“The U.S. is technically bankrupt.”

Our budget deficit this year will be $1.6 trillion. Our official national debt exceeds $14.3 trillion and Congress has just given the Obama Administration permission to increase our debt to $16.4 trillion. Our unofficial national debt, when you take into account unfunded liabilities and entitlement to our citizens, is closer to $100 trillion.

By the end of this decade, according to the White House’s own prediction, the official national debt will surpass $20.0 trillion—not including off-balance-sheet items like old-age security, Medicare, and other government promises to its citizens.

And there’s also hidden government guarantees not on the government books…

Fannie Mae and Freddie Mac own or guarantee half the residential mortgages in America. Who owns both of these companies now? Why, it’s the U.S. government. They “censured” both Fannie Mae and Freddie Mac on September 7, 2008.

In effect, the government either owns or guarantees half the outstanding residential mortgages in this country. According to data compiler CoreLogic Inc., 5.67 million home mortgages in the U.S. were either in the foreclosure process or delinquent last month, exposing our government to even more losses.

Politician after politician has failed to reduce government spending. Their belief is that spending more money will fix the economic problem. Well, they’ve spent trillions since 2008 and our economic problems are about to get worse.

The U.S. government and the politicians that run it are addicted to spending more money than the government takes in. If we look at it conservatively, and only look at the government’s “official” figures, by the end of this decade, our national debt will be about 150% of our GDP—about the same level it was after World War II.

Why we’ll never get out of this hole

After World War II, America became a superpower. Our manufacturing base grew dramatically; the industrialized revolution was so great that the American dollar replaced gold as the reserve currency of other world central banks. There was a U.S. job boom.

Today, what do we have in America to carry us into the next boom? Nothing. The Internet isn’t creating jobs. Manufacturing, it’s gone to Mexico, India and China. I doubt George Washington ever envisioned a future where Americans would be suffering so much. It’s embarrassing, but true: Over 44 million people in this country are using some form of food stamps! (Source: National Inflation Association)

America, the Empire, is history. The Standard & Poor's downgrading of the U.S.'s credit rating on August 5th, 2011 is just the beginning.

Going back in time a little…

In an e-mail blast to thousands of my followers on July 21, 2005, I said,

“The U.S. lowered interest rates in 2004 to their lowest level in 46 years. And what did Americans do with their access to easy money? They borrowed and borrowed some more, investing the borrowed money into real estate. Looking ahead, perhaps the Fed’s actions (of 2004) will one day be regarded as one of the most costly errors committed by it or any other banking system in the last 75 years.”

I was exactly right.

Artificially low interest rates are actually causing us harm

Interest rates have remained so low for so long that inflation will become a serious problem for America in the months and years ahead. With the price of gold rising from $300 an ounce to $1,600 per ounce (a gain of 433%) in less than a decade, gold is screaming, “inflation ahead!”

How does the government and an economy deal with inflation? Inflation is dealt with via higher interest rates. Mark my words: The artificially low interest rate policies of the past few years will come to hurt us in the form of hyper-inflation and sharply higher interest rates.

I believe we are on the cusp of a new 30-year up-cycle in interest rates that will cripple the government and the economy.

It will get worse

My prediction is not only that we are headed into Recession Part II—my prediction is that this next recession will also be much worse than the 2007-2008 recession and that it will hit as deep as the Great Depression.

You see…

Our government has no money left to bail us out during the next recession. The government is over-extended—if it was a business, it would be bankrupt right now. According to the Obama Administration’s adjusted 2011 budget, just the annual interest on our debt will reach $554 billion in three years.

The Federal Reserve has kept the economy alive the past two years by keeping its printing presses running overtime.

Let’s face two important facts.

The Fed can’t lower short-term interest rates below the zero they are at today. The more money the Fed prints, the greater the risk of inflation, and the higher long-term interest rates move, stifling the economy.

Let’s move to the stock market

Did you know there is a striking similarity between the years 1934-1937 and 2008-2011?

Look at these facts:

The stock market crashes in 1929. Eighty years later, in 2008, it does the same thing.

The bear market rally that started in October 1934 lasted until August 1937—35 months—and took the Dow Jones Industrial Average from a level of 90 to 185, a gain of 106%. The Dow Jones then plummeted and didn’t recover until seven years later, 1944.

So similar it’s frightening: The bear market rally that started in March 2009 has lasted around 30 months so far and has resulted in the Dow Jones Industrials rising close to 100%.

If the current bear market rally follows the same path as the bear market rally of 1934 to 1937, we have about six months left before the next phase of this bear market gets underway, ultimately bringing stock prices below their March 2009 lows.

This time around, for reasons I’ve just explained, the after-effects of the next leg of the bear market could be much worse than the Great Depression.

At this point, I assume you are sitting there, watching and listening to this audio-video presentation and saying, “Okay, Michael, what you say is stark and frightening. But it makes sense, the way you’ve laid out the facts.”

“So what do I do as an investor and
consumer to protect myself?”

The good news is that you could protect yourself from the economic devastation headed our way over the next six months. The better news is that, if you position your portfolio properly, starting today, you could actually make money during the next devastating down leg of this economy, while others struggle like never before.

