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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.

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Evidence for Inflation

When we look at some critical events over the last 100 years, the evidence for an inflationary period is clear. While stocks are trading at record highs, consider that commodities are often at the same time undervalued. History repeated itself to show this in 1972 (nifty fifty stock bubble) and 1995 (dot-com bubble). As we see capital move into high growth and low valuation, investors respond. It is generally a time to part with fixed-income securities and deflationary growth equities and reconsider hard assets. The years’ worth of declining industrial materials, agriculture, and energy coupled with these historical stock/bond bubbles are strong evidence for impending inflation. It is apparent on the commodities front.

Pre- & Post-Covid Events

Pre-covid, jobs were returning, and the economy was near full growth potential even while debt remained high. Inflation has remained in check, but again we must look at history. Shortages in the reserve currency, post-covid economic downfalls, and continuing stimulus packages may trigger rising commodity prices that could trickle into the global supply chain and truly impact living standards. There is no doubt the global economy may be at risk of commodity-supply inflation similar to what we experienced in the 1970s.

The Bloomberg Commodities Index is keeping watch on a 12-year resistance line that may cause a shift in small investments. Both aging demographics and advancing technology may lead to deflation even though consumer prices have remained stable. This is due in part to depressed commodity prices that may be about to change. When this happens, investors look at gold and silver. These metals are fast becoming highly demanded and, at the same time, short in supply.

According to google search engine, the price of gold has increased 28% within the past 12 months of year 2020 and silver also increased 47%. Furthermore, the gold supply issues are due to a shortage of gold discoveries and the expense involved in gold mining. It is a 30-year decline trend, but mining companies are reacting in efforts to reverse this trend. Gold and silver are continually rising, and resulting cash flow is high—more than ever in the last 25-year period.

Increasing Gold & Silver Prices and Demand

Increasing prices are due to several factors:

1) Central bank debt monetization

2) Printing of money to address the debt burden

3) The attraction by investors due to post-pandemic uneasiness

4) Declining real interest rates

Looking at gold for example…Gold prices and demand are on the rise, with a high at nearly $1,918 a troy ounce in December 2020. History shows us that gold underperformed during the period from 2011 to 2018 when money was printed regularly. When we experience eventual imbalances in the economy, rising commodity prices, and real-world inflation, traditional assets are often devalued.

Printing money through central banks is frighteningly accepted as a way out of global debt burden, highly impacting worldwide GDP as much as 365%. This near-World War II level deficit may come at a severe cost to traditional investors. The Fed, along with the central banks believe they can exceed a 2% inflation target at full employment expense. While rising inflation is driven by consumers’ and investors’ expectations and actions, there is no doubt they may begin to act upon it.

Historical Evidence for 2021 Inflation

There is a strong possibility that inflation will rise at a faster rate than interest rates. This can drive investors away from overvalued stocks/credit into commodities such as precious metals and oil. This was the case at three different times in history (including the two noted above):

  1. During the dot-com bubble in the mid-1990s – the NASDAQ declined 78% over 2-1/2 years, at which time gold stocks went up over 7 years. Energy and industrial commodities increased.
  2. During the 1974 bear market – the S&P 500 declined 50% over 2 years, gold mining stocks increased 5-fold, and oil prices skyrocketed during the 1973 Arab Oil Embargo.
  3. Post-Spanish flu period 1918-1919 – this health crisis limited the industrial side of the economy and lead to raw materials shortages.

This caused commodity inflation and a rise in wholesale prices even as the pandemic healing was taking place. Grocery stores hoarded inventory to sell at a higher price, in which case the government was forced to intervene before a negative consumer impact. The cost of living surged, and labor unions protested for higher wages. Inflation rose above 20% in 1920. The Dow Jones Industrial Average declined from 1920 to 1921.

An Opportunity for Gold

It is a time when investors are beginning to see gold as a solution to impending inflation, and the evidence is clear as gold and silver prices rise and supplies shrink. People are counting on the gold mining industry to send their junior explorers after new gold and silver deposits. Even with the 2020 stock price performance rebound, there is much more unexpected performance to surmise. What is certain is that the precious metals mining industry will provide valuable alternatives, especially those created from small-cap exploration, for shareholders.

At Reagan Gold Group, we offer gold and silver investment solutions that are essential in a weakened economy amidst a hopeful Covid-19 recovery, an uneasy political regime change, and a job market desperate to return to normal. Here, we guide individuals and significant investors to make critical decisions that impact personal and business futures. While government-backed fiat currencies sit in peril, potentially devalued due to impending inflation, now is the time to re-evaluate your investments. Don’t wait another day. A lot is going on. Forecasts show that gold will shoot to $3k per ounce by the end of 2021! Reach out to Reagan Gold Group and learn more about the upcoming bull market for precious metals.

