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Weekly Touchpoint: Fund Managers Say Trade War Will Never End

Posted By Isaac Nuriani |

Experts say the biggest risk to a portfolio right now is the hostile trade war between the U.S. and China. The dispute is constraining global manufacturing and threatening to plunge the world economy into recession. That’s bad enough – but it could get a lot worse. A new Bank of America Merrill Lynch poll suggests global fund managers expect the trade war effectively to never end. How will you prepare for the possibility of an endless trade war? One smart step could be adding gold and silver to your asset base. A closer look at the surprising poll opens this week’s roundup of news for astute retirement savers.

  • Numerous experts lay the blame for many of the world’s current economic troubles at the feet of the rancorous trade war between the U.S. and China. Some say an improvement in economic relations between Washington and Beijing is pending, but few experts are buying it. As a matter of fact, according to the latest survey of global fund managers by Bank of America Merrill Lynch, 43% believe the trade war is now “the new normal and won’t be resolved,” compared to 36% who think there will be a resolution by the 2020 U.S. presidential election. Head over to MarketWatch for more on this sober outlook from world leaders in institutional, mutual and hedge fund management.
  • The trade war continues to exact a terrible toll on manufacturing and international commerce, and the International Monetary Fund (IMF) is becoming increasingly worried about the state of the global economy. According to MarketWatch, the IMF now is saying it believes global growth will drop to a feeble 3% in 2019. That would be the slowest rate of expansion since the 2008 financial crisis. If growth drops below 2.5%, it would signal recession officially on a global scale. At a recent press briefing, Gita Gopinath, the IMF’s chief economist, said ominously, “At 3% growth, there is no room for policy mistakes and an urgent need for policymakers to cooperatively de-escalate trade and geopolitical tensions.”
  • As the previous item noted, global growth is expected to finish the year at 3%, the lowest figure since last decade’s financial crisis. The trade war is seen now as the single greatest factor hindering worldwide economic expansion, but a recent article by economics columnist Ferdinando Giugliano is sounding another alarm related to the slowdown. Giugliano says one of the natural consequences of a recession could be “a wave of defaults among corporations” that have been gorging on cheap debt over the last decade. For more on how a global recession and debt-laden corporations could conspire to “threaten the world’s financial stability,” refer to Yahoo News.
  • It’s difficult to imagine a more ringing endorsement for gold than the world’s central banks buying it at a record pace for nearly two years. Central banks are essentially a function of fiat currencies, and yet the tremendous surge in gold-buying by these institutions makes it clear they don’t believe “monetary policy” alone can preserve the stability of the nations they serve. Now the Dutch Central Bank has gone even further to validate its affection for gold, publicly declaring it to be the only asset nations can count on to rescue the global financial system if it collapses. If a European central bank believes gold can save the world economy, it’s not unreasonable to conclude gold could go a long way to keeping your personal retirement portfolio safe. To learn more, read Augusta’s latest blog article here.

It’s difficult to overstate the significance of this. Not only are central banks buying gold as fast as they reasonably can but now one European central bank publicly testifies that, in its view, gold is the only asset capable of keeping the global economy afloat. Anyone interested in finding ways to help secure their personal savings could do worse than relying on the asset central banks turn to when they want to protect their own portfolios. Is gold a part of your asset mix? If not, why not? Call Augusta Precious Metals at 800-700-1008 or visit Augustapreciousmetals.com.

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