There’s a money printing party going on and the entire world is invited.
EU just approved a $2.1 trillion budget.
Bank of England added an additional $131.2 billion in asset purchases on June.
And our very own Feds announced on Wednesday that it would keep lending until the end of the year instead of ending it in September. It will also keep the benchmark lending rate unchanged, at near zero.
Meanwhile, bank indexes show that financial institutions based in the UK, Japan, and the EU are about to break support levels that have held up since the mid-eighties.
The result? The worst dollar value we have ever seen since May 2018. The USD index against a basket of fiat dropped from 93.42 to 92.82 on July 30. It’s odd, if you think about it. Governments are printing more money to help the economy. The logic is simple. If people have money, they can spend more.
But the more money they print, the more money loses its value.
So, it wasn’t exactly a surprise when Fed chair Jerome Powell told the press that the “pace of recovery looks like it has slowed”
We’re not saying what the Feds is doing is an absolute sham. The Feds is doing what it can do… but what it can do is not a comprehensive solution to allow the economy to recover.
To improve the economy and the value of the dollar, we need to improve our gross domestic product. That’s not easy to do when most businesses aren’t open. The U.S. The Commerce Department reported GDP shrank by 32.9%, the worst ever. Now surprising considering we saw 1.43 million new unemployment claims for the week. Collectively there are more than 54 million Americans that have filed claims
We need to strengthen the world’s need for the dollar. That is also not easy to do when other countries’ economies are also in shambles. They hardly have enough to keep their currency giong, let alone buy currencies of other countries.
There are many factors in play and none of it is on our hands. We can’t stop the dollar from losing its value.
But there is something we can do to protect what we have right now.
We can take what we have right now and reexamine how we are securing our future. Are our bonds, funds, and stocks future proof? Given the changing needs of the market, are we investing in companies that will flourish post Covid?
More importantly, do we have investments
and convert it to assets that will weather the economic storm. Global investors have said that the central bank’s stimulus and interest rate moves worldwide will continue to cushion precious metals and cryptocurrency markets.
Bitcoin is being projected to make dash towards $28,000.
On the other hand, gold will most likely exceed the $3,000 Bank of America projection and cross the $5,000.
It’s not surprising. Gold has been the only asset that has weathered through all economic storms. It’s not surprising investors are turning towards now.
So, make your move. Don’t let the millionaires and billionaires hoard all the gold. You need protection as much as they do.