Editor's note: Today, we're sharing another insight from veteran market timer Mason Sexton.
He got worldwide attention for his uncanny prediction of the 1987 stock market crash. As the Chicago Tribune wrote, he called that crash "practically down to the minute."
And Timer Digest named him "Top 10 Timer" in 1987, 1988, 1989, 1990, 1992 1993, and 1994.
If you don't know the name... there's a reason for that. For the last 30 years, Mason's reserved his forecasts for his wealthy clients, who pay up to $10,000 a month to get his insights.
Mason just went public for the first time in three decades, releasing the details of an ominous forecast he sees ahead for America. In today's essay, he shares how the parallels for the crisis he sees coming go back thousands of years...
Inflation and the end of empires go hand in hand...
At the start of Imperial Rome, in 27 BC, the preferred Roman currency was the silver denarius.
Rome's first emperor, Augustus, minted coins that were 95% silver. This coincided with the Pax Romana – a time of unparalleled peace and prosperity in the early years of the empire.
But later emperors debased the currency by using less silver in the coins.
Emperor Caracalla ruled from 198 to 217 AD. He was one of the most prolific debasers of the currency. When questioned about this, he reportedly held up his sword and declared, "So long as we have these [pointing to the sword], we shall not run short of money."
And by 268 AD, there was less than 0.5% silver in the denarius.
Pride comes before the fall.
Even non-economists can likely guess what happened next...
Hyperinflation ran rampant. Prices during this time rose as much as 1,000%. This became known as the Crisis of the Third Century.
Over the next 50 years, 26 men would claim the seat of power, often through military force. Rome would limp on for another roughly 200 years. But it was the beginning of the end.
British historian Edward Gibbon summed it up best. He said the great wonder of the Roman Empire was not that it fell, but that it lasted as long as it did.
The one thing I know for sure beyond "death and taxes" is that history repeats.
Today, the world faces new inflationary pressures. The authorities – again and again – reassure you that it's all under control.
But let's consider something troubling...
What if it's not? What if it won't be for nearly a decade?
Inflation is down from its peak.
But the Fed won't be able to tame it as easily as some people think. It can use higher rates to deter new spending. But it can do nothing to address supply-side issues.
It doesn't build new homes. It doesn't harvest crops, refine oil, or build new automobiles. All the Fed can hope to do is destroy demand faster than supply capacity.
It's a dangerous gambit, and I do not believe it will work.
I got my start in finance in the 1970s – another inflationary era. And I remember the terrible sideways-and-down movement of the stock market.
I also remember the cautious optimism during the vicious counter-trend rallies... and the dashed hopes when each new rally would fail and reverse.
After accounting for inflation, the Dow dropped 62% from April 1971 to April 1982.
That was 11 years of real losses. That's unthinkable for most investors today. But that is the danger investors face.
Every lesson you've learned over the 15 years since the global financial crisis and the unprecedented levels of stimulus must be thrown out.
That doesn't mean it's impossible to profit.
I asked my analysts to perform an analysis of my 2022 recommendations...
Remember, this was the worst year for inflation in roughly four decades.
But had you gone long or short according to our signals – in other words, bet that stocks would rise or fall – you'd have grown your portfolio by 38% in 2022.
And 79% of our trade recommendations were winners. The remaining 21% were small losses. The biggest loss on a single trade was down 4.8%.
This was during the worst year for stocks in more than a decade. And it was a year when many investors saw their wealth shrink as the "Everything Bubble" of the pandemic years burst.
How did we do it?
I'd like to walk you through it, step by step. That's why I just put together a brand-new presentation where I share exactly what I see coming... how bad it will get... and what you should do to prepare. Watch it right here before this video goes offline tonight at midnight.
Regards,
Mason Sexton
June 2, 2023
