July 24, 2018
The stock markets signals are flashing a warning.
Former congressman, Ron Paul has warned the bubble is about to burst, and when it does the stock market will halve.
In truth, the economy has never fully recovered from a decade long recession. Although the Dow Jones is looking strong on the surface, the false economy propping it up is crumbling under the weight.
Paul has always had concerns over government spending. And for good reason. The Feds quantitive easing policy has deepened the US debt crisis and inflated the market bubble.
Quantitative easing involves printing more money in order to help boost the economy. And although the monetary policy inevitably succeeds, the reality is that manipulating growth arrows from pension funds and other long-term paper investments.
In addition, interest rates have been manipulated, foreign debt is not in good shape and rising inflation will cause debtors to default on payments. The Fed is only two years into it rate-hiking cycle and grocery bills have already increased by five per cent in the last year.
Paul has accused the Fed of unloading assets from its balance sheet and accruing $4.5 trillion worth of national debt. To make matters worse, the Congressional Budget Office estimates federal deficits will average an additional $1.2 trillion until 2028.
Negative outlook on future of stock market
Paul is not alone in fearing the worse for the economy. A number of politicians and economic commentators have voiced concerns.
In April, financial expert and stock market commentator David Tice warned his investors to get your money out the markets now before its too late.
There are a number of key warning signals that indicate the Dow Jones is not in healthy shape.
Paul Ryan recently said President Trump’s new tariffs on Chinese goods will be felt by American consumers. The cost of living is going up whilst wages are stagnant.
A trade war between the US and China will drag economic aggregates down – and ultimately the GDP numbers. US stocks may look favourable today but the new tariffs will eventually cause to the dollar to rebound.
Low gold prices
With the US economy looking healthy right now, this is a great time to invest in gold. The best time to buy assets is when the price is low, and with the yellow metal slipping to a one-year low, $1219 an ounce looks an absolute steal.
Economic advisors may say that “technically” there is no point in buying gold right now. Some “experts” are even telling investors to sell gold. Smart investors know to hold on to their gold and cash in when the dollar collapses.
And if you don’t already have gold in your portfolio, there may only be a small window to add it to your cash cow before the gold market heads into a bull run.
Historical records show that gold prices always increase dramatically in times of an economic crisis, and when the US stock market crashes – which history also records is inevitable – investors buying gold now, at low prices, place themselves in a stronger financial position for the future.