“Subprime lending.” Remember those words? It was practically all you heard about when the global economic system was brought to its knees during last decade’s financial crisis. An aggressive rise in subprime lending, combined with a dangerous level of speculation in the housing market during the early-to-mid-2000s, is viewed largely as the core reason for the collapse. Well, hang on to your hats – and your money – because a new report says 2020 will see the return of subprime lending and all the baggage that goes with it. This week’s assembly of important news for retirement savers begins with a look at this worrisome development.
- In the words of Liberty Nation’s Andrew Moran, “subprime [lending] will be back with a vengeance in 2020.” Moran cites a new report from Moody’s Investor Service that says mortgage lenders, in an effort to reignite the slowing housing market this year, will resume offering limited and alternative-documentation loan programs and will again re-embrace borrowers with poor credit histories. The Moody’s report also notes that the new round of subprime mortgages will be packaged as debt instruments, presumably leading to a resurgence of the same dangerous mortgage-backed securities that played such a big role over the last decade in bringing the global banking system to its knees.
- There’s no shortage of dire warnings about what’s in store for the economic health and security of the nation if the federal debt continues expanding. Nevertheless, it’s clear neither politicians nor the Federal Reserve are willing to act prudently to reign in the ballooning obligation. Now we learn from the U.S. Treasury that the national debt grew by a mind-boggling 10.8 trillion dollars from 2010 through 2019. Referring to this period as the “decade of debt,” com notes this is the first decade in our nation’s history when the federal debt grew by an average of more than one trillion dollars per year. According to CNS, this debt growth represents a massive 40% increase over the inflation-adjusted 7.8 trillion dollars it grew from 2000 to 2009.
- In a recent article for MarketWatch, economist Alicia Munnell of the Center for Retirement Research cites independent data from both the University of Michigan and the Federal Reserve indicating that 401(k) and other defined-contribution retirement balances are dropping sharply among the baby boomer class. The Fed research determined that the level of defined-contribution wealth among Americans age 51 to 57 is an eye-opening 40% less than it was for that same age demographic just 12 years ago – at the beginning of what has been a record run for financial markets. Lower retirement account balances suggest it will be more important than ever for savers to protect their portfolios, and one way to do that is by adding safe-haven assets such as gold and silver to their holdings.
- Mainstream financial markets continued to climb in 2019 largely on the strength of highly accommodative central bank monetary policy. But gold’s near-20% performance last year is nothing to sneeze at. According to Casey Research analyst Nick Giambruno, this was just a prelude to what he predicts will be nothing short of a monster year for the metal in 2020. In a recent article for Commodity Trade Mantra, Giambruno cites no fewer than eight reasons he thinks gold – and gold owners – will enjoy an “epic bull market” this year. For further insight, including simple steps you can take today to capitalize on what could be a year like no other for gold, read Augusta’s latest blog article here.
Last week, gold jumped nearly 2% based on news that the U.S. had killed Iranian General Qassem Soleimani in a Baghdad airstrike. The metal had been meandering between $1,450 and $1,500 an ounce for months but spiked above that and came close to a six-year-high in the immediate wake of the military operation. Rising geopolitical tension throughout the world is just one of the many reasons experts believe gold could have an extraordinary 2020.
If you’ve seen enough and you’re ready to equip your portfolio with dynamic safe-haven assets such as gold and silver, call Augusta Precious Metals at 800-700-1008 or visit Augustapreciousmetals.com for more information. When you contact us, find out if you’re eligible to participate in our live 30-minute Profit & Protect Web Conference. This presentation will share with you “inside” information as to why it’s so difficult for the typical saver to make real progress toward financial security. The presentation also shares what you can do today to put the odds of achieving retirement success back in your favor, even in the face of formidable challenges such as a return of subprime lending, an ever-expanding federal debt and an overall steady decrease in retirement savings.