• Americans may be exposed to higher taxes due to last year’s record Social Security cost of living increase
• Millions of new remote workers are vulnerable to being taxed twice on the same income
• A Gold IRA can shield savings from this administration’s aggressive tax policies

Higher Taxes in 2024

Older Americans grappling with the severe consequences of stubborn inflation may soon find themselves facing another harsh reality – higher taxes. 2023’s record high Social Security benefits increase could result in a new, heavier tax burden. And the army of new remote workers may also be caught in a tax trap. Fortunately, there are means to escape the impact of this administration’s heavy tax policy.

Taxes on Social Security Benefits

Social security recipients receive a cost-of living (COLA) increase indexed to inflation. The current inflation crisis resulted in an 8.7% COLA increase last year. That is the biggest increase since 1981. The Social Security Administration said more than 66 million people received higher benefits last year. The average monthly payment jumped up around $140. The boost could push more seniors into higher tax brackets.¹

²

The problem is that the amount of benefits exempted from taxes hasn’t changed since 1984. Recipients owe taxes on benefits if their adjusted gross income is more than $25,000 if they are single and $32,000 if they are a married couple. Individuals earning more than $34,000 and couples earning more than $44,000 can be taxed up to an astonishing 85% of their benefits.³

Surveys show this jump in taxes could come as a surprise to many seniors who have never owed taxes on their benefits before. “We really expect a huge bump in the number of people who will be paying taxes on their social security benefits this year, sadly,” said Shannon Benton, executive director of the Senior Citizens League. ⁴

A recent study showed 23% of retirees had to pay taxes on benefits for the first-time last year. That number is projected to rise significantly in 2024 as there will be another COLA increase of 3.2% this year.
Economists recognize the tax trap the government is laying out. “It’s kind of a Catch-22,” Benton said. “It’s like, ‘OK, give me a raise, but then take more of it away.’ So, they’re getting this increase every year that they desperately need, but the [tax] thresholds have never been increased.”⁵ Higher monthly income can also reduce senior eligibility for income-sensitive government programs such as Medicare. ⁶

Surprise Remote Work Tax

The pandemic redefined work. There are now 35 million people working remotely. While remote work may bring several perks, it can also come with a nasty tax surprise. Depending on where you live and where your employer is based, remote workers may be subject to the income tax rules of two – or more – states. Individuals can be taxed based on both where they live, and where they earn income.

Several states tax people based on where their office is located, whether they physically work in the state or not. If an employee’s home state doesn’t offer a tax credit, or if they don’t live in an income tax free state, they can be stuck paying taxes twice on the same income.

Jared Walczak is the vice president of state projects at the Tax Foundation. He said, “some [people] are unfortunate enough to work for companies based out of states that have what’s called a convenience rule, which can result in two states taxing the same income without any adjustment.”⁷

Conclusion

Increasing taxes are becoming a staple of this administration and Americans can expect more if the administration doesn’t change in November. There are strategies to try and limit the impact of these taxes. If you are already retired, it may be possible to avoid having Social Security benefits taxed by limiting withdrawals from a traditional retirement plan.

However, that could result in not having enough money to pay your bills. Especially as inflation continues to erode purchasing power. As it is, nearly 3 in 5 seniors report struggling financially to cover the costs of necessities like food, rent, and medical care. Prices are up a shocking 17.23% when compared to January 2021.⁸

For those not yet retired, the Motley Fool suggests saving for retirement in a Roth account instead of a traditional savings plan. Roth IRA and 401(k) withdrawals aren’t taxed, and they’re not factored into combined or provisional income. To gain additional protection from inflation, people can investigate a Roth Gold IRA. It combines tax advantages with the wealth protection offered by physical precious metals. To learn more about how you can secure your financial future, contact American Hartford Gold today at 800-462-0071.

