Think the Fed Will Hike? Think Again.

shutterstock_117869614From our vantage point, a September rate hike by the Federal Reserve at this point seems about as likely as the price of gold going to zero. While the central bank has talked the talk for many months now, one has to wonder if such talk is more about saving face than substance. In fact, the only way we see a September rate hike is if the non-farm payrolls data for August is substantially above consensus estimates. Again, we feel this is not likely.

If you live on this planet, you have undoubtedly heard and seen discussion in recent weeks about China and concerns over its slowing economy. These concerns have caused markets to shudder and have driven extreme volatility in recent weeks. More of this volatility may be on the way as markets seemingly hang on every piece of data coming out of China.

Given the fact that China is the world’s second largest economy, this certainly makes a lot of sense. While recent disappointing data coming out of China could certainly give the Fed reason for pause, there are other factors at work that in our opinion could delay the Fed’s first rate hike in almost a decade.

This week saw the release of two key pieces of data to highlight this notion. First, today’s trade report showed exports up slightly but down in several key areas. This may be indicative of an overvalued U.S. dollar.

Yesterday, the ADP employment report also revealed some non-impressive data. The data showed an increase of 190,000 private sector jobs added last month. The ADP report has repeatedly failed to show employment gains of over 200,000 jobs over the last several months which calls into question the perceived strengthening of the labor market.

And while Friday’s non-farm payrolls data may potentially show over 200,000 jobs added in August, in our view the jobs market is not nearly as strong as it needs to be.

We have said it before and we will say it again…The economy is not strong enough to handle higher interest rates.

What might this mean for you and your portfolio?

As there is currently no interest income to be had, and as this will likely be the case for the foreseeable future, where are you going to put your capital to work?

The artificial rally in stocks may have one last breath to go before a new bear market begins. Many investors, hungry for any type of return and willing to “chase” the stock market, may head back into equities hoping for another leg higher. While we think this is unlikely, the market could possibly make one more attempt at the highs before succumbing to reality…

Those investors that choose to go down this path will then be sitting on a house of cards that is beyond fragile.

Just look at how much wealth was erased this past week in the stock market…

In our view, the current conundrum faced by the Fed is a LOSE/LOSE for investors…

If the Fed hikes rates, economic activity slows, stocks fall and the economy may be set back…

If the Fed does not hike rates, it is clearly indicative of the true state of the economy…

There is no winner….

In our opinion, stocks will fall regardless of what the Fed does or doesn’t do…

The only question is: Will you allow yourself to be part of the carnage?

You have seen stock market bloodshed in recent weeks-and it could potentially be just the beginning.

NOW is the time to seek out alternatives. Now is the time to take your cards off the table and preserve your wealth…

NOW is the time to consider an allocation in physical precious metals such as gold and silver.

These hard assets have been considered a reliable store of wealth and value for thousands of years.

These asset classes may potentially offer further diversification and even potential protection from economic and geopolitical chaos…

Don’t wait until the stock market falls another 10, 20, 30 percent OR MORE…

Let us educate you on the potential benefits of gold and silver ownership today.

One of the simplest ways to gain exposure to these critical precious metals is through a precious metals IRA. Getting started with a gold IRA is easy. Our experienced executives are here to guide you, step by step, through the entire process. Call us today at 1-800-341-8584 FREE