Sept. 26, 2022
We all knew it was coming, but it finally happened.
As predicted, the Federal Reserve hiked interest rates at its latest meeting. Rates officially went up 0.75%. That’s the fifth-straight increase and puts things in the 3% to 3.25% range. So your credit cards, auto loans, mortgages, and other variable-rate loans have just gotten more expensive.
Likewise, companies are going to find it harder to make money, so they will have to shift strategy.
And the average consumer will have to tighten the belt a little more.
And the soft landing Chairman Powell has been aiming for will get a little less soft.
And surefire investments to protect wealth will become increasingly fewer in number.
After announcing the hike, Chairman Powell had this to say about what he expects to come:
“I think that shelter inflation is going to remain high for some time. We’re looking for it to come down, but it’s not exactly clear when that will happen. It may take some time. Hope for the best, plan for the worst.”
The market didn’t take long to react.
Upon the Fed’s announcement that the interest rates were going back up, the Dow, Nasdaq, and S&P all shed points. They’ve been doing that all year, but the Fed’s announcement only made things worse. The bloodshed lasted for the rest of the week.
So that pain he mentioned a few weeks ago is here. Not only that, but there’s no telling how long it’s going to last.
Chairman Powell most likely isn’t above raising again if the Fed isn’t satisfied with the rate of inflation by the time the Fed meets again in early November. So while things are bad now, they can most certainly get worse before they get better.
We already know that the market had an immediate reaction and that there might be more Fed interference to come, but what else might come from this?
Well, in the short term, unemployment may go up as companies struggle to get by with less. The housing crisis will worsen, as fewer people will be willing to take on mortgages, so builders will build less. The likelihood of a recession (we’re probably already in one, but let’s not split hairs) will deepen and markets will price that in.
In the longer term, continued rate raises are likely not just going to happen here, but worldwide. Even as rates rise, inflation may continue to persist until the reality of a recession becomes too much for the central banks to ignore.
Throw in Russia digging its heels in over the conflict in Ukraine, along with supply chains that are still struggling in some regards, and the outlook for at least part of 2023 is grim.
And that’s the reason why investors should take Chairman Powell’s warning of “Hope for the best, plan for the worst” to heart.
Smart investing is about hedging your bets, having a safety net, and positioning assets in a way that you’ll benefit no matter which way the wind blows.
That philosophy is what makes gold a perfect investment vehicle in an environment like this.
Even though it’s been going through a rough patch like everything else, it’s been proving more resilient than a lot of sectors.
On top of that, it has a long and storied history as a safe investment hedge, and it’s set to live up to that reputation again in the coming quarters.
Investors have largely been ignoring the yellow metal for a while now, instead choosing to put capital in sectors that had been hot until they weren’t.
The realization that gold is the way to go hasn’t dawned on the herd yet, but that’s set to change.
Especially once they learn about extremely promising gold plays like this miner in North America that’s sitting on what might be the largest gold discovery ever.
It’s a company with a share price under $1 now, but the drills are turning and the truth about what this firm is sitting on will be made public soon enough.
And that’s happening just as the economy is set to contract even more, leaving people scrambling for a way to protect their dollars.
That’s why you want to get in now, before the secret is out and everyone is trying to get in.
A new documentary-style video has all the details you need.
You’ll see why, in the coming gold bull market, this is the one investment you need in your portfolio.
Don’t wait. This play will take off before you know it.
Editor, Daily Profit Cycle