Here are my five core beliefs about what’s headed our way and how I plan to actually profit from them.

1. The devaluation of the U.S. dollar that started in early
2009 will accelerate as the U.S. economy deteriorates.

After World War II, our government did a masterful job at convincing foreign central banks they should have U.S. dollars as their reserves instead of gold bullion. Today, 70% of world central banks have adopted the U.S. dollar as their official reserve currency.

As the value of the greenback erodes under a mountain of debt and rapid inflation, courtesy of too many dollars in the financial system (thank you, Federal Reserve), foreigners will be dumping dollars and moving away from a system where the greenback is the official reserve currency.

Chart courtesy of www.StockCharts.com

Shorting U.S. dollars is too risky and complicated for most of my readers. But there is a simple, easier way to make money as the U.S. dollar continues to devalue. There is an ETF you can buy that goes up when the U.S. dollar declines in value.

This ETF is in the currency that I believe will rise the most against the U.S. dollar over the next two years. No, it’s not gold. It’s a fiat currency that is up close to 30% against the U.S. dollar over the past 24 months. It’s a currency of one of the economically strongest countries in the world.

You put your money in this ETF, sit back, do nothing, and watch the value of the U.S. dollar fall as inflation and the national debt rise, and just watch this investment rise in value as the months go by.

My analysts have recently completed a research report called The ETF Set to Skyrocket in Price as the Devaluation of the U.S. Dollar Continues. We have hundreds of hours invested in researching, compiling and writing this report. My company plans to sell this report for $95. You can get it for free.

2. Gold prices will continue to rise.

When we look at the price of gold bullion today in inflation adjusted terms, it would need to be trading at $2,250 an ounce to be equal to its January 1980 price high of $850 an ounce.

But my public predictions about where gold prices are headed have been much higher. I’m expecting gold to trade at $3,000 before the bull market in the yellow metal is over.

Chart courtesy of www.StockCharts.com

Here’s an important fact I want you to be aware of:

For the nine years starting and including 2002 to 2010, whenever we had a year where the price of gold remained relatively unchanged in the first two months of the year, January and February, like we just experienced in 2011, gold bullion and gold stock prices were higher in November and December of that year 100% of the time.

I’m a big bull on gold. Rising inflation, a debasing U.S. dollar, out-of-control government spending, and a currency printing press that never seems to stop will continue to push the price of gold higher.

But when I look at gold, if it moves from $1,600 or $1,700 to $3,000 an ounce over the next five years, as I expect it to, my gain will be close to 100%—as an investment, that’s not enough for me. I’m gunning for much bigger profits than that.

The big winners of the gold bull market will ultimately be the gold mining stocks. Look at this way. If a gold company’s cost to produce one ounce of gold is $800, at a price of $1,600, they are making a 100% profit. But, at price of $3,000, they are making a profit of 275%—and the stock market will reward the stock by multiples of 275%.

I’ve found a security that goes up in value when the stock prices of junior and senior gold producers rise. I started buying it at $14; it trades at $23 today. If gold bullion prices go to only $2,000, this security will triple in price to $70.

My analysts have recently completed a research report called Single Best Leveraged Play for the Gold Bull Market. We have hundreds of hours invested in researching, compiling and writing this report. My company plans to sell this report for $95. You can get it for free.

3. The euro is as done as the U.S. dollar.

I’m blessed to be able to visit Europe once or twice a year to check on the economies of various European countries. In fact, I just returned from Europe on August 8th. Let me tell you firsthand, things are much, much worse in Europe than we read in the mainstream media.

Greece, as you know is bankrupt. Spain is next. Italy is not far behind.

Austerity measures are a difficult sell in Europe. This summer, Greek police needed to use tear gas to disperse 20,000 protesters at Greece’s Parliament House, as citizens demonstrated against the government’s wage cuts and tax increases.

Every morning, I wake up and ask this one question: when will Germany come to its senses and pull out of the euro? After all, Germany is the only real engine of the European Economic Community. Greece’s GDP…it’s less than 10% of Germany’s GDP.

Source: The Wall Street Journal, August 4, 2011

The euro has declined steadily against the U.S. dollar. I actually envision a time when the richer European countries will tire of bailing out the poorer European countries (it’s actually happening right now), when each country will just go back to its own currency. Ultimately, the euro will die, and with it the economies of the weaker European countries: Greece, Spain and Italy.

There’s a stock you can buy that goes up in value as the euro declines in value. The stock currently trades under $18—I see a $30 price tag on it this year.

My analysts have recently completed a research report called Making Money from the Sovereign Debt Crisis: How to Achieve Massive Profit from the Collapse of the Euro. We have hundreds of hours invested in researching, compiling and writing this report. My company plans to sell this report for $95. You can get it for free.

4. Inflation will become a real problem in America.

According to the U.S. Labor Department, the core consumer price index (“CPI”) is at its highest point since July 2008. The core inflation rate (which excludes the volatile food and energy items) is running at 3.6% per year.

