Weekly Market Update: Protect Your Retirement Portfolio from Record Consumer Debt Fallout
This past week, the Federal Reserve released their most recent report on consumer debt. It did not paint a pretty picture. Overall consumer debt increased by a sobering $10.3 billion for March. This brought it up to an all time high of over $4 trillion ($4.05 trillion to be exact). The chart below shows the year long trend in consumer debt:
This means that through the conclusion of the first quarter in 2019, the total American consumer indebtedness rose at a yearly rate of 4.25 percent. Yet March’s increase was a mere 3.1 percent. This March total actually came in as the tiniest increase in consumer debt in nine months.
Now these totals of consumer debt encompass student loans, credit card debt, and car loans. They do not consider mortgage debts. Regardless of this, the consumer debts only keep rising and setting new records each month.
Yet another worrying revelation for March was that this borrowing pace slowed down for the month. It represents a significant potential red flag warning on the American economy.
Consider that the category of revolving credit (mostly credit card debts) declined 2.5 percent by $2.18 billion in March. This was on the heels of a 3.5 percent gain for February. Yet it represented the second such drop in the credit card borrowing category in the past four months.
The category of non-revolving credit (student loans and car loans) carried the total record debt to a new high as it increased by $12.5 billion. American student loan debt has now risen to almost $3 trillion, a scary figure that will represent a drag on the economy and haunt consumers for decades to come.
Some people might be inclined to believe that a slowing consumer borrowing represents a positive thing as the debt burden Americans are carrying is so astronomical. This should be the case, but is not for an economy erected entirely on borrowing. 24/7 Wall Street refers to this as a proverbial two edged sword, with:
“The more borrowings are outstanding means the more burdened the consumer is with debt. Then again, if they aren’t buying on credit then they it is also assumed they are buying less in general… Close to 70 percent of GDP is tied back to consumer spending — and it is hard to feel great about this trend considering that the Commerce Department’s first estimate for first quarter GDP was unexpectedly above three percent and considering that unemployment is at the lowest level in 50 years.”
Consider yourself fairly warned; the economy is not in such great shape as the government wants you to believe.
Is Your Retirement Portfolio Protected from the Record American Consumer Debt Fallout?
The Federal Reserve is undoubtedly being influenced by this tug of war in American consumer debt going on. Their present stance may be patient without Powell presently foreseeing either rate hikes or cuts in the immediate future, but he may have no choice but to force rates lower to keep people borrowing before long. Raising rates will also be necessary again at some point, but doing so will destroy the finances of a federal government paying interest on over $21 trillion in debt and the consumers saddled with more than $4 trillion in debt.
Lower rates would mean easier money and more bubbles to explode, taking down the stock markets again and causing inflation to rise. Higher ones will similarly tank markets as investors trip over each other in their panic efforts to get to the exits. Where can you find a safe haven to protect your retirement portfolio from either scenario? Gold delivers an incomparable track record and offers reliable protection in both cases. No other safe haven asset can hope to match it. Gold has insured people’s precious assets for thousands of years, allowing them to sleep secure in the knowledge that their currency was safeguarded by the reliable yellow metal.
Click here now to obtain your truly free and entirely no-obligation gold IRA rollover kit from the nation’s most award winning gold retirement company ever— Regal Assets. The country’s long-time leader of gold retirement and alternative asset firms always endeavors faithfully to earn its enviable reputation by taking responsible care of its domestic and international customer base. Their 100 percent free precious metals investing report will make certain that you get all of the crucially time-sensitive info that you really must have in order to protect your IRA retirement assets via a both prudent and partial diversification of your retirement accounts into reliable, tangible gold.
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How Much Does Investing In Gold Coast
Investors can put money into gold through exchange-traded funds (ETFs), purchasing stock in gold miners and related companies, and purchasing physical item. These investors have for investing in the alloy as many reasons as they do those investments to be made by methods. Some argue that gold is a barbaric relic that retains the monetary qualities of the past.
They assert that the only advantage of gold is the fact it is. Are those that claim gold is an asset with intrinsic qualities which make it essential and unique for investors to maintain their portfolios.
