As I have said before and I will say once again, “when the Fed starts raising interest rates, markets in paper will start to go into turmoil, and gold will turn bullish on either the first or second rate hike.”
The Federal Reserve is Making Moves
The Federal Reserve has backed itself into a corner, they are darned if they do and darned if they don’t. In September 2015 Janet Yellen, Fed Chairman, talked about negative interest rates as an option to sustain and stimulate the economy. Can you imagine for a moment your bank charging you to hold your money? Would you do that? That is what a negative interest rate would do.
In December 2015 the Fed raised interest rate was .25 percent to .5 percent of a percent. This sent stocks down and gold prices up. Since then, stocks are off about 9 percent and gold rose over 16 percent. Last week Japan announced negative interest rates, being the fifth entity to join the ranks with Switzerland, Sweden, Denmark, and the Euro. This caused a one day rally since there was a large injection of capital from the Japanese sector and trickled over into our markets. The next day they wore off and we were back to the fundamentals, which the lack thereof caused the paper indexes to fall more and gold moved up.
The Fed also recently announced that they are pausing on raising rates next month and the paper indexes fell again while gold moved up. Gold and silver are now clearly in a bull market that I believe will continue for quite a few years. I am now making public my prediction that gold will move between 15 to 30 percent in 2016. At the end of the year this will put it between $1250-$1400. Stocks this year will remain volatile with at least another 10 percent downturn and we will move into a recession. Recently our national debt broke through the $19 trillion level and will exceed $20 trillion before Obama leaves office.
In this week’s news President Obama is asking for a $4.1 trillion spending bill for 2017. Less than 2 months ago we passed a $1.1 trillion spending bill for 2016. This new spending is asking for almost 4 times as much spending. THIS IS INSANE! Where is all the money coming from, issuing more Treasurys as debt? I don’t think so since rates are low and they might even go negative, no investors would buy that, which is what is happening. Raise taxes? While this is what Obama wants to do, raising taxes won’t be enough and that is where the Bail In comes into place.
The last 4 years our government has already done 5 government Bail In’s totaling over $800 billion. The government in 2015 moved aggressively toward solidifying the plan of seizing bank account and retirements of U.S. citizens. Get the facts in our newly released white paper that will startle you. It is free and will only cost you your time in reading. This could be the most important resource to save you from the biggest wealth tax coming known as The Bail In.
I get asked the question many times, “what should a person do in this type of volatile market?” The answer is simple you should not have all your eggs in one basket. That’s how you get hurt in this environment. Historically gold and silver is the assets class that brings financial protection and stability to a portfolio. It is the insurance policy that brings peace of mind from a Bail In with additional market protection. Not all asset classes rise and fall at the same time and pace, which is imperative to have a well-diversified portfolio. Stocks and bonds, real estate, cash, and precious metal stocks (if bought with the proper allocation by investors prior to 2008) weren’t hurt significantly by the huge downturn in the global recession.
Reprinted with permission from David Fischer at Landmark Capital.
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