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It appears a consensus is building among both everyday Americans and financial experts that we’re a long way from economic recovery. Recently published results of two different polls demonstrate this. One poll – a cross-section survey of Americans – says an overwhelming number of citizens fear an economic collapse. In another survey, top money managers, strategists and economists say they believe the economy could be years away from returning to its pre-pandemic condition. They also say trillions more must be pledged by the government and Federal Reserve to achieve a recovery.
Viewed together, these two surveys illustrate that very few people are confident a functional economy will return anytime soon. That sends an important signal to retirement savers who are concerned about what might be in store for their portfolios. So does this: some experts say it will take something tantamount to QE infinity (endless quantitative easing by the Fed) to restore genuine economic order. This belief raises the possibility that one key alternative asset will flourish amid all the chaos.
Survey Reveals Vast Majority of Americans Fear Economic Collapse
The poll of everyday Americans was conducted jointly by the news website Axios and global market research company Ipsos to formulate their latest Axios-Ipsos Coronavirus Index. It reveals that 89% of both Republicans and Democrats are “somewhat, very or extremely concerned” about the prospect of “the U.S. economy collapsing during the coronavirus outbreak.” Note that there’s no division along major political party lines.
Though respondents agree on a foreboding economic outlook, they also are concerned the country may reopen too soon. Those numbers are sharply divided between parties. In the poll, 88% of Democrats say they’re “somewhat, very or extremely concerned” local communities may be reopening too soon, while only 56% of Republicans feel that way.
Here’s how Cliff Young, president of Ipsos U.S. Public Affairs, assesses the current viewpoint of Americans: “When you force one question over the other, health is still more important, over the economy. But that’s going to start changing.”
It appears the change is already underway. The fact that nearly 9 in 10 Americans overall are concerned about a total collapse of the economy says a great deal. Among other things, the data suggests we could be mired in a recession – or worse – for some time to come.
Financial Experts: Recovery Is Years Away – Maybe Not “Until Mid-Decade”
It appears experts see eye-to-eye with regular Americans on the economic outlook.
In the recent CNBC Fed Survey of economists, strategists and asset managers, a majority of respondents (33%) say the economy won’t return to “full strength” until the end of 2022.
One survey respondent, John Kattar, chief investment officer at Ardent Asset Management, wrote, “My guess is that the virus itself will largely disappear within a year, but that the structural social and economic impacts will be with us much longer.”
Some of those whose job it is to closely watch the economy agree with Kattar. Jack Kleinhenz, chief economist for the National Retail Federation, said, “The policy response has been appropriate, but policy takes time to work its way into the economy and targeted sectors. … Many small businesses stand at risk.”
Moody’s Analytics chief economist Mark Zandi has perhaps the most worrisome view of the economy through the foreseeable future. According to Zandi, even the accelerated development of a COVID-19 vaccine won’t soon reverse the damage already done. “The economy won’t be in full swing and fully recovered until mid-decade,” he predicts.
Gold Alert: Fed Balance Sheet Could Hit Nearly $10 Trillion Before Recovery
Another significant takeaway from the CNBC Fed Survey was that experts believe it will take trillions more new dollars pumped into the economy to make it whole again. The Federal Reserve’s balance sheet is already at an unheard-of $6.45 trillion according to CNBC. But survey respondents say it will have to go a lot higher before the economy is fully recovered. According to them, the Fed’s balance sheet could climb to a truly extraordinary $9.8 trillion – a 50% increase!
This possibility that the Fed’s balance sheet could increase by half sends an important message about gold to retirement savers who watch for ways to protect their portfolios. Gold has been known through history to thrive during periods of economic difficulty. During the Great Recession, gold surged 160% over several years on the back of two rounds of Fed quantitative easing (QE) (this is well-documented).
So, here’s today’s situation: Both regular Americans and financial experts are pessimistic about the economy. And those same experts say it will take several trillions more in asset purchases to fix what the coronavirus has broken.
If that doesn’t sound like a fertile environment for gold, I don’t know what does. Experts agree – they say gold again has nowhere to go from here but up. The expectation that Congress and the Federal Reserve will pump trillions more into the money supply makes an increase in gold prices all but certain.
Questions About Gold and Silver? Augusta’s Economic Analysts Have the Answers
If you’re ready to learn why gold can thrive in distressed economic environments, call award-winning Augusta Precious Metals at 800-700-1008. At Augusta, your questions won’t be fielded by generic salespeople and customer service representatives. You’ll have access to a team of highly knowledgeable economic analysts. These in-house professionals live on the cutting edge of global economic developments, including the evolving effects of the ongoing pandemic.
Augusta is devoted to serving American retirement savers who have so much at risk right now. Callers with portfolios valued at $100,000 or more will receive our free guide on retirement protection. They also have the opportunity to reserve a seat for Augusta’s live Profit & Protect Web Conference. This presentation is hosted by Devlyn Steele, Augusta’s senior economic analyst, who is a member of the prestigious Harvard Business School Analytics Program. Mr. Steele has had a long career in helping consumers protect their savings – and he is known for being one of the few who accurately predicted the historic rise of gold and silver in the wake of the 2008 financial crisis.
Not many Americans – neither everyday citizens nor financial experts – feel confident the nation’s economic ship will be back on course in the near future. Sadly, many retirement savers will do nothing to change their fortunes. This is not only a shame but entirely unnecessary. There’s little doubt we’ll continue to see massive Fed asset purchases by the trillions, and experts agree this kind of QE is music to the ears of gold.
Are you ready to learn how adding gold to your portfolio could write a happier ending to this pandemic for you? If so, contact Augusta today.