It’s no secret that the U.S. and global economies have hit some major bumps in the road in recent months. The ongoing U.S./China trade war is having a measurable impact on the economies of both nations, and thus far the war on trade appears set to continue for some time.
The U.S. also last week announced a five percent tariff on Mexican goods to begin June 10th. Those tariffs are set to increase until Mexico takes action to stop the flow of illegal immigrants along the U.S./Mexican border.
The World Bank recently downgraded its outlook for 2019
The bank is throwing gasoline on the fire of recession fears, as it downgraded its economic outlook for the year from 2.9 percent to 2.6 percent. There are numerous factors at work that could put further pressure on the global economy. An escalation of trade war actions, renewed turmoil in emerging markets or a more substantial deceleration in growth among the globe’s largest economies to name a few.
The World Bank also cited ballooning government debt as another source of concern that could weigh heavily on growth. As debt grows and becomes increasingly unsustainable, governments may be forced to take action which could include raising taxes. Not only that, but the higher the debt level the less capital governments can allocate to other growth-promoting activities. As debt gets more and more out of control, tax hikes or other action could put a major dent in consumer spending, thus setting up a vicious cycle that could keep the economy under pressure and below its potential.
Market expectations for lower rates in the U.S. have increased exponentially over the last several weeks
Markets are now pricing in a high possibility of a rate cut as soon as July, and some analysts have suggested that the U.S. could see three rate cuts by the end of the year.
The market seems to be in trouble, and recent market action would suggest that many investors know it. Oil prices hit a five-month low today, and stock market volatility has been on the rise. As the Fed gets ready to start fighting the next major slowdown through its monetary policy tool kit, now may be the ideal time to start building an allocation in alternative asset classes that have the potential to outperform in a recessionary environment.
The gold market has already begun to take off to the upside, breaking out of its recent trading range and potentially setting its sights on new highs for the year. This asset class not only has tremendous upside potential but may also provide a key hedge against a recession, lower dollar and rising inflation.
Adding this important asset class to your portfolio has never been easier, and perhaps never more important. 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 to build a significant allocation using an IRA account.
Don’t wait for the next recession to take hold, wiping out billions in stock market value in the process. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started today.Tags: economic outlook, gold market, inflation hedge, rate cuts, stock market value, stock market volatility, tarrif, tax hikes, trade war