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Inflation Awaits

We’re living in a nation that is teetering on the brink of a pandemic-based economical disaster. The country has a severe debt of $27 trillion and counting! Every 11.5 seconds, the national debt is increased by an additional $500k… visit usdebtclock.org and grab a stopwatch and time it yourself. This debt would be acceptable if our economy were at $50 trillion. Unfortunately, we have around a $21 trillion economy. When debt is larger than the economy, inflation awaits.

Historical studies by renowned economists like Carmen Reinhart and Ken Rogoff span hundreds of years show that varying countries and empires have defaulted on debts. When this happens, a dollar of debt generally yields below a dollar of output. This is a case when the debt goes against growth. When you look at the current US debt-to-gross domestic product (GDP), you see a recent increase from 105% to about 130% (a spike that is primarily due to the 2020 Covid-19 pandemic).

While it would seem tax cuts and structural changes to the economy combined would manage the problem, most see the issue as too big to solve this way. This leaves only one outcome: inflation. How do we solve it?

History Proves this Action

The Fed could vote on new policies and literally announce a gold price increase to $5,000/oz. They could then practically back the price using Fort Knox Treasury’s gold in which US bank dealers of gold would conduct open market operations. At the price of $5,000/oz, dealers will buy if the price goes below $5,000/oz and sell if the price goes above $5,000/oz. They would then print money on a buy or reduce money on a sell-through the banks. The Fed, in turn, would target gold prices rather than interest rates.

Such a scenario had taken place before—in fact, twice over the last 80 years, in 1933 under the order of Franklin Roosevelt to increase the gold price from $20.67/oz to $35/oz (for a 75% rise in price), second in 1970 under Richard Nixon when he stopped the dollar-to-gold conversion by US traders. Gold went from $35 per ounce to $800 per ounce. The country experienced inflation, after all.

We can see from history that raising the price of gold quickly leads to inflation. The markets may not cause inflation, but the government can force it. For example, when the US Treasury took control of the nation’s gold under the Gold Reserve Act of 1934 (during the depression), it also included the Federal Reserve’s gold. While the Fifth Amendment states the government may not seize private property without compensation, there are loopholes. The Federal Reserve is not a government institution, so the Treasury gave them a gold certificate to compensate and to follow the Fifth Amendment (it was left on the books).

In 1953, Eisenhower faced a debt ceiling, as Congress did not raise it in time. When the administration could not pay the bills, they turned to the gold certificate left on the books in 1934. It turns out this certificate did not include all of the gold the Treasury possessed. So, the Treasury figured the difference and sent it to the Fed, asking for the money. The government essentially got the funds needed from the Treasury’s gold—until Congress increased the debt ceiling.

Today’s Scenario

Today is no different. The Federal Reserve’s gold certificate values gold at $42.22/oz—while today’s market price of gold is about $1,900/oz. The Treasury could issue the Federal Reserve a gold certificate in the amount of 8,000 tons at $1,900/oz, subtract the original $42.22/oz, multiply the difference by 8,000 tons and literally come up with nearly $500 billion.

Simply put, the Treasury could issue the Fed a gold certificate in the amount of 8,000 tons (in Fort Knox) at $1,900/oz and ask the Fed to give the difference over $42/oz. The Treasury would gain nearly $500 billion, debt-free. This would not increase the national debt since the Treasury already possesses the gold.

Conclusion: Inflation is Inevitable

In reality, there is not enough gold to support finance and commerce. Also, the gold supply does not grow fast enough to support world growth. Therefore, whether this scenario will play out as we deal with economic trials remains to be seen at a national level. Our solutions to the current national debt are certainly inflationary measures, which means we must revalue the dollar through higher gold prices or mark the gold as marketable to give the government money.

Both scenarios are leading in one direction: Higher inflation seems inevitable to save the nation from debt. As the government begins to recover from the results of a complicated and unusual state of distress, Reagan Gold Group may be able to address your financial questions and guide you for a stable investment in Physical Gold & Silver. Now maybe the most critical time to watch the market and invest in a more positive future. Call today and learn more about how to stabilize your retirement portfolio and prepare for the possibility of most-certain inflation.

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How Gold and Silver Can Positively Improve your Health

How Gold and Silver Can Positively Improve Your Health

In an era of dispute and disagreement, people need “hope,” and hope comes in many forms. Now more than any other period in history, financial stability is critical. It is a time when owning safe alternative investments can literally contribute to your good health. With a concrete backup plan that offers resilience, there is hope for a safer financial future. A financial investment alternative that is backed by precious metals in place of the volatile dollar makes a direct impact on your health through hope. Gold/silver resiliency gives people confidence, well-being, and a positive outlook during so many unpredictable situations.

Insurance During Difficult Times

Precious metals have long been known as financial insurance policies in times of chaos and uncertainty. When economic conflicts arise, investors buy gold/silver. This period in history is impacting every person, and there is an imminent need for added insurance in terms of safety, finances, and security during difficult times.

