Mainstream media has successfully avoided shining a bright light on the upcoming debt ceiling discussions, probably to avoid the panic which is sure to occur if the matter is not resolved unilaterally and expeditiously. But considering the turmoil in the White House, ineffectiveness of the Fed, and growing legislative group of Trump “deserters,” one has to be open to the possibility of a cataclysmic Congressional failure to approve even a temporary extension, say through the end of the year. Such “inaction” could easily serve as the straw that breaks the country’s fragile economic back. Since coming to the verge of a complete government shutdown in 2011 and again in 2013, the majority of taxpayers polled blamed the Republican-majority in Congress rather than President Obama. The same Republican-majority will be holding up the debt ceiling increase proceedings this time too, with corresponding spending-cut demands.
September is notorious for being the worst month of the year for stocks and this year is sure to be no different. Both European Central Bank President Draghi and Federal Reserve Chair Yellen are scheduled to speak at the end of the week, which will do little to inflate any sort of investor confidence. And ongoing joint military exercises between South Korea and the U.S. are sure to keep geopolitical tensions at a high level. This combination of geopolitical and economic pressures is sure to deter a continuing bull market.
Yesterday’s solar eclipse captured the attention of many Americans. The coming market eclipse is going to wrestle the attention of many Americans who were not expecting it. Not only is the market well-overdue for a correction, but due to the cavalier buyback policies of many public company CEO’s, the correction might more closely resemble a collapse. The dollar is in trouble, the Fed is useless, and the banks are now in it for themselves, so who’s watching out for the American Investor? No one, unless the investor takes it upon him/herself.
The best possible protection from the list of negative economic factors discussed so far is the ownership of physical precious metals, like gold and silver. 5% to 15% is a common precious metal percentage recommendation for a portfolio, but these are not common or ordinary times. Large hedge funds have the ability to buy up all availability of the gold market before the average investor could hear about it on the evening news. Don’t let today’s availability and lower prices give you a false sense of security. Now is the time to take advantage of what might be a never to be duplicated opportunity, stock up on available and low priced precious metals before a market collapse removes the opportunity. You might very well see another total eclipse, before you see an opportunity like this again.