There Is No Economic Recovery!
The FED and the Corporate World understand that there is NO economic
recovery. They need to keep feeding this 'bull market' with plenty of accommodative
easing or this 'bull' will die. The FED will do whatever it takes to maintain
this by cutting rates to near zero and below so asto spruce up the economy. However,
these conventional policies that are being applied, by the FED, will
not work seeing as the 'deflationary forces' have gained momentum. Global
economies cannot sustain rate hikes. They will continue to use 'expansionary
monetary policy', indefinitely: (https://finance.yahoo.com/news/trump-says-fed...-114816250.html).
The FED will no longer remain the 'lone wolf' Central Bank of and by keeping
interest rates from going negative. The New Zealand Central Bank went through
this same cycle, last year, at which time the economy could not sustain a rate
hike, thus resulting in a quick cycle of rate cuts.
The 'herd mentality' is now at the stage where they must accept this as the
'new norm'. They want to keep this illusion alive and do not want to deal with
the reality.
When the FED does implement negative interest rates, the stock markets are
going to soar so high that it will probably even shock the 'bulls'. Thus, this
is the reasoning that the market will not currently crash, but will experience
sharp corrections. In this current market environment, I now recommend putting
your money into precious metals.
This is one of the most detested 'bull markets' in history. The FED has provided
this market with the ingredients that it needs to take it to the 'bubble
level'. The masses will embrace this market in the same manner as the corporate
world has done so for the past eight years.
The main trigger for the financial crisis of 2008 was the issuance of mortgages
that did not require down payments. The ease at which one could get mortgages,
in the past, is what drove housing prices into unsustainable levels.
Currently, Barclays has launched the "Family Springboard Mortgage" which allows
homebuyers the opportunity to purchase a property with a mere 5% deposit.
In order to acquire this 5% deal, one will need guarantors to put up the cash,
which, in turn, will be lost if one fails to repay the mortgage.
Ones' family/guarantor must place savings which are equal to 10% of the purchase
price into a Barclays Helpful Start savings account. No withdrawals are allowed
for three years. The Helpful Start savings account pays the Bank of England's'
base rate plus 1.5%, which currently means getting 2% interest, before taxes.
This is not a lot of interest considering the lengthy period of time: target="_blank"(http://www.barclays.co.uk/mortgages/family...gboard-mortgage).
When the FED starts purchasing private assets, this will negatively impact
economic growth and consumers' well-being. This reasoning is that the FED will
use this power to keep failing companies alive and thus preventing the companies'
assets from being used to produce goods or services which are more highly valued
by consumers.
The Reality:
Over 50% of Americans do not have enough money to invest in stocks. The U.S.,
unfortunately, is currently appearing to be closer to that of a third world
nation. Americans appear to be living hand to mouth thus making it more and
more difficult for the average person to focus on his/her financial security.
One in every seven Americans currently depend on food stamps in addition to
using Food Banks, despite this 'so-called economic recovery'.
The chart below from Banktrate.com illustrates that a total of 74% of individuals
either do not have enough money to invest in the stock market or they do not
know anything about stocks.
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Random tests have already shown that the monkeys with darts fare better than
most of these experts would.
The severe economic contractions which I have been speaking of, over the last
couple of years, should now be evident to all of us, today. Productivity has
now fallen to a negative rate. Investment has stalled and individuals have
turned against globalization. Without productivity growth, capitalism becomes
unpopular, globalization becomes unpopular and politicians, in turn, become
unpopular.
Conclusion:
Gold and silver should be viewed as a form of insurance against the impending
future financial disaster. We will also experience another disaster, sooner
or later. I am not advocating that you should load up on bullion seeing as
the precious metals sector has put in a bottom. I am referring to one obtaining
insurance against another financial crisis that has the potential to be larger
than the 2008 financial crisis was.
Every crisis also brings with it an opportunity, hence, one should make the
best use of this opportunity before the price of gold and silver jump and value.
It is better to invest now and see one's investments multiply rather than waiting
for the crisis to commence and pay a premium for insurance later.