You don’t hesitate to purchase flood insurance when you live on a flood plain. It’s that simple. Your investment portfolio is much the same right now. Warning signs are sounding all around you. Consider that gold/silver is one of the few assets today that you can count on when a financial crisis is in the air. When a recession appears on the horizon, gold and silver investment can reduce fears, boost confidence, and offer hope for the good of your health.

A Gold & Silver Mix To Enhance Your Investments

It’s an odd time for many small businesses, families, and individuals. While an investment in a motor home may seem like a comforting solution during this time of a global pandemic, a longer-term investment would include adding gold/silver to your financial portfolio. When you are equipped with a tangible asset shown to withstand value in times of uncertainty, you are safeguarded from the fear of economic unknowns.

Gold and silver is a treatment plan to get you through this crisis, also worthy investment. The geopolitical landscape and the actions by central banks and US-wide activists protesting for a cause are leaving thousands of people feeling fearful. The benefits of a gold/silver investment right now are critical:

  • Financial insurance to empower and give hope
  • Focus on a business strategy that matters
  • The long-term solution to many short-term problems
  • A proven method for moving people through hard times
  • Tangible, hand-held system of REAL money
  • Low-risk investment compared with the volatile dollar and other forms of paper money
  • Value to pass on to family heirs
  • The safe monetary policy that cannot be manipulated like a bank account
  • Will ALWAYS hold value
  • Transferrable across the globe
  • Survival investment that has sustained every crisis over the centuries
  • Timeless metals over thousands of years?

Take precious metals off the table. If gold and silver were not available as a financial investment, it would forever change our economic landscape. The fact that central banks and private investors are busy buying gold and silver at unfathomable rates should be a strong indication of the actions small investors and family members should also take. Investors are fortunate that investments come in so many forms, but many often become unstable. Fiat currency, paper products, real estate, and consumable commodities are incredibly volatile, while gold and silver are stable investments.

The Wealth Factor of Gold & Silver 

There are many kinds of wealth, but your financial portfolio and health are by far the most important. By owning gold/silver, you gain confidence for your financial future and your children and grandchildren’s future. Improve your well-being and your health with a confident gold/silver investment.

Gold/silver is the only type of asset that cannot be devalued or destroyed. While prices may rise and fall, gold/silver always has value. As fake money, corporate greed, and political division plague America and other countries, people need hope. There is hope in a substantial, timeless investment—and that hope is likely to give you a healthy outlook during difficult times. It’s time to count on more than paper money and lost promises. Count on gold/silver to boost your financial portfolio and prepare you for any future scenario you may face. Ensure your assets now before it’s too late. Contact Reagan Gold Group to discuss the wealth factor of gold/silver.

 

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The United States’ DELEVERAGING

