Fed Claim China’s Real Estate Crash Poses a Threat to US Economy

The China Evergrande Group, said to be the second largest property developer in China according to its sales, is under a threat of collapse according to several US news articles (including NBC News and the Wall Street Journal).

With China Evergrande under such a threat, The Federal Reserve warned that such a collapse would likely trigger a contagion that could wipe $1 trillion off of global growth.

iStock 164156552Chinese Indebted Property Market and Evergrande Crisis

China’s biggest corporate headache, China Evergrande Group, is grappling with a debt burden of more than $300 billion, keeping global markets on alert about the fate of the country’s second-largest property developer.

Real estate in China has continued to grow because investors, developers, and homebuyers are convinced that the sector is too crucial to the economy to allow any significant correction. Officials in the country have sought to reassure investors that the crisis will not spiral out of control and these officials will protect creditors’ interests. Still, the long-term effects on China’s economy and property market remain unclear.

In the event of Evergrande’s collapse, other developers will undoubtedly follow. With housing and construction accounting for 29% of China’s economic output, setbacks in this sector could devastate global economic growth. China’s housing market could collapse in 2022 due to a lack of vacant property to house 90 million people and impact the US as well.

Potential Impact on US Housing Markets

If there were a severe economic slowdown in China, the Fed warned that there would be “spillovers to financial firms, a sudden correction of real estate prices, or a reduction in investor risk appetite.”

iStock 1416740933US home prices have already increased by a record 19.8% over the past year. Regardless of your economic background, we all know that the current rate of growth, which happens to be faster than the run-up to the 2008 financial crisis, is not viable. With a housing debacle that unleashed the most profound crash since the great depression in the US, it is no surprise that the Evergrande crisis could produce similar results.

However, emerging economies suffer from the immediate impact of the global rise in food and energy prices. The problem is particularly pronounced in developing countries where staples occupy a larger share of household spending.

Prepare For the Housing Market Crash with a Golden Opportunity

There is one reliable way consumers, financiers, and investors can respond during uncertain economic times. With currency devaluation and rate changes at the forefront, your financial portfolio can change in an instant. Have you thought about diversifying your portfolio with gold to take you through a crisis?

iStock 1142839776Gold is a safe haven in times of both national and world crises. Gold’s historical cycle demonstrates several factors that affect its price over the decades, including periods of recession, expansion, and deflation. Gold prices usually skyrocket just before a recession ends, so the best time to hedge with gold is usually just before the recession finishes. Now is the time to reevaluate your financial portfolio with gold, silver, or a combination of precious metals.

Get in touch with Reagan Gold today to find out how we can help you prepare for uncertain times ahead.

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1-888-634-1523

Learn how a Gold, Silver, & Precious Metals IRA can help you hedge against inflation

Strap In. Roller Coaster Markets Ahead

In today’s uncertain financial landscape, protecting and diversifying your portfolio has never been more urgent. The latest economic indicators are flashing warning signs that a downturn could be on the horizon, leaving many investors exposed to the volatility of dollar-denominated “paper” assets like stocks, bonds, and cash.

Why wait to act? Here’s what we know:

Economic Pessimism is Rising: A recent survey from the Fed shows weaker job growth and a slowing economy. More Americans are locked into jobs they may not be satisfied with because hiring is more and more stagnant. Growing pessimism among leading economists and financial experts is partly fueled by a widening trade deficit and lower productivity in the US. Sluggish growth, inflationary pressures, and other factors indicate potential market corrections could be on the horizon.
Market Volatility is Increasing: Today’s markets anticipate and then react to more and more bad news. Uncertainty surrounding Federal Reserve policies, rising debt levels, and geopolitical tensions is leading to greater instability in global markets, with many pointing to an almost inevitable downturn.
Inflation is Eroding Wealth: As inflation persists, the purchasing power of your dollar-denominated assets is diminishing, putting your financial future at risk. In spite of optimistic economic indicators from the ivory towers, Americans are still grasping at pennies when shopping for basic necessities.

What can you do to safeguard your wealth?

It’s time to consider moving a portion of your portfolio out of “paper” assets and into hard assets like gold and silver. Precious metals have been a trusted store of value for centuries, acting as a hedge against inflation, economic uncertainty, and market volatility.

Here’s why you should act now:

Diversify Your Portfolio: Gold and silver can reduce your exposure to dollar depreciation and market downturns, offering greater stability in times of crisis.
Inflation Hedge: Historically, precious metals retain their value and even appreciate during inflationary periods, protecting your purchasing power.
Global Demand is Increasing: As more investors flock to safe-haven assets, demand for gold and silver is surging. Acting now ensures you lock in today’s prices before they rise further.

Your Next Steps
Don’t wait for the markets to dictate your financial future. Protect yourself by diversifying into gold and silver now.

