and mental health is deteriorating. And death rates are soaring. Premature deaths are up by 20% since 2000.
As Bridgewater Associates wrote in a 2017 report…
The biggest contributors to that change are an increase in deaths by drugs/poisoning (up two times since 2000) and an increase in suicides (up over 50% since 2000).
That is the definition of hopelessness.
And it’s why the inevitable Jubilee in America is already underway…
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The concept of a Jubilee comes from the Bible (The Old Testament), the Book of Leviticus, Chapter 25. A Jubilee in the Jewish tradition was said to occur roughly every 50 years. It was a time for total forgiveness of debt and the freeing of slaves. Pope Boniface VIII proclaimed the first Christian Jubilee in 1300. And rulers throughout history have occasionally used a Jubilee to reset the financial system – especially when the poorest citizens are threatening revolt. Today, the vast majority of America is in bad shape. And the poorest citizens are calling for a radical solution… But this Jubilee will be different from the 1933 and 1971 ones we’ve discussed. The federal government is free to print all the money it needs to pay government debts. Private households are different. The only ways out of private debt are to pay it, to default, or to have it forgiven with a Debt Jubilee. Today, America’s low-income households don’t have the funds to service the money they owe. It’s mathematically impossible. And politicians will never allow tens of millions of our poorest citizens to go bankrupt. It will be similar to the one that took place in 1841 in America... Back then, the laws were temporarily changed, so debtors could be discharged of their debts – without the consent of the creditors. Over a period of 13 months, more than 40,000 people wiped away their debts before the act was rescinded. So the only solution left is a Debt Jubilee.
Today, it will be tens of millions of people and trillions of dollars.
And once again, there will be consequences...
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Millions of investors, pensioners, insurance customers, and creditors will lose a fortune . Stocks will collapse . Dozens of companies will go bankrupt .
I’m not saying this to scare you. This is simply the reality we face.
In this book, we’ll walk you through the critical information you need to know to keep your money safe during the next Debt Jubilee. We’ll look at the main investments you should own and the ones you should avoid. We’ll discuss the largest part of wealth that most Americans overlook – but that could prevent your entire retirement nest egg from disappearing. And we’ll share our crash course on how to become a better investor in the process. The Jubilee is already starting. Protect your financial accounts. Get out of the common investments that are most likely to get crushed. Focus on ways to profit while everyone else loses their shirt.
And learn all you can about the corruptions destroying America…
Don’t hesitate. Claim your own copy of The American Jubilee here.
This is the first step to protecting your life savings from the greatest Debt Jubilee in American history. Congratulations on getting started today.
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