The Phaserl


The Biggest Threat to America That No One Is Talking About

by Doug Casey, Casey Research:

America’s empire is coming to an end.

Since the fall of the Soviet Union, the U.S. has been the world’s dominant superpower. It has the world’s largest economy, an unrivaled military, and the world’s most important currency.

But that may soon change. As Dispatch readers know, America has been in decline for decades. The 2008-2009 financial crisis only accelerated the country’s downfall, thanks to the Federal Reserve.

Since 2008, the Fed has held its key interest rate near zero. It’s also pumped $3.5 trillion into the financial system over the last eight years.

These “stimulus” measures were supposed to fix America’s economy. But they have only made it weaker.

Right now, the U.S. economy is “recovering” at the slowest pace since World War II. The typical U.S. family earns about $2,500 a year less than it did in 2008. And the number of Americans on food stamps has nearly doubled over the last decade.

In March, Casey Research founder Doug Casey warned that the U.S. is now on the edge of a complete economic meltdown.

Right now, we are exiting the eye of the giant financial hurricane that we entered in 2007, and we’re going into its trailing edge. It’s going to be much more severe, different, and longer lasting than what we saw in 2008 and 2009.

If you’ve been reading the Dispatch, you’re already prepared for this coming crisis. You own gold. You’ve stockpiled cash. And you’re out of most U.S. stocks. These simple strategies could save you thousands of dollars when the next crisis hits.

But there’s another major economic event that you need to prepare for.

• A new superpower is being born…

And that superpower is China.

China’s economy has exploded over the past couple of decades. In 2010, it overtook Japan as the world’s second-biggest economy. It’s grown at an average annual rate of 10% since 1990. The U.S. economy has grown just 2% per year over the same period.

You may have heard that China’s economy is cooling. Last quarter, it grew just 6.7%. Keep in mind that’s coming from the Chinese government. Some analysts think China’s economy is growing much slower than the government claims.

Still, China’s economy is doing much better than the U.S. economy.

Think about it. If China’s economy is growing half as fast as the government says, it’s still growing at more than 3.3% per year. That’s almost three times as fast as the U.S. economy grew last quarter.

With America in rapid decline, China will soon become the world’s biggest and most important economy. And it could happen faster than most people think.

And that’s exactly why China deserves a look.

• Nick Giambruno, editor of Crisis Investing, just went to China in search of opportunities…

Like Doug, Nick is a contrarian. He likes to buy assets other investors hate. This simple approach often gives you the chance to buy world-class businesses for cheap.

According to Nick, China is one of the most hated markets on the planet right now. Investors are worried about its slowing economy… a potential property bubble… and China’s volatile stock market.

These are legitimate concerns. But the key is to find markets where the upside outweighs the risk. And Nick thinks China’s long-term potential far outweighs these risks.

• China wants to unseat the U.S. as the dominant world power…

To do this, China is spending billions of dollars to develop the “New Silk Road.”

The New Silk Road is the world’s biggest infrastructure project. If all goes according to plan, it will give China a huge economic advantage over the United States.

It’s one of the biggest investing stories in the world. Yet the U.S. media barely mentions it. Maybe because it’s too big and complex of an idea to fit into soundbites.

• Nick covered the ambitious project in the June issue of Crisis Investing…

Here’s Nick.

China’s New Silk Road is all about tying Eurasia together with infrastructure. China is building a web of high-speed rails, modern highways, fiber optic cables, energy pipelines, seaports, and airports to span all of Eurasia.

Eurasia is a giant landmass that includes all of Europe and Asia. It contains most of the world’s resources and people. For centuries, countries that controlled Eurasia ruled the world. That’s exactly why China is going after it right now.

If China succeeds, Nick says it could “overtake the U.S. to become the dominant global superpower.” This could trigger “the biggest shift in global power since the end of World War II.”

• China’s New Silk Road is a direct threat to U.S. global supremacy…

But it’s a huge opportunity for investors who know how to profit from it.

Unfortunately, China’s government has made it hard for foreign investors to directly invest in China.

You could own Chinese stocks that trade on the Hong Kong Stock Exchange. Or you could own one of the few dozen Chinese companies that trade on U.S. exchanges. Neither option allows you to put money directly into China.

Plus, many of China’s biggest companies only trade on the mainland, which includes the Shanghai and Shenzhen stock exchanges.

Because of these barriers, many investors don’t own any Chinese stocks at all. According to global bank UBS, China is “the biggest underweight” among global mutual funds. But that could soon change.

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