Brave Federal Reserve Chairman Powell Saves the Day
Hopefully you can see right off the bat that I’m kidding. Sadly, central banks around the world are all engaging in more manipulation of the currency markets and the economy in lockstep, moving into the next stage of the current financial meltdown, joined this week by Singapore.
The difference this time? Well, for starters, they’re not calling it quantitative easing, because they’ve used the term enough already. Nope, now they are just injecting billions into the overnight repo market (a fancy name for overnight loans in massive amounts for large corporations and moneyed institutions) with a promise to continue well into the latter part of 2020.
What does this mean for you and me?
The stock market may stay relatively high in nominal terms, but not real terms. The fact is, unless you’ve sold your stocks or cashed out your IRA or 401k, you haven’t made anything. It’s only gains on paper, just like in 2007-2008.
The global consumer is spending less and taking in more debt in the many bubbles we have on our hands at this point- student loans, private debt, corporate debt, municipal and government debt, mortgage debt, and now treasury bonds.
No one knows what’s going to prick any one of the bubbles and cause the stock market to correct to 50% of its current value, but one thing’s for sure- it will happen eventually, sooner or later.
Do Something About Your IRA or 401k While You Still Can
A Gold IRA:
*Can protect you from the devaluation of the dollar due to un-payable US national debt
*Enables you to make money even as stock markets decline, drop in price, or even crash
*Let’s you retain all the same tax benefits of a traditional IRA or 401k
When the Recession is officially announced, it will likely already be too late to save your retirement and investments. And a Depression will likely not be announced.
If you were curious as to whether the United States mainstream media spin machine is in full effect, look no further.
Only in a society that so morbidly and closely mirrors George Orwell’s dystopian 1984 in so many ways already could the media interpret keeping interest rates at zero well into the future as a sign of good things for the economy.
Traditionally savings have been the hallmark of a successful economy, nation, and society.
You cannot save money and beat inflation if interest rates are at zero. The only logical place then for your money is to risk your ventures and investments in the likes of stocks, bonds, real estate, or investing in a business, and even starting your own business.
While I am a big fan of people starting a business, the logic behind the Federal Reserve move indicates that the economy is not in fact demonstrating the huge gains hoped for when stimulus began and interest rates were initially lowered. Also they are stealing from people who have the audacity to save their money intelligently!
After all, if you want money to move around in the economy, remove all incentives from saving so that people take their money out of their savings accounts. Not only have they done that, they have essentially penalized anyone who chooses to save money in a traditional savings account. I’ve also talked about negative interest rates which they have introduced in Europe because all the entitlement crowds were fed up and rioting over austerity. So the elites and the banks decided to just tax the middle class savers some more, and word is that it’s heading to the U.S. soon as well.
Some might argue it’s already here, since the Federal Reserve already has a very special status quo protecting method of ascertaining actual levels of inflation, which conveniently neglects to account for many of the basic necessities upon which many middle and lower class Americans rely.
It’s a rigged game. They’re meant to win, at all costs. No fundamental changes since the bail-out.
Business as usual for everyone involved.
At this point the majority of the US economy is based largely on risk and the “recovery” has only materialized in the form of padding the numbers on people’s investment accounts. In fact only the richest 20% of Americans have benefited from the “economic recovery”.
One unfortunate reality behind investing is that you cannot guarantee behavior of the markets to ensure the kind of returns that fund managers try to sell you on.
If all you ever do is look at the stock market over 20 year period, it usually looks like a fun casino where there are only winners and the only losers are the idiots dumb enough to sit on the sidelines.
But the truth is, it’s actually quite difficult to get more then a 10% return on investment compounded when you take market crashes into account. Market crashes in any sector take away from the ultimate compound interest wealth building vehicle that the stock market is touted as.
This is one big reason why holding the majority of your savings and investment account in funds denominated in stocks which are denominated in paper US dollars is in fact far from a sure thing investment. It’s easy to look back on the past and try to predict the future. But it’s really easy to just look at the numbers and the direction of those numbers too.
All you have to do is examine the repeated inconsistent behavior of the government that prints money and continuously keeps interest rates near zero to understand the real direction of the currency and economy of United States of America.
I don’t personally see how the Federal Reserve manipulating the markets and constantly overspending can result in good things long term for America’s fiscal health. I think unfortunately many would agree with me.