Notes:
1. https://www.foxbusiness.com/money/social-security-recipients-could-get-hit-surprise-tax-bill-year
2. https://www.foxbusiness.com/economy/small-social-security-cola-could-leave-retirees-struggling-get-next-year
3. https://www.foxbusiness.com/economy/small-social-security-cola-could-leave-retirees-struggling-get-next-year
4. https://www.foxbusiness.com/economy/small-social-security-cola-could-leave-retirees-struggling-get-next-year
5. https://www.foxbusiness.com/economy/small-social-security-cola-could-leave-retirees-struggling-get-next-year
6. https://www.schwab.com/learn/story/how-higher-income-can-affect-medicare-premiums
7. https://www.foxbusiness.com/money/remote-workers-face-double-taxation-threat-irs
8. https://www.foxbusiness.com/economy/small-social-security-cola-could-leave-retirees-struggling-get-next-year

• Credit card debt and delinquencies are at record levels
• Rapidly ballooning consumer debt can have disastrous impact on individuals and the economy
• Physical precious metals can safeguard retirement funds from the effects of runaway debt

The Danger of Exploding Credit Card Debt

More and more Americans are buckling under the weight of mounting credit card debt. Inflation and strong consumer spending has sent credit card balances ballooning. Outstanding credit card balances now top an astounding $1.3 trillion. “Over the past two years, Americans’ credit card balances have skyrocketed 40%,” said Ted Rossman, senior industry analyst at Bankrate. The explosion of credit card could hold severe consequences for the economy as a whole.¹

Data points to credit card debt that is snowballing out of control. Credit card balances spiked 18% this past November alone. The share of people carrying balances month to month has leapt up to 49%. Only one third of account balances are paid in full, the lowest amount in 4 years. Meanwhile, 56 million Americans have been in credit card debt for at least a year.²

³

In addition, all stages of credit card delinquency (30, 60, and 90 days past due) jumped higher during the third quarter of last year. They surpassed pre-pandemic levels and are close to setting a record high since data started being collected in 2012.

Delinquencies are occurring as debt is getting drastically more expensive. Carrying a balance is worsened by sky high annual percentage rates, making the debt a deeper and deeper hole to climb out of. The average credit card rate is now more than 20%. “Most cardholders’ rates have risen five-and-a-quarter percentage points during that span as a result of the Fed’s rate hikes meant to combat inflation,” Rossman said. “It’s no wonder, then, that we’re seeing more people carrying more debt for longer periods of time.”⁴

Paying just the minimum on a card with a 20+% rate is “brutal.” Borrowers making the minimum payment on an average credit card balance of $6,000 at the average rate of 20.74% would be in debt for more than 17 years and end up paying more than $9,000 in interest.

The overwhelming effect of debt is feeding into the negative outlook Americans have on the economy. This is despite being told how well the country is doing. People are being forced to rack up debt for practical purchases such as food, fuel, and day-to-day expenses. They are not buying indulgences that can be delayed or ignored. Bills are becoming harder to pay in the face of stubborn inflation, burned up stimulus savings, and renewed student loan payments.

Banks are making it harder to get credit in response to delinquencies. They are granting fewer credit line increases and reducing credit lines more frequently. And even if the Fed does start cutting interest rates this year, credit card APRs aren’t likely to improve much.

The Bigger Picture

For the overall economy, more credit card debt can be ok when things are going well. Consumer spending accounts for about 70% of the US economy. But the short-term boost can become a drag in the long term. If the current pace of defaults and delinquencies continues, the consequences to individuals, financial institutions, and the broader economy would be profound.

As individuals falter in repaying their credit card debts, creditors, including banks and credit card companies, would bear the brunt. The surge in defaults would translate into significant financial losses for creditors. This could lead to a decline in their profitability, potentially threatening the stability of financial institutions. As a response, these institutions might tighten their lending practices, creating a ripple effect that restricts access to credit for consumers.

Consumer spending, a linchpin of economic growth, would contract as individuals curtail discretionary spending. Businesses, especially those reliant on consumer spending, would experience a decline in revenue. The potential consequence is layoffs and a rise in unemployment rates, compounding the economic slowdown. This negative feedback loop could lead to a prolonged recession.

Investors holding securities backed by consumer debt would not be immune to the fallout. Asset-backed securities, including those comprised of credit card debt, form a significant portion of investment portfolios. A surge in defaults would translate into losses for investors, affecting investment portfolios and retirement savings.

Conclusion

The potential for massive credit card defaults presents a clear financial danger. Ballooning consumer debt could set up the economy for a crash. With overwhelmed Americans left with nothing to spend, businesses would decline, and financial institutions could be left holding trillions in bad debt. Any government intervention can make the problem worse – stricter lending requirements could suffocate growth, cutting rates could reignite inflation, while raising them could put the final nail in indebted American’s coffin. That’s why experts suggest looking to physical precious metals to hedge against the consequences of runaway debt. With intrinsic value and no counterparty risk, physical precious metals, especially when in a Gold IRA, can protect the value of your retirement funds. Contact us today at 800-462-0071 to learn more.

