Friday, January 14, 2011

Shorting Municipal bonds? Read Carefully.

How We Know the Crisis Has Arrived
by End of America video by Porter Stansberry 
For us, the moment arrived five years ago. We noticed the dollar collapsing against both gold and the currencies of our trading partners. We could see the problems on the balance sheets of car makers, investment banks, and Freddie and Fannie. We watched, aware of the risks, when investors bid up real estate prices, oil prices, gold prices... almost anything to get out of the dollar....

We would urge you to share these facts (and our "End of America" video presentation) with anyone you care about.

Here are the top seven factors we believe MUST lead to the end of the global U.S. dollar standard – what we call The End of America

Seven Ways to Know:
1.The price of gold has gone up for 10 years in a row.
2.Our government's deficits are out of control
3.The government cannot increase tax revenues enough to cover our spending or repay our debts – ever.
4.Special-interest groups – particularly government unions – are looting our Treasury. Self-serving special interest groups have completely hijacked government spending.....
5.We're printing money just like the banana republics we used to mock.
6.We can't repay our debts. Total debt outstanding in the U.S. currently exceeds $55 trillion.
7.Shockingly, new debt issuance in the U.S. is soaring, with the lowest-quality debtors borrowing record amounts.

Why No One Else Is Issuing These Warnings
You may read these facts and ask, "Where are the ratings agencies? Why does a small newsletter based in Baltimore, Maryland seem to have the jump on everyone in Washington and most of the people in New York? Why aren't these facts in the newspaper? On the news at night? In magazines?"

The answer: Government spending now makes up more than 40% of our economy. No big business can afford to offend its best customer. And most also depend on the government for protection from competition, in the form of licenses or permits.



".......The easiest and most direct way to profit from the coming collapse of municipal finance is simply to short the bonds of the lowest-quality municipal issuers. One ETF in particular should be on your radar: the Market Vectors High-Yield Muni ETF (NYSE: HYD). Look at the following chart of the ETF. As you can see, it is collapsing. More than 30% of its holdings are rated below 'B' – which is deep into junk status. Most of the other bonds it owns are triple B, double B, or B. Most of these bonds will be downgraded at some point this year. And many of them will default."...........more


Norton's comment: I am sharing this with you because I feel it is urgent for all my friends and acquaintance's to protect their hard earned savings and additionally figure out they can thrive during this catastrophe.

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