Pandemonium During a Pandemic!

Considering our upcoming election, declining dollar, and continuing COVID-19 pandemic, it’s safe to assume that our near and medium-term economic landscape is riddled with hazards. The current administration claims that it kept quiet about the depth and breadth of the coronavirus pandemic, in order to avoid panic, but at the same time, it did little if anything to acknowledge, mollify, or mitigate the problem. History will record and debate that decision. However, in the same time frame and chapter, it will discuss the “silence” surrounding the Fed’s injection of more than $3 trillion into Wall Street “liquidity.” Nary a word was spoken in public circles about the massive financial injection, but constant public attention was assigned by the administration to the stamina, strength, and resolve of the U.S. market (aka economy, according to this administration) to flourish even in difficult times.

The important thing to realize about today’s stock market is that it was never allowed to truly consolidate and form a strong base on which to build. Instead, any perception of a stock market “collapse” was not be tolerated by this administration and therefore actions were taken to quickly avert such perceptions in every circumstance. This has left us with a stock market constituted of nothing but government injected liquidity, a very late-to-the-party group of bandwagon investors, and public companies that have borrowed mass amounts of cheap Fed money in order to buy back company stock resulting in less stock issued, higher stock valuations, and absolutely no funds available if growth opportunities found a way to arise. The administration keeps pointing to the stock market as a shining beacon of our country’s economic well-being, however the DJIA closed at 26,917 on September 30, 2019 and yesterday, a year later, the DJIA closed at 26,917. That’s an annual gain of 3.2% and a looming recession combined with increasing inflation paints a pretty ugly picture of what’s to come.

The Fed has announced plans to encourage inflation, in spite of the fact that their greatest control is interest rate reduction, which they’ve already eliminated from their quiver of tools. The administration has regularly played on investor sentiment to maintain interest and excitement in the stock market. It’s been effective to this point, because as sentiment vacillates between the two greatest motivators, greed and fear, which there is plenty of nowadays, the rich stay rich by successfully navigating or paying professionals to successfully navigate the near-daily volatility. But only half of America has money in the stock market and the great percentage do it by way of an IRA or 401(k), then they trudge off to work and go about their business, paying taxes all along the way; federal income tax, state income tax, Medicare tax, social security tax, disability tax, sales tax, property tax, et al.

As we race toward a $27 trillion national debt, don’t expect to get a break from the administration, regardless of who wins in November. The government has plans of making up ground on the national debt when they roll out their Fedcoin digital dollar, like the “adjustments” they made in 1907, 1933, and 1971. In case you weren’t there to remember, suffice it to say that the average American got financially screwed. Gold, silver and bitcoin are your greatest instruments of protection. Call the investment protection experts at American Bullion, now! Call (800) 653-GOLD (4653).