Notes:

1. https://www.cnbc.com/2024/01/08/56-million-americans-have-been-in-credit-card-debt-for-at-least-a-year.html
2. https://qz.com/us-credit-card-balances-hit-a-new-record-as-delinquenci-1851151742
3. https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/credit-turnaround-expected-in-2024-even-as-card-delinquencies-jump-in-q3-79808520
4. https://www.cnbc.com/2024/01/08/56-million-americans-have-been-in-credit-card-debt-for-at-least-a-year.html

• The UN, IMF, and World Bank predict a decade of dismal growth
• The global economy is being dragged down by war, inflation, high interest rates, and debt
• Physical precious metals can preserve portfolio value against global recession

Global Economy Facing ‘Wasted Decade’

Global financial institutions are painting a sobering picture for the years ahead. The IMF, UN, and World Bank all foresee a challenging path for the world economy, with a bleak period of economic growth that could result in a “wasted” decade.

World Bank Outlook

The World Bank said the global economy is on course to record its worse half decade of growth in 30 years. The global growth forecast has slowed for the third year in a row. And it is the slowest rate for a five-year period since 1990-1994. It is slowed down by high interest rates, sluggish trade, and geopolitical tensions. World Bank called it a ‘wretched milestone’.

“Without a major course correction, the 2020s will go down as a decade of wasted opportunity,” Indermit Gill, the World Bank Group’s chief economist and senior vice president, said.¹

²

The World Bank pointed to the rise in geopolitical conflict as one of the primary drags on the global economy.

“You have a war in Eastern Europe, the Russian invasion of Ukraine. You have a serious conflict in the Middle East. Escalation of these conflicts could have significant implications for energy prices that could have impacts on inflation as well as on economic growth,” said Ayhan Kose, the World Bank’s deputy chief economist.³

While growth is set to weaken in the West, developing countries are going to face the biggest decline. They are trapped by paralyzing levels of debt that is only growing more expensive as interest rates soar. By the end of 2024, 1 out of every 4 developing countries will be poorer than they were before the pandemic began. Investment in developing countries will drop to about half the average of the previous 20 years. Inflation has declined in the past year, but in about a quarter of all developing countries, annual inflation is projected to exceed 10%.⁴

United Nations Forecast

The United Nations issued a pessimistic forecast for the global economy due to escalating conflicts, sluggish global trade, high interest rates and increasing climate disasters.

A UN report, the World Economic Situation and Prospects 2024, projected global economic growth would slow this year. It will be below the 3% growth rate before the COVID 19 pandemic. Their forecast is lower than those of the IMF and the Organization for Economic Cooperation and Development.

The UN report warned tighter credit conditions and higher borrowing costs could present “strong headwinds” for a world economy saddled with debt. Especially for developing countries in need of investment to recover.

They caution that global inflation could lurch upwards again. All it would take would be another supply chain shock or problem in fuel availability to boost inflation. This, in turn, could prompt another interest rate hike to bring inflation down – further slowing global growth.

Meanwhile, the UN Economic Analysis and Policy division said long term high interest rates and potential price shocks means ” we are not yet out of the woods” when it comes to a global recession.⁵

The UN signaled that the United States isn’t immune to a downturn. “Amid falling household savings, high interest rates, and a gradually softening labor market, consumer spending is expected to weaken in 2024 and investment is projected to remain sluggish,” the UN said. They continued, “the United States economy will face significant downside risks from deteriorating labor, housing and financial markets.” Growth in the US is expected to slow to 1.6 percent this year from 2.5 percent.⁶

The World Bank attributes the coming US slowdown to the highest interest rates in 22 years. They see businesses becoming wary of investing due to economic and political uncertainty, especially around the 2024 election.

Conclusion

In today’s world, no country is an economic island. The fortunes of the entire globe are bound together. So just as a rising tide raises all ships, the opposite holds true. The largest international finance organizations are all warning of a dismal decade ahead. The US economy may be able to stagger through the downturn. But it will also need to resist the downward pull of the sinking economies of developing nations. As global recession sets in, the value of markets, and retirement funds built on them, will naturally decline. Those looking to protect the value of their portfolios before the slide accelerates should investigate the benefits of a Gold IRA from American Hartford Gold. To learn how physical precious metals can safeguard your financial future, contact us today at 800-462-0071.

