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Weekly Touchpoint – Experts: Soaring Markets Due to Cash Infusions

Posted By Isaac Nuriani |


We are over a decade into the current bull market, and key indexes are still hitting new highs. Experts say there is only one thing sustaining these new record closes: enormous infusions of cash from central banks. The Federal Reserve denies a recent T-Bill buying spree represents another round of quantitative easing, but analysts are rolling their eyes in response. One Wall Street CIO went as far as to say the renewed cycle of bond-buying and market-inflating is “massively concerning.” Some are calling it “QE4.” We take a closer look at the phenomenon in this week’s rundown of important news items for retirement savers interested in securing their portfolios with precious metals.

  • Experts want to make it clear to you: Financial markets are climbing again because they’re being juiced by central banks. Nothing more. A article suggests it’s not mere coincidence that since mid-September the S&P 500 has grown roughly 4% and the Federal Reserve’s balance sheet has expanded by 4.5%, almost the same amount. In a note to clients, Albert Edwards at Societe Generale essentially laughed at the Fed’s contention that the massive T-Bill purchases it made recently are something other than another round of QE: “Tell that to the equity market, which is certainly reacting as if it was, as it forges to new all-time highs.” Morgan Stanley Wealth Management CIO Lisa Shallett says what’s going on now is “massively concerning.” She elaborated: “The market is diverging from fundamentals,” and all this liquidity is “going into the financial markets” and “not going into the real economy.” It prompts us to ask just how long this rally is going to last. I for one want to be ready when that bubble bursts.
  • Could debilitating effects of the ongoing trade war on China’s economy prompt it to go to war with Taiwan? That’s the contention made recently by Taiwan’s Foreign Affairs Minister Joseph Wu. During a recent interview with Reuters, Wu said it is very much in the realm of possibility that mainland China will wage war against Taiwan to divert the citizenry’s attention away from the struggling economy. In a reference to China’s president, Wu connected the dots this way: “Perhaps Xi Jinping himself is called into question of his legitimacy, by not being able to keep the Chinese economy growing. This is a factor that might cause the Chinese leaders to decide to take an external action to divert domestic attention.” The possibility that a shooting war could be a consequence of the ongoing trade war is just one more reason prudent retirement savers should be sure to own safe-haven assets such as gold and silver.
  • A recent article at ZeroHedge makes it clear the slumping auto industry is a principal reason we’re staring down the barrel of a deep recession. It’s not surprising. The worldwide auto manufacturing industry is characterized by long supply chains and enormous consumption of raw materials, textiles, chemicals and electronics. Millions of jobs are dependent on people being able to get from Point A to Point B in their personal cars, SUVs and trucks. Last year, for the first time since the global financial crisis, the auto industry contracted. Now, according to ZeroHedge, analysis by the International Monetary Fund (IMF) reveals last year’s drop in auto manufacturing output “accounted for more than 25% of the slowdown in the global economy between 2017 and 2018 and 33% of the weakening in worldwide trade growth during the same period.
  • Threats to your financial security are as numerous as they are varied. Understandably, most of us think in terms of trade wars, soaring global debt and banks’ continued heavy use of derivatives as the sorts of factors prepared to turn financial dreams into nightmares. However, the next financial crisis could be caused not by a potential economic trigger commonly discussed but by a cyberattack so great it effectively immobilizes the global financial system. To find out more about why one expert says “the world’s next great crisis could easily originate in cybersecurity,” as well as why gold offers the potential to protect portfolios from such an unusual but still-dangerous threat, read Augusta’s latest blog article here.

So, what is it you should be most concerned about when it comes to the safety and stability of your portfolio? The more standard potential threats, such as shifts in interest rates, trade conflict and rapidly mounting global debt? Or particularly ominous threats, such as a shooting war or a worldwide cyberattack? Here’s the great news about physical precious metals: When you have them on your side, the exact nature of the threat doesn’t really matter. As safe-haven assets with the demonstrated potential to strengthen in a wide variety of adverse conditions and circumstances, physical gold and silver offer perhaps your best defense against trouble.

To learn how easy it is to put the protective power of precious metals on your side, call Augusta Precious Metals at 800-700-1008.

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