Stock Market Warnings | The Gold Standard #2125

https://www.midasgoldgroup.com/

The US economy is not healthy. The economy is fragile and growing weaker each day. Warning signs are showing up all the time; however, many investors underestimate how far the US dollar could fall. Host Dave Deno and guest Ken Russo, VP of the Midas Gold Group, discuss what many on Wall Street are not acknowledging.

For the longest time, the Fed insisted that inflation would be temporary. They now admit that inflation will stick around a bit longer than expected. As we move deeper into 2022, one of the burning questions is how high will inflation go, how long will it last, and does the Fed have the tools, and the nerve, to tame it?

Higher Inflation and Gold

Gold is an asset with inherent value; therefore, it holds its value when other assets fail, eroded as the national currency becomes weaker and weaker. As this erosion of currency value takes a foothold, investors scramble to convert their cash holdings to gold to protect their assets’ value. That’s why gold is often considered a good hedge against inflation.

The Economic Outlook for 2022

The rapid rise of inflation presents a much more significant threat to our economy and the stock market than the global pandemic. We’ve had the supply-chain breakdown, a tight labor market, and a burst of consumer spending as the lockdowns lifted. From groceries, gasoline, automobiles, and new homes, all of us have spent more on everything this year. For the first time in our nation’s history, we’ve engaged in mass helicopter money. The Treasury Department has sent six trillion, an average of $50,000, to each family in the US. The Federal Reserve printed four point five trillion dollars since the pandemic’s start.

The Emperor Has No Clothes

At almost twenty-nine trillion dollars, the national debt showcases the country’s addiction to a debt-based monetary system and way of thinking. Along with the rest of the global economy, the US is speeding towards a fiscal and monetary cliff.

How Does the Stock Market Rally to Record Highs?

Despite more economic uncertainty now than ever before, the year-to-date gains in the stock market have been astonishing. Last year was the global pandemic, supply-chain shortages, and the highest consumer prices we have seen in over forty years. Despite these challenges, the Dow Jones Industrial Average, an index of thirty of the most extensive blue-chips stocks in the market, is up nineteen and a half percent, the S&P 500 climbing twenty-eight percent, and the NASDAQ composite up twenty-three percent.

Some would argue that the market is an indicator of things to come, and investors don’t believe Covid-19, or Omicron, will hurt economic recovery in 2022. As long as companies turn profits and consumers continue to spend, there’s no reason not to believe the market will continue its gains.

The Money Liquidity Crisis or the Inflation Crash

Another way to explain it is that the stock market is the most overvalued it has ever been in history. It is a house of cards propped up by massive fiscal and monetary stimuli. Earnings of the S&P 500 went up forty-five percent in 2021. The waves of stimulus have made the market look like it’s doing better than it is. The illusion of abundant growth creates an atmosphere reminiscent of the emotional exuberance of the Roaring Twenties. Just like the years leading up to the Great Depression, the market today overflows with speculators and trading on borrowed money. As Ken says in the program, “same story, different names.” We’ve had the dot com crisis, the sub-prime mortgage loan crisis. What are we going to call this one?

Federal Reserve tapering, inflation, and the interest rates will inevitably come will dramatically impact the financial markets. The prices of stocks, bonds, and most other assets will decline as soon as the government ends stimulus, and they will have to at some point. A fiscal tightening will provoke a credit crisis and global recession.

The Gold Britannia

The featured bullion product for this episode is Europe’s first Gold bullion investment coin, the Gold Britannia, which, as Ken points out, represents a truly outstanding value for investors. The Gold Britannia can is available for much less than the Gold Eagle or the Gold American Buffalo. Like the Gold Buffalo, the Gold Britannia is .9999 pure 24-karat gold. Ken offers insights into the bullion coin’s design and its history. The Gold Britannia is approved for the Gold IRA program.
______________________________________________________________________________

Listen to The Gold Standard: https://www.midasgoldgroup.com/gold-standard-radio-show/
Gold IRA: https://www.midasgoldgroup.com/gold-ira/
Invest in Gold: https://www.midasgoldgroup.com/buy-gold/
Guide to Owning Bullion & Coins: https://www.midasgoldgroup.com/bullion-guide/
Read the latest precious metals news: https://www.midasgoldgroup.com/news/