An inevitable march is very much in progress toward a world where all nations have digital currency. A number of countries are in various stages of creating a digitized form of their official currencies. Recently, influential U.S. figures – including Federal Reserve members –acknowledged our own country is working diligently to make the digital dollar a reality. China’s highly focused pursuit of a digital yuan energizes this worldwide effort toward digital currency. According to a new report, the Chinese government filed a flurry of patents related to digital yuan development. Some say the nature of these patents confirms worries about the future of national digital currencies. This week’s Touchpoint kicks off with a look at China’s latest efforts.
- A Chamber of Digital Commerce report reveals China has filed no fewer than 84 patents supporting digital yuan development. Unsurprisingly, the People’s Bank of China’s Digital Currency Institute filed most of them. Marc Kaufman is a patent attorney who worked with the Chamber of Digital Commerce to uncover the patents. He explained to Financial Times how the currency will work. “Virtually all of these patent applications relate to integrating a system of digital currency into the existing banking infrastructure.” He said the patents indicate the Chinese government will be able to alter currency supply. They also will be able to fully integrate the currency into bank accounts. Ultimately, they will connect the currency to spending devices, such as digital wallets and chip cards. The new digital currency may be convenient, but also could be less secure than traditional currency. Chamber president Perianne Boring said the Chinese have no mechanism to prevent government tracking of user transactions. The patents confirm both expectations and worries many have about the advent of national digital currency. Decrypt has more.
- Many economists and money managers see the coronavirus as a potential trigger of economic disaster. And the list continues to grow. One of the latest additions is Scott Minerd, chief investment officer at the legendary Guggenheim Partners’ global asset management division. In his most recent corporate outlook, Minerd wrote that any expectation the coronavirus will not upset the global economic order is “irrational.” He says the outbreak’s “current trajectory” indicates diagnosed cases soon could be in the millions. And he believes the economically contagious effect on the global economy and overvalued financial markets will be “dramatic,” even “extreme.” If the spread continues, he envisions a massive disruption of supply chains in the U.S. and Europe. Minerd also sees the price of oil plunging to just $25 per barrel, a drop of more than 50% of present levels.
- It’s often said records are made to be broken, but some are better left untouched. Total U.S. household debt is surely a record that doesn’t need to get any higher. But, alas, the old record has fallen according to the New York Federal Reserve. The Fed announced last week that American households now are carrying more than $14 trillion in total household debt. This number surged by $193 billion just in the last quarter of 2019. With that increase, household debt is now roughly $1.5 trillion higher than its previous record of $12.7 trillion. We reached the previous total in 2008 as the financial crisis was unfolding. In reporting on the Fed data, global news site CCN.com makes the risk clear. “The massive debt bubble is an economic time bomb. If growth and hiring slow down, the ability of consumers to service their record debts will be imperiled.” And if THAT happens, as baseball legend Yogi Berra famously said, it could be “Déjà vu all over again.”
- “Safe-haven assets” don’t sound as fun as “risk assets.” Savvy retirement savers understand, however, that they’re essential for any effectively diversified and highly optimized portfolio. Gold, in particular, is well-regarded for its tendency to strengthen during periods of economic and noneconomic turmoil. In fact, many see gold as a sort of portfolio “insurance.” One of the best examples of gold’s insurance-like potential in action is its performance during the 2008 financial crisis. Experts worry we could be headed for another downturn on the scale of the previous debacle. So, it’s worth examining what gold did when effects of that crisis filtered through the worldwide financial system. To learn more, check out the latest blog article from Augusta Precious Metals.
Gold has yet to sustain a move upward past 1,600 dollars per ounce this cycle. However, an ongoing stream of worrisome news on the global economic front is keeping the metal close to that level. Many predict gold will surge well above the 1,600-dollar mark in 2020. Some believe it could reach a new all-time high of 2,000 dollars per ounce.
Will Your Portfolio Withstand the Risks of Digital Currency and Global Crises?
With each passing day, it’s getting more difficult to account for all the varied risks to retirement portfolios. Fortunately, gold repeatedly has demonstrated its capacity to defend portfolios against both economic and noneconomic threats. Can you count gold (or silver) among your assets? If not, now is an excellent time to call Augusta Precious Metals at 800-700-1008 or visit Augustapreciousmetals.com.
It is also an excellent time to find out if you qualify to participate in Augusta’s Profit & Protect Web Conference. Devlyn Steele is the engaging and highly knowledgeable host of this dynamic, live presentation. He is Augusta’s lead economic analyst and a member of the Harvard Business School’s Business Analytics Program. During this informative conference, you’ll learn how the financial and political elite keep regular, hard-working Americans from achieving retirement goals. You’ll also learn how physical precious metals can help you successfully travel the road to financial independence.
Don’t delay – contact Augusta today.