There is a lot to be said about all the money that has been printed over the last decade and what those consequences will be when all of that money finally hits the economy. Find out what Patrick Brunson has to say about this topic in this week’s Market Insights video.
More QE Coming? What happened to the money from the last three rounds?- Video Transcription
Good morning and thank you for tuning in to daily market insights. Today I want to touch on a couple of things that we touched on last week. We were talking about inflation. Mr. Wells spoke a lot about interest rates, things that are happening with the treasury bonds and we’re starting to see inflation, That big nasty word, really come into play and the big question is, when. When will it kick in? Well, as I stated last week, we printed a lot of money over the last 10 years under quantitative easing and other programs, but we haven’t really seen the cause and effect of all that money being created just yet. And I don’t have a crystal ball. I don’t know exactly when that money is going to start to hit the economy but the question is is where is all that money at currently? Well, the answer to that question is real simple.
The one area that’s gone gang busters over the last eight or nine years, a toddler could point out that the stock market has increased more in the last nine years than it ever has at any other point in history. So it’s pretty clear where the money went. The question is, is when that money finally comes out of the stock market and starts to hit the economy, what is that going to do to your normal way of life? Well, if you look at the past and you’ve used the past as prologue, you can see that when more money printed out of thin air hits the economy, well, it makes the cost of our goods and services rise dramatically causing mass inflation. A lot of times these corrections cause a recession. So that’s the other thing that really, really sticks out. Everybody wants to paint a recession, like it’s a bad thing. But essentially if you think about it, it’s really not.
It’s good to have a recession every seven, eight, maybe every 10 years because it gets asset prices back down to where they naturally should be from being overbought or oversold. That way the economy and the markets can continue to grow healthy and steadily, but we haven’t seen that recession yet. We haven’t seen a recession in almost 10 years and we’ve seen more money printed over the last 10 years than any other point in history. So the question I have is when this next recession does take place, how bad is it going to be? So we’re trying to touch on these things each and every week to make sure people understand what to expect. Again, we don’t have a crystal ball, we don’t have all the answers, but we do know what fundamentals are and we can help share those with you here at daily market insights.
But the fact of the matter is is we have to pay very close attention and read between the lines because the media is not telling us everything. It seems like every time we turn on Fox business news or CNBC, they want to tell us anything they can to make sure that consumers keep their money in the markets. Don’t panic. But quite frankly, at some point we all know that this bull market is going to come to an end and all this money that’s been created is going to hit the economy. So the question you have to ask yourself at that point is, are you protected? The number one way to protect your assets during times of recession, inflationary periods and stock market corrections has always been gold. It always has been. Gold and other precious metals are the areas that you can protect your dollar and your assets from dropping in value and losing 30 40 50% of everything you have.
So really take a look at your portfolio, see where you stand. Most experts would recommend having a minimum of 10% of your portfolio protected in precious metals. Some financial experts are putting as much as one third of their clients’ portfolios into gold. But you’ve got to ask yourself what is the right amount of protection for you? With that being said, we have a new 2018 annual report coming out very soon, but until that comes out, you can also pick up this particular report, the fiscal states of America by clicking on the link below or calling the phone number. This will tell you what’s happening in your state, specifically with your state pension funds and why it’s a good idea for you to have a small portion of your portfolio diversified in hard, tangible assets. So I want to talk more about that in our future videos, but until this new annual report comes out, make sure you pick this up. It’s going to be real good for you, especially if you’re a retiree that’s living off of a state pension plan. For today, that’s all on daily market insights. If you have any questions, click on the comment section below. We’ll either reply right there on the Facebook page or we’ll cover that in our next video. Thank you for tuning in to daily market insights.