The Best Four Ways to Profit in America's Dying Economy

Shah Gilani

It's not exactly dead, but the pace of U.S. economic growth since 2009 could rightfully be called morbid.

That's because the prime movers of economic activity – consumers – are acting like the walking dead.

Since 2009, the U.S.' GDP (the total value of everything produced by all the people and companies in the country) averaged annual growth of only 1.3%.

The average annual growth rate from 1990 to 2000 was 3.3%. Compared to that, current growth (only 1.2% in the first quarter of 2017) looks like more of the same slow slog we've been suffering through.

What's really killing the economy?

Here's the sad truth about half-murdered American consumerism and how to make money on the few hot spots that are floating the economy now.

A Shrinking GDP, a Rising Debt… and Who to Blame

Since two-thirds of economic growth is driven by consumer spending, something must be wrong there.

In fact, there's a lot wrong. And what's wrong can easily, and rightfully, be blamed on politicians and their paymasters. Good old crony capitalists.

Let's go down the list, shall we?

1) There are fewer good jobs and career opportunities at home.

That's because a series of bad trade deals exported U.S. jobs to the benefit of giant multinational companies, who, to add insult to injury, leave their profits overseas, flooding foreign economies with cheap money to spur consumer spending abroad.

2) Healthcare costs are out of control.

Thanks to bad politicians, who probably still haven't read the Affordable Care Act they signed into law, a lot of money spent on healthcare would otherwise be spent elsewhere in the economy.

3) Student loan debt is fast approaching $2 trillion.

Once again, thanks to politicians pushing higher education as a means to a better future, while the Fed keeps rates low and crony capitalists make loans easy to access. Enslaving not only student borrowers but also their parents and relatives diverts consumer spending.

Besides sky-high healthcare costs and huge student loan costs…

4) Rising house prices and rising rent are sapping consumers.

Healthcare, housing, and education costs accounted for 25% of consumer spending in 1980. Today, the percentage of spending on the necessary trio is fast approaching 40%.

No wonder the economy can't reach the speed it needs for lift-off.

The Fed pumping more than $4 trillion into the same banks that went bust from slinging subprime derivatives didn't trickle down to American consumers as advertised.

Sure, there are loans to be had to buy houses, if you have the right credit.

And there are consumer loans to buy almost anything, if racking up credit card charges, fees, and astronomical interest payments is your only borrowing facility.

But as cheap as interest rates are and as available as credit is, the truth is that American consumers are tapped out.

Household debt in America just topped $12.73 trillion, a new record, eclipsing the old mark of $12.68 set back at the height of the housing bubble in 2007.

Consumers need more credit to consume, but it now takes more credit to drive the same percentage of economic growth, which ultimately means more debt and less consumption.

That's a classic negative feedback loop.

Four Sectors You Still Have a Chance to Cash In On

Shah Gilani

About the Author

Browse Shah's articles | View Shah's research services

Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.

The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.

Shah founded a second hedge fund in 1999, which he ran until 2003.

Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.

Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.

Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.

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