Absolutely insane things are happening in European financial markets right now.

For example, things got so extreme last week that the interest rate on Spanish government bonds fell below the rate on U.S. government bonds. (That’s looking at five-year bonds.)

That is crazy…

Spain is a country with 56% unemployment for people under 25 – in the prime working age of their life. That number tells me this country is broken – it is not working right.

[ad#Google Adsense 336×280-IA]So why would a broken country be able to borrow money at a lower rate than the United States?

Good question… The answer is: Europe’s Central Bank is forcing interest rates down across Europe, in an extreme effort to stimulate Europe’s economy.

In short, Europe’s Central Bank is setting up what I’m calling “The Sequel” to the Bernanke Asset Bubble in America…

My paid subscribers have made a fortune by staying in U.S. stocks.

The main theme in my newsletter has been what I’ve called “The Bernanke Asset Bubble.”

It is the idea that the Fed will keep rates low for longer than anyone can imagine, and that will allow asset prices to soar higher than anyone can imagine.

The “sequel” now happening in Europe has the same basic plot as the original Bernanke Asset Bubble in America. The roles haven’t changed… just the actors playing them.

So, what I expect is… European stocks will soar, just as U.S. stocks did when Bernanke pulled out all the stops.

Now in our sequel, European Central Bank President Mario Draghi is playing the role of Ben Bernanke (who headed the U.S. Federal Reserve when the U.S. bubble started).

Draghi is already playing it perfectly…

On March 12, Draghi announced he would keep interest rates low “even after we see improvements in the economy.”

Draghi is borrowing directly from Bernanke’s playbook. And he should! He has his work cut out for him…

The U.S. economy is back on its feet. Europe has much further to go. Take a look at how Europe looks today, versus the U.S:

In short, Mario Draghi needs to do everything he can to stimulate Europe’s economy. He NEEDS to create the Bernanke Asset Bubble, the Sequel. We’d be fools if we didn’t position ourselves to take advantage of it.

If Draghi pulls out all the stops in the next year or two – like Bernanke did years ago – European stocks will absolutely soar.

Keeping it simple… the lower the interest rate, the higher the price people are willing to pay for stocks. When rates go lower, investors have to find something else to do with their money.

Basically, you can’t earn easy interest in Europe anymore – the easy money in European bonds is gone. Even broken countries like Spain can borrow for five years at 1.8% interest.

Money managers in Europe will soon realize that bonds (like Spain’s) are a bad deal, and they will turn toward the stock market. When they do, they will like what they see…

European stocks are irresistible right now… They’re paying 3.3% dividend yields today – more than most European government bonds. Now THAT is attractive!

It won’t last. European stocks will go up. By any measure, European stocks are dramatically cheaper than U.S. stocks. Take a look:

By buying Europe, we’re betting on round two of the Bernanke Asset Bubble… which could lead to enormous gains for investors in Europe.

In my opinion, the U.S. is in the seventh inning of this bull market. But Europe is closer to the fourth inning. The massive move we saw in U.S. stocks over the last two years could repeat in Europe over the next two years.

The easiest way to make the trade is through shares of the SPDR EURO STOXX 50 Fund (FEZ).

I believe Europe – and FEZ – could drastically outperform the U.S. over the next few years.

If you missed out on the first Bernanke Asset Bubble, I urge you not to miss out this time!

Here’s your chance…

Good investing,

Steve

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Source: DailyWealth