In one word – yes. You bet it does.
The comments above and below are edited ([ ]) & abridged (…) excerpts from an article by Erika Nolan to provide a faster and easier read.
It’s true that U.S. markets reached new highs this month…yet those of us who like to err on the side of caution…are wondering how much farther these markets can run before things fall apart.
There are well-respected economists and top fund advisors out there who agree with us that the financial picture around the globe is not rosy. Most western countries are suffering with a flu-like economic malaise. It’s running through Japan, Europe and now the U.K, as they wrestle with the reality of exiting the E.U.
Sluggish GDP growth of barely 1% in the western world has forced central banks to unprecedented actions. With nearly non-existent interest rates in the U .S., Canada and Britain – and negative rates in Japan, Switzerland, Denmark, Sweden and the E.U. – we are living in a time that carries some very serious economic risks. Negative rates, which have never before been tried, are very similar to the creation of Frankenstein. Regardless of their intentions, Central Banks may soon realize they, too, have created a monster.
Of course, the U.S. economy is plagued by its own economic flu, but our fever hasn’t spiked as high as some others – yet. Investors from around the world are piling into the U.S. markets and the U.S. dollar in hopes that the U.S. will stay healthier than the rest.
It’s in moments like this when…[caution] pays huge dividends.
As Central Banks continue with their economic experiment, the results are warping the banking sector and distorting how businesses and investors invest. It is also altering how retirees save. As Jeff D. Opdyke recently wrote to his subscribers in The Total Wealth Insider, “ These experiments create misallocation of capital, i.e. bubbles…and bubbles – particularly bubbles the size the governments and central banks have blown – always burst, and often with spectacular effects”.
In today’s “new normal”, you might believe that old stores of wealth, like gold, are no longer relevant – but think again. Gold has played a role in…[every] major financial reset in recorded history and it’s still viewed as the only true form of hard currency.
Just last week, the World Gold Council reported that investment demand for gold surged to more than 1,000 tons for the first time in history during the first half of 2016. That level of demand clearly shows just how much market concern there is, and how much fear there is that bubbles could bust sooner than anyone expects.
Every investor should have a minimum of 10% of their portfolio in physical gold – coins or bars.