Notes:

1. https://www.bloomberg.com/news/articles/2024-01-09/world-bank-sees-wretched-run-for-post-pandemic-global-growth
2. https://www.bloomberg.com/news/articles/2024-01-09/world-bank-sees-wretched-run-for-post-pandemic-global-growth
3. https://www.cnbc.com/2024/01/09/global-economy-set-for-its-worst-half-decade-of-growth-in-30-years-world-bank.html
4. https://www.whio.com/news/un-economic-forecast/AJ7F6U37A3CIQ6O2Q4IO7SCBRY/
5. https://www.whio.com/news/un-economic-forecast/AJ7F6U37A3CIQ6O2Q4IO7SCBRY/
6. https://www.whio.com/news/un-economic-forecast/AJ7F6U37A3CIQ6O2Q4IO7SCBRY/

• The US is in a ‘rolling recession’ with some industries sinking as the overall economy treads water
• Conditions are creating a unique ‘richcession’ where white collar workers are being laid off en masse
• A Gold IRA can protect the value of assets from the effects of the impending recession

A ‘Rolling Recession’ Plagues the Economy

A surging stock market, declining inflation, and solid job market have analysts putting the idea of recession behind us. This view is strengthened by signals from the Fed of potential interest rate cuts. However, this perspective isn’t seeing the whole picture. Hopes for a ‘soft landing’ are blinding some observers to the current ‘rolling recession’ and the advent of a ‘richcession’.

Rolling Recession

‘Rolling recession’ was coined to describe the current situation where only some industries are shrinking while the overall economy manages to stay above water. The economic weakness is across various segments but primarily focused on manufacturing and housing. An overall recession has been avoided by offsetting that weakness with the relative strength in consumer services such as travel, restaurants, etc.

Excessive government spending shielded sectors like education, government work, and healthcare from surging interest rate hikes. Private industry was not so lucky. The housing sector was the first to suffer from aggressive rate hikes. Mortgage rates nearly doubled, and home sales plunged. They are 19% lower than they were a year ago.

Manufacturing quickly followed. It’s been dubbed the “global cardboard box recession” because demand dropped for things that go in a cardboard box. Factory output dropped dramatically in 2023. The Global Manufacturing Purchasing Managers Index (PMI) marked the 15th straight month below 50, the level that divides growth from contraction. That is the longest stretch in history. A shrinking number of new orders indicate that production weakness will continue well into 2024, furthering the record duration. ¹

²

The Richcession

Current economic conditions are giving rise to a phenomenon dubbed a ‘richcession’. In a typical recession, lower paying jobs are cut first and in greater numbers. Now, service industries – restaurants, hotel, bars – are hiring. Major job cuts are concentrated in higher paying industries like technology and finance.

³

Economists point out that higher-income individuals tend to have financial cushions to withstand layoffs. Therefore, their rising unemployment is less likely to sink the overall economy. Still, their economic pain is compounded by fewer comparable job openings and salaries. Having the overall economy stay above water is cold comfort to someone approaching retirement age. A recent Bank of America report showed that the number of 401(k) plan participants taking hardship withdrawals was up 13% from the second quarter and 27% compared with the first quarter of the year.⁴

Major companies initiated substantial job cuts, reminiscent of the significant layoffs observed in 2022 when over 120 large U.S. companies downsized, affecting about 125,000 employees. Tech firms bore the brunt, but startups, banks, manufacturers, and online platforms were also affected. Major US banks trimmed 20,000 jobs in 2023. Salesforce let 10% of its workforce go, about 8,000 employees. Amazon fired 18,000 people, mostly impacting corporate roles with hourly staff minimally affected. And Spotify cut 17% of its global workforce. ⁵

A 2023 Randstad RiseSmart report revealed that 92% of employers are gearing up for layoffs in 2024 to address COVID-19’s economic impact and potential overstaffing.

Full Recession is Coming

Analysts don’t see the consumer sector offsetting declining parts of the economy much longer. Most leading indicators suggest consumer spending is slowing. Higher costs and borrowing rates will continue to put pressure on profit margins. And spending cuts by households and businesses will result in an across-the-board recession.

Predictions of a soft landing are being challenged by a couple of factors. First is the lagging in impact of rate hikes. We have not officially past the ‘expiration’ date for those lags. This is seen in the Leading Economic Index (LEI). The LEI is a composite index designed to predict the future direction of the economy. It’s comprised of several individual indicators, including the stock market, job market, and interest rates.

