The Yield Curve Inverts: A Recession is On the Horizon
A traditionally correct indicator of a coming back recession was triggered on Friday, because the three month T bill rate exceeded that of the 10-year Treasury bond. What this implies is that short term government bonds are manufacturing greater return on investment than long term instuments, showing that investors have a weak read of the economy long-run.
Put in a different way, the treasury yield curve inverted.
What’s Supporting the High Prices of this Stock Market?
The Federal Reserve System recently opened up that they had no desire to raise interest rates any more for 2019, primarily admitting defeat in a plan to raise rates a minimum of four times this ucpoming year. Upon raising rates in 2018 many times to a nominal rate of solely 2.5%, the exchange began a semi-permanent dive beginning in October, and had a spectacular devaluation on Christmas Eve in 2018.
What this implies is that the FRS is confessing that the economy isn’t that robust in any case, and without 0% interest rates to ensure a lot of free cash injected into the equity and bond markets, the Dow-Jones Industrial Average, NASDAQ and S&P five hundred don’t have a chance in hell to keep their upward trajectory in place.
Federal Reserve Continues to Bide Its Time
After reversing course throughout the Christmas holidays on future rate hikes, the Fed has shown their hand, and if you browse the headlines you’ll see that they’re not against dropping rates back to zero, if not going into a vicinity of negative interest rates- charging you cash for merely holding your money in an exceedingly greedy commercial bank.
But perhaps unsurprisingly this is just the result of ten years of quantitative easing, cash printing, tax cuts for the wealthy companies leading to just end up with their own stock share buybacks- events that have occurred in a deceptive time wherever client, corporate, national, and worldwide debt have soared to a combined $250 trillion that at now, everybody admits will never be paid off.
So as we sit and anticipate the worldwide debt default, it’ll be attention-grabbing to work out what happens while housing markets round the world still slide, the college student loan bubble rises to new heights, and currently record retail location closures and other people missing their automobile payments for three months straight paint the backdrop for this brewing perfect debt storm.
Indeed, the economy isn’t as robust because the “experts” are playing for “them”, and central banks around the world are quietly shopping for gold. Gold and silver are at uncomparable historical lows, and lots assume precious metals are the last undervalued investment offered since BitCoin crashed in 2018.
Many Great Ways to Invest in Precious Metals
A great way to hold gold and silver is to simply purchase it yourself online. If you have a traditional 401K or IRA and want to take out a meaningful position in precious metals, a Gold backed IRA could be beneficial to your overall portfolio, providing a tax haven, allowing for holding metals and ownership of real gold, and enabling buyers to accept delivery whenever they like.
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