The current state of the United States economy is called “deleveraging.” As we as a nation traverse a series of severe economic events, namely, as a result of an unexpected worldwide Covid-19 virus pandemic, it is essential to note this position is also a result of repeated economic cycles. There are several periods in history in which the US was forced to deleverage. To realize the US’s current financial state, it helps to understand the inner workings of our economic system. Forces That Drive Our Economy Our economic system is logical and based on common sense principles, but not all Americans realize how our cyclical financial system performs. The economic cycle is generally straightforward, but impactful factors can change what history has usually proven to be true. Ray Dalio, Author, Entrepreneur, and Hedge Fund Manager, shared a video entitled How The Economic Machine Works. He states, “the economy works like a simple machine, but many people don’t understand it or don’t agree on how it works…” Dalio believes in an economic template for dealing with the global financial crisis. Oxford Languages defines economy as: “the wealth and resources of a country or region, especially in terms of the production and consumption of goods and services.” Dalio describes the economy as transactions generated by human nature. He says three primary forces drive our economy: 1) productivity growth, 2) short-term debt cycle, and 3) long-term debt cycle. He believes buyer and seller “transactions” are the foundation of our economic system. How Transactions Are Constructed The economy is based on buyer and seller transactions performed with money or credit, usually for goods, services, or financial assets. When you add credit to money spent, the result is total spending, which drives our economy. There are markets for everything we buy and sell. Therefore, the economy is made up of all transactions in all markets. Dalio says the largest buyers and sellers include the central government and the central bank. These entities have a great deal of control in tax collecting, spending money, and controlling cash and credit, making up the economy. Keep in mind that the central banks have control of interest rates and the printing of money along with the credit. The Key Role of Credit Most people do not realize that credit is one of the most critical yet volatile factors of the economy. Lenders and borrowers are behind the credit cycle in which principal and interest payments are significant. For example, once the credit is created in the form of a loan, it is called a “debt.” While Debt is considered a liability to a borrower, it is viewed as an asset to a lender. Credit transactions result in spending—which we know drives the economy. Credit patterns ultimately lead to these economic cycles: productivity growth, short-term Debt, and long-term Debt. The periods for debt swings generally range from 5-8 years and 75-100 years. Dalio explains that an economy without credit (Debt) is not feasible and that borrowing helps with spending and allows time for advancing productivity, thus the cycles. Pros and Cons of Credit The amount of credit in the economy far outweighs the actual amount of money. Credit allows income to rise and increase spending, creating growth, while borrowing creates cycles. Dalio states, “In an economy without credit, the only way to increase spending is to produce more – but in an economy, with confidence, you can increase credit by borrowing. “If borrowing money is done with purpose, it can help people and the economy (as long as it can be paid back). A pattern is created called a short-term debt cycle. Here we see expansion–increased spending fueled by credit, rising prices, leading to inflation. Then the central bank raises interest rates, so less borrowing is possible. Spending slows, incomes drop, and prices go down, which ultimately leads to a recession. When the central bank lowers interest rates, debts are reduced, and borrowing picks up. More simply, credit provides for economic expansion. A long-term debt cycle takes place when debts rise faster than incomes. Lenders continue to lend when revenues are rising, assets become more valuable, and the stock market increases. Borrowing continues leading to a bubble. Prices continue to go up and lead to more massive debts over time. Finally, people stop spending, incomes, and borrowing decreases, and liabilities increase. Debt burden becomes too high (as we experienced in both 2008 and 1929). Dalio states, “The economy begins “deleveraging” – people cut spending, incomes fall, credit disappears, assets prices drop, banks get squeezed, the stock market crashes, social tension rises…” He says borrowers can no longer borrow enough, and they rush to sell assets. Spending falls, real estate markets fall, resulting in “less spending, less income, less wealth, less credit, and less borrowing – a vicious cycle.” At this point, the only reason we are in a recession is that the interest rates are already at their lowest point (the 1930s and 2008). We find ourselves in a non-credit worthy economy. What Happens in Deleveraging According to Dalio, when deleveraging occurs, the steps to resolve high debt burdens require the government to:
  • Cut Spending — people businesses, and governments cut their spending
  • Reduce Debt — debts are reduced through defaults and restructuring
  • Redistribute Wealth — wealth is redistributed from the haves to the have-nots
  • Print Money — the Central Banks print new money
  • Create Stimulus Plans – the government offers stimulus funds to the people
Deleveraging has occurred in the US and many other countries experiencing deflation, depression, debt restructuring, tension, and political pressures. These steps were effective in the US during the 1930s, England in the 1950s, Japan in the 1990s, and Spain and Italy in the 2010s. Dalio explains that the central government can buy goods and services to support the people, but they cannot print money while the central bank can print money but buy only financial assets. He says to stimulate the economy, the central bank and central government need to work together. “The central bank buys government bonds, lending money to the government to run a deficit and increase spending on goods and services through a stimulus program, and through unemployment benefits.” These increases in consumer income are expected to add balance and stability for a positive deleveraging effort. Finding balance is significant in a deleveraging success. Economic Cycle Takeaways Dalio leaves his How The Economic Machine Works video audience with three takeaways:
  1. Don’t have debt rise faster than income (your debt burdens will crush you)
  2. Don’t have income rise more quickly than productivity (you will eventually become uncompetitive)
  3. Do all that you can to raise your productivity (it matters most)
When you consider how the economy operates, and the historically cyclical processes involving productivity, short-term, and long-term Debt, the current state of the economy makes sense. In this case, it gives Americans peace of mind for the present and hopes for the future as we move through our economic deleveraging state to better times.
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Health, Safety and Stability

As the nation’s leaders make every effort to get the economy back up and running during the coronavirus pandemic, there is much uncertainty about your health, safety, and money. The Washington Post writer, David J. Lynch, in a recent article stated, “The pandemic shock, which economists once assumed would be only a temporary business interruption, appears instead to be settling into a traditional, self-perpetuating recession.” People in the US and abroad have every reason to be concerned for a number of reasons: the pandemic and a number of other pressing local and worldwide issues.

US Dollar at Risk

Many economists currently state that the US dollar is at risk and that we can’t turn this around anytime soon. In a report by the United States Census Bureau, 85.5% of the 73,472 household respondents said they “had received or expected someone in the household to receive an Economic Impact Payment of stimulus check.” While this news is positive for many, the impending results of printing that kind of money could prove to be damaging for our long-term economy. The long-term impact is yet to be seen, and we are still in the middle of a crisis.

Low Inflation Over Time

With consumer inflation low over time, there are repercussions. Low inflation adds up. Consider that the US dollar lost 44.2% of its purchasing power between 2000 and now. This translates to a savings account that potentially lost half of its purchasing power. Your fiat money in the form of paper is continuing to lose value—and this loss will likely impact you in the future. Simply put, your savings are likely or will soon be worth less than it is today.

