The sobering news these days is that it’s a race to see which of the numerous ridiculously high-flying asset bubbles in the world will pop first. Consider the prescient words of CEO and Cofounder Gran Strajnar of Brave New Coin (the digital currency data provider) who just this past week warned:
“The world is full of cheap or free credit. There are asset bubbles everywhere from property to retail to bonds. Lots of cheap credit is looking for new safe havens to move into and digital assets are an attractive new asset class. The volatility really doesn’t matter as demand greatly outstrips supply.”
Strajnar raises many insightful and predictive points you should pay close attention to with these words. In one quote, he has hit on the greatest danger facing your retirement portfolio today. There are not one, but many asset bubbles threatening the financial markets now. He gives four examples here.
Consider a recent joke I read that is so truth— 1999 called, it wants its stock bubble back. Yes, the stock market makes new highs all the time anymore. Just like back in the early 2000’s few investors and even analysts believe that the markets can not go up forever.
They are massively overvalued given not only their current and forward price to earnings ratios, but also considering the many troubling geopolitical problems facing the world. Practically every Western government is so overextended as to be bankrupt in all but name. Companies in the U.S. are saddled with enormous debts which they can not hope to repay.
Look at Netfix, a classic example of the last major stock market bubble from the heady days of the first Internet boom in the 1990s all over again. Consumers love the service, yet investors should find it a laughing stock. The company is bleeding out cash horrifically. It has not enjoyed a quarter of positive free cash flow for over five years, since 2011.
Netflix’s losses of operating cash flow have increased by over two-fold from 2015 to 2016, exploding from minus $750 million to negative $1.5 billion. This year 2017 does not look any better. They are on track to experience their worst loss ever this very year.
Has the stock been punished for this abysmal performance as a reasonable person might expect? Quite the opposite is true. Since the conclusion of year 2015, Netflix stock value has risen over 40 percent! What is the justification for this? The subscriber base has risen from 74 million people by year end 2015 to 99 million nowadays.
Netflix continues to prove with every new subscribing user it gains, it loses still more money. The Wall Street fanatics have decided they will somehow make up for their losses in volume. It reminds you of the old Internet tech bubble joke from the 1990s, “We lose money on every sale, yet we will make up for it in volume.” Those turned out to be famous last words.
Is Your Retirement Portfolio Protected by Gold Against The Collapse of Asset Bubbles?
As Gran Strajnar warned earlier, retail stocks are only one example of bubbles waiting to ambush your portfolio. There are also property bubbles, sovereign and corporate bond bubbles, and digital asset bubbles. Eventually companies have to earn profits. Companies and governments have to balance their budgets. Otherwise your company, sovereign bond, or government eventually goes bankrupt. The only question is will it be sooner or later?
No creative numbers or financial fiction will continue forever. This is always the case as history has proven, whether the actors are loss-making companies or sovereign governments bleeding out trillions in dollars. In the coming bursting of various asset bubbles, it will not matter which one explodes violently first if you have the greatest safe haven in the history of the world on your side. Gold will sustain your retirement accounts when all else fails, just as it has for the last over 5,000 years. By clicking here now you can obtain a completely no-cost, no-obligation rollover kit from first-in-industry Regal Assets that will provide you with everything you need to know to protect your retirement portfolio by partially diversifying your retirement assets into physically held, real gold.