A recession is when your neighbor loses his house. A depression is when you lose your house. This old adage, while recited tongue in cheek, speaks to the awareness of economic situations occurring around us. There is a multitude of distractions currently to keep our attention away from the most important headline that is missing from the front page of the newspapers. Charges of a stolen election, Covid-19 and its unending parade of brothers and sisters, just as the U. S. Government claims victory over Covid, a humanitarian disaster erupts in Ukraine. How can we possibly keep up with all the news that we are being fed on a daily basis?
Exactly what is not being broadcast with the same zeal includes but is not limited to, Inflation, reported at 7.8%. The experts that came up with this number are not shopping at the same stores the American People do. Saudi Arabi is considering accepting the yuan for payment of oil from China bypassing the Petrodollar. The last dictatorship that announced this measure was Saddam Hussein. It was so unacceptable to the United States that his country was toppled not once but twice. The lack of employees to fill millions of jobs is affecting manufacturing and creating supply chain problems. This while the Federal Reserve is at the ready to raise interest rates. Raising interest rates is designed to cool an overheated economy. With $4.00 per gallon gas, this economy is far from needing cooling down. American citizens are already having to give up some purchases in lieu of filling their fuel tanks, automobile and heating. Until a replacement for Russian petroleum is allowed to occur, $10.00 - $15.00 gasoline will have enough cooling effect.
There is a perfect storm brewing in the World Economy. With the irresponsible fiscal policies piled on top of each other year after year, election cycle after election cycle, there has always been a day of reckoning on the horizon. With the dollar as the reserve currency of the world and the U. S. economy the largest in the world, what happens in the United States of America spreads like a contagion throughout the world. At some point the rest of the world will simply accept the American hegemony as “a nice run” and turn its back on the dollar and the former envied and respected democratic republic. With Saudi Arabia negotiating abandoning the Petrodollar, that day may be sooner than later.
What does history tell us is next up for this economy and the United States. While there are no predictions in this writing, there are history lessons. The first would be the signs and trial balloons being floated currently about recession. A recession in an election year is devastating for the incumbent party. Yet, the Secretary of Treasury admitted yesterday that signs point to a recessionary environment upcoming. A recession in the United States trickles throughout the Western World. And with our retail dependence on China, they will certainly feel the impact as well. The last recession was not televised for a full nine months after statistics clearly showed we were indeed in a sustained and deep recession. In addition, it was deemed to be over about six months earlier than it actually was, statistically. The average length of previous recessions was sixteen months. The fact that the Great Recession of 2008 was to be closer to three years in length, was deemed more than the world’s perception could endure.
In ordinary circumstances, a recession is a natural occurrence in an otherwise healthy economy. Because we have kicked this can down the road as far as we possibly can, our economic situation is hardly ordinary. We are on the verge of at the very least a sustained and deep recession. History and Statistics are starting to show that our inflation may evolve into Stagflation which is a nightmare the world witnessed for most of the 70’s and early 80’s. Analysts warn to be prepared for a major correction in the equities market as this is imminent. Americans are already experiencing the early stages of the storm with the worst inflation in four decades. History shows that precious metals will rise in the inverse relationship they enjoy with the stock market. This is largely due to the safe haven status that gold and silver provide. When times are prosperous and stable, investors seek more aggressive plays with their money. As the instability occurs, the solid aspects of holding Gold and Silver are more attractive.
GMRgold began readying its subscribers and clients about the dangers of inflation a full year before it became a household topic. The only time it is too late to buy homeowners insurance is after the fire. The same rings true for purchasing Precious Metals to protect your future, your money, and your way of life. With the nearly 100 years of combined Portfolio Management experience handling your precious metals portfolio, you can be assured that the advice you receive will be the best available in the Gold and Silver coin and bullion market. The timing has never been more critical than today to pick up the phone and secure your future. We look forward to handling your confidential and secure purchases for diversification in your personal and retirement accounts. Contact your representative today!