Ryan Stancil,
Editor
Sept. 16, 2022
At this point, it’s a done deal.
The speculation has been around pretty much all year, so it was just a matter of when it was going to happen. But it seems like it’s a lock now.
Chairman Powell and other officials at the Federal Reserve have been saying time and again how they will do whatever it takes to bring inflation under control. That always meant more rate hikes were on the table.
Given the latest inflation numbers, we can expect that to manifest this week when the Fed holds its next meeting on the 20th and 21st.
As a refresher, last week it was revealed that the consumer price index jumped to 8.3 percent in August. So there was no celebration to be had even as gas prices went down when the price of just about everything else continued to go up.
The usual suspects of food and housing are behind the continued pinch consumers are feeling, and the release of the news threw cold water on what officials were hoping would be a turnaround in economic outlook.
The stated mission has been to slow things down, and so far the Fed has failed to deliver. This latest news release gives them the cover they need to raise rates. It could go up 0.75 points. It could go up an entire point.
Whatever the case may be, come Thursday, another rise in rates will make it harder for companies across most sectors to make money. And if that doesn’t cause the slowdown Powell wants, he’ll do it again.
The way things look now, it’s likely these rate raises will continue into 2023. After this week, there are two more meetings for the rest of the year. Whether or not rates will be raised again at those meetings, of course, depends on what happens between this week’s meeting and the next one in November.
But just as it took us some time to reach this point, it’s going to take a while to get back to what officials see as an acceptable level of inflation.
That means we’ll be seeing some of the economic pain that Powell promised a few weeks back. It also means that portfolios are going to take a hit as companies realign and expectations shift.
The long and short of it is that, as the Fed forges ahead with its mission, investors have to hope for the best but prepare for the worst.
Remember, the major indexes are down year-to-date and they still have room to fall due to skepticism that the economy can handle the Fed’s actions. That leaves most sectors, even traditionally stable ones, vulnerable to losses over the next few quarters.
It also creates an opportunity to take advantage of reduced prices for sectors that are poised to benefit from the chaos this could create.
Investments like gold and gold miners thrive in that kind of chaotic environment.
The sector has been discounted as of late, especially as it fell from highs in the spring and has largely been holding steady for the last few months. Investors have been staying away and the Street hasn’t been treating it like the hedge that it normally is.
That’s why you want to buy now.
Both the metal itself and the companies that pull it from the ground are in the perfect place to benefit over the next few months.
While the Fed may be gung-ho about its current mission, it’s going to eventually be forced to turn around and begin lowering rates again. And when that happens, investors will begin feeling the pain and looking for something that can weather the storm.
And gold will be right there.
Its price will rise, as will the share prices of miners. That means the coming bull market will be a moneymaker in a time when investors will be scrambling to stop from losing their shirts.
There’s a new video documentary that highlights a perfect example of a mostly unknown gold miner set to thrive in this coming bull market.
Nick Hodge personally visited and vetted the site. In the video, he explains why it’s such a winner and why he thinks it will deliver massive gains when gold’s price takes off.
You can learn all the details about America’s Next Biggest Gold Mine here and set yourself up for the kinds of gains most investors only dream about.
Ryan Stancil
Editor, Daily Profit Cycle