January 2021 Newsletter: Gold Rings In the New Year Strong Off Stimulus Package; Fed’s Balance Sheet Spells Doom for the Dollar

Home » Blog » January 2021 Newsletter: Gold Rings In the New Year Strong Off Stimulus Package; Fed’s Balance Sheet Spells Doom for the Dollar

Although it just started, it looks as though 2021 is off to a horrible start for the economy.

Global debt is at a record high of $277 trillion

The debt-to-GDP ratio is 50 percentage points higher among developed nations than it was only one year ago.

At home, the Fed's balance sheet skyrocketed $120 billion in the second week of December alone, totalling $7.4 trillion. In fact, the U.S. money supply had a year-over-year increase of 25% for the first time in history.

The consequence? Hyperinflation, at least according to some experts. By 2022, a trip to Dollar General might feel more like shopping at Nordstrom.

Nevermind the impact of the coronavirus pandemic and what might happen if the new, more contagious UK variant proves resistant to the vaccines. 

If the vaccines do work, then the economy should take off in Q3/Q4 of this year before inflation eventually pumps the brakes. If they don't work, well, it might take years for the stock market, and the country, to recover.

Right now, there are over 7 million more Americans out of work or laid off than there were last February, yet the S&P and Dow Jones continue to breach all-time highs. The consensus on Wall Street is that speculation and a few overvalued tech stocks are single-handedly keeping many investors’ portfolios afloat. 

Not surprisingly, experts know that the stock market's rally won't last forever. We’re likely overdue for a massive course correction that quantitative easing probably won't be able to fix.

Once the Fed stops printing cash like it's Monopoly money, the house of cards will likely come crashing down with an impact that'll make 2008 look like a mere blip. 

Meanwhile, Trump's signing of the stimulus package sent gold to its best close in seven weeks. As more investors transfer their wealth from stocks to the relative safety of gold, the price of the yellow metal will likely continue its rally.

Even if the vaccines have a picture-perfect rollout, there's no cure for the recession that lies ahead. Meanwhile, currency debasement fears, rock bottom interest rates, and a weaker US dollar are poised to drive gold and cryptocurrencies to new heights in the years ahead.

That's why it's crucial you prepare yourself now. With your retirement at stake, you can't afford to have all your wealth tied up in stocks and Treasuries. Precious metals are one of the only sound forms of money we have, and cryptocurrencies can provide extra insurance in case of a market downturn.

Don't wait—protect your retirement savings today. Get started by checking out our list of IRA-approved precious metals to add to your retirement account, or open a crypto IRA to diversify with Bitcoin and Ethereum.

 

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Mark T.
Mark has worked in the investment industry in Chicago and New York for over 15 years. After graduating from Chicago State University with a degree in Finance, he has occupied various management positions at reputable banks and financial institutions, including: Chase, Bank of America, Wachovia, Sterling Trust and Fidelity. His experience has led him to develop a keen understanding of the current economic landscape. For the past 10 years, Mark has been working as an independent investment advisor and has helped many Americans learn how to protect and grow their savings by properly diversifying their portfolios.
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