• Consumer confidence has dropped for three straight months, signaling growing recession fears.
• Inflation concerns and market instability are putting pressure on household finances.
• A Gold IRA can help safeguard wealth during recession.

Economic Confidence Collapses

U.S. consumer confidence has taken a sharp downturn, raising fears that a recession may be on the horizon. The Conference Board’s consumer confidence index fell by seven points in February to 98.3. That’s its third consecutive month of decline. This drop was the largest since August 2021 and fell below economists’ expectations. Following the report, stocks and bond yields declined, reflecting broader market anxiety.¹

The decline in consumer confidence was widespread. All age groups and income levels experienced the effects. Concerns about the job market, personal earnings, and business growth are on the rise. The expectation index measures consumers’ outlook for the future. It dropped 9.3 points to 72.9—well below the recession warning threshold of 80. Also, the share of Americans expecting a recession in the next year is now at a nine-month high.²

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Inflation Concerns

Inflation expectations have surged as well. Inflation is sticky as prices for things like eggs keep rising. Also, uncertainty about tariffs is adding to financial worries. Concerns are rising among economists. They think tariffs on imports from Canada and Mexico could increase gas and food prices. They could also harm the auto industry and lead to a trade war.

The University of Michigan’s consumer sentiment index also reflected this economic unease. It showed increasing inflation fears as well. Rising inflation expectations can become a self-fulfilling prophecy. They make it harder for the Federal Reserve to adjust monetary policy. Not only could the Fed rule out rate cuts, but analysts now warn that rate hikes could be possible if inflation continues to rise. Higher interest rates will make borrowing more expensive. Mortgages, auto loans, and credit cards will cost more. Putting even more strain on American households.

Cutbacks in Spending

Economic anxiety has already begun to impact consumer behavior. A Wells Fargo study shows that uncertainty is making Americans hold off on big purchases. And that one in eight workers has postponed retirement plans. Meanwhile, the stock market is showing signs of stress. The “Magnificent 7” stocks have fallen into correction territory. This comes after a two-year rise of 54%. The group has lost $1.6 trillion in market value, with Tesla leading the decline at 37%.⁴

Treasury Secretary Scott Bessent stated that the U.S. private sector has been in a recession. He blames the Biden administration. Saying its policies put government growth ahead of private industry. He argued that government spending created the illusion of strong economic metrics. But real economy was turning brittle underneath.

Bessent noted that job growth occurred primarily in government, education, and healthcare. Meanwhile, private-sector job creation slowed, adding fewer jobs in 2024 than in 2023. He warned that excessive government spending distorts the economy. It inhibits innovation, and limits growth to select sectors. “This is about more than just reducing the fiscal deficit,” Bessent said. He emphasized that the administration’s goal is to “re-privatize the economy.” He wants to restore balance between public and private sector growth.

Recession Indicators

Several key recession indicators suggest trouble ahead. Morningstar, the investment research firm, includes all of the following as key signals of a looming recession:

Inverted yield curve: The yield curve was inverted for more than two years. It turned positive at the end of 2024. Past data shows that a recession often starts within six months after a yield curve inversion ends.⁵

Stock market decline: On February 21, 2025, the Dow Jones plummeted. It dropped 748 points, marking its worst day of the year.⁶

Decreased home sales: U.S. existing home sales fell more than anticipated in January 2025.⁷

Inflation worries: In February 2025, the University of Michigan’s consumer sentiment index fell by 10%. The drop was primarily a result of fears about inflation.⁸

How Likely Is a Recession?

Some official recession predictions remain relatively low. JPMorgan estimates a 20% chance of a recession, while Bankrate puts the odds at 26%. However, these same experts predicted there would be severe recessions in 2022 and 2023. They were wrong then and they may be wrong today. Their models paint a picture that is disconnected from the day to day reality of Americans who make up the ‘economy’.⁹

Independent economists are painting a grimmer picture. A consulting economist at Primerica believes there is over a 50% chance of a recession in the next year. They point to global issues like war, trade disputes, and political instability as reasons for their concerns. A Raymond James analyst recently estimated a 40% chance of recession in a Wall Street Journal survey. This is one of the highest probabilities among major financial firms. Fears of a trade war reminiscent of the Great Depression, along with AI-driven volatility in stock markets, add to concerns.¹⁰

Debt also looms large in recession fears. If the U.S. Treasury has to raise bond yields to fund spending, inflation may rise. Worsening economic conditions.

