There has been no shortage of issues for global financial markets to contend with in recent months. An aging economic expansion and equity bull market, an accelerating global economic slowdown and the ongoing U.S./China trade war have been at the center of attention. At some point, the economic expansion and bull market in stocks will have run its course, as they always do. Likewise, the war on trade may not go on indefinitely, as it is in the best interest of both sides to come to some type of agreement.
As market dynamics shift and as trade negotiations continue, the Fed and other global central banks stand by ready to ease further.
The U.S. Fed will almost certainly cut rates by another 25-basis points at its meeting this month, and it could even lay out a path for further easing if deemed necessary. The ECB this week will likely launch measures of its own in the form of some type of bazooka that includes both lower interest rates as well as fresh QE. As the era of ultra-low rates continues, other global central banks may follow suit and cut rates from already-low levels.
Central banks will do whatever they can to combat the current economic slowdown and to try to avoid the next major recession. These measures may not only include ultra-low rates-perhaps back to zero or even negative-but also fresh QE. In an effort to stay ahead of the curve, central banks may become quite aggressive in their efforts to lower borrowing costs and stimulate economic activity. This could, however, lead to the next major issue that they may have to contend with: Rapidly rising inflation.
The Fed and other central banks may have no choice but to ease until their respective economies take off, and they may have to let those economies “run hot.”
This could lead to a rapid and significant rise in inflation, making everything from a gallon of gas to a loaf of bread more expensive. As inflationary pressures mount not only does the cost of every day goods increase but net returns on investments also decrease. As the risk of rapidly accelerating inflation increases with ongoing central bank accommodation, now is the time for investors to get ahead of the curve. To do so, investors must look to add significant allocations in hard assets that may potentially hold or increase in value as inflation rises. With its unlimited upside potential, long history and reliability, there may simply be no better asset class to look to than physical gold.
Capital has already begun flowing into the yellow metal as the economic and geopolitical backdrop deteriorates further. The market could be at the beginning stages of the next major cyclical bull market that could take prices to previous all-time highs and beyond. As the market strengthens, now may be the ideal time to build a significant allocation before rapid inflation takes hold. Adding gold to your portfolio has not only never been easier, but it has perhaps never been more important.
Speak with an Advantage Gold account executive today about the potential benefits of gold ownership. Our associates are here to answer any questions you may have and can even show you how to build a significant allocation using an IRA account.
Don’t wait for the next major stock market collapse or for inflation to erode the value of your earnings and investments before taking action. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: aging expansion, basis point cut, cyclical market, ecb, economic slowdown, global central banks, inflationary pressure, market dynamics