It seems like Jerome Powell and President Trump both secretly have a wish to see gold prices hit $2,000 this year. I’m their biggest cheerleader, if that’s what they’re shooting for, and at this pace, THEY’LL get it.
Powell has announced a 50bps cut, WELL ahead of the official meeting, giving the central bank enough time to enact another CUT at the formal date.
That’s unprecedented and the market is still DEMANDING that rate slash of an additional 25bps.
We are now very close to saying ZIRP again in the United States. I am shocked by the speed of it, but it seems that public outrage is minimal or non-existent.
The masses have no curiosity about these matters, and until they start seeing the visible impact of the experimental policies taken by the Federal Reserve, I am certain that NOTHING WILL CHANGE.
This is the most basic and fundamental chart in the world of investments. The 10yr Treasury bond is the yardstick by which all other financial instruments are measured.
The “risk free” asset, which is the bond that Washington issues a decade ahead, now delivers less than a 1.00% yield. To give you an idea, throughout the decade of the 1990s, investors received no less than 6% for it. In the 2000s, you could have gotten no LESS than 4%, right up to the Great Financial Crisis.
93% Of Investors Generate Annual Returns, Which Barely Beat Inflation.
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Retirees had choices – a plethora of bonds to look at and invest in. Today, most of the sovereign bonds yield either zero or negative income streams.
In that light, the dividend yield of the S&P 500, which stands at 1.94%, looks juicy. It is double that of the 10yr bond.
Every asset on the planet will stay at elevated prices, so long as these bonds are yielding next to nothing and credit is plentiful.
As you can see, Wall Street is not shy about betting that the ZIRP/NIRP popularity will keep growing.
In the world we live in, retirees don’t need income from the stock market; they need to have real estate holdings, which can still generate 4%-10% per annum, even before appreciation. They also need precious metals to safeguard their purchasing power.
Personally, I’ve allocated over a quarter of a million dollars towards real estate in the past two months. In today’s world, the types of private funds, crowdfunding solutions and tailor-made turn-key operators make it easy to own managed real estate.
While the stock market can be hyped-up to the point of screaming MAYDAY, real estate is a much more relaxed investment vehicle.
Yields are quite stable, returns are reliable and professionals are handling the investments for you, from A to Z.
This is the reason I decided to act on this. Prices are definitely not CHEAP, but the ability of millennials to escape the renting loop is not great right now. They’re buried in student loans.
In the next few weeks, the entire world will see what a coordinated effort to contain Covid-19 looks like. If successful, the surging comeback could fuel a Mother of All Rallies in just about everything.
If that’s the case, the FED will be very sorry about cutting rates so dramatically. Great errors will be made; stand ready to defend your nest egg and to capitalize on the flipside.
Research Partner, PortfolioWealthGlobal.com
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Governments Have Amassed ungodly Debt Piles and Have Promised Retirees Unreasonable Amounts of Entitlements, Not In Line with Income Tax Collections. The House of Cards Is Set To Be Worse than 2008! Rising Interest Rates Can Topple The Fiat Monetary Structure, Leaving Investors with Less Than Half of Their Equity Intact!
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