Conclusion

Caught between rising inflation and a potential recession, retirement funds are at risk. History has shown that during times of economic uncertainty, people flock to gold as a safe-haven asset. Diversifying with precious metals can provide long-term protection against market downturns.

A Gold IRA from American Hartford Gold offers a reliable way to safeguard wealth from economic turbulence. Call us today at 800-462-0071 to learn more about how gold can help secure your financial future.

Notes:
1. https://www.bloomberg.com/news/newsletters/2025-02-25/us-recession-fears-rise-as-consumer-confidence-falls
2. https://www.usnews.com/news/economy/articles/2025-02-25/consumers-sound-alarm-on-trump-economy-as-expectations-reach-recession-level#google_vignette
3. https://www.conference-board.org/topics/consumer-confidence/press/CCI-Feb-2025
4. https://www.bloomberg.com/news/newsletters/2025-02-25/us-recession-fears-rise-as-consumer-confidence-falls
5. https://www.dws.com/en-us/insights/cio-view/asset-classes/inverted-yield-curves-finally-end-what-now/
6. https://www.barrons.com/livecoverage/stock-market-today-022125/card/the-dow-just-notched-its-worst-day-of-the-year-RAh9wT6d1xxOaO7GlrF3
7. https://www.nar.realtor/newsroom/existing-home-sales-decreased-4-9-in-january-but-increased-year-over-year-for-fourth-consecutive
8. https://tradingeconomics.com/united-states/consumer-confidence
9. https://privatebank.jpmorgan.com/nam/en/insights/markets-and-investing/five-factors-we-use-to-track-recession-risk-and-what-they-say-now
10. https://www.barrons.com/articles/recession-could-be-coming-this-year-97e58b6f

 

• As national debt creates instability, experts propose linking the dollar to gold.
• Revaluing U.S. gold reserves can give the economy an $800 billion boost.
• Adding gold to a portfolio through a Gold IRA could protect wealth as gold gains prominence in monetary policy.

U.S. Government Looks to Gold

The government is turning its eye back to an old asset, and investors are taking notice. Gold is stepping back into the spotlight, not just as a safe haven for investors but as a key player in discussions about the nation’s financial future. Over the past 12 months, the price of gold has soared by more than 40%, doubling the S&P 500’s gain during the same period. This surge is part of a larger debate on how our monetary system is managed—and it might be time for a change.¹

Dr. Judy Shelton is a Senior Fellow at the Independent Institute and former economic advisor to President Trump. She has been one of the most vocal critics of the current monetary system. She warns that the national debt and dollar instability are existential threats to the country. And urges a return to “sound money.”

Sound Money

Sound money is a concept rooted in the era of the gold standard. It means having a currency backed by a fixed amount of gold. This ensures stability, predictability, and a limited supply to help maintain value over time. Shelton argues that linking the dollar to gold could help rein in inflation. It could also tame the fiscal irresponsibility in our current fiat currency system. “The dollar used to be as good as gold,” she reminds us. Shelton proposes the government issue long-term Treasury Trust Bonds. Investors can choose at maturity to receive either the dollar value or a set amount of gold. This move would tie the dollar’s value to gold, preserving its purchasing power.²

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Driven by Debt

The urgency behind this proposal comes from the staggering national debt figures. Today, the debt exceeds $36 trillion. Debt service payments alone are costing billions of dollars each year. In just 50 years, the national debt has exploded from $400 billion in 1971 to over $36 trillion today. The Congressional Budget Office (CBO) now projects that servicing the debt from 2024 to 2033 will cost $10.6 trillion. That is double the forecast from 2021.⁴

Shelton blames runaway debt on the Federal Reserve’s “no limit” powers. The Fed can buy unlimited government debt. Hence, she believes decisions are based on financing government bills, not improving the economy. She warns the overpowered Fed can limit the economic agenda of a new president. And they could try to inflate away the U.S. government debt, eroding American purchasing power.

