New Year resolutions are a tradition for many as a way to improve their lives. January 2016 saw many stock exchanges falling dramatically leaving investors wondering “Why.” George Soros has suggested that Capitalism might be in serious trouble.
“Ground Hog Day All Over Again”
At the 2016 economic forum in Davos, participants might have been surprised when George Soros said that 2016 was looking eerily similar to 2008. In 2008, the United States warned the entire world that the entire Capitalist system was in danger of collapse. Immediate bailouts of the banks was the only option.
Capital is one of the key factors in production. With the proliferation of credit cards, many consumers cannot survive without continually receiving new loans. Businesses need money to pay their employee salaries. Governments sell treasury bills to service their debt.
In 2008, global banks ran into a “Credit Crunch.” It wasn’t necessarily that they were out of money, but they might have been fearful that bad debts could ruin their bottom line. When the Federal Reserve (Fed) guaranteed bad housing loans, it changed the risk level. Thus, with the Fed as guarantor, the banks felt protected and continued to make loans.
“Gold coins are for the long run”
In the old days, your aunt might have purchased a gold coin for her favorite nephew. This taught the child the value of saving money. Gold coins have always been valuable and usually reserved for the wealthiest members of society.
The paper United States Dollar remains very strong in 2016 while stock exchanges fall. This has been very confusing for the average investor. They are not listening closely to what George Soros has been saying for years.
Eric Dye’s US Money Reserve Podcast of US Money Reserve president Philip Diehl connected the dots for investors. The United States paper dollar was indeed strong, but its continued strength was questionable. Former US Mint Director Philip Diehl predicted that the US Dollar value would eventually fall.
Why not add some gold to your portfolio mix? Gold is effective for estate planning because it rises with inflation. Moreover, there is always demand for gold. US Money Reserve president Philip Diehl stated that Chinese and Indian gold demand had never been higher. So, if you are uncertain after listening to George Soros, then you might want to add some gold to your portfolio. It always pays to plan ahead.
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