Millions of Americans are asking the same questions right now…

“How do I deal with inflation? What investments work best? And most importantly, what will happen to my retirement?”

It’s no surprise why they’re asking these things.

With inflation at 40-year highs, the course of this country, the trajectory of your portfolio, and your standard of living have never been more under threat.

The price of everything is soaring – from oil and gas… to food and clothes… to health care and medicine. And your purchasing power is steadily decreasing with each passing day.

It feels as if inflation is hollowing out the American way of life.

I don’t disagree.

But my concern is that the “cure” for inflation will have unintended consequences… So you need to protect your capital right now because your financial future is at stake.

Here’s what I mean…

The Federal Reserve’s series of rate hikes this year will continue to support the U.S. dollar and eventually bring inflation under control.

But the unintentional cost of reining in inflation and keeping the dollar strong could result in what I call “The Next Lehman.”

In 2008, Lehman Brothers went from being the fourth-largest U.S. investment bank to one of the largest bankruptcy filings in U.S. history.

The collapse triggered a massive panic in the market that almost destroyed our entire financial system.

The Next Lehman could trigger on December 13. That’s when the Fed holds its next Federal Open Market Committee (FOMC) meeting… and millions of investors are unprepared for what will happen next.

A Global Debt Crisis

If the Fed keeps raising rates like it’s promised… I believe it could trigger a debt crisis in emerging markets (EMs).

If you’re unfamiliar with emerging markets, the term refers to developing nations undergoing fast economic growth.

Emerging market economies are those with some – but not all – of the characteristics of a developed market.

This includes strong economic growth, high per capita income, liquid equity, debt markets, accessibility by foreign investors, and a dependable regulatory system.

(The biggest emerging markets are Brazil, Russia, India, and the Southeast Asia region.)

Now, Lehman’s market cap was nearly $60 billion at its peak… and according to the World Bank, the total market cap of EMs is about $9.3 trillion – 155 times bigger.

This comparison matters because the U.S. dollar is the world’s reserve currency… That makes it the world’s most-trusted currency.

And since EM currencies are less trusted than more developed countries, they are often forced to borrow in U.S. dollars…

This opens them up to massive currency risk if the U.S. dollar moves significantly higher in value against their local currency. For instance, over the last 12 months, the Thai baht has dropped as much as 15% in value against the U.S. dollar.

That means Thailand’s borrowing costs have risen by 15% in local currency terms.

In Argentina, it’s even worse. Over the last year, the Argentine peso has dropped nearly 40% in value against the dollar. That means a year ago, it cost 100 pesos to pay back $1 of interest.

Today, it costs 160 pesos to pay back $1 of interest.

So every time the Fed increases interest rates, the U.S. dollar strengthens relative to those other currencies… and it becomes more expensive for these countries to pay their debt.

This is similar to what happened to homeowners who had low-rate adjustable mortgages back in 2005–2008. As interest rates rose, these homeowners could no longer afford their mortgages.

Pretty soon, hundreds of thousands of people just walked away from their homes… and in the process, took down Lehman Brothers, Bear Stearns, and a string of other former financial stalwarts.

We also saw this play out in the mid-1990s when the Fed raised rates from 3% to 6%.

The result?

The Asian currency crisis and Russian debt default in 1997… and the collapse of the hedge fund Long-Term Capital Management in 1998.

That’s why the United Nations recently urged the Fed to stop hiking rates… warning that “alarm bells are ringing most for developing countries, many of which are edging closer to debt default.”

When global interest rates rise, EM nations typically need to aggressively raise their own rates to make their debt more attractive and to avoid a collapse in demand… This craters the value of their already issued debt.

A stronger dollar also makes it harder for EM countries to service their debt… raises their risk of default… and causes investors to lose confidence in holding that debt.

It’s a vicious cycle that can quickly spiral out of control… and it’s the kind of collapse I think we could see if the Fed keeps hiking rates.

If this debt crisis gets triggered, it will be painful… However, I don’t believe this Next Lehman episode will play out like last time.

Due to the size of the emerging markets at risk, it could be much, much worse.

A Recession-Proof Solution

During the Great Financial Crisis, the Fed didn’t do anything to save Lehman. It just let it go bust, and panic took over.

This time, the Fed won’t let the crisis get out of control… because it knows the entire financial system could collapse if it doesn’t act. So I believe the Fed will keep raising rates until something breaks, and then it’ll pivot from hawkish to dovish.

That’s why you need to prepare now… And it’s why I held a special briefing last night called the Next Lehman.

During the strategy session, I explained how this crisis could devastate your wealth if you’re in the wrong investments when it triggers. I go into more detail on what to avoid in my special briefing.

I also reveal how it could give investors a shot at 14x returns using a little-known recession-proof asset I call “VIP Shares.”

These VIP shares are far safer than regular stocks but still offer massive upside… And just for joining me last night, I revealed the name of one VIP share absolutely free.

I know the idea of another Lehman-like event is scary.

I hope I’m wrong about it… because I’m an optimist at heart.

But if the Fed continues these massive rate hikes, it could trigger a debt crisis in emerging markets far worse than the Lehman Brothers collapse.

So click here to learn more about this little-known recession-proof asset.

Let the Game Come to You

Big T