Whatever the Fed wants to call it – a cooling off, a correction – the end result is the same, the economy is in trouble and so are your retirement funds.
For the past two years, the Federal Reserve has been recklessly printing trillions of dollars. Surprising no one but themselves, this has put the country on the path to hyperinflation. Now, with the dollar losing value and status, they want to fix what they broke with a series of rate hikes, regardless of who they hurt in the process.
The Fed announced interest rate increases for March. U.S. central bankers also have accelerated plans to unwind support for the economy amid rising inflation.
This isn’t going to be a one and done. Fed Chairman Powell left the door open to raising rates at consecutive policy meetings, which are held roughly every six weeks. That is something the Fed hasn’t done since 2006.
Not only that, Mr. Powell suggested that the Fed wasn’t likely to offer any forward guidance, the term used to describe its intentions with interest rates over the next few years. Forward guidance has been a central feature of Fed policy and the lack of it means they are playing fast and loose with the economy.
Another reason to be concerned – Wall Street seems increasingly worried that stocks have been supported by printed money instead of company performance.
To make matters worse, the Fed released a statement that outlined their plan for “significantly reducing” their $9 trillion securities portfolio, which has more than doubled since March 2020.
All these factors combined mean that the economy is going to slow down, stocks are going to drop and the cost of living will continue to go up. We are facing the very real possibility of “stagflation”, an economic disaster not seen since the Carter administration.
No surprise to us, Fidelity called gold “the surprise investment of 2022”. Gold performs well when other assets do badly, and it does best when people lose confidence in central banks’ abilities to contain a crisis.¹
Gold contracts for February climbed to their highest so far this year, marking the fourth consecutive rise. It’s the strongest string of gains since November. Bullion has outperformed the U.S. Treasury index by 46.7% going back to 2016, and has a better Sharpe ratio.
World governments see the writing on the wall – that the time to buy gold is now! The official sector’s total gold holdings climbed to a 31-year-high by the end of 2021. Other countries such as Hungary and Poland have made record gold purchases as their supply of greenbacks lose their value.
It’s not the time for their “do as I say, not as I do”. Investing in gold is the smartest thing to do right now.
“Rich Dad” Robert Kiyosaki advised investors to buy gold and silver as protection. Why?
“I’m not buying gold because I like gold, I’m buying gold because I don’t trust the Fed.”²
Call American Hartford Gold at 800-462-0071 to learn how thousands of Americans are protecting their wealth and retirement during this economic crisis.
Footnote
1. Fidelity International
2. Yahoo
