Precious metals ownership has been a proven method to hedge against inflation, money printing bailouts and stock market crashes and corrections. Last week’s much-anticipated vaccine rollout from Pfizer and Moderna sent practically all markets higher. The Dow, the Nasdaq the S&P, most U.S. commodities, oil and foreign markets as well as all precious metals saw an up swing on the news. The swing was short lived however as all markets did take a tick down.
The U.S. stock markets are still near all-time highs and their projections coupled with consumers’ high hopes are still growing as many more vaccine manufacturers apply for approval. Could these gains be real or just speculation fueled by hope and 0% interest lending to big corporations, banks and hedge funds?
U.S. and foreign markets at all-time highs--when have we heard this before? We heard this before the 2008 crisis on October 9, 2007. News headlines all across the country read similar as they are today: ‘Amazing Market Milestone!,’ ‘The Best Market Ever!,’ ‘S&P Climbing With No End In Sight!,’‘Dow Jones Tops All Time High!’ and ‘Gold a Dull Investment.’ Gold topped at $737.75 on October 9, 2007.
One year later to the day, the news headlines were much different. On October 9, 2008, news publications read like this; ‘Markets tanked Today with the Dow falling 700 points during the session.’ ‘Panicked investors dump stocks across the board.’ ‘Since hitting an all-time high of 14,164.53 one year ago today the Dow has lost 39.4%.’
Many people that were set to retire had to keep working as their retirement plans were wiped out. The only thing that saved the markets and the average American worker’s retirement plan was the banker bailout, but not right away. On October 3, 2008, then President Bush signed the $700 billion Emergency Economic Stabilization Act.
Congress is now passing another $900 billion emergency coronavirus relief package. Included in the package is the green light for the Fed to purchase corporate bonds and ETFs bailing out the banks, Wall Street and institutional investors once again. I’m not sure how the markets are going to react to this, but last time it took the price of gold from around $900 to $1,950 in 2 years. As of this writing gold is $1,881. Ask yourself these 3 important questions: Do you think gold will double in the next 2 years? Where is that going to leave the value of the dollar? How can I protect my money that I have in savings from inflation?