The LEI has declined for 19 consecutive months. Such steep declines typically only occur during recession. This recession signal from the LEI has not expired. The average length between peaks in the LEI and recession start is 11 months. But the actual range is much larger. It’s been as little as three months to as many as 21 months.⁶

Another recession signal is the inverted yield curve. The yield curve has been inverted for more than a year. Now, except for an extremely brief and mild inversion in 1998, all other inversions over the past six decades have had a perfect track record of signaling recessions to come.

Conclusion

Despite hopes for a ‘soft landing,’ the burden of a ‘rolling recession’ continues to impact specific sectors like manufacturing and housing. Moreover, the emergence of a ‘richcession’ signals a unique economic downturn, characterized by job cuts in higher-paying industries. Indicators point towards an inevitable recession when the rest of the economy starts to shrink. As the economic ground shifts, people contemplating retirement should carefully examine how to protect their portfolios. A Gold IRA can protect retirement funds from the effects of recession and richcession. Contact American Hartford Gold today at 800-462-0071 to learn more.

Notes:
1. https://www.schwab.com/learn/story/market-outlook-whats-store-2024
2. https://www.bloomberg.com/news/articles/2023-02-09/what-is-a-rolling-recession-us-could-escape-economic-pain
3. https://economictimes.indiatimes.com/tech/technology/2023-year-in-review-how-layoffs-hit-technology-and-startup-workers/articleshow/106377064.cms
4. https://www.cnbc.com/2023/11/28/401k-balances-are-down-while-hardship-withdrawals-are-up.html#:~:text=’Last%20resort’%20401(k)%20hardship%20withdrawals%20rise&text=Bank%20of%20America’s%20recent%20participant,withdrawal%20amount%20just%20over%20%245%2C000
5. https://investorplace.com/2023/12/layoffs-2023-a-roundup-of-the-biggest-companies-making-job-cuts-in-q4/
6. https://www.schwab.com/learn/story/market-outlook-whats-store-2024

• Buy Now, Pay Later loans are luring consumers into deep debt
• Called ‘Phantom Debt’ due to the lack of oversight, its rapid rise can lead to recession
• Physical precious metals can protect portfolio value from runaway debt

The Heavy Price of Buy Now Pay Later Services

A new fintech version of the old layaway plan, Buy Now, Pay Later (BNPL) services are growing rapidly. And are dangerously luring people deeper into debt. Economists are calling the loans ‘phantom debt’ because it exists outside the scope of regulators. For a country already drowning in national and consumer debt, experts fear the exponential growth of BNPL can pose a threat to individuals and the economy at large.

Promoted as easy and convenient, BNPL split purchases into four equal payments. Adding to their appeal, this type of short-term loan doesn’t involve a credit check. They seem like an attractive option compared to credit cards averaging 21% interest, a record high rate for the past 30 years since it’s been tracked.

Experts estimate 93.3 million people will use buy now pay later services by the end of 2024.
BNPL purchases are projected to top $1 trillion by 2025. BNPL surged more than tenfold between 2019 and 2021, pushing the dollar volume from $2 billion to $24.2 billion.
BNPL are promoted as short-term no-interest loans – a cost effective way to spread out payments. But users who miss payments find themselves swamped by penalties and late fees. And fees stack up quickly when payments are due every 2 weeks. Ultimately, an average of 25% is added onto the purchase price.¹

BNPL fans say they use the service to avoid high interest rates on credit cards. Credit card debt has broken record levels – hitting more than $1.08 trillion nationwide. However, some BNPL are paid with credit cards. “New BNPL users experience rapid increases in overdraft charges and credit card interest and fees, as compared to non-users…They are facing fees on two products rather than one. “²

The Consumer Finance Protection Bureau said last March 43% of BNPL clients had overdrawn their bank accounts in the preceding 12 months. Missed payments can also impact user’s credit rating. ³

⁴

Critics of BNPL-linked fees are turning to regulators to consider consumer protections. The relatively new field has virtually no oversight. There is also no transparency. The Senate Banking Committee found that BNPL programs lure consumers into taking more debt and overextend themselves. The debt quickly becomes unmanageable. The Committee stressed that the rapid rise in household debt, high inflation and a massive drop in savings are putting Americans in financial jeopardy and urged some oversight.

Credit Risks

The short-term loans are not reported to credit bureaus. Lenders can’t see the true financial risk posed by potential borrowers. And borrowers can easily get in over their heads with new loans. Putting fragile banks and indebted consumers in jeopardy.