Coronavirus Spikes

City mandates for people to wear masks are increasing by the day, but many refuse to do so and are generally not following protocol guidelines. The recent spikes in the coronavirus are affecting both large cities and small towns alike. The spike in cases, as you know, has a direct impact on jobs and the economy. Jobs numbers have improved over the past two months. Still, Lynch also reports, “Now states such as Florida, California, Texas, and Arizona are setting daily records for coronavirus cases. More than 70 percent of the country has either paused or reversed reopening plans, according to Goldman Sachs.” We must rethink the way we live and work amidst a virus, or a mutation of the virus, that is likely to be among us for years to come.

Riots, Violence, and Crime Are Increasing

Most major US cities are experiencing an increase in riots, violence, and crime. There are several opinions as to why, but most media outlets agree that the pandemic and resulting financial setbacks and social justice protests are the leading causes. These activities, along with the high percentage of police officers retiring after the call by many democratic states to defund the police, have put fear in Americans’ hearts—concern for safety, for children, and financial futures. There is an alarming rate of uncertainty by people across the globe.

How To Protect What You’ve Worked For  

As an American, you’ve worked your whole life to provide for your family, live a quality lifestyle, and save for retirement. Today, you feel vulnerable and less in control. Amidst so much controversial news, a lingering pandemic, and a country experiencing division at every turn, there is one thing you can do to protect your assets—hedge your income with a precious metals IRA.

It is essential to consider that history sheds some appealing light on fiat currency vs. precious metals. The records show that gold and silver as monetary standards prevail while fiat currency systems eventually fail. Today, our monetary system is possibly at the highest risk level ever. Let’s face it, the more money we create, the less valuable it becomes. By hedging your savings with gold or silver, you gain stability in this nation’s grave uncertainty.

How Can Physical Gold/Silver Help At A Time Like This?

An investment in precious metals, particularly gold, stands out as a stable and secure transaction in this volatile market. A truly diversified portfolio that includes gold or silver (in addition to cash, stocks, and bonds) is essential in an unpredictable economy and when people are uneasy. How can physical gold help, you ask?

  • Increased Purchasing Power. History shows us that the purchasing power of gold has remained stable even during an inflationary period.
  • Consistent Worldwide Value. An ounce of gold or silver is the same value in every corner of the world; therefore, precious metals trading is straightforward.
  • Authenticity. Gold and silver coinage and bars are tangible, meaningful, and authentic as family investments; they have never been devalued in the way fiat currency is depreciating.
  • Not Paper Currency. The dollar is known as “currency” while gold and silver is known as “money.” There’s a difference in a fluctuating piece of paper and a physical gold/silver asset as a lifelong investment.

With your health, safety, and money at risk during the coronavirus pandemic, now is a valuable time to reevaluate your financial portfolio and prepare for what is yet to come. It’s a lot like preparing for a natural disaster, an unprecedented emergency, or an EMP. Create a plan, develop a strategy, and progress on your objectives while there is still time.

Take a stand. It may be time to leave the fiat currency bandwagon while the nation is still functioning, and precious metals is always an option. Supplies are limited, and investors are taking action with prices nearing an all-time record high (the highest gold price was $1,917.90/oz, closing at $1,880/oz in 2011). Today’s price is mid $1,800’s/oz (the highest silver price was $49.50/oz, on Apr. 28, 2011). Today’s price is low $20.00/oz.

Contact Reagan Gold Group to discuss the sensibility and opportunity in a gold or silver investment now, before the country spirals further out of control. We hope and pray it does not.

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The Federal Reserve Impacts America

