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March 16, 2022
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Interview Link: Chuck Hughes Lifetime Income System

We promised we’d send you this link and wanted to get it to you ASAP. The glimpse at the inner workings of the system was amazing and any delay allowing you to see this powerful information could set back your financial timeline.

If you have any questions about Chuck’s Lifetime Income System we have set up a number for you to call. Just dial 1-800-268-8936 and we will help you with any questions and make it as easy as possible for you to get the alerts that have the significant wealth generating potential discussed in the interview.

Check out the “Lifetime Income System” Trading Service Overview Recording Here.

Again, even though the tips and strategies discussed in the webinar are already helping many people boost their trading accounts, they all had questions too. Just give us a ring when you watch the video and we will be glad to help you out.

Call 1-800-268-8936 Today!
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Tomorrow, you could begin doubling your account every single month starting with one letter.

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The Four Phases of the Economy
by Peter McKenna

Economists have divided the business cycle into four distinct parts. They are the expansion, the peak, the recession and the trough. The expansion is the growth stage, when the economy grows rapidly. The peak is when the expansion reaches its height and begins a downturn. The recession is the period of contraction that follows the peak. The trough is the low part of the recession, when the inevitable upturn begins.

During the expansion phase of the cycle, everyone mentally and physically healthy enough to participate in the economy makes money. Unemployment drops as companies hire aggressively, a necessity if they want to keep up with the increased demand for their products created by the strong economy. The cost of hiring new workers is offset by higher corporate profits. Both interest rates and wages stay low, while consumer spending gallops forward. Enlightened societies use the surplus of wealth created by the good times to fund programs that help the least among us and promote the arts and sciences.

Unfortunately, the peak of the business cycle is usually disguised by the euphoria surrounding the rampaging economy. Without realizing that they are asking for trouble, companies overbuild, overbuy, over-hire and over-borrow. The music stops when a contraction takes hold. Unemployment rises, labor costs increase and consumer spending slows. Companies begin laying off their employees. This leads to an even sharper drop in consumer spending. Eventually, if the contraction is deep enough, the country will suffer a bout of inflation and recession. As described above, inflation is a rise in prices across all areas of the economy and recession is a prolonged decline in production in all areas of the economy.

Here are the components that make capitalism the most efficient economic system in the world:
  1. The freedom to invest capital in the purchase of raw materials.

  2. The freedom to hire others to turn raw materials to goods and services.

  3. The freedom to sell these goods and services to consumers.

  4. The freedom from undue government intervention.

  5. The freedom to engage in business based on the laws of supply and demand and free trade.
THE MODERN ECONOMY

If you could return an early capitalist to life, he would marvel at the ways the economy has changed, and the ways it has remained the same.

The economy, for example, is still based on the theory of supply and demand and the power to make financial decisions still rests with individuals rather than a ruling class or government. A factory owner, for example, has to find the cheapest way to manufacture and sell goods to others. He has to price his goods correctly, striking a balance between the supply of goods he can create and the demand for these goods. He has to decide when to expand and when to cut back.

Individuals face a similar challenge. They must decide when to buy a home or new car or take a vacation, even how much food to buy each week or when to eat dinner in a restaurant or see a movie. They decide whether they can afford to pay cash for goods and services or use a credit card. They decide whether they can afford to send a child to a state school or a prestigious university.

The business cycle is still with us. It always will be a primary component of our economic system. All of the financial decisions described above will be made based on one factor: the current state of the business cycle. If businessmen and individuals believe the business cycle is in an expansion phase, they will step up their spending. If they believe the business cycle is experiencing trouble, they will cut back their spending.

The ultimate goal of capitalism is still to make the most of available natural resources, ensure stable prices and interest rates, stimulate full employment and build wealth that can be passed on to the next generation. To reach these goals, periods of economic contraction still must be kept to a minimum and not allowed to create inflation and recession.

THE STOCK MARKET

The biggest shock of all for an early capitalist returned to life today would be the stock market. It is a direct offshoot of the capitalist system. It developed because capitalists were free to start businesses without unreasonable interference from the government. In 1792, a few dozen traders in New York City seized on the idea of buying and selling pieces of paper that represented single shares of stock in two local companies. The concept was that the stock would either gain value as the businesses flourished or lose value if the businesses did poorly. This was the beginning of the New York Stock Exchange, which is now the largest stock exchange in the world, trading more than 3,000 stocks.

In addition to the New York Stock Exchange, there are seven smaller, regional stock exchanges in the United States. Trading at an exchange takes place on a central exchange floor, where buying and selling is conducted much like an auction, with traders bidding on stocks.

Another type of trading is conducted on the NASDAQ System, which is comprised of a network of traders across the country called market makers who trade through a centralized computer system. The stocks traded on the exchanges tend to be large, established Blue Chip companies, while NASDAQ stocks tend to be small technology companies.

Under capitalism, businessmen and individuals alike have the freedom to make financial decisions without interference from the government or ruling class.

THE IPO SYSTEM

The stock market creates wealth in a few different ways. As private companies grow, they reach a point at which they need an infusion of cash to finance expansion. The solution is to offer stock in the company to the public through an initial public offering, called an IPO. The company hires a brokerage firm to underwrite its stock, which means the brokerage will buy all the shares the company is offering for sale. The brokerage in turn charges a commission for handling the IPO and makes money by selling the shares to investors. The commission is usually about 10% of the total value of all of the shares.

Many people believe companies make money every time a share of its stock is traded after its IPO, but that is a misconception. Companies get the IPO money, and that's it. From that point on, the money derived from the buying and selling of a company's stock is passed back and forth between buyers and sellers.

Thus the stock market gives companies a way to fund expansion through IPOs. If the expansion works and the companies prosper, they will hire more and more people and buy more and more raw materials from other companies. This process contributes to the expansion of the economy as a whole, creating a wealth-generation process that would not exist without the stock market.

Investors also create wealth for the overall economy. If they buy low and sell high, they have made a profit that improves their standard of living and their ability to buy goods and services. They also use stock profits to start small businesses, re-invest in the stock market or add to their savings. This process of turning stock profits back into the economy helps the economy grow over the long term is a vital component of economic prosperity.

If a company increases its profits year after year, its stock price will rise. The price rise is the result of the law of supply and demand. When the company went public it issued a limited number of shares, called a "float" or the number of shares outstanding. As the demand for these shares increases, the supply decreases. In this situation, the price will rise.

Companies derive a benefit when their stocks are in great demand. Its market capitalization, the value of all shares of its stock, will go up. Market capitalization is computed by multiplying the current stock price by the number of outstanding shares. For example, a company with 20 million shares outstanding trading at $10 each would have a market capitalization of 200 million.

The stock market, then, is a powerful mechanism of the capitalist system. It has an enormous influence on the business cycle, because it creates wealth and stimulates investment in the future. When it functions as it should, with fair and proper valuations of stocks, it can give the business cycle a boost that will last for years.

Based on what we have learned, it should not be a surprise to see the stock market react so violently to the economic news such as an interest rate change. The economy is a fluid system, one that evolves through predictable ups and downs. Investors will buy stocks when it appears that companies will be able to use the capitalist system to improve their earnings. They will sell stocks when it appears that economic ill-health is on the horizon. All of this buying and selling is precipitated by economic news that provides the clues to the direction the economy is taking. And it is this news that event traders patiently wait for.

 
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