Markets have been on more solid footing in recent days as a quiet North Korea and the notion of tax reforms stoked investors’ appetite for risk. Much has been made of the potential Trump tax reforms, and the President is attempting to make good on a key campaign promise.
At the same time that hopes for a tax plan have been seemingly rekindled, the U.S. reached a significant milestone in its ongoing debt problem. In fact, as of the Friday before last, the nation was reportedly over $20 trillion in the red, a staggering number for sure.
This ongoing debt problem brings us to the notion that gold could potentially be in a position to go higher whether a tax plan is passed or not.
If the Trump administration is able to get major tax legislation passed, it could potentially fuel economic activity, job growth, wage growth and more. There are, however, no free lunches when it comes to major policy. A major tax plan could potentially have a significant impact on government revenues, and could possibly slash the amount of money flowing into the treasury.
Along with the benefits come the trade-offs, and in this case that could mean larger deficits and more debt. This could potentially have a bearish effect on the dollar, and in turn has the potential to fuel buying interest in gold and other hard assets.
If a tax plan is not able to make its way through the enormous Washington gridlock, the dollar could still lose ground, while stock investors may become increasingly frustrated. If a tax plan stalls out, it could potentially be the final straw for an aging bull market in stocks that has arguably run its course.
Should the stock market see a significant sell-off, or if the longer-term trend does start to point lower, alternative asset classes like gold could potentially see significant inflows.
The current situation could possibly be a win/win for gold. Tax cuts likely mean lower revenues, higher deficits and more debt. No tax cuts could mean weaker economic activity, job growth, wage growth and a lower stock market.
Discussions about the debt ceiling may also become more and more prevalent in the coming weeks, and with the country owing over $20 trillion and counting, now may be the ideal time to consider diversifying with asset classes that can potentially provide a hedge against a lower dollar or lower stock market.
Now may be the ideal time to consider hard assets like physical gold. This metal has been considered a reliable store of value and protector of wealth for centuries, and it may potentially offer a degree of protection from the possible consequences of runaway debt and currency devaluation.
Speak with an Advantage Gold account executive today about the potential benefits of physical gold ownership. Our associates are here to answer any questions you may have, and can even show you how to incorporate physical gold in your IRA account.
Don’t wait for the debt bomb to explode or for the value of your dollars to decline. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started today.Tags: advantage gold, debtm, gold, gridlock, job growth, RISK, tax reform