A special message 
from Bill Bonner

San Martín, Argentina

April 2020

Dear Reader,

We are facing an unprecedented challenge.

** A lethal virus has struck the world… One Federal Reserve governor warns that US GDP could be cut in half – worse than the Great Depression. But there’s a deeper story here… one that needs to be told. Why are Treasury bonds suddenly going down… when they should be going up? Why is cash suddenly becoming so scarce when the Fed is supplying hundreds of billions of dollars every week?

** Stocks are down 30%… with wild price gyrations… is the bottom in? Is there more damage to come?

** Corporate bonds – some $16 trillion worth – face a meltdown… Will some of the biggest businesses in America be forced to default? Is a “Lehman moment” coming soon?

** Governments have begun inflating (printing new money) on a scale never before seen. What will that mean? Will consumer prices soon “take off”?

Just take a look at this chart. Do you see what I see?

That line on the right is not the right axis. It’s a jolt of chaos…this is a market in crisis.

The Fed adds money. And still prices go down. It is the most dangerous… and potentially profitable… market we’ve ever seen.

Nothing like this has come along before. Most likely nothing will again as long as we live.

No one can seem to agree on where it’s headed… so recently I set out to get some solid answers.

And to bring you those answers, I’ve brought together some of the best minds I can find…

These are men who predicted exactly the situation we are now in…

…who understand how it all works…

…and who are now showing their readers how to make (or preserve) money, rather than lose it, in the midst of what could become the worst crisis in American capitalism in history.

Just look at this chart. It shows – beyond doubt – that it is possible to make money even in the most savage sell-off America has ever seen:

That’s the kind of investment we want to own!

I’ll introduce our experts in a moment. But let me first describe the point of this exercise.

I brought together these experts to prepare a Situation Report… similar to the intelligence briefing the president of the US receives every day.

And I believe these dossiers are the most important we’ve ever issued.

Don’t be fooled by 
market upswings

First, I need to warn you. As the old-timers say on Wall Street, “Mr. Market is a Trickster.” He draws as many people as possible into his trap. And then it springs shut.

Then, to make sure he captures as much “dumb money” as possible, he pretends to back off… so stock prices rise. People say, “Buy the dip”… “The worst is over”… ”It’s back to normal.”

Then, he attacks again.

That’s the way it went in 1929-1932… in 2000-2002… and in 2008-2009. After the ’29 Crash, for example, the bottom didn’t come until three years later.

You can see that in this chart:

The lesson? Here’s how the old-timers put it:

Never try to catch a falling knife.

And here’s something else that is very important:

This is not a repeat 
of 2000… or 2008.

Both of those were financial crises. Money got tight. Credit got scarce. So the government simply flooded our country with more money and cheaper credit.

This time, it’s different.

By the time this started, the government was already lending money at less than zero… and flooding the economy with vast sums of new money. Yet, that didn’t stop the biggest sell-off in history…

All over the world, businesses have stopped doing business. Consumers have stopped consuming. Wage earners have stopped earning wages. And taxpayers have stopped paying taxes.

The government can say they are delaying the tax deadline… but it’s not out of the kindness of their hearts… it’s because they don’t want to stoke mass panic when everyone realizes there’s no money left to pay those taxes with.

What we’re looking at is far more serious than the crisis of ’08-’09.

That’s what our small panel of experts spell out in these reports I want to send you: the what… why… how… and when of the present crisis. What’s going on… and what it means.

They’re going to tell you – specifically – what’s happening and what you need to do about it… right now.

Let me tell you about 
this unique group

I can’t reveal their names. People pay thousands of dollars for their advice and financial management; they don’t want to appear to be giving it away for free.

The first thing to understand is that they come from very different places. One is an Australian… carefully watching the boom, boom, booming Australian market for years… but with a sharp eye on New York and Washington too…

His book, A Parent’s Gift of Knowledge, which is all about the passing of investing intelligence from father to daughter, is what caught my eye some 10 years ago.

Is now the time to refinance your home? How much cash do you need to “tide you over” through this rough patch? He has the answers… after a lifetime of study.

Another member of our team is based in London. He’s one of the sharpest macro-investment thinkers I’ve ever met.

Until recently, he was director of investment for a wealth management company which looked after £1.5 billion of clients’ money.