Revaluing America’s Gold

Adding a layer of complexity to the discussion is how the United States values its gold reserves. The U.S. holds the largest gold reserves in the world. It has 8,100 tons tucked away in the vaults of the Federal Reserve and the Treasury. Yet, these reserves are still recorded at a book value of $42.22 per ounce—a figure set by a 1973 agreement. With gold now trading at over $2,900 an ounce, this outdated valuation represents a potential windfall profit. It could earn roughly $800 billion for the Treasury Department if market values were applied.⁵

New Treasury Secretary Scott Bessent has hinted at a willingness to shake things up. He stated, “we’re going to put the assets to work,” signaling plans to “monetize the asset side of the U.S. balance sheet.” Rethinking the gold valuation could improve the Federal Reserve’s balance sheet dramatically. David Teeters is a professor at IESE Business School and former director at Barclays and BNP Paribas. He noted that an $800 billion mark-to-market gain would reduce the country’s borrowing as a percentage of its total assets.⁶

Currently, with gold valued at just $42 per ounce, the Federal Reserve’s owes-to-owns ratio stands at a staggering 179-to-1. If gold were revalued at around $3,000 per ounce, that ratio could drop to roughly 11-to-1. That figure more in line with ratios seen in major banks like Goldman Sachs. Although this revaluation would only be a one-off boost for the Treasury, it might create room for policy changes. Including potential tax cuts wanted by the Trump administration.

Stephen Miran is Trump’s nominee to lead the White House Council of Economic Advisers. He has floated a bolder idea. He suggested selling U.S. gold reserves to buy other currencies. Miran argues that this could weaken the dollar and give the U.S. a trade advantage. It could also counter de-dollarizing efforts by the BRICS nations. The sale would undermine their record gold buying spree.

David Teeters expressed the potential of gold in today’s monetary system. He said that one way to fix the money system is for countries to work together and lower the value of all currencies compared to something stable. Gold, which has been valuable for thousands of years, could serve this role. If this happens, gold could become dramatically more valuable.

Conclusion

The government is taking a fresh look at an age-old asset. Whether it’s a move toward sound money or a strategic revaluation of the world’s largest gold reserves, the yellow metal is becoming central to debates about our monetary future. With experts predicting that these trends will push gold to record heights, adding gold to your portfolio—especially through a Gold IRA—could protect and potentially grow your nest egg. To learn more about how gold can secure your financial future, call American Hartford Gold at 800-462-0071.

Notes
1. https://fortune.com/2025/02/11/adjusting-bookkeeping-america-gold-reserves-add-750-billion-treasury-overnight/
2. https://www.kitco.com/news/article/2024-10-30/linking-gold-us-dollar-how-americas-debt-and-fiat-dependence-threaten
3. https://kinesis.money/case-studies/paper-money-eventually-returns-to-its-intrinsic-value-zero/
4. https://www.kitco.com/news/article/2024-10-30/linking-gold-us-dollar-how-americas-debt-and-fiat-dependence-threaten
5. https://www.kitco.com/news/article/2024-10-30/linking-gold-us-dollar-how-americas-debt-and-fiat-dependence-threaten
6. https://www.kitco.com/news/article/2025-02-14/us-sitting-gold-fortune-can-it-actually-fix-debt-problem

 

• Inflation unexpectedly jumped again, bringing annual inflation to 3%.
• The Federal Reserve may delay interest rate cuts, increasing market volatility.
• A Gold IRA can shield retirement funds from the ‘invisible tax’ of inflation.