In June of 2020, The Federal Reserve (aka the central banks) decided to hold interest rates at near-zero and likely keep rates lowered through 2022 in support of the post-COVID-19 economic recovery. The benchmark rate today is 0%-0.25% (compared to 2.50% a year ago). This news, coupled with May’s unexpected decline in the unemployment rate to 13.3% even amidst the virus aftermath is enough for workers, shareholders, and investors alike to relax a little while working toward a full recovery. In a recent video segment entitled “Federal Reserve Chairman Jerome Powell speaks to reporters on central bank’s latest decision,” even while there is still much unrest and uncertainty about the timeline for our economic comeback due to the pandemic, the Chairman shared a great deal of hope. His positive outlook on jobs, the economy, and the state of the country were reassuring. The Realities of Our Current Economy There is certainly no doubt that the pandemic (and media coverage thereof) has impacted the lives of every American and nearly everyone in the world. We are all quite aware of the most significant economic hits. Chairman Powell admitted that the pandemic outbreak was similar in many ways to a natural disaster. He stated that this setback is, in fact, the “biggest economic shock in the US and the world ever. In two months we went from the lowest level of unemployment to the highest level of unemployment in 50 years.” He shared these impacts:
  • Indicators of inflation and degrees of uncertainty based on virus containment
  • A decline in economic activity that has added to job losses
  • Nearly 40 million jobs lost, with a record rise in unemployment
  • The virus impacted industries that involve tight groups of people in the service economy
Even given these realities and the fact that “a full recovery is a way out,” Chairman Powell agrees that the economy was in an excellent position to begin with and take such a hit. The Fed has positive goals to help the US economy recover. The Goal of The Fed Chairman Powell spoke a great deal about The Federal Reserve’s mission and goals for our country in such a time of crisis. While he agrees the US and world economies have suffered greatly, The Fed has tools to weather this type of unexpected disaster. The message is clear. The Federal Reserve is concerned about the well-being of the economy and the people of our nation. They are committed to using all of the tools possible for our nation to ensure:
  • Relief and stability
  • A recovery that is as strong as possible
  • Limit to lasting damage
  • Lowered interest rate (0%-0.25%) that is expected to remain low
  • Improvement to our gross domestic product (GDP)
  • An inflation rate that remains below the 2% objective
  • Maximum employment
  • Stable prices for Americans
  • Promotion of our financial system
The Fed has “listened” in order to create change to help as needed. They “lowered minimum loan sizes and increased maximum loan sizes – lengthened the maturity and stretched out the repayment schedule; borrowers will get a two-year delay before a principal payment is due along with a one-year delay on interest payments.” As the nation faces much unrest and several social and equality concerns, the fact is The Fed is objectively supportive of the nation, the people, and the world. Chairman Powell indicated, “there is no place for racism anywhere.” All of these assurances bring comfort to many. A Word About the Stimulus Program  The Chairman said, “The government has been large, fast and forceful.” He believes our pre-existing healthy economy, financial system, and 50-year low unemployment rate have positioned the country well for re-opening and the building of momentum and job growth over time. In terms of the $3 trillion stimulus program, he believes “households, laid-off workers, small, medium and large businesses, hospitals, and state and local governments” benefitted and that the paycheck protection program (PPP) and unemployment benefits have been very innovative. These, coupled with the Fed’s innovations, are ALL making a difference. A Hopeful Message for Our US Economy Chairman Powell expressed a positive outlook for our economy based on several recent signs of stabilization since the outbreak of the pandemic in January 2020:
  • People going back to work following social distancing protocols
  • Businesses re-opening using new guidelines to protect customers and staff
  • Stimulus payments and unemployment benefits that seem to be helping
  • Inflation is below the 2% objective (weak demand hold down consumer prices)
  • Pleasant lending climate going forward
The Federal Reserve monetary policy “is equipped to support the economy.” They continue to study yield-curve control, gain a better understanding of the economy’s trajectory, and streamline how best to deploy tools toward economic goals. Even though the expectation is that we have months, if not years, to recover fully, The Fed believes the economy is re-opening. They “want the markets to be working,” and they “want to get the labor market back.” Good News for Continued Investments Now is the time to HEDGE, HEDGE, HEDGE! In this present time of uncertainty in which the value of the US dollar could plummet, some of the world’s smartest investors hedge their portfolios with physical gold and silver. This move helps them maintain purchasing power. When the dollar is at high risk, the central banks quietly increase their withholdings of physical gold on a daily, weekly, monthly, and annual basis. This strategy begs the question, “Why are you not doing the same?” With interest rates are at an all-time low, it means the US dollar is weakened. This creates an inverse (negative) relationship between currencies compared to the higher values of gold and silver. This alternative currency in the form of gold and silver is not printed but rather “organically” grown and mined out of the earth with minimal volume. Currently, the precious metal supply cannot cover today’s demand. Therefore, premiums are increasing rapidly due to shortages. Contact Reagan Gold Group today. Discover your options while this legal tender currency in the form of gold and silver is still available and before premiums increase or supply runs out.

