The TreeceCo Report
What in the world is going on? Gas prices are dropping. Gold is going down. And the government money printing is ending.
While the price of gas dropping is viewed as a welcome reprieve, it also indicates that we are experiencing deflation.
Conventional economists commonly state the inflation rate should be at 2%. Remember that food and a few other key elements in the government’s reporting of inflation were taken out years ago.
The water gets muddy very quickly because with the Federal Reserve printing $3.5 trillion in new money since 2008, we can see inflation in some sectors and deflation in other sectors. For example, because of quantitative easing, the bull market in precious metals ended and entered a deflation state last year.
The price of precious metals had to be pushed down because during geopolitical uncertainty metals always increase in value, so the illusion that the economy is recovering had to be propagated. If metals went up it would also indicate that the dollar is losing value. Several trading techniques are being used to cause gold and silver prices to be suppressed.
The Federal Reserve has stated that money printing will end in the next few weeks, but they have already tried to halt the printing only to see the market drop. The graph below demonstrates that when the Fed has tried to stop QE, the market has gone down drastically.
As you can see, when the quantitative easing stops the market could very easily drop lower than it has in recent memory because our economy is addicted to easy money and low interest rates. When interest rates go up, lending will become harder, thereby driving us into a deeper recession if not a depression.
What should you do?
If you have a 401k account that you cannot touch because you are still working or are too young, give us a call. We may be able to help you secure some or all of your 401k account. At the least, move your funds out of the stock market and into a money market cash account. Stocks and mutual funds fall much more quickly than they rise and during this period you’d be wise to hedge your loses.
If you have IRA accounts that you can move, ensure they are in accounts that guarantee your principal savings or investment cannot be lost. And make sure that you have a contract on each account, because making a handshake deal in our present day will not suffice.
With your remaining cash, buy cash hedging insurance: physical precious metals.
We do not anticipate metals dipping much lower. I believe that gold will remain above $1,200 and I anticipate it will rocket up when the stock market drops. Most people who were going to sell gold and silver already have, so the price should remain level where it is until the market drops.
If you wait, it’s likely that you will not be able to get a contract stating your principal cannot be dissipated because there will be a rush for this type of investing vehicle. Also getting gold and silver is likely to be difficult because some mines have quit producing metals until prices return to a point where they are not losing money to mine them. I anticipate the supply to be limited.
Begin today to prepare, because our window for preparation is quickly closing. Call our office to begin protecting your money.