Profit Pregame

The U.S. Debt Could Be Larger Than The Economy by October – Here’s How to Play It

That’s an alarming number…

The U.S. deficit continues to grow.

What’s happening?

We haven’t seen this trend in nearly 75 years – but in the direction, we’re headed, it’s looking to be unavoidable. You see, for the first time since just after World War II, U.S. debt is projected to surpass the size of the country’s economy. And this could happen as early as next year as the government continues to approve copious amounts of spending during the pandemic.

The Congressional Budget Office recently projected that the federal debt could be bigger than the U.S. gross domestic product for the fiscal year starting in October. It hasn’t passed that threshold since 1946. The CBO also predicted that the federal deficit will hit $3.3 trillion – that’s more than triple than what was recorded in 2019.

Where’s the money?

The rapid increase is mainly the result of the economic fallout from the pandemic. This is causing the GDP to shrink as Congress funnels trillions of dollars into the economy to keep the country afloat. Over the course of 2020, Lawmakers approved $3.7 trillion in spending, sending out stimulus payments directly to American households, boosting unemployment benefits, and expanding lending to small businesses.

This hasn’t phased investors, though. Traders continue to pour money into U.S. treasuries, hoping to find a haven investment. And just a few days ago, the DOW had its best day since July, while the S&P 500 and Nasdaq achieved new records as well.

But many economists are trying to warn what could be coming – but before you panic – there’s something you need to know….

How can I get some?

Here’s the thing, the U.S. debt can continue to increase, even bypassing the 75-year record, as long as Chine and Japan buy our bonds. And with the current economy, every single sign shows that we have more room to borrow if we want to see the economic recovery we need. In fact, both Republicans and Democrats appear to be committed to another round of spending, though talks on the stimulus package have stalled.

So, I don’t think this debt situation is improving anytime soon – and you shouldn’t let it sideline you from the market.

Truthfully, the debt might have a negative impact on the economy in the long-term, I don’t see it affecting the stock market. And that’s why I want to encourage you to continue to stick to your trading plan and don’t be intimated by the talking heads.

With that said, if you’re looking for the perfect play when it comes to these “uncertain times” – TLT is the answer. I would look to short TLT on any rally – and by doing this, you’ll set yourself up for fast and easy profits.

In the spotlight: Your favorite trading app…

Robinhood has become one of the most popular trading platforms out there – and it’s for a good reason. Their app is accessible, easy to understand, and helps new traders navigate the market with ease. The company is now under investigation related to its disclosures around its practice of selling clients’ orders to high-frequency traders.

The Securities and Exchange Commission’s probe into the Silicon Valley start-up is at an advanced stage and could result in a fine of more than $10 million if the company agrees to settle.

Robinhood made $180 million in trading revenue in the second quarter, roughly double from the prior quarter, as investors flocked to the platform seeking to ride the historic market rebound. Now, selling order flow itself isn’t illegal – and in reality, most brokerages do it. But in Robinhood’s case, more overall revenue came from the practice than other brokers, which caught the SEC’s attention.

But Not to Worry…

Even though the uncertainty surrounding the ballooning debt pumps the brakes on my overall optimism for the markets, my Project 303 readers and I know we can rely on my S.C.A.N. trading system to guide us through.

In any market condition, S.C.A.N. can pinpoint the best profit opportunities by using algorithms that took me years to perfect…

In fact, this week alone, readers had five chances to close out winners!

Project 303 is on a roll, and I want you to join us as we ride it for even more profits.

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