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Wealth Destroying Potential of Taxing Unrealized Gains

Kamala Harris recently introduced her policy goals for her administration, should she win in November. And it should be taken deadly seriously. The polls right now show we have about a 50/50 chance of President Harris come January 2025.

One of the most shocking planks in her platform is the tax on UNREALIZED capital gains – a potential game-changer for capital accumulation and financial stability in this country.
As it stands now, you pay taxes on the profit of a stock or real estate when you realize those gains, or sell. Meaning, you have the cash in hand to fork over to the IRS.

But what happens if you are taxed based on the imaginary, presumed value BEFORE you sell – when you have no intention or desire to sell? You are taxed simply for the privilege of continuing to own that asset. And who determines the value of a thing before it is sold? And how? Prices are determined by what a buyer is willing to pay and what a seller is willing to accept. For an unrealized gains calculation, there is no buyer or seller.

And what if you don’t have the cash on hand to pay those taxes?

Say you bought a house last year for $400,000 and today it might appraise for $450,000. Without even selling, depending on how the tax code is structured, you could potentially be on the hook for capital gains taxes on $50,000 – that you don’t have cash to cover! What if you renovated and its worth $500,000? What a disincentive for capital improvements!

Many people might be FORCED to sell under those circumstances. And then, where do they live? What can they afford to buy with what’s left? Not another $500,000 property… They just got a major lifestyle downgrade, courtesy of Uncle Sam. Or Aunt Kamala as the case may be.

Don’t think it can happen? The Democrat donor class is certainly hoping this gets scrapped. They actually have the most to lose from this policy. But they are hopeful, and not switching course on donations and support. They are still shelling out millions to get her elected, expecting to NOT be on the menu if she does.

Is she really just kidding about all this?

Be careful.

Remember what they said initially about student loan forgiveness. The left said not to worry about that – they don’t have the constitutional authority to do that. It’s not a realistic policy to pursue. The Supreme Court has agreed – multiple times – that it is unconstitutional. And yet, the Biden Administration has attempted to do it multiple times. The latest court battle has been waged by the Attorney General of Missouri, Andrew Bailey and several other states to halt the third and latest attempt to cancel student loan debt.

And remember what they said about vaccine mandates once upon a time. Before the Biden Administration barged ahead with mandates, they used pressure and incentives and denied mandates were in the cards. Then the Biden Administration ended up doing whatever it wanted, and only the agonizingly slow and costly legal process has been able to slow them down. Sometimes it appears they are stopped, yet they forge ahead anyway in spite of losing in court.
What then should we do about this insanely destructive idea about taxing unrealized gains?

And don’t fall for the line that it will only affect the very wealthy. History should teach us that when the IRS is given the tools to go after the “wealthy” it is only a matter of time until the definition of wealthy includes YOU.

A tax on unrealized gains is a naked attempt to open the door to eventually divorcing you from your property through confiscatory taxes. It may not be structured that way today in proposals, but these things have a way of creeping down into the middle class and causing economic chaos.
If you want to move some of your net worth out of this destructive and toxic system, precious metals remain a popular choice for many reasons. If you would like more information on how gold and silver can help, please call us. We would love to discuss your situation with you and answer any questions you may have for us.

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The WORST of all Possibles if Trump Wins… He could get the blame for a Biden recession

Donald Trump rarely talks about his one big fear should he win in November.​
Back in January he mentioned it to The Hill and its CHILLING.

Trump feels the stock market is on edge and a crash is coming. Not that he WANTS a crash, but if it happens, the worst possible time would be during his second term, giving him a Herbert Hoover scenario.

Black Friday and the start of the Great Depression happened just a few months into Hoover’s term, marring his legacy and impeding his goals as president.

Trump is afraid the same may happen to him – due to Biden’s disastrous economic policies.

And the worst thing is there isn’t anything Trump can do to prevent it, but it could seriously derail his agenda.

For that reason, Trump think it would be better for Biden’s crash to happen on Biden’s watch – SOONER rather than later. And time is running short.

Of course, we may already be in a recession. A new survey shows that a majority of American farmers and agricultural economists believe we are on the verge of a recession or already in one. Farmers know what’s up with the economy.

Economists who specialize in agriculture are keenly aware of these early economic indicators as they wade through commodity prices like corn and wheat every day.  Some quotes from agriculture economists –

“Farm incomes are down. Ag manufacturers are laying people off. Suppliers for those manufacturers are laying people off. What are the bright spots? Cattle, depending on the segment? Trade with Mexico? After that, the list gets pretty thin.”

“I do think the U.S. ag economy is in a recession. The projection for 2023 and 2024 farm incomes in real dollars are the two largest declines in history. Costs exceed prices for most commodities. And the outlook doesn’t provide indication of improvement soon.”
Chillingly:

“I think we’ll enter into a recession after the election.”
If that prediction comes true, even a Trump win could be a long term loss for sound economic policies.

Are you ready for all economic possibilities on the horizon?

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