“Until there is a definitive measure for it, there is no way to know when this phantom debt could create substantial problems for the consumer and the broader economy,” Wells Fargo economists wrote earlier this month. They continued, “But it could also be an “unregulated danger zone that could lull consumers into a false security in which many small payments add up to one big problem.”⁵

Impact on the Economy

There is no central repository for monitoring “phantom debt.” Its growth could imply total household debt levels are much higher than traditional measures capture.

Consumer spending accounts for 70% of the American economy. Unpaid consumer debt, when widespread, can strain the financial health of individuals. As debt accumulates, people spend less on goods and services, impacting businesses’ revenues. This reduced spending can lead to a slowdown in economic growth, potentially causing job losses, decreased investments, and a general economic downturn, which, if severe, can result in a recession.

National and consumer debt already pose an existential threat to the American economy. The explosive growth of BNPL services looks like a last gasp by desperate consumers facing high inflation and dropping income. That’s why experts are looking at gold and silver. Physical precious metals have intrinsic value that’s not tied to national debt or currency fluctuations. When national debt rises, it can weaken a country’s currency. Precious metals tend to retain their value or even appreciate during such times. They act as a hedge, preserving wealth by offering stability and serving as a safeguard against the erosion of value. A Gold IRA from American Hartford Gold can help protect your financial future. Contact us today at 800-462-0071 to learn how.

Notes:

1. https://www.inc.com/bruce-crumley/growing-buy-now-pay-later-debt-prompts-calls-forregulation.html
2. https://www.inc.com/bruce-crumley/growing-buy-now-pay-later-debt-prompts-calls-forregulation.html
3. https://www.inc.com/bruce-crumley/growing-buy-now-pay-later-debt-prompts-calls-forregulation.html
4. https://www.statista.com/statistics/1328323/bnpl-missed-payments-in-the-us/
5. https://themessenger.com/business/buy-now-pay-later-bnpl-affirm-afterpay-klarna-paypal

• Inflation continues to plague everyday Americans
• Astronomical debt and a bursting ‘everything bubble’ signal extreme volatility
• Experts are flocking to physical precious metals to protect the value of portfolios

Economic System Positioned for Major Disruption in 2024

The aftershocks of the Biden administration’s pandemic spending spree are still shaking the foundations of the economy. Even in the face of recent drops, inflation is still punishing consumers and businesses. And the debt accrued from the near bottomless printing of money is undermining the stability of the financial system.

Inflation, having hit a 40-year high last year of 9.1%, is still above the Fed’s 2% target. The cumulative effects of inflation are straining Americans to a breaking point. The cost of groceries is up 25% since January 2020. According to a recent holiday shopping survey, one in three Americans are foregoing giving gifts this year. And one in four still have holiday debt from last year they are paying off. The survey showed that almost half of Americans are cutting back on charitable donations as well.

President Biden is touting the success of his ‘Bidenomics’. But that success doesn’t translate down to the personal level. Credit card debt is at record highs and personal savings are at a new low. With stimulus payments all but spent, 33% of Americans have less than a hundred dollars in savings.

Record government debt, overinflated stock prices, and a simmering bank crisis have experts predicting the high probability of a major economic disruption. The stability of the financial system is coming into question. This concern is reflected in gold prices hitting all-time-highs as people seek safe haven assets to protect the value of their portfolios. Gold is expected to continue its upward trajectory in 2024, making now an ideal time to investigate the benefits of a Gold IRA.

Contact us today at 800-462-0071 to learn how you can protect your funds with precious metals or a Gold IRA.

• Economists say the ‘Everything Bubble’ is going to burst in 2024
• The country will experience one of the biggest stock market crashes in history as a result
• Financial gurus advise protecting portfolio value with precious metals

Bursting ‘Everything Bubble’ Could Devastate Economy

Since 2009, an ‘everything bubble’ – composed of stocks, bonds, real estate, and crypto – has been inflated by unprecedented money printing and deficits. Today’s prices are deemed by some experts as 100% artificial. But now, the tap of free money has been turned off and the bill for the astronomical debt is coming due. Harry Dent, a leading economist said, “I think 2024 is going to be the biggest single crash year we’ll see in our lifetimes.” He continued, “I don’t think we’ll ever see a bubble for any of our lifetimes again”. ¹

Market bubbles are characterized by a rapid rise in stock prices before being met by a sharp fall.
Dent stated the ‘everything bubble’ picked up momentum in late 2021. The first signs of it bursting occurred in 2022 when the Nasdaq dropped 38%. In 2024, Dent predicts the ‘B wave’ of the crash will occur.