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Market News

Your Money Get The Facts

Due to the January 2020 coronavirus outbreak, The Federal Reserve kicked in over $3 trillion in four separate US stimulus measures between April 24 and May 22 to eliminate a US financial system’s seize-up. With another $3 trillion approved by the House and on the table in the Senate, before actually evaluating the success of the first packages, the total pandemic spending bill is well on its way to an overall cost of $10 trillion. Even with this astronomical figure in play, many recipients have doubts about whether the money targets the real areas of concern: small companies, local cities & towns, and average borrowers for positive outcomes. Coronavirus Relief To Date A recent report published by NPR provides a breakdown of the bills and monetary allocations made toward the coronavirus relief effort, giving added perspective on where we are today. The breakdown looks like this: $681 billion went to testing, administrative costs, state and local governments, and public health, $513 billion went to the CARES Act for tax breaks for businesses, $532 billion went to large corporations, $748 billion went to individuals (those making less than a certain amount), and $810 billion went to small businesses. The HEROES Act is pending due to several non-coronavirus related wants inserted into the bill. There is also concern that we need more data about how the previous stimulus money has helped before the Fed doles out more. Does the Fed Print Money To Cover the Coronavirus Relief? Technically the Fed does not print money, but the way they come up with the money for such a relief effort as the coronavirus is described another way by thebalance.com: “When people say the Federal Reserve “prints money,” they mean it’s adding credit to its member banks’ deposits.” They remind us that today’s money is not always described as cash or coin. “When the Fed expands credit, it’s engaging in expansive monetary policy. It increases the money supply available to borrow, spend, or invest. Those three things all help end recessions.” Another example of “appearing money” is described in open market operations. “The Fed buys US Treasuries and other securities from banks and replaces them with credit. All central banks have this unique ability to create credit out of thin air. That’s just like printing money.” The Impact for Investors and Individuals While the goal of the “stimulus” packages was to stimulate the economy, and the $1,200 check received by many American was forthright, there are unexpected impacts to investors and individuals in terms of their checking accounts, savings, money markets, and CD accounts and especially their individual retirement accounts (IRAs). Creating money is also known to “debase” the US dollar. This, in turn, reduces its purchasing power because the money adds up to more than US products and services. Inflation could set in, and the US could find itself in a timeless debt vacuum. When we realize a spike in demand without supply, prices rise. The ultimate impact for investors and individuals is a devaluation in their money and especially their retirement accounts. According to Reuters, based on the coronavirus pandemic, Goldman Sachs “is now forecasting a real GDP sequential decline of 34% for the second quarter…” However, a more optimistic report is shared on Business Insider: “While economic indicators point to the worst recession in nearly a century, Federal Reserve Chair Jerome Powell doesn’t expect a prolonged, Great Depression-style slump.” Smart Money — Going Toward Gold Smart money may mean something different to the average saver than to the savvy investor, but in this time of economic crisis, smart money means gold. If you hadn’t noticed, as the Dow Jones Industrial Average goes down, the price of gold goes up! With interest rates at all-time lows and a stimulus package debasing our currency for a potential inflationary period, there is no better time to look into the reserve currency called “gold.” The only concern in doing so is that all of a sudden many investors around the globe are also looking into gold. The price is rising, the supply is dropping, and orders are becoming backlogged. While it is a trying time for many workers, families, and individuals in every corner of the globe due to COVID-19, it is an exciting time for gold. Gold trading is showing some exciting patterns since the Federal Reserve stimulus packages were issued, and it continues to fascinate those who recognize its value when the dollar is weak. It directly holds its value when other forms of currency do not. Why Consider Gold?  There are generally many reasons to consider gold, but in a time of crisis, the reasons increase even more. Review these considerations about gold:
  • Gold is a coveted metal across the globe
  • Gold has increased 13.07% within 150 days starting Jan 1, 2020 to May 29, 2020
  • Gold is perfect for diversifying and hedging financial portfolios as a safe haven asset.
  • Gold has proven to hold its value and serve as a commodity to hedge against inflation
  • Gold is robust when the US dollar is weak
  • Gold prices rise for owners when costs of living increase
  • Gold supply is dwindling which means the value of your gold is increasing
  • Gold is a safe-haven asset while government debt plagues the nation
  • Gold is going to global central banks over individual financiers (668 tons in 2019, and rising every year); more challenging to get
  • Gold is and has shown to outperform other major currencies
  • Gold is called a crisis commodity in times of governmental challenges
Think about how gold may have a place in your financial future in place of your existing monetary accounts. It’s a sound investment in more ways than one. Learn more today and secure your financial assets for tomorrow while you have time, and gold is still a market commodity for all to purchase. This era may end soon. It’s your money – get the facts and act now.
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Market News

How To Move Ahead – Amidst a Worldwide Economic Recovery

As the world begins to prepare for a COVID-19 recovery period, it is no surprise that nearly every human life has been impacted. The devastation is centering around personal health, finances, supply availability, jobs, and businesses. In less than four months, the coronavirus epidemic created anxiety, along with grief and depression for individuals, families, and companies across the globe. In fact, according to the US Bureau of Labor Statistics, the unemployment rate went from an all-time low of 3.5 in December 2019 to 4.4% in March 2020, then 14.7% in April 2020, totaling over 22 million unemployed, and still growing! While it is indeed a time of uncertainty for many, it is also a time in which people and businesses can reflect, consider what we’ve learned, and begin to take action toward both recovery and a healthier, safer future.

We’ve Learned So Much

The coronavirus has impacted many people differently, but one thing is certain: such a crisis makes businesses and individuals re-evaluate identity, the current state of affairs, achievements, ability to move forward, health, and so much more. If there is a positive outcome from the terrible COVID-19 outbreak, it is “lessons learned.” While some regions are still in the middle of the devastation and other areas are just beginning to think about recovery,

there is still much to witness and learn. It’s just not over yet, but if we take stock of what we’ve learned so far, we can turn some aspects of this disaster into something good.

What We’d Do Differently in Terms of Health?

From a health perspective, we’ve heard the daily briefings and online doctors over and over. Most health actions are common sense, but the reminders can never be stressed enough (especially as many people do not take the spread seriously). We need to take every precaution to protect ourselves, family, friends, and businesses.