Inflation Unexpectedly Increases

Inflation has been a primary concern for Americans over the past few years, especially after it hit a 40-year high of 9.1% in 2022. While inflation did slow somewhat in 2023, it hasn’t disappeared. On the contrary, recent reports show it’s on the rise again. This uptick is causing anxiety for consumers, investors, and the Federal Reserve alike.

After a hotter-than-expected Consumer Price Index (CPI) report, the Dow Jones fell over 300 points. The S&P 500 and NASDAQ also dropped. Major tech stocks like Amazon, Microsoft, and Alphabet all took a hit after the CPI report.

By the Numbers

The January CPI saw a 0.5% jump, pushing the annual inflation rate to 3%, higher than economists had expected. Core CPI, which excludes volatile food and energy prices, rose 0.4% for the month and 3.3% for the year, marking its highest level in 10 months. The recent rise is mainly due to higher prices in food, energy, and housing. Key areas that impact everyday Americans.¹

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A headline issue, egg prices spiked by 15% in January, up a staggering 53% over the past year. Housing costs, which make up 35% of inflation’s overall impact, continue to climb as rents and home prices increase across the country. Gas prices are rising again, partly due to the possibility of tariffs on crude oil, even as the U.S. remains the world’s largest oil producer.³

At the same time, the 10-year Treasury yield spiked from 4.54% to 4.66%. Meaning higher costs for mortgages, auto loans, and credit cards.⁴

Inflation and Interest Rates

As costs continue to rise, the Federal Reserve’s interest rate policy is growing murkier. While the Fed had previously forecasted rate cuts for this year, surging inflation makes that less likely. President Donald Trump has publicly called for interest rates to be lowered. But Federal Reserve Chair Powell has made it clear that his decisions will not be swayed by political pressure.

Powell emphasized that while progress toward the 2% target has been made, “we’re not quite there yet.” Powell reassured the public that the U.S. economy is strong, and the country is not in a recession, negating the immediate need for rate cuts. January’s jobs report showed that while job growth slowed, unemployment fell from 4.1% to 4% and wage growth remained stable. As a result, rate cuts could be delayed until the end of the year—or even further. There has even been talk of new rate hikes.⁵

Sameer Samana is head of global equities at the Wells Fargo Investment Institute. He said, “The hotter-than-expected CPI confirms investors’ anxiety regarding too-hot inflation that will keep the Fed on the sidelines.” As inflation rises quicker than expected, analysts believe rates will stay higher for longer. Thereby keeping borrowing costs high and fueling market uncertainty.⁶

Inflation Expectations Grow

The growing expectations for sustained inflation pose a real risk, as they can create a self-fulfilling cycle. As businesses and households expect prices to continue rising, they adjust their behavior. Businesses increase prices and workers demand higher wages. These further fuels inflation and creates a difficult-to-reverse inflationary spiral.

Gold Reacts to Rising Inflation

Gold’s appeal as a safe-haven asset has held strong, even in the face of rising inflation. Gold prices initially dropped after the CPI report. But they quickly rebounded as investors sought refuge in precious metals. Despite inflation’s impact on bond yields and the dollar, gold’s status as a store of value remains steadfast. And its price is hovering at all-time highs. ⁷

Conclusion

With inflation not showing any signs of slowing down, the best way to secure your future is to make smart, informed choices now. Physical precious metals in a Gold IRA can protect the value of your nest egg from inflation’s ‘invisible tax’. Contact us today at 800-462-0071 to learn more.

Notes:
1. https://www.cnbc.com/2025/02/11/stock-market-today-live-updates.html
2. https://www.axios.com/2025/02/12/inflation-january-cpi
3. https://www.axios.com/2025/02/12/inflation-january-cpi
4. https://www.cnbc.com/2025/02/11/stock-market-today-live-updates.html
5. https://www.businessinsider.com/inflation-january-cpi-consumer-price-index-federal-reserve-interest-rates-2025-2
6. https://www.cnbc.com/2025/02/11/stock-market-today-live-updates.html
7. https://www.kitco.com/news/article/2025-02-12/gold-erases-solid-early-losses-despite-hot-us-cpi-data