He’s one of us. When the 2008 crisis struck, the London stock market got cut in half. I was there at the time. I saw investors ready to slit their wrists. But not his clients; they were among the few to survive with their wealth intact…

One other member of the group deserves a special introduction. His grandfather was president of Barclays, one of the world’s biggest banks at the time. His father followed the banking tradition. And so did he… analyzing risk for Citigroup in London… where his traders were handling trillions of dollars’ worth of positions.

You might say “finance” is in his blood.

But in 2018, he made an important move. When the Fed stopped “normalizing” its finances, he saw the writing on the wall and moved 100% of his money to gold.

Bold? Definitely. Crazy? A lot of people thought so at the time. But it doesn’t look so crazy now. In fact, it looks inspired.

Here’s what he avoided:

Since the S&P 500 peaked on 2/19/2020…

• Norwegian Cruise Line is down 69%
• Royal Caribbean International is down 63%
• Carnival Cruise Line is down 59%
• MGM Resorts is down 58%
• Marathon Petroleum is down 59%
• Las Vegas Sands is down 30%
• Boeing is down 46%
• United Airlines is down 55%
• Citigroup is down 41%

• Hilton Worldwide is down 35%
• ExxonMobil is down 36%
• Ford is down 35%
• Starbucks is down 22%
• Best Buy is down 31%
• Disney is down 25%
• Goldman Sachs is down 30%
• JPMorgan Chase is down 29%
• Union Pacific is down 22%
• McDonald’s is down 22%

He spared himself all those losses… and slept like a baby! Not only that, he took his family on an 18-month round-the-world odyssey… as if he hadn’t a care in the world.

And now his next move is a bombshell…

He’s protected himself from the big sell-off (more to come… he says) and gotten richer in the market meltdown…

He’s protected his family in a completely original version of social distancing… (I’ll let him tell you about that himself in his report…)

And now he’s finding ways to make big profits by anticipating the Fed’s next moves.

“This phase won’t last forever,” he says. “And now people are panicking. There are investments available now – in mining, oil, and transportation – that we never would have dreamed of a few months ago.”

Getting in Front of the Fed

There is big money to be made by knowing what the Fed’s response will be. In all modesty, our team has that nailed. Cold.

Nothing in the Fed’s response so far has surprised any of us. Every member of the team saw it coming. That’s why I selected them for this project.

And we can guarantee that the government bailouts will benefit some industries… and some investments… and some people — hugely.

On the other hand, there are some things – corporate bonds! – that are going to be wiped out. Erased from the face of the Earth.

The point is, there is big money to be made by simply putting your investments on the right side of the biggest financial event in history – the attempted bailout of the entire US economy.

The big money, over the last three decades, has been made by anticipating the actions of the Fed. That is, the serious players figured out that the Fed had to support the bond market by lowering interest rates and buying bonds. So, they bought them first and made billions in profits.

Now is an opportunity for you to get in front of the Fed too. We know what the Fed MUST do. And it will mean a huge turnaround. If you’re on the wrong side of this flip-flop, you’re going to lose and lose big.

But you don’t have to be. Instead, this is one time when ordinary investors and even homeowners can play the Fed, too.

Once-in-a-Lifetime Bargains

There is also a lot of money to be made by “bottom fishing.” That is, there are some very weak companies that have destroyed their own balance sheets because of too much borrowing… too many share buybacks… too many bad acquisitions financed by cheap money. Boeing. GE. Occidental Petroleum. Big hotel chains. Airlines…

Some of these companies are NEVER coming back. Never. They dug their own graves during the boom years. Stay away.

But there are other companies that made the right decisions… carefully holding onto their profits… and investing wisely to build their businesses. They’re not going away. They’re not going broke. They’re just hunkering down until the storm blows over.

Want to know how to find these firms? Just run these “screens.”

• Market cap greater than $150 million (just to strain out the micro-caps)
• Price-to-earnings ratio greater than 1 (gets rid of the companies losing money)
• Price-to-tangible book ratio less than 1
• Debt-to-equity not to exceed 0.30 (gets rid of heavily indebted companies)

These will be the best stocks to buy… especially when this deflationary phase bottoms out.

They’ll be selling for a fraction of what they cost a few months ago. Because a bear market takes down ALL stocks… not just the bad ones. Just as most investors didn’t know what to buy during the boom… they don’t know what to sell during the bust. Read full article here