Dear Reader,
There’s nothing wrong with your screen!
Yes, I am wearing a dress shirt.
I’ve got a good reason for that which I talk about in today’s video:
It’s because I’m about to film a new documentary about the housing market…
See, a bunch of people I know who make really good money, above average incomes, are unable to buy a house.
These are young couples who do very, very well.
So I said, “what is going on? How bad is the housing market?”
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Why this Market Could Drop 50% (or more)
The first time this powerful signal flashed red was in 1929 – right before the market crashed 80%.
This second time it flashed red was in 1999 – right before the dot com crash sent the market down 50%.
And now it’s flashing red again – for the third time in history.
Take these 4 steps to protect your retirement here.
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I started to research this with my team and what we’ve found in the last four months is shocking, and disheartening…
Housing today is the most unaffordable it has been since records have been kept.
It’s much harder to afford a house now than it was even at the peak of the last bubble that led to The Great Recession.
The way we can know that is to look at the “P/I ratio” – price to income.
The average PI-ratio for the past 50 years has been about 3.7…
That means the average house has sold for about 3.7x the average income.
The current average income is $74,000 a year. So a house should sell for about $270,000.
Right now, houses are selling at 5.7x income.
To give you an idea of how high that really is, at the peak of the housing bubble that popped in 2008 and led us into The Great Recession, housing was trading at 4.7x income.
Right now, housing is more expensive than it has ever been in recorded history!
So when I started to pull on this string and say to myself, “why are people who make good salaries unable to afford houses…”
The first thing I started to look at was housing prices in relation to income.
Then I started saying, “what the heck is going on? How did this happen?”
And what I uncovered in this deep research project frankly surprised and really disheartened me. It was so alarming I said, “we’ve got to tell this story.”
Because what I found out actually, was that Washington and Wall Street cut a deal Franklin D. Roosevelt had warned about and tried to prevent. And that has led to the situation that we find ourselves in right now.
This betrayal of the American people not only affects young families trying to buy their first homes…
It also threatens the retirements of everyone in or near retirement age.
We’ve seen this movie before, in 2008.
I’m telling you, this bubble is even bigger.
There are so many warning signs, and I’ve laid out the most critical ones right here.
That’s why we’ve sold a record number of stocks this year.
I’ve been a professional investor for 33 years and everything I’ve seen leads me to one conclusion:
Countless Americans are about to be blindsided by a historic financial meltdown.
There will be no stimulus package big enough. All we can do is prepare for it.
And the next 30 days leading up to the election are critical.
In the end, we’ll see real estate plummet 40%, the market tumble 50%, savings accounts lose 30% of their value and unemployment will triple.
“The Buck Stops Here,”
P.S. The last time the “Buffett Indicator” flashed this red was in 2000 – right before the market crashed 50%.