A Double Whammy of Rising Inflation and a Falling Dollar

Investors could potentially be in for a rough ride in 2018, as several key market dynamics are changing. The Fed has been slow to raise rates further-and with good reason- as inflation for some time lagged well-below the central bank’s desired target of 2% annually. The central bank seems to be thinking a bit differently at this point, however, as some key indicators of inflationary pressure have been ticking higher in recent months.

The central bank has penciled in three rate hikes this year, but a fourth hike or perhaps even a larger hike cannot be ruled out. The crude oil market is a simple barometer of price inflation, and it is trading at multi-year highs. Other commodities, such as agricultural products and other energies, have also been showing some bullishness. 2018 could be a big year, in fact, for commodities, as stronger demand and contracting supplies could push prices higher.

The potential beginnings of a strong bull market in commodities also comes at a time when the dollar is under significant pressure. The greenback has been in a steady downtrend for months, and is at risk of seeing another sharp downturn from current levels. The U.S. seems to be embracing a weaker currency, further adding to the dollar’s woes- as it allows exporters to be more competitive and can make debt payments more manageable.

But it comes at a cost…

A weaker dollar along with rising prices can be a recipe for disaster. It is insult added to injury, whereby everyday goods and services become more expensive as your dollars simultaneously buy less and less. This is a trend that could continue for some time, and as commodity prices accelerate higher while the dollar is pushing lower, consumers will feel the pinch.

This scenario can potentially lead to a significant decline in disposable incomes, higher default and delinquency rates, job losses and sharply higher interest rates.

The effects of this double whammy can be severe, and now is the time to consider how you may “weather” the storm. If your portfolio does not contain assets that may potentially provide a hedge against a weaker dollar and rising price pressures, now may be the ideal time to consider adding them. In fact, gold may be the perfect asset for such a scenario, and adding it to your portfolio has never been easier.

Gold has been considered a reliable store of wealth and value for thousands of years, and it can potentially provide a hedge against falling currency values and higher prices. Not only that, but it also has the potential for substantial price appreciation, and comes with zero counterparty risk.

Unlike the dollar or other fiat currencies that have shown a tendency to lose value over time, gold may hold its value-or even sharply increase in value-as inflationary pressures rise. As a dollar-denominated commodity, there may be a strong correlation between a weaker greenback and higher gold. The yellow metal may help preserve and protect the wealth you have worked so hard to build.

If you do not already have a significant holding of this key asset class, now is the time to strongly consider adding it. If you already own gold, now is the time to consider adding more.

Speak with an Advantage Gold account executive today about the harmful effects of higher inflation and the potential benefits of gold ownership. Our account executives are here to educate you, while answering any questions you may have. We can even show you how easy it is to gold to work for you, using your existing IRA account or even an old 401k.

Don’t wait for the toxic effects of a weaker dollar and higher price pressures to do their damage. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started today.

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