Throw in the highest food prices we’ve experienced in years and $80-to-$100-per-barrel oil and, all of a sudden; inflation is a real problem in America. That’s what the rise in gold price has all been about: Gold is screaming: “Higher inflation ahead!”

Thanks to years of monetary policies that promoted artificially low interest rates and printing presses churning out dollars in overtime mode, hyperinflation and American sovereign debt issues will become the biggest obstacles for the United States for the remainder of this decade and well into the next decade.

How does the government fight inflation? It raises interest rates. After a 30-year down-cycle in interest rates, I believe we are at the cusp of a new 30-year up-cycle in interest rates that will cripple the government and the economy and ultimately send stock prices much lower than they are today.

Higher interest rates will also put the proverbial remaining nails in the coffin known as the U.S. housing market.

Now you see why I said at the very beginning of this presentation that it’s not for the faint of heart. Imagine our government, the economy, housing prices and the stock market all collapsing at the same time?

But, for smart investors, there is more than just hope. As history has shown us, where there is fear, there is also profit.

We’re just putting the finishing touches on a special report that reveals an ETF that rises in value when interest rates rise. It’s called Inflation Hedge: Serious Profits from the New Multi-Year Trend of Higher Interest Rates. We have hundreds of hours invested in research, compiling and writing this report. My company plans to sell this report for $95. You can get it for free.

5. The stock market will ultimately test its lows of March 2009,
bringing the Dow Jones down 46% from where it sits today.

Yes, this is my final core belief: The bear market rally in stocks will lose steam somewhere in the next six to eight months and move straight down to test its March 2009 lows.

Phase One of a bear market brings stock prices down sharply. That’s what happened when the Dow Jones Industrial Average fell from 14,164 in October 2007 to 6,440 on March 9, 2009—a tumble of 54%.

Phase Two of a bear market is when the bear lures investors back into stocks. The bear gives investors and analysts the false sense that the economy is improving and it’s okay to own stocks again. That’s where we are today. The bear did a masterful job at convincing investors to own stocks again…and, presto, the Dow Jones got back to 12,000.

But the bear market is getting old and “long in the tooth” as they say. If I compare this bear market rally to the 35-month bear market rally of October 1934 to August 1937, we have about six months left before Phase Three of this bear market gets underway—ultimately bringing stock prices below their March 2009 lows.

How am I going to make money from this? Easy: I’m not going to short the market, because that’s too risky for most of my readers. I’m not going to buy put options, because they are too short in nature for Phase Three of the bear market.

What I plan to do is to buy a stock that goes up in price when the stock market falls. The stock is very liquid, it trades on a major American exchange, and it has already jumped to $29 from $24 in the past 30 days. If the market tanks like I believe it will, this stock will easily move to $100, maybe even $125.

My analysts have recently completed a research report called Lombardi’s Secret Stock That Goes up When the Stock Market Goes Down. We have hundreds of hours invested in researching, compiling and writing this report. My company plans to sell this report for $95. You can get it for free.

Putting it all together

At this point, you’re probably saying: “Okay, Michael. Everything you’ve said so far makes sense. Now, how do I get my hands on these five new reports you and your analysts have just completed?

The ETF Set to Skyrocket in Price as the Devaluation of the U.S. Dollar Continues

Single Best Leveraged Play for the Gold Bull Market

Making Money from the Sovereign Debt Crisis: How to Achieve Massive Profit from the Collapse of the Euro

Inflation Hedge: Serious Profits from the New Multi-Year Trend of Higher Interest Rates

Lombardi’s Secret Stock That Goes up When the Stock Market Goes Down

Well, dear reader, I’m not going to sell them to you. I’m going to gift them to you. All five of them, yours free, and in your hands via e-mail within 48 hours!

How can I do that? These reports are very valuable. In 2011 alone, they can make or save you thousands of dollars, maybe even hundreds of thousands of dollars, depending on how big of an investor you are.

Fortunes will be made as the decline in the value of the U.S. dollar continues, as gold prices rise to $3,000, as the euro collapses, as inflation sets in and as the stock market succumbs to the devastation of the economy. You need to position yourself to be among those precious few making fortunes from these five events.

Holding your hand all the way

More important than the five reports, I want to send you our new Lombardi’s Crisis Profit Alert. It’s the first new Lombardi newsletter in two years.

There is no doubt about it. I’m worried about our economic future and I know our readers are worried about our economic future. When I walk through our customer service department during the day; I hear our people on the phone with customers who are very worried about their investments.

That’s what Lombardi’s Crisis Profit Alert is all about—helping our customers make money as everything around us falls apart.

The greenback will continue to fall in value against other world currencies—we’ll make money from it.

The 10-year old gold bull market will continue—we’ll make money from it.

The Euro will evaporate—we’ll make money from it.

Inflation will become a real problem in America—we’ll make money from it.

The stock market will proceed to test its March 2009 lows—and we’ll make money from it.

With Lombardi’s Crisis Profit Alert, you’ll make money by buying ETFs and stocks that rise in value as gold prices and inflation rise and the American dollar, euro and stock market collapse. It’s not a short selling service. In fact, short selling is banned from the mandate of Lombardi’s Crisis Profit Alert.