While gold's history started in 3000 B.C, when the ancient Egyptians began forming jewelry, it was not until 560 B.C. that gold began to act as a currency. At that moment, merchants wanted to make transferable and a standardized kind of money that would simplify commerce. A coin stamped with a seal's creation seemed to be the answer, as gold jewelry has been widely accepted and recognized throughout various corners of the earth.
Gold symbolized wealth throughout Europe, Asia, Africa, and the Americas. The U.S. Bimetallic Standard The U.S. government continued on with this gold tradition by establishing a bimetallic standard in 1792.
How I Made Money Investing In Gold
Had to be endorsed by gold or silver. By way of instance, one U.S. dollar was the equal of 24.75 grains of gold. To put it differently, the coins which were used as money only represented the gold (or silver) which was presently deposited in the bank. But this standard did not last.
The Gold Reserve Act of 1934 gave the U.S. government title to all of the gold coins in circulation and put a stop to the minting of any gold coins.
Gold in the Modern Economy Even though gold no longer backs the U.S. dollar (or other worldwide currencies for that matter), it still carries importance in today's society. It is important to the market.
Presently, these associations are responsible for holding roughly one-fifth of the world's source of above-ground gold. Moreover, several central banks have added to their gold reserves that were present, reflecting concerns about the international economy. Gold Preserves Wealth The reasons for gold's importance in the modern economy centers around the fact that it has successfully preserved wealth throughout centuries.
What About Investing In Bitcoin Or Gold
To put into perspective, consider the following example . Let's say that at that moment, you had a choice of either holding an ounce of gold or just keeping the $35. They would both buy the things to you, like a brand new business suit or fancy bike.
In short, you would have lost a substantial amount of your wealth in the event that you decided to hold the $35 as opposed to the 1 ounce of gold since the value of gold has increased, while the value of a dollar has been eroded by inflation. Gold as a Hedge Against the Dollar the thought that gold preserves wealth is even more important in an economic environment where investors are facing a declining U.S.
Historically, gold has served as a hedge against both these scenarios. With rising inflation, gold typically appreciates. When investors realize that their money is losing value, they will start positioning their investments at a hard asset that has traditionally maintained its value. The 1970s present a prime example of rising gold prices in the midst of rising inflation.
First, investors that are looking at buying gold (i.e., central banks) must sell their U.S. dollars to make this transaction.
How Much Does Investing In Gold Coast
This results in greater demand from investors who hold currencies which have appreciated relative to the U.S. dollar. Gold as a Safe Haven Whether it's the tensions in the Middle East, Africa or elsewhere, it's becoming increasingly obvious that economic and political instability is another reality of our contemporary economic environment.
Why is this Well, history is filled with declining empires, political coups, and the collapse of currencies. Whenever there are news events that hint at some type of economic uncertainty, investors will buy gold as a safe haven.
It's apparent that gold has historically served as an investment that may add a diversifying component to your portfolio, regardless of whether you are worried about inflation, a declining U.S. dollar, or even protecting your wealth. If your focus is simply diversification, gold isn't correlated to property, bonds, and stocks.
Increases in the price of gold are often magnified in gold stock rates. A relatively small increase in the price of gold may cause significant gains in the best gold stocks and owners of gold stocks typically acquire a higher return on investment (ROI) than owners of physical gold.
Why I Investing In Gold Good
Stocks that pay dividends tend to show higher gains when the sector is rising and fare better on average, almost twice as nicely than non-dividend-paying stocks when the overall sector is in a recession. The Gold Mining Sector The mining sector, which includes can experience high volatility.
Factors like the company's history of paying dividends and the sustainability of its dividend payout ratio are two important elements to examine from the provider's balance sheet and other financial statements. A company's ability to sustain healthful dividend payouts is greatly enhanced if it's always low debt levels and strong cash flows, and the historical trend of the company's performance shows steadily advancing debt and cash flow figures.
Different methods for Owning Gold One of the main differences between investing in gold several hundred years back and today is that there are many more investment options, such as: Gold Futures Gold Coins Gold Companies Gold ETFs Gold Mutual Funds Gold Bullion Gold Jewelry A Bad Time to Invest in Gold In order to ascertain the investment merits of gold, let us check its performance against that of the S&P 500 for the past 10 decades.
