Why the Next Recession Has Just Been Proven Unavoidable
A traditionally reliable indicator of an impending recession was set off on Friday as the Dow Jones closed down 460 points, and the 3 month T bill interest rate exceeded that of the 10-year Treasury bond. This shows that limited term government bonds are producing more cash outflows than longer term instruments, proving that investors have a declining view of the economy long-term.
Every time the, the yield curve has inverted, a recession has followed just a year later, from 1929 to 1989, 2000 to 2007, and now, 2019.
Insane Over-Valuations of Current Stocks Spell Trouble
The Federal Reserve Bank recently acknowledged they had no real plan to increase interest rates any more for 2019, casually admitting a reverse in course from the plan to raise rates at least 4 times in 2019. After lifting up interest rates in 2018 a few times to a nominal rate of only 2.5%, the stock market began a major dive starting in October, and had a significant price drop on Christmas Eve in 2018.
This says that the Federal Reserve System is admitting that the economy once hailed as the best ever is not that strong after all, and devoid near-zero % interest rates to ensure more free money is injected into the stock and bond markets, the Dow Jones, Nasdaq and S&P 500 don’t have much room to go up any longer.
The Federal Reserve is Running Out of Tools
After doing a 180 during the Christmas holidays on future plans for rate hikes, the Fed Reserve has revealed the true weakness in the economy, and if you pick up the silent message you can see that they’re not ruling out pulling rates back to zero, if not going into new territory of negative interest rates- charging you money for simply holding your money in a private commercial bank.
But this is what happens after 10 years of quantitative easing and keynesian economics, money printing, tax cuts for the corporations which in turn resulted in no more than their own stock share buybacks- events which have transpired in a time where personal, corporate, government, and worldwide debt have risen to a total of $250 trillion which at this point, everyone says can never be paid off.
It’s inevitable and all over but the shouting concerning the global debt default, and this occurs simultaneously as housing markets around the world continue to slump, the student loan bubble traverses to new highs and defaults, and now retail store closures with people missing their auto payments for 3 months straight- all record misses on the hottest economy since the 90’s, if you believe the mainstream media.
Gold and Silver are About to Have a Breakout in Price
While the MSM tells you to buy more stocks, the central banks around the world are quietly buying up and hoarding more and more gold. Gold and silver assets are at all-time historical lows, and many think metals are the last opportune investment since nothing else is anything but extremely over-valued right now.
The advantage is you can invest in gold and silver by simply buying some here and there online. If you have a 401K, Roth or traditional IRA and want to take out a larger position in precious metals, a Roth IRA Rollover to Gold could be advantageous to your overall investments, providing tax benefits, allowing for physical possession and ownership of real gold, and giving investors the chance to take delivery at a time of their choosing.
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