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New Administration’s Impact on Investments

New Administration’s Impact on Investments

2021 government policies and multiple executive orders are impacting wealth in many ways, and the recent change in administration is perhaps one of the most significant transitions the United States has faced. This fact, combined with the aftermath of a worldwide pandemic, has placed the US economy in a vulnerable situation in which inflation is almost certainly around the corner. Let’s explore some of the current concerns about the new administration’s impact on business and family investments:

The Weakening Dollar

Since 2020, the dollar declined from its April high by a historical 15%. This recent decline is likened to previous black swan events—described by the Corporate Financial Institute as “a phrase commonly used in the world of finance … an extremely adverse event or occurrence that is impossibly difficult to predict. The weakening dollar is evident.

The Rising Debt

As the nation doles out even more in pandemic-related stimulus money, the country is nearing $30-trillion in national debt. This frightening figure includes a debt to GDP ratio near 130%, primarily due to the loss of jobs, closure of businesses, and reduced incomes based on the over-year-long Covid pandemic combined with new job losses.

The Loss of Jobs

With climate change now on the minds of many in charge, oil and gas are the targets. The recent XL Pipeline halt has already resulted in 11,000 job losses, not to mention the losses for local businesses and infrastructure. There is plenty of controversy about the potential for a $15 minimum wage—excellent for the workers but detrimental for small businesses. Not only that, new immigration policies are sure to impact the availability of US jobs.

The Government Stimulus

The government will ultimately try to calm down the public and insist that inflation will not happen—that the new stimulus (the largest in history) will strengthen the dollar and boost the economy. In reality, the latest stimulus package is primarily focused on state infrastructures such as transportation and climate change rather than small businesses and individuals that need help. It’s noted that two-year and ten-year Treasury notes went up recently as well. On February 13, 2021, Wolf Street reported, “10-Year Treasury Yield Hit 1.21%, More than Doubling Since Aug.”

Printing of Money / Inflation

In any case, the Feds will print more money to accommodate the nation, and more credit will be issued. The bottom line—inflation! The nation’s monetary policy, as described by Investopedia, is impacted. This means a rise in costs for many commodities: gold, silver, agriculture/food, oil, lumber, gas, copper, and steel, to name a few. With inflation or even hyperinflation on the horizon, every investment profile should be under comprehensive review. As more money is printed, rates go up, and we have a market wrought with fear of inflation.

Risk Impacts to Consider

The value of your assets is almost always expected to suffer at the hands of inflation. Consider these risk impacts to you, your family, and your financial portfolio:

 

  • The price of goods and services rising
  • Expect an increased cost of living
  • Suppliers and wages cannot keep up
  • Pensions, treasury notes, and savings may devalue
  • Commodities and equities are at risk
  • Bonds may incur higher short term interest rates
  • Real estate values will drop if interest rates rise
  • Negative impact on retirement plan if not revised
  • Hyperinflation—defined as 50% per month inflation—could lead to an economic collapse

By re-evaluating your portfolio with a long-term mix of the right assets, you can hedge against the impacts of inflation. There are several ways to hedge, including precious metals. Keep in mind that hyperinflation defense almost always involves gold and silver investments.  

Hedge with Gold and Silver

With the current printing of money and the resulting value of the dollar going flat, investors must make a plan to hedge against inflation. If you look at historical black swan events:

It’s a time when investors find gold and silver a sound, a tangible commodity that lasts the seasons of inflation. Speak with an expert at Reagan Gold Group to learn more about what you can do to prepare for the frightening times ahead. It is not too late. The new government impact on investments is inevitable—how they impact your financial portfolio can be planned out. Find out more. 

 

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National Debt Impacting Financial Portfolios

With a new US government administration, the lingering financial and economic uncertainty in America continues, especially as a new Covid-inspired stimulus payout amount of over a trillion dollars is negotiated. The current national debt crisis is already sitting at nearly $28 trillion.

While the government does not agree on much, the people know, for sure, that the national debt crisis is climbing and impacting financial portfolios across the nation. As money continues to be printed infinite and jobs continue to be lost, the value of the dollar risks extreme peril.

Changing America

For the average investor with a standard, non-diversified financial portfolio, the impact of our national debt crisis, among other political developments, is nothing short of frightening. There are many “firsts” to recognize in America, and they are based on many factors:

  • The trickle-down impact of governmental efforts by many over the last 30-40 years has placed the country in a volatile place
  • The Covid-19 pandemic has resulted in over a year of chaos due to job loss, working from home, schooling from home, human division, business shutdowns, and so much more
  • US political disparities among the parties and non-parties
  • Influences and interferences from other countries
  • Differences in social and political equalities

These factors, coupled with a current national debt (nearly the highest since World War II) that has almost exceeded our total economic size, cause a great deal of uncertainty—as we’ve never seen. A newly proposed stimulus of $1.9 trillion under the Biden administration is under review. That should get the US to a hideous nearly $30-trillion national debt—higher than any other country’s debt—this spring (if not sooner). While the nation’s debt has never been so high, the potential impact is clear.

Potential Impact on America

As the people in America make personal adjustments based on the state of the nation’s direction, they are also thinking of their retirement investments, costs of everyday goods, safety for their families, ability to purchase food, future of their jobs, their health, prepping for a disaster, and much more. While the national debt crisis appears indirectly to many, the overall impact on America is real (see The Fiscal and Economic Impact):

  • Prices started rising as further debt is incurred (due to stimulus measures, etc.)
  • Interest rates rising – increasing the cost of borrowing, reducing income, and limit consumer spending.
  • US dollar devalued further – the devaluing of the dollar lead a recession.
  • Yields are too high – this may cause a collapse.
  • Unemployment falling further – it already has due to 2020 Covid-19 lockdowns, the recent cut of the Keystone XL Pipeline project, and a halt of the border wall construction.
  • Other countries may stop buying our bonds and our debt – then the Fed must continue to print money, purchase our debt with the phony money, and then charge us for it.
  • The nation could ultimately face a recession and/or bankruptcy – in the worst case.
  • Reduced private and public investments – due to interest costs
  • Less economic opportunities – income is reduced when debt is high.
  • Less fiscal flexibility – higher debt contributes to a fiscal crisis
  • Risks to national security – debt impacts our strengths in national security.
  • Our safety net at risk – much-needed programs are positioned in jeopardy.

Gold & Silver Owners Hopeful

It is important to note that, amongst the state of national unrest, gold & silver owners are in a class of their own—with gold and silver prices shooting up since the Presidential inauguration. History shows us that with the fall of currency or a potential recession, investors hedge with gold and silver. With gold and silver prices rising (as high as $1860 per ounce in February 2021 and silver at $27.00) along with demand, investors are making their move to get on board.

This period offers a little good news for enthusiastic investors that have decided to diversify their portfolios and hedge with gold and silver. The fact is the impact of a national debt crisis creates a perfect storm for the precious metals. Contact Reagan Gold Group today, and do not wait another minute to take advantage of the current reasonable price of rising gold and silver. Get prepared now. It is not too late.