Fed: U.S. Economic Slump Could Last For Years - Read This Now

The Phoenix Letter - When the tiger is away, the monkeys rule the jungle...



Fellow Investor:

On Wednesday the Fed reached into its bag of tricks, and to no one's surprise pulled out an old favorite called Operation Twist.

Last used back in 1961 the strategy involves the central bank buying longer term bonds and selling short term notes in an attempt to put more money in the hands of consumers and businesses.

The Fed is gambling that this will cause long term interest rates to fall that will help boost investment while at the same time attracting foreign capital.

Unfortunately, the markets reacted to the news with a big thud as the Dow lost 283 points. The market selloff continued on Thursday.

Many financial experts were expressing worry and skepticism over the latest Fed actions.

"This is perhaps a recognition that the Fed is running out of firepower and resorting to some arcane techniques resurrected from the vault of history," said Lawrence Creatura, portfolio manager at Federated Investors.

It's being viewed as perhaps an admission that this is a longer-term issue that the U.S. economy is facing and not one that is going to be solved over a couple of years," said Oliver Pursche, president of Gary Goldberg Financial Services..

Message to Big Banks: This Time You're on Your Own.

Just about the same time as the Fed announcement came, Moody's lowered its debt rating for three of the nation's top banks; Bank of America, Wells Fargo and Citigroup.

In their announcement the rating agency said that it has become less likely that the government would step in this time and prevent any of these lenders from failing if we have a repeat of September 2008.

"The probability of government support for the big banks is less now than during the financial crisis," said David Fanger, senior vice president at Moody's.

While the downgrade announcement further roiled markets, it should not have been a big surprise to anyone. Moody's put the banks on notice back on June 2 that a possible downgrade was in the cards.

Moody's also downgraded Bank of America's long-term deposit ratings increasing the level of risk faced by customers who have deposits above the $250,000 FDIC insurance limit.

This means that there is an increasing possibility that customers with more than $250,000 in deposits may not be made whole in the event of another crisis.

IMF Warns of Dangerous New Phase of World Economic Decline

As if the news couldn't get any worse, The International Monetary Fund (IMF) stated Wednesday that "The global financial system is in its most vulnerable state since the 2008 financial crisis. The risk to banks and financial markets has grown in recent months."

Chief IMF Economist Oliver Blanchard said, "The world economy as entered a dangerous new phase of declining growth. Global activity has weakened and become more uneven, confidence has fallen sharply recently, and downside risks are growing." Investors are worried and searching for answers.

They are also concerned that Greece won't qualify for the bailout funds it is seeking from international lenders. Some fear a Greek default may start a chain reaction that would dwarf the credit crisis of 2008.

As a citizen I'm worried. But as an investor I'm not losing one more minute of sleep over the latest economic crisis. And neither should you.

While it's never wise to stick your head in the sand and ignore what is going on in the world, I've learned that in life most things you do based on pure emotions usually cost you big time.

You often wake up the next day regretting what you did and wondering "What was I thinking?" It's the same when it comes to investing.

Investors who are disciplined, follow a plan, and leave their emotions outside the door come out on top more often--and those who know in advance when they are going to sell, and limit their losses when the market turns against them do even better.

I've been in this business for 13 years and have seen it happen time and again.

A few weeks ago I wrote to you about a small group of investors who found success by deciding once-and-for-all to turn off the financial news, and stop their knee-jerk investing.

They spent only ten minutes a week checking on their investments.

They weren't Wall St. Jerks, or fat cats. Just average investors who wanted to become wealthy but didn't want to give up their day jobs--or too much of their free time--to do it.

This small group of investors--many former buy-and-hold investors whom were burned by the market crash of 2007-09--quietly turned just $10,000 into $81,191.37 in just 44 weeks using the miracle of what I call "compound trading."

Many of them followed my step-by-step compound trading plan, and checked on it once a week. Most of their money was made while they were out spending time with their spouse, playing golf, or fishing on their favorite lake.

Today, not a single one of them is losing a wink of sleep over geopolitical unrest, the price of oil, quarterly earnings, new housing starts, or any other economic or political news of the day.

That's why as an investor, I am not worried about the crazy stuff going on around the world today.

I was with them every step of the way and today I want to show you how you can become a millionaire in three years or less using this same simple plan.

You'll find everything you need in this free special report:

"How to Become a Worry-Free Millionaire in 3 Years or Less."

Check it out for yourself and see exactly how they did it--and how you can get started today.

So turn off the news, stop worrying about Europe, Ben Bernanke, or the latest downgrade from Moody's.

It's time to start enjoying your money now.

To Your Success,

ScottNeptune

Scott Neptune

P.S. The two most common complaints I hear from of investors are "If only I held on a little longer" and "I should have sold it sooner." This indecision has cost investors millions over the years. And if you don't stop the cycle now, it will keep repeating.

Did you know that an entire year worth of stock market returns got wiped out this August. Many investors were up the first 7 months of the year only to see it vanish in a few short weeks and are now thinking "I should have sold sooner?" Find out how you can be in the right stocks, and on the right side of the market. It's possible starting today.