This Is the Best-Performing Index on the Planet
Andy Snyder|October 28, 2020
We’re not sure if you’ve heard… but things aren’t great in the U.S. these days.
How bad are they? We don’t yet know.
But somehow… someway… hundreds of millions of folks have been tricked into letting a single man dictate their happiness, financial well-being… and freedom.
Next Tuesday, they’ll cast their votes and ignorantly think change is on its way.
It’s silly.
But we’ve seen it coming.
A few years ago, we created something to help our Manward Letter readers measure such things. We call it our “Gone to Hell” scale.
It measures five simple things:
- The rule of law
- Our education system
- Social safety nets
- Self-defense
- Our tax structure.
Oh boy… are we in trouble.
In just the last seven months, things have, well, gone to hell.
Our laws are flouted as protestors run cops over with their cars… our schools are closed… and Congress can’t compromise on saving the poor.
Just about the only category that remains above a passing grade is our self-defense… and that may change quickly as governors call up their troops to calm the citizenry next week.
Rich Comparisons
This is where things get interesting… when money gets involved.
Despite all of this, the stock market remains near record highs. Even after Monday’s fright, the Nasdaq is up some 30% on the year.
It makes the United States home of one of the best markets on the planet.
What gives?
We’re going to hell… atop a raging bull.
Some will say the market is surging on expectations of good times ahead. They’ll say the market is forward-looking. And they’ll say, given enough time, stocks always go up.
They’re right… sort of.
But those old market clichés don’t tell the full story.
To prove it… we turn to the world’s hottest stock markets. Some of them are flat-out raging this year.
Red-Hot
You may be surprised by who is leading the charge – but you shouldn’t be surprised why their stocks are soaring.
The idea fits perfectly with our Dow 100K theory.
Market gains of 270%, 508%, 544% and 257% so far this year sound great… until you see the full picture.
Take that first big gainer, for instance – 270%. That’s how far Iran’s stock market has climbed this year.
It’s not good news though. It’s not a sign that America’s sacrifice in the region is paying off and economic health is suddenly sprouting from the desert.
Nope… it’s just the opposite.
Inflation is raging. The country’s currency has lost half its value.
The official rate of price hikes is close to 40%. But in reality, it’s a lot higher.
Most experts agree that purchasing power today is about one-fifth of what it was just three years ago.
The only folks who have a chance, in other words, are those folks lucky enough to have some cash in that raging stock market.
Those who don’t are in trouble.
From a piece in Al Jazeera this month:
“Last week, I examined a young woman with a benign lump in her breast at the clinic,” a doctor wrote on Twitter. “I told her, ‘Do another sonography in six months. It’s unlikely it will grow, but if it does you better operate.’ She came back and said I want to operate now. When I asked the reason, she said, ‘Now I can pay for it, in six months I might not be able to.'”
As fast as stock prices are inflating in Iran, they’ve got nothing on the action in Venezuela.
Printer Prosperity
Surely you’ve heard of the misery there. But you may not know that the nation’s stocks are up more than 500% this year.
It’s a bunch… but it’s not enough to overcome an inflation rate that’s more than three times higher.
Perhaps the best investment these days is a stake in Bain Capital (you know… the private equity firm launched by Mitt Romney). It owns the Italian printer charged with making the paper Venezuela prints its money on.
So far this year… Caracas has ordered 71 tons of the stuff.
Of course, by the time inflation soars by more than 1,500%, most folks will be too poor to ride the raging market higher. With an average income of $0.72 per day, 96% of Venezuelans live in poverty, with 70% living in extreme poverty.
It’s hard to invest when you can’t afford to eat.
The World’s No. 1 Stock Market
And then there is the king of kings when it comes to a roaring stock market… Zimbabwe.
It’s up by close to 550% this year.
Then again… so is inflation.
The rate of climb for the nation’s currency sat at 660% in September.
It turns out the country has been secretly printing more money to prop up its high-value gold mines (a theme that should sound familiar as Washington considers a move to now bail out American restaurants).
The move didn’t do a whole lot for the gold industry… but it did manage to slash the value of its currency by 90%.
Once again, it was the poor fellow who suffered most. He had no way to hedge his wallet.
Coming Soon?
Do we expect America to someday soon look like Iran, Venezuela or Zimbabwe?
No… not by any stretch.
But there’s a lot of distance between here and there – a lot of money to be printed.
Washington has printed trillions in 2020 and appears on track to print just as much or more next year.
But what lies beyond? Will it ever stop? Can it stop?
Some folks say the market is looking beyond and seeing economic growth and stability. That’s why stocks are climbing.
But that view uses blinders to black out what’s going on in so much of the world. Everywhere else, we’ve got proof that printing money leads to bad things… without exception.
But here’s the big takeaway… the important part that so many folks overlook.
The folks who survive this trip to hell will use a buoyant stock market as a lifeboat to keep from drowning.
Perhaps that’s why stocks keep rising.
Nobody in Iran or Venezuela is asking whether the economy and the markets are disconnected. They know the truth… that stocks are soaring because their currency is falling.
Dow 100K is coming with or without us.
The reality of the world tells us we’d better tag along.
What will you do to prepare for America’s trip to hell? Share your thoughts at mailbag@manwardpress.com.