  • Wear a mask or face scarf and gloves in the public
  • Keep a 6′ distance from other people
  • Wash/sanitize hands regularly
  • Sanitize all surfaces regularly
  • Keep sanitizing products on hand
  • Stock a supply of medical supplies and personal protective equipment (PPE)
  • Bring essential medical supplies and drug production back to the US
  • Create a will describing your wishes, and make sure it’s notarized
  • Consider a diversified investment (such as gold) and get a better night’s sleep

What We’d Do Differently in Terms of Finances?

Personal wealth has been hit hard. Most long-term investment plans are shot. Many people living week-to-week are now behind on their payments. Small businesses are suffering, losing staff, applying for loans with no clue how it will be paid back, and possibly having to close their doors. Overall, financial portfolios have been devastated. While it seems there is no hope, we have learned that we will recover, but we must “be prepared” for a future disaster. Precious metals are indeed an attractive solution in times like these. There is urgency in making this type of investment because premiums on metals are fastly increasing due to current demand and limited supplies. Some actions to consider:

 

  • Create a financial disaster preparedness plan
  • Place our jobs back on American soil
  • Never be dependent on others or the government; work to be financially self-sufficient
  • Re-evaluate personal stock market investments
  • Order gold and silver now to hedge a financial portfolio with alternative investments while supplies last and before premiums increase
  • Set up a backup plan independent of government funding
  • Move money out of the banks and invest in other commodities such as real estate and metals
  • Search for alternative currencies
  • Move some funds out of the financial system

 

What We’d Do Differently in Terms of Goods and Supplies

We’ve learned about the goods and supplies we desperately need daily, including fuel, food, health and sanitization products, and paper supplies. First and foremost, we’d stock up on paper goods and disinfectants! The real reason for the shortage of these items, however, is a result of human hoarding. Because of high volatility in the markets, the precious metals industry is encountering major problems accumulating metals to fund peoples’ orders because of hoarding. Also, mint production companies are closed; therefore, new inventory is not produced, resulting in limited supplies. If everyone stocked up in goods and supplies over time while they are readily available, next time, perhaps the need for hoarding would be minimized (doubtful). In the meantime, we’ve learned we may not be able to depend on the system to get the fuel, food, and the supplies we need. What can we do differently?

  • Create a personal disaster preparedness plan
  • No longer rely on other countries to supply us with oil, prescriptions, and medical supplies
  • Stock up on non-perishables such as dried foods, paper goods, and disinfectants – at least a three-month supply
  • Plant a garden and stock it with fruits, vegetables, and herbs (save the seeds)
  • Store some water; a water heater is an excellent supply, but one can’t have too much
  • Create a camping tub (or enhance an existing one) to camp out at home if needed, and that includes propane, a camping stove, lighting, etc.
  • Make a list of the personal items needed to survive in a crisis (medications, health and safety items, water, grooming aids, etc.), and keep them in stock (with expiration dates in mind)
  • Stock up on precious metals as a hedge against inflation before the metals cost more

What We’d Do Differently in Terms of Businesses and Jobs

So far, we’ve learned that most small businesses and individuals are not financially self-sufficient for more than one month. However, disappointing that is, we recognize the need to make changes in order to create a three-month survival plan. Governor Gavin Newsom just announced on 5/15/20 that the State of California will quarantine for an additional three months because there is no vaccine or proven effective medication to date for the coronavirus. It was announced that we could wait 18 or more months for this to happen. As a business owner (or an employee), several actions can be taken to prepare for this delay or another unexpected event:

 

  • Prepare gold and silver tangible assets as your backup plan to manage risk, promote stability, hedge against the U.S. Dollar, and hedge against the upcoming inflation that may arise.
  • Stock up on supplies and equipment employees might need
  • Take on backlogged projects that need attention
  • Design a resiliency plan and present it to staff for ideas and testing
  • Revisit regular suppliers and ensure long-term relationships and agreements; so the company can count on them in the case of an emergency
  • Lead by example during a time of crisis; show work teams they are working for a caring company; assist in motivating and engaging staff to keep them on board
  • Maintain transparent communications throughout a difficult period
  • Visit the CDC and US Equal Employment Opportunity Commission (EEOC) to become familiar with current labor laws
  • Protect employee health and safety: Consider flexible schedules, PPE on hand, avoiding personal contact, health posters, symptom trackers in place, remote workforce or shiftwork to minimize exposure, etc.
  • In the case of a layoff, provide employment options and guidance

We’ve Learned To Be Prepared 

As a nation, there are many actions individuals and companies can take to prepare for the present and the future. Both worldwide and nationwide crises are inevitable, but rather than wait for the next disaster to happen, take action now. We’ve learned ONE crucial thing: we can be more prepared. It’s time to assemble health-, finance-, supplies-, job-, and business-preparedness plans. While no two disasters are the same, some or all of these areas of human impact are likely. Work with those you love and employ to devise plans today that could prove worthy for the future in this unsettled atmosphere in which we live and work. Consider gold and silver as stable insurance to hedge yourself and your family.