Asset Strategy, Market Insights

What You Should Do About the Fed’s Bubble

Gold Alliance disclaimer

Stock market bubbles. The Fed is supposed to discourage them, but now it’s officially in the bubble business itself.

A couple of months ago, the Fed pretty much guaranteed it would hike interest rates four times in 2019 and continue its $50-billion quantitative-tightening program. But now, our central bank has done a remarkable 180 and is pushing for no rate hikes and for possibly ending its QT program.

In those few weeks, every single Fed hawk on the Federal Open Market Committee went from being extremely hawkish to extremely dovish.

And now, the Fed is officially done raising interest rates this year, and it’s planning on raising rates only once in 2020. In addition, it’s is lowering its QT program from $50 billion to $15 billion and ending it completely in September.

It’s also worth mentioning that the Fed is no longer mentioning “financial imbalances” and “robust asset prices”—Fed-speak for “stock market bubble.”

In other words, the Fed is now in the bubble business itself. Its actions are going to expand the stock market bubble until it eventually bursts and ends in a disastrous crash, just like it did in 2000 and in 2008.

We are likely to see the S&P 500 go well above the 3,000 mark, setting a new all-time record. The problem is that the resulting crash will enter the record books as well as the crash of the century.

Investors are enjoying the rally, but don’t let that fool you. The crash will be ugly, and so will the consequences. If you’re a day trader, you don’t care. But, if your retirement savings are depending on the stock market, you need to care. You want to start preparing now!

Let’s imagine you were holding gold in early 2008. While 99% of investors were gambling on the final market gains, only to be butchered shortly after, you would have secured 3 digit gains on your precious metals.

That sounds a lot better than seeing your stock market investment crash and burn, doesn’t it? Like me, you should aim for massive returns when everyone else is panicking.

The stock market bubble is approaching a crash, and 99% of investors are going to panic when it hits.

But not me.

I’ve spent my career preparing for this exact type of timing, and my friends, my family, and my clients are all in on investment portfolios that will go gangbusters when the markets go bust. Would you like to get more information about protecting and growing your wealth? Then, I will gladly discuss it with you—with no obligations—if you have a few minutes to do so.

Schedule an appointment with me here.

About Fred Abadi

In his over 14 years in the financial industry, Fred has focused on commodities and precious metals as investment assets. He has penned several articles on topics such as the commodities markets investing in precious metals for retirement accounts. Fred has helped thousands of clients safeguard their investments with gold and other precious metals. He has been with Gold Alliance for over two years as a leading Sr. Portfolio Manager.