The U.S. stock market witnessed massive selling for the second day in a row as investors continue to run for the exit signs in droves. The broad market SP 500 index saw losses today to the tune of over 3 % and closed 64 points lower, while the Dow Jones Industrial Average was hammered for a loss of over 530 points. Concerns over a global economic slowdown and plunging emerging market currencies have been cited by some media outlets as the cause of the selling, while the notion of a rate hike may be taking a toll on markets as well.
Despite a plethora of ongoing economic concerns, the majority of the markets immediate woes all seem to lead to the same place-China.
Masamichi Adachi, an economist with JP Morgan Chase in Tokyo, stated today: “It’s all coming from China. Brazil, South Africa, many countries are commodity exporters, and the final destination is all going to China.”
According to a recent article on Barchart.com, the Chinese economy is slowing much sharper than many had expected considering its double digit growth rates in the mid-2000s. According to the article, the Chinese economy may grow less than seven percent this year which would be its lowest growth rate since 1990.
This slowing growth in the world’s second largest economy is likely have a significant trickle-down effect on many emerging markets.
China’s recent devaluation of the yuan was a great clue that things are not looking great…
In fact, other countries have looked to devalue their currencies as well in order to keep up.
With the U.S. possibly raising interest rates this year, it could potentially cause even more capital to flow out of emerging markets. All of which leaves inevstors in the paper markets no place to run and hide.
We have felt this day would come for some time, and it seems that a significant turning point is upon us…
Gold and silver have driven higher as the world seels off.
With the possibility of China slowing significantly, a new bear market in stocks and low interest rates.
Where will you put your money?
We believe that a great asset reallocation is now underway. Equities, in our opinion, have been artificially propped up for years now on the backs of quantitative easing and zero interest rates.
While times may have been good for stock investors in recent years, we believe things are going to change. That change appears to be already underway…
As the uncertainty surrounding interest rates in the U.S., emerging market currencies and Chinese growth takes its toll on investor sentiment, there may be few places to turn.
Fortunately, precious metals like gold and silver can potentially outperform during such times…
We believe recent economic events will prove to be the catalyst that drives gold and silver back to recent highs. We believe that gold and silver will resume their long-term uptrend after a multi-year pullback.
We believe that economic reality will set in…
For the long-term investor, we see this as an opportune time to buy physical gold and silver-precious metals that carry zero counterparty risk and could potentially appreciate in value rapidly. These metals have stood the test of time in good times and in bad. They have a history as a reliable store of value and are recognized all over the world for their inherent value.
Where else would you want to put your money to work?
Although gold and silver have risen recently, we feel there is significant upside potential at current levels-levels which we feel are fire sale prices…
Don’t wait until the train has left the station…
It has never been easier to make allocations in physical gold and silver than it is today.
The writing is on the wall-look closely and we think you will agree.
Please reach out to our experienced precious metals executives with any questions that you might have about investing in gold or silver and the process of setting up a Precious Metals IRA. Call us today at 1-800-341-8584 FREE to get started.