The recent surge higher in both stocks and economic growth may very well be unsustainable. In fact, it seems that an increasing number of analysts and prominent investors are now sounding the alarm bells about what could be seen economically next year or the year after.
This could potentially put gold into a win-win scenario. Here’s why:
Slowing Growth and/or Recession: The economy is, without question, humming along at what is arguably an excellent pace. Jobless claims are the lowest in nearly half a century, and growth has topped four percent, a level that even some of the most optimistic analysts did not see coming. It is important to keep this growth in the proper perspective, however. The fact is, a great deal of the recent economic gains seen could be the result of years of loose monetary policy as well as recent tax cuts and government spending. The tailwind effects of tax cuts and spending are not likely to last very long, and the economy could right now be in the midst of a high-point from that legislation. Eventually, the thrill will wear off.
The Fed: The Fed has talked a largely hawkish game for some time now, and has thus far followed-through on expected rate hikes. As it stands right now, the central bank is set to hike rates again this month, with another hike penciled in before the end of the year. With increasing concerns about an aging bull market and stimulus effects wearing off, however, some have suggested that the central bank needs to start thinking about the next recession. This could potentially affect its policy in one of two ways: First, the central bank may take a more dovish approach, and not hike rates as far as previously expected in order to try to keep the economic engine running as smoothly and for as long as possible. Another possibility is that the central bank gets a little more aggressive with rates-in order to have more “lowering” power later.
There are plenty of warning signs already flashing red, and the next major stock market catastrophe could be much closer than many anticipate.
When the next major downturn does occur, the Fed will have arguably less capability to fight the recession. The next one could be deeper and longer than the last recession, and could potentially require extremely drastic measures from global central banks.
Many investors saw their portfolios cut in half after the financial crisis of 2008/2009. This time around, the market has even further to fall and the damage could be even greater. That is why now may be the ideal time to diversify with alternative asset classes. Given the notion of accelerating inflation, a dollar reversal and a potential return to a zero-interest rate environment, what better asset class to diversify with than gold?
Speak with an Advantage Gold account executive today about the potential benefits of gold ownership. Our associates are here to answer any questions you may have, and can even show you how easy it is to build a significant allocation in this key asset class using an IRA account.
Don’t wait for the next major recession to hit, or for the current stock market bubble to burst before acting. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: advantage gold, Fed, gold, interest rate hikes, recession, unemployment rate