²

According to his analysis, this crash is not going to be a correction. A stock market correction refers to a short-term reverse movement in the stock market. Typically, a decline of around 10% or more from the recent peak in stock prices. Corrections are considered normal and are part of the market cycles. They are distinct from bear markets, which involve more prolonged downturns and larger drops in stock prices. Corrections are seen as healthy adjustments that can bring stock prices back in line with their fundamental values and prevent overvaluation.

Instead, Dent maintains that the drastic drop in market value will recreate conditions like the Great Depression. He predicted an 86% crash in the S&P 500, 92% drop in the Nasdaq, and a 96% dip in crypto. Housing is also projected to lose 50% of its value, declining more than at any time in history. ³

Dent considers this current surge in the market a ‘gift’ of time to get yourself out before the crash happens.

The Fed & Rate Cuts

The current leap in stock prices can be traced to optimism about potential interest rate cuts in 2024. Policymakers, in their annual projections, priced in the potential of three rate cuts, with the federal funds rate falling to a range of 4.4% to 4.9%, down from the current 5.25% to 5.50%.

Examining the Federal Reserve’s anticipated rate adjustments, Dent said that achieving a ‘soft landing’ was virtually impossible. He believes the Fed has overtightened and the full impact of the rate cuts will be felt in 2024. And when they hit, the damage to the economy will be severe. He deduces the economy will move beyond recession and into depression. Dent doesn’t see the economy recovering for at least a decade.

Dent isn’t alone in his forecast. “Rich Dad, Poor Dad” author Robert Kiyosaki is also sounding the alarm. He stated, “This may be the start of the biggest crash in history. Hope I am wrong yet no time to play Russian Roulette with your life.”⁴

Kiyosaki focused on the impact the crash will have on retirement savings. As millions of Americans are heavily invested in the stock market via their retirement funds, a substantial decline in the S&P 500 could have catastrophic consequences. In the market downturn of 2022, participants in 401(k) and IRA plans collectively suffered an estimated loss of roughly $3 trillion.⁵

Kiyosaki offered this advice to prepare for the upcoming crisis: Buy gold while you still can. Gold is a time-tested safe haven asset that can safeguard your future from economic collapse. Gold is already at all-time-highs and experts predict that it is only going to go higher.

“You will wish you had bought gold below $2,000. Next stop gold $3,700,” said Robert Kiyosaki.⁶

There are many ways to gain exposure to gold and silver, but Kiyosaki prefers to just buy the physical metals directly. “I do not touch paper gold or silver ETFs. I only want real gold or silver coins.”⁷

Reckless government spending and monetary policy have created the ‘everything bubble’ – with drastically overinflated prices for stocks, bonds, real estate, and cryptocurrencies. And signs point to the bubble bursting in 2024. And when it does, economists see the worst stock market crash happening in our lifetimes. Retirement funds could be wiped out. Now is the time to protect your portfolio. A Gold IRA from American Hartford Gold can shield your assets from the severe impact of the bursting ‘everything bubble’. Contact us today at 800-462-0071 to learn more.

Notes:
1. https://nypost.com/2023/12/19/business/us-economist-predicts-2024-will-bring-biggest-crash-of-our-lifetime/
2. https://www.google.com/url?sa=i&url=https%3A%2F%2Fgoldbroker.com%2Fnews%2Ftime-say-goodbye-everything-bubble-2479&psig=AOvVaw1zqwYqph8xOYAabGZG-Ar4&ust=1703188651210000&source=images&cd=vfe&opi=89978449&ved=0CBIQjRxqFwoTCJjdvKnmnoMDFQAAAAAdAAAAABAf
3. https://nypost.com/2023/12/19/business/us-economist-predicts-2024-will-bring-biggest-crash-of-our-lifetime/
4. https://finance.yahoo.com/news/biggest-crash-history-robert-kiyosaki-130000435.html
5. https://finance.yahoo.com/news/biggest-crash-history-robert-kiyosaki-130000435.html
6. https://finance.yahoo.com/news/biggest-crash-history-robert-kiyosaki-130000435.html
7. https://finance.yahoo.com/news/biggest-crash-history-robert-kiyosaki-130000435.html