26, 2018, with the S&P GSCI index generating 3.27% in comparison to the The S&P 500, which has returned 10.36% over the same period. That said, gold trounced the S&P 500 in the 10-year period from November 2002 to October 2012, with a whole price appreciation of 441.5 percent, or 18.4% annually.
What Portfolio Theory Says About Investing In Gold
The point here is that gold is not always a great investment. The best time to invest in just about any advantage is when there is negative opinion and the asset is cheap, providing substantial upside potential as it returns to prefer, as indicated above. The Bottom Line There are advantages and disadvantages to every investment.
If your interest is in using leverage to gain from rising gold prices, the futures market may be your answer, but notice that there's a fair amount of risk associated with any holdings.
Investors can put money into gold via exchange-traded funds (ETFs), buying stock in gold miners and related companies, and buying physical product. These investors have as many reasons for investing in the alloy as they perform methods to make those investments. Some argue that gold is a barbaric relic that no longer holds the past's monetary qualities.
They assert that the only advantage of gold is the fact it is. On the other end of the spectrum are those that claim gold is an asset with different intrinsic qualities that make it unique and essential for investors to hold in their portfolios.
What Is Investing In Gold Called
While gold's history began in 3000 B.C, when the ancient Egyptians started forming jewelry, it was not until 560 B.C. that gold started to act as a currency. At that time, merchants wanted to create a standardized and readily transferable . A coin stamped with a seal's introduction appeared to be the answer, as gold jewelry recognized and has been widely accepted throughout corners of the planet.
The British pound (representing a pound of sterling silver), shillings and pence were all based on the amount of gold (or silver) that it represented. Eventually, gold represented wealth throughout Europe, Asia, Africa, and the Americas. The U.S. Bimetallic Standard The U.S. government continued on with this gold convention by establishing a bimetallic standard in 1792.
Had to be endorsed by either gold or silver. By way of example, one U.S. dollar was the equal of 24.75 grains of gold. In other words, the coins that were used as money simply represented the gold (or silver) which was presently deposited in the bank. However, this standard didn't last forever.
In 1913, the Federal Reserve was created and began issuing promissory notes (the current day version of our paper money) that could be redeemed in gold on demand. The Gold Reserve Act of 1934 gave the U.S. government name to all of the gold coins in circulation and put an end to the minting of any new gold coins.
What Are The Benefits Of Investing In Gold
The U.S. abandoned the gold standard in 1971 when its currency ceased to be backed by gold. Gold in the Modern Economy Although gold no longer backs the U.S. dollar (or other international monies for that matter), it still carries importance in today's society. It is still important to the global market.
Presently, these associations are responsible for holding approximately one-fifth of the world's supply of above-ground gold. In addition, several central banks have added to their gold reserves that were current, reflecting concerns about the long-term global economy. Gold Preserves Wealth The reasons for gold's importance in the economy centers around the fact that it has preserved wealth .
To put into perspective, consider the following example : In the early 1970s, one ounce of gold equaled $35. Let us say that at that time, you had a choice of either holding an ounce of gold or simply keeping the $35. You would be both bought the things by them, like a completely new business suit or fancy bike.
In short, you'd have lost a significant amount of your wealth if you opted to hold the $35 as opposed since the value of gold has increased, while the value of a dollar has been eroded by inflation. Gold as a Hedge Against the Dollar The idea that gold preserves wealth is much more important in an economic environment where investors are faced with a declining U.S.
How Much Money Can I Earn Investing In Gold
Gold has served as a hedge against both these scenarios. With rising inflation, gold appreciates. When investors realize that their money is losing value, they will start positioning their investments at a hard asset that has maintained its worth. The 1970s present a prime example of gold prices in the middle of rising inflation.
There are two reasons for this connection. First, investors that are looking at purchasing gold (i.e., central banks) must sell their U.S. dollars to make this transaction. This ultimately compels the U.S. dollar lower as international investors seek to diversify out of the dollar.