Following what many considered to be a long-shot victory by Republican Presidential candidate Donald Trump, markets have been moving higher after some initial volatility. The dollar index is approaching 14 year highs, while the Dow Jones has been on a record-setting spree. Interest rates have been on the rise, as bonds and notes were sold heavily.
Is this truly the beginning of a new era? In our view, the answer is perhaps yes, but probably no.
While things may be looking better here in the U.S., they are far from rosy. And what about other global economies? Are they getting on more solid footing?
The European Union, for one, appears to be extremely fragile, even after all of the stimulus efforts put forth thus far. Eurozone central bankers last month decided to leave the door open (wide open), for further easing measures if the sluggish EU economy was still unable to reverse the deflationary trend seen there for some time.
It is expected that the ECB will, at its December meeting, announce an extension of its 80 billion euro per month bond purchase program for six months after the scheduled end in March 2017.
According to the ECB’s meeting minutes, there appeared to be concerns that inflation “still lacked a convincing upward trend.”
The ECB has, according to at least one report, already pumped 1.7 trillion into stimulus measures, and clearly stands ready to keep the spigot open.
Apparently nothing helps ineffective stimulus like more stimulus.
While the U.S. is currently cheering on potentially drastic changes in fiscal policy, it remains unclear if Mr. Trump’s plans will provide the economy with a sustainable boost. In fact, it remains very unclear how such policies would even be implemented in the first place.
Either way, the era of low rates and easing is far from over, in our view, and some key economies are still very reliant on stimulus to stay afloat. Among other things, an ongoing era of low rates and QE could mean weaker currency values and the potential for severe inflation down the road.
If you don’t own hard assets that may potentially provide a meaningful hedge against lower currency values or rising inflationary pressures, now may be the ideal time to explore your options.
Hard assets like physical gold and silver have been considered a reliable store of value and protector of wealth for thousands of years-a reputation we believe will continue for thousands of years to come.
With the recent declines seen in gold and silver-perhaps nothing more than a knee-jerk reaction to the election- we believe now could be the ideal time to begin allocating to these key precious metals, or to add to existing holdings.
All you have to do is pick up the phone. Speak with an Advantage Gold account executive today. Our professionals are here to answer your questions and show you the simplest way to begin acquiring and holding these important assets. Our representatives can even show you how easy it is to buy and hold physical gold and silver using your IRA account.
Don’t wait for inflation to rear its ugly head or for your purchasing power to decline. Call us today at 1-800-341-8584 to get started today.Tags: advantage gold, deflation, ecb, european union, fiscal policy, gold, stimulus, trump