To the Victor Go the “Spoils!”

Like I said before the election, regardless of who wins, “the spoils” they will inherit are a growing and unsustainable $20 trillion debt, an utterly ineffective Fed, and a national fiat currency that has run its course and will most probably be abandoned by the International Monetary Fund as a global reserve currency and replaced with a gold-backed “One World” currency. Another consideration, according to the Stock Trader’s Almanac, is the fact that initial four-year election cycles typically see the beginning of wars, recessions, and bear markets, then conditions tend to improve in the second half term. It’s not the typical baggage people are saddled with when beginning a new position, but “that’s the deal.”

Now that Donald Trump is the President-elect, we can discuss additional factors being brought to the table. His announced re-negotiations involving NAFTA and TPP, combined with his tariff increase threats regarding China, in particular, possibly represent the tip of a global trade war. His proposed tax cuts for the wealthiest taxpayers will add to the growing debt. An initial “wait and see attitude” is likely to reduce business and consumer spending, thereby slowing already sluggish GDP growth. A failure to achieve continued GDP growth represents the perfect excuse to leave interest rates low, which only adds to the potential for explosive inflation. And finally, existing global economic and political uncertainty will not be alleviated, by the U.S. replacement of a somewhat predictable, but steady leader, with a less predictable and potentially loose cannon.

As the debt continues to grow, the likelihood of negative interest rates also grows, because the government needs its citizens to finance the debt. Charles Schwab recently informed its clients that “at least 80% of the (Schwab Money) fund’s net assets (which used to be in money market funds) will be invested solely in U.S. government securities.” Negative interest rates will drive citizens to the limited, but positive gains of U.S. Treasuries. It’s been reported for months, but not advertised by the government, that they are doing everything in their power to abolish the use and storage of cash. If cash is eliminated, the stock market has no room to profitably grow, and keeping your savings in a bank actually costs you money, then U.S. Treasuries become the only logical choice, right?

WRONG! As Americans, no doubt we need to support the country, but perhaps the 5%-15% of precious metal ownership typically recommended by financial advisors just isn’t enough anymore. Physical precious metals have been a universally accepted currency for millennia, regardless of economic or political concerns. When was the last time a conquering country pillaged the wood shed? Held in an IRA it allows for an easy and tax-free transfer to a beneficiary. Hands-on ownership is very discreet and transfer is as easy as possession. Isn’t it time to seriously protect your assets with the time-tested safety of gold, silver and other precious metals? Today’s low prices and availability are just additional bonuses.

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