The Fed's Bloodletting Means That You Must Follow This Strategy To Profit

You are receiving this as part of your free subscription to Sure Money. To remove your email from this list, [unsubscribe here](. [Sure Money] March 27, 2019 [The Fed's Bloodletting Means That You Must Follow This Strategy To Profit]( by Lee Adler Dear Sure Money Investor, Editor's Note: In this issue Lee Adler cautions readers to know the real signs of a weakening market and even recession. The danger now for investors is a nearly $800 billion in new Treasury bills, notes, and bonds needed to be absorbed ending in March 2019... That's only a few days away. And the Fed isn't in any position to buy or finance anything, making it even harder for the market. Here's what to do to protect your investments. The Fed started shrinking its balance sheet in October 2017. It euphemistically named the program, balance sheet "normalization." I call it "bloodletting," in honor of the medieval medical treatment for disease. The Fed's QE had caused asset markets, including stocks, bonds, housing, and commercial real estate, to become bloated and diseased as prices inflated relentlessly. They floated higher on a sea of the Fed's newly conjured money. The Fed pumped that money directly into the accounts of the big shots who make the markets, known as Primary Dealers. The Fed appoints the Primary Dealers to be its exclusive correspondents in the execution of monetary policy. They're also responsible for absorbing a significant portion of the Treasury's issuance of new bonds, notes, and bills. They mark that paper up and sell it to investors. The Fed expanded the money supply by buying securities - US Treasuries, Agencies, and Mortgage Backed Securities (MBS) - directly from those Primary Dealers. The dealers used the money to buy Treasury securities from the US Government. Since they are trading firms, they also used the cash to buy other bonds, as well as stocks, and occasionally exotic derivatives. Those cash injections helped ignite and promote animal spirits among hedge funds and other massive leveraged speculators, along with more conservative investment institutions. We saw the effect in the long running big bull that became a bubble market. The policy of QE ultimately carried stock prices to extremes of valuation only seen at modern major market tops. The Fed stopped QE in late 2014, but the stock market continued bubble upward. That was partly because the Fed was still pumping a little money into dealer accounts through its MBS replacement purchase program. [So let's take a look at it!]( Sincerely, Lee Adler --------------------------------------------------------------- You are receiving this e-mail at {EMAIL}, as a part of your free subscription to Sure Money. Remove your email from this list: [Unsubscribe]( [Manage Your Email Preferences]( To cancel by mail or for any other subscription issues, write us at: Sure Money | Attn: Member Services | 1125 N Charles Street | Baltimore, MD 21201 North America: 888.384.8339; International: 443.353.4519; Fax: 410.622.3050 [Contact Customer Service]( Website: []( © 2019 Sure Money All Rights Reserved. Nothing in this email should be considered personalized financial advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Protected by copyright laws of the United States and international treaties. This Newsletter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of: Sure Money. 1125 N Charles Street, Baltimore MD 21201.