Wealth Preservation During Depression

There's a viral war raging over our brains and wallets.

Bears are talking up the next depression; bulls are claiming it's a buying opportunity.

I'll tell you who's lying in a moment. I'll tell you who's half right and who's totally wrong. And I'll tell you what you should buy right now to beat these guys at their own game...

But first, let me set up the playing board for you.

Priests of Doom

On the one side, you have high priests of fiscal policy like U.S. Fed Chairman Ben Bernanke, who warned us last week that we might just be slipping away into another recession.

And then there's Bank of England Chief Mervyn King, who shrieked hysterically of "the worst global depression ever."

Their morbid opinion of our current circumstance is backed up by the various professional risk rating services like Fitch, Moody's, and S&P, who are racing each other see who can downgrade the most countries the fastest.

Zombie Army

And on the other side, you have "Goldman's Dark Army" — the legion of corporate cheerleaders deploying the latest round of cooked government stats to "prove" the global economy has "finally turned the corner."

These guys point to such figures as a temporary bump in payrolls and a miniscule rise in summer construction expenditures that — gasp! — "exceeded forecasts" by a percent or two.

Each party is trying to sell their own particular load of horse manure.

A Web of Lies

The central bankers want us to think their fountains of unlimited imaginary money are our sole hope of escaping yawning pits of economic hell. For these apparatchiks, it's all about hanging on to the levers of power any way they can.

The private bankers claim that if we just turn them loose from the stranglehold of post-crash regulation — and allow them to tangle the world in a impenetrable web of insanely profitable derivatives and bonds again — they will plant our feet firmly on the road to financial nirvana.

To these guys, you and I are just foot soldiers and cannon fodder. Our jobs, homes, wealth, and health? Collateral damage.

The Cold, Hard Truth

The truth is we are headed for second technical recession — and quite possibly depression.

The REAL facts are on my side. But do not fear this downturn...

That little bump in employment? Balderdash!

Fully half were Verizon (NYSE: VZ) workers returning from strike. And the others will all get fired shortly.

How do I know? I read honest reports like the one out of outplacement expert Challenger, Gray and Christmas that warns the very people who are trying to suck up your brains (Washington and the banks) plan on laying off 115,000 workers ASAP.

Bright Red Sell Signal

As for that slated rise in GDP that's "just around the corner"?

The guys who set the prices and yields for billions in treasury bonds (again, basically Washington and the banks) quietly disagree. Market yields offer a spot-on indicator that has predicted every U.S. recession since 1970. And it is currently kicking out a bright red sell signal.

The Treasury yield curve — adjusted for the Federal Reserve’s 0.16% interbank rate — has two-year notes yielding 20 basis points less than five-year notes.

This inversion, with short-term rates higher than longer-term yields, has forecast each of the seven recessions since 1970.

The current adjusted spread is putting 60% odds on at least two consecutive quarters of GDP contraction within the next 12 months.

History, Facts, and Logic

Good stuff — and the perfect antidote for the poisonous tripe Washington and Wall Street keep forcing down our throats.

Now, I will tell you the one thing none of these clowns will:

This depression is completely necessary. We absolutely MUST flush away every last remnant of the busted real estate economy before we can ever hope to begin rebuilding.

I am talking scorched earth here. Closed doors. Bulldozed houses, even. Quite possibly riots. Maybe a great fire or two.

I'm not rooting for any of this; I am telling you what must happen, what WILL happen before we "turn any corners."

Blood on the Floor

Junius Morgan made his nut shilling worthless U.S. bonds to the Brits during the post-Civil War crash.

The Rothschilds bought whenever there was blood on the floor.

Warren Buffett never met a collapse he didn't love, because it meant he could suck up every company in the Dow for pennies on the dollar.

And Bill Gates could only gin up Internet trillions after the horrid grind of the late 70s and early 80s.

If YOU want to be in on this next round of empire building, you will need some serious capital. Here is how to build it.

Buy This NOW!

You start by holding your nose and buying select put option contracts all the way down to the very bottom.

When the market puts in dead cat bounces rallies like it did the other day, you don't freak out and wonder if you somehow missed something... You buy more puts!

Here's what you should be buying today: As I sit to write to you, at-the-money Dow Jones Industrials SPDR (DIA) put contracts are currently available for less than $560 per contract.

If all the Dow does over the next few days is drop back to the bottom of the trading range it's been stuck in for months, this play will continue to turn a profit as you ride out the market storm.

And when the true end for this bogus market finally comes, this play will continue helping you secure profit as you ride out the market storm.

Good luck and good hunting,

Adam Lass
Editor, Wealth Daily

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