It’s no secret that the Eurozone continues to struggle with a slow economy. The EU has seen many of the ups and downs that have been seen in the U.S. in recent years while also having to contend with numerous other issues such as massive sovereign debts and policy disagreements.
Now, the ECB has slashed its growth and inflation forecasts for the year while also lowering the outlook for 2020 and 2021. This would seemingly acknowledge the fact that the slowdown being seen in Europe is far deeper and likely to run longer than anticipated.
The region has dealt with numerous issues – both domestic and global – that have hampered growth and prevented the central bank from policy tightening. The global trade war and rising protectionism have fueled a decline in industrial production and exports from the region and have also led to significant domestic difficulties such as French protests and Italian budget troubles. Italy is already in recession, and Germany – the economic engine of the EU – may not be far behind.
The EU is once again taking steps to try to boost confidence and economic activity. The latest action involves providing cheap loans to banks in order to boost activity. The action comes just a few months after the ECB put an end to its unprecedented asset purchasing program. The ECB now sees growth in the region at just over 1% this year, far below previous estimates of 1.7% that were projected just a few months back.
The ongoing challenges being seen in the EU seem to underscore the theme of a global slowdown and the reliance on central banks to inflate economies and asset prices.
While the U.S. may be on more solid footing, for now anyway, the struggles of the EU demonstrate just how fragile modern economies can be. Although the U.S. has seen a rise in growth in recent quarters, the global slowdown is taking a toll and the next major recession could potentially arrive sooner than anticipated. Once it does, the Fed will again spring into action, cutting rates, printing money or doing a combination of both. Such moves by the central bank could potentially have a significant negative impact on the dollar and may need to remain in place for a significant period of time.
Either the central bank will take action and weaken the dollar, or it will try to stay on its present course of policy normalization. Either way, the outlook for the dollar is negative and stocks will collapse at some point.
With equities near all-time highs, now may be the ideal time to take action before the next major economic crisis takes hold. With the potential for a sharply lower dollar and significant declines in equity markets, now may be time to add diversity with hard assets that may potentially outperform in such a scenario. When it comes to potential upside, stability and long-term value, there may be no better choice to consider than physical gold.
Adding this key asset class to your portfolio has never been easier. Simply pick up the phone and speak with an Advantage Gold account executive today. Our associates are here to answer any questions you may have and can even show you how to build a significant allocation in this key asset class using an IRA account.
Don’t wait for the next major recession to take hold, fueling a weaker dollar and a massive collapse in stocks. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: add gold to my ira, advantage gold, best way to buy gold, central bank, cheap loans to banks, ecb, economic crisis, eu, european union, eurozone, global slowdown, weaker dollar