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Michael lombardi and critical warning number six

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Michael Lombardi, author of Profit Confidential has predicted five major economic events in the past ten years. As a continuation of the same, he has issued an alert to his readers through his recent article “Critical Warning Number 6” in which he has described the fragility of the economic scenario that is prevailing in the U.S. and advised how the common investor can still get the best through his investments despite the adversity of the current situation.

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Michael lombardi and critical warning number six

  1. 1. http://www.1realestateinvesting.com/michael-lombardi-and-critical-warning-number-six/Michael Lombardi and Critical Warning Number SixBy Michael Lombardi for real estate investing | Jan 16, 2013Michael Lombardi, author of many famous newsletters; “Profit Confidential” beingthe chief amongst them is the successful predictor of five major economic events inthe past. A brief summary of the same is as follows:In 2002, he advised his readers to invest in gold and related investments. At thattime $300 was the rate at which gold bullion sold. Michael invested all hisretirement money in gold. In 2006, he asked them to retreat from the housingmarket when he foresaw that the stocks of the new home builder stocks would dropin prices. At that time, people had never thought that the real estate prices woulddip low in the future. Michael also predicted that America would go into recession inlate 2007. This was long before the actual recession. In the fall of 2008, he directedhis readers to get out of stocks and in March 2009, Michael advised them to againinvest in stocks. All of Michael Lombardi’s five predictions came true and his wordsof advice started being looked upon with respect and appreciation.For the once- stock market-immature seventeen year old lad who had had to bearthe loss of half of his summer job savings of $2,000 to his maiden stock, this was amoment of truth. That he had not become embittered with his first failure withstocks and vowing never to lose money on stocks again, he had painstakingly takenefforts to gain good knowledge of this field - had proved to be a blessing. Withexhaustive research in the stock market; reading all accessible books associated withthe same and enrolling in every possible course that gave information about stocks,Michael left no stone unturned and success soon followed him in the form of profitswith invested stocks. He even launched a newsletter on the stock market.The scenario today is that of Michael, a seasoned stock market analyst and stockpicker whose recommendations have posted gains above 500% and who is the author
  2. 2. and publisher of 1000+ money-management and investment articles. He is an activeinvestor in real estate, art, precious metals and various businesses. He built apublishing house-Lombardi Publishing Corporation, which has over one millioncustomers in 141 countries. Successful stock-picking is Michael’s forte. With allthese credentials to back him, when Michael has issued his sixth prediction titled“Critical Warning Number Six”, it is but natural that his readers will take utmostinterest in what he wishes to convey. A short gist of the same is as follows:The U.S. today is in the midst of a number of problems. Its economic situation is notquite strong even with the quantitative easing rounds by the Federal Reserve inorder to ease its monetary condition. Many sectors have been hampered in theirgrowth to recovery. Although there is slight recovery in the housing market, it willbe quite some time before it recuperates completely. The consumer spending of theU.S. despite the festive season of November and December has not been very highand as this is a factor that aids the economic growth of a nation, it certainly presentsa cause for worry. Another reason for the lack of enthusiasm in spending is due tothe rate of unemployment and the number unemployed in the U.S. As compared tothe previous month, December 2012 saw no change in its rate of unemployment at7.8% as per the U.S. Bureau of Labor Statistics. This rate has been somewhatconstant since September. The number of unemployed persons too was 12.2 million,more or less the same since November. In addition, commodity prices are expected tobe volatile.The credit crisis in the euro zone has had long lasting effects on many of its nations.Still, it is a relief of sorts when the bond auctions in Spain and Ireland lookedsuccessful and the borrowing rates of the former nation saw a drop below fivepercent, while the latter had the satisfaction of investors returning due to a regain oftrust in it.The U.S. dollar is getting devalued with respect to other major currencies of theworld. It is mainly due to the Fed adopting the monetary easing and asset purchasesstrategy; the amount of which is nearly trillions of dollars; done with a view tosupport its economy and flow of capital money to the emerging nations.Consequently, it gave rise to liquidity and hence inflation.In the past, some American banks had automatically signed off on foreclosures andat that time they did not legally review the concerned documents. Consequently, dueto these Robo –signing acts, homes of innumerable Americans were seized. A fewdays ago, the U.S. banks have agreed to pay $8.5 billion as settlement charges forthese unlawful foreclosures. Though this could be a step towards elimination of hugepotential liabilities for the banks, there have been some complaints from consumeractivists that the settlement price by the regulators was very low.The estimates for the fourth quarter earnings of the banking sector have beenreduced from 15.9% to 8.7% which, as per FactSet, is considered to be the largestdecrease of the ten major corporate sectors.In 2011, the credit rating AAA of America was downgraded by the S&P. Presentlythe interest rates are near zero. But for how long will they so remain? A time will
  3. 3. certainly come when the nation will have to bow down to the pressures of theinternational bond market and hike the interest rates.The national debt of America is presently $16.44 trillion. The recent aversion of thefiscal cliff by a deal was nothing but a strategy to stall the frighteningly real cliffthat is just around the corner. With America losing out its once leading status in themanufacturing sector; with an astounding spending of $80.4 billion on food stampsby the U.S. in fiscal 2012; with the inflation increasing day by day and the U.S.dollar suffering a losing valuation, U.S. certainly is seeing its worst days ever. Still,the wise investor will find ways to protect his investments and secure himself for thefuture.

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