The Weekend Edition is pulled from the daily Stansberry Digest.
The Problem Is Bigger Than 'Soft Landing' or 'Hard Landing' By Corey McLaughlin
 Our founder Porter Stansberry wanted everyone who attended his free presentation on Tuesday morning to understand one thing...
"We're looking at two very different Americas today." Before he dug into today's markets, Porter shared a chart that illustrated that story. It highlighted the difference between what life feels like as a "political insider" – like U.S. Representative Nancy Pelosi or Federal Reserve Chair Jerome Powell – and what life feels like for most everyone else in the country. The chart showed how wages and productivity in the U.S. economy rose in tandem for decades. But about 50 years ago, the story changed. Longtime readers may know the date that marked a catalyst – August 15, 1971. That's when President Richard Nixon severed the tie between the U.S. dollar and its gold backing for good. We've described this point as the "day the dollar died"... Since then, inflation, driven chiefly by what Porter calls "disastrous monetary policy in our country over the last half a century" has eaten away at the once-healthy relationship between the value of a paycheck and real productivity. It has been easy to do with fiat currency. You see, too often, millions (and now trillions) of dollars have been created from nothing – like during the great financial crisis or, most recently, during the COVID-19 market panic – to benefit the political insiders in the "system." Meanwhile, these decisions have eaten away at the value of the dollar. So while certain folks in society have taken advantage of their positions to become wealthy, tens of millions of Americans are struggling to keep up with a rising cost of living. It really does feel like two Americas. The 40-year-high pace of inflation we've seen over the past few years has brought this dynamic to the forefront. But it has been happening for decades. Now, we're also seeing the consequences play out in an "accelerating cultural decline in America," as Porter said earlier this week... It's really simple. If people can't earn an honest wage by going to work and doing an honest job because all of those gains to productivity keep being printed away by the Federal Reserve, then they're not going to believe in the social contract that underlies the integrity of our country. Unfortunately, Porter doesn't see this dynamic changing... He's "hopeful" the country will return to "sensible monetary policy," but not "optimistic." As he said on Tuesday... I'm very worried that America is heading off a financial cliff. And mark my words, that's happening. And it's happening really fast. Last year's rescue of regional banks only widened the "two Americas" financial bubble. So has "reckless" government spending. The Congressional Budget Office projects the federal budget deficit will be $1.9 trillion for the 2024 fiscal year. Meanwhile, on Monday, total U.S. debt surpassed $35 trillion... That's partly because higher inflation (caused by stimulus and loose monetary policy) led to higher interest rates... which means higher interest payments on America's debt. Uncle Sam's deficit was more than $1 trillion in the first half of fiscal 2024, with $522 billion coming from interest paid on the debt. That's a rise of more than 30% from the same period in 2023. You can see the cycle at work. As Porter said... If our elected leaders continue to spend so recklessly and without any discussion in public at all about the threat of these debt levels, then it's possible that this train can run a lot further than anybody, including me, thinks. Every time a new dollar is created, the value of each existing dollar goes down. Yet stocks can keep pushing higher... and on it goes. Then, we have the Fed's latest move... The central bank is apparently getting closer to a rate cut... That's the story coming out of the Fed's two-day policy meeting, which wrapped up on Wednesday... and Powell's post-meeting press conference. As widely expected, the Fed kept its benchmark federal-funds rate range right where it has been for a year: between 5.25% and 5.5%. It's keeping "restrictive policy" in place, Powell said. But as usual, investors are more concerned about the future. The central bank seems like it's close to making a rate cut during its next policy meeting in September. As Powell said... We have made no decisions about future meetings, and that includes the September meeting. The broad sense of the Committee is that the economy is moving closer to the point at which it will be appropriate to reduce our policy rate. In that, we will be data-dependent but not data-point-dependent. So it will not be a question of responding specifically to one or two data releases. The question will be whether the totality of the data, the evolving outlook, and the balance of risks are consistent with rising confidence on inflation and maintaining a solid labor market. If that test is met, the reduction in our policy rate could be on the table as soon as the next meeting in September. In other words, the Fed isn't "there" yet. But investors should prepare for the return of some economic juice from the monetary powers that be... the kind we haven't seen since the early days of the COVID-19 pandemic through late 2021. Powell wants to stick the "soft landing"... Powell said the central bank is more concerned with the unemployment rate, which has been moving higher over the past few months, rather than inflation (with its headline measure at 2.5%) now. As he said during the press conference... We've had a really significant decline in inflation. Unemployment has remained low. This is a historically unusual and such a welcome outcome... What we're thinking about all the time is, "How do we keep this going?" He added that he thinks the bank's policy has been restrictive and that "lags" in monetary policy have yet to hit the economy. The Fed also sent some subtle signals about the future of rate cuts in its formal written policy announcement... Fed officials believe inflation is now "somewhat" elevated, compared to just plain "elevated" before. The bank also noted there has been "some" further progress on getting inflation to a 2% annual rate. It didn't say that earlier in the year. In one passage of its policy press release, the Fed also eliminated the word "inflation" from its previous statements in favor of "both sides of its dual mandate" – meaning maximum employment and stable prices – when referring to what features of the economy it's considering most. And during his press conference opening statement, Powell said... As the labor market has cooled and inflation has declined... [they] continue to move into better balance. The major U.S. indexes moved higher – at first – following the policy announcement. But that was followed by volatility... On Friday morning, the U.S. Bureau of Labor Statistics released the jobs report for July. The U.S. added 114,000 new jobs – much less than the 175,000 expected. The unemployment rate rose to 4.3%, up from 4.1% in June. The report also revised May and June's job gains lower. The market is less confident about the Fed's soft landing. We'll see if recession fears outweigh the hopes of rate cuts ahead. So... what can you do to fight all the nonsense in the market these days? How can you grow – and protect – your wealth when the U.S. dollar's erosion of long-term purchasing power seems inevitable? Porter has a few ideas. If you missed the debut of his free presentation earlier this week, be sure to check out the replay right here. You'll hear Porter's take on the state of the economy, and much more – including what he expects after the incredible run-up of Nvidia's (NVDA) stock... what he thinks about the artificial-intelligence boom... and why the market crash he predicted last year hasn't happened yet. He also describes what he believes is the "only game in town" to protect yourself from the risks he sees to your money... as well as "the most dangerous investment in America today." Don't miss it. Good investing, Corey McLaughlin
Editor's note: When investors were gripped by fear in March 2020, Porter predicted the market would bottom within 10 days. He was right... And seven of the stocks he recommended to buy that day have soared 100%-plus. Now, he's sharing an urgent message about the action we're seeing this year... Plus, he revealed the ONE simple change you need to make to your strategy immediately... and why it could dramatically transform your investing results – regardless of the Fed's next move. Watch his recent briefing here.
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