One of the world’s leading entrepreneurs is describing inflation and the energy crisis like “two freight trains barreling at each other.” More on that in a moment.
But first, I’d like to remind you of an idiom attributed to Mark Twain that reads, “history doesn’t repeat itself, but it frequently rhymes.” If you’re an investor of a certain age, you may be feeling like it’s the 1970s all over again.
That was the last time the United States was facing the combination of an energy crisis along with inflation.
But the cause was the same…government spending.
Back in the late 1960s, President Lyndon Johnson had begun massive spending and took on huge budget deficits to pay for the Vietnam war and his “Great Society” benefits: Medicare, Medicaid, Head Start, urban renewal, environmental issues, and new immigration policies, just to name a few.
Sure sounds a lot like today, doesn’t it?
Except today, the Biden administration is spending money on the “Green New Deal” which increasingly has less to do with climate change and more to do with fundamentally reshaping the U.S. economy.
But let’s go back to the 1970s for a moment. Specifically to the time when OPEC banned oil exports to the U.S. in October of 1973.
Gas prices quickly shot up 37 percent. Gas was rationed. Many stations ran out. Others locked up their pumps at night.
The ban on exporting oil to the U.S. lasted only five months—a tiny problem compared to what’s going on in the energy markets today—but by then the wheels of crisis were already in motion.
By 1974, inflation hit more than 11 percent, and the stock market (as measured by the Dow Jones Industrial Average) was plummeting.
After a few months, however, it seemed like the worst was over. Stocks soared about 48 percent starting in November of 1974.
But the bear market rally did not last.
It wasn’t long before stocks would collapse again, this time by more than 50 percent.
In total, this bear market would take the stock market down more than 72 percent.
Sounds a lot like 2022, does it not? But the problem is; the worst may be yet to come.
Because few investors are considering the historical impact of pairing inflation with an energy crisis—which is exactly what we are looking at right now.
That’s what Bill Bonner calls “two freight trains barreling at each other like two runaway freight trains on the same track.”
Bonner says: “The collision of these two inevitable trends will bring about some of the most difficult years in American history.”
He calls this looming scenario, “America’s Nightmare Winter.”
But predictions come and go. Why should you listen to this man?
Bonner is the co-founder of one of the world’s largest independent financial research firms. He’s a successful entrepreneur, owner of real estate on four continents, and business interests across the globe in over 12 countries.
When Bonner speaks, he’s someone worth listening too. You see, he’s made three big macroeconomic predictions in the past and all have come true.
Not that there weren’t critics. In fact, in each and every case, Bonner was mocked by the mainstream financial press.
And now Bonner is making what he calls his: “Fourth and Final Prediction.”
He has prepared an analysis looking at the history and parallels of today in a unique forward-facing way.
Get the facts for yourself. Learn what you can do to protect your family and your money.
Bonner’s full analysis is available, including his four recommended steps that you can take right now.
You can check out Bill Bonner’s entire piece, free of charge. Click here to view.
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