Despite recent stock market highs, many analysts are still warning about the growing risk of a 2020 recession. With persistently low inflation, trade tensions and overall global growth concerns, the alarm bells of an economic fallout are getting louder. Learn more about these indicators and what you can do to help make your portfolio more recession-resistant in this episode of USMR Market Insights with Patrick Brunson.
2020 Recession Risks – Video Transcription
Patrick Brunson: 00:00
The alarm bells regarding a global recession in 2020 are getting louder and louder. As I record this, chairman Powell is on Capitol Hill speaking about whether to drop interest rates or not. While this may seem like it's not a big deal, it really is. Just discussing a rate drop, actually causes the dollar to pull back. At a meeting in three weeks from now, he and his board will decide what to do, but many expect a quarter point drop which could signal the slowing of the economy and overall concern of a possible recession. In June of 2019 David Malpass, president of the World Bank, cited several ingredients of a potential global recession. He stated that a tumble in business confidence, a deepening slowdown in global trade, and sluggish investment in emerging and developing economies could all lead to a major global recession. With 2019 halfway over, it's important that we take the time to revisit the latest buzz on global recession warnings so we can all be better prepared.
Patrick Brunson: 01:01
The first one to look at would obviously be threats of U.S. Tariffs against Mexico. Another would be economic policy, financial, and political risks in Europe, including ongoing uncertainty over the fate of Brexit. Another would be continuing fluctuation and interest rates set by the Federal Reserve and other central banks around the world. We also have manufacturing sluggishness in Europe, U.S. and Asia. China's mounting debt is another big factor. So, perhaps the most prominent ringer of the recession alarm bells is economist Nouriel Roubini, chairman of Roubini Macro Associates LLC. Roubini points to the trade clash between the U.S. and China as the primary driver of his dire outlook for a global recession hitting next year in 2020. He predicts the trade and tech skirmish between the two global powers will only worsen. In a widely published opinion piece, Roubini cautions that as the U.S. and China drift farther apart, and as the chances of compromise shrink, the risk of a global recession is rising against the backdrop of an already fragile global economy.
Patrick Brunson: 02:10
Roubini isn't the only voice in the “recession is coming” camp. Financial service giant UBS recently warned that the global economy is on the edge of a recession. We are seeing several of those pistons within the global engine beginning to stutter. Andrew Milligan, head of global strategy at Aberdeen Standard Investments Incorporated, told Reuters new service “When is the time to buy gold? Soon, If not now.” Given the possibility of a global recession arriving in 2020 you might be wondering whether it's an excellent time to buy gold or not. The answer obviously is yes, it is.
Patrick Brunson: 02:48
When economic perils are on the horizon, it can make even more sense to look at adding gold to your portfolio overall. If you'd like to learn more, you can get U.S. Money Reserve's Precious Metals Report. It has a lot of really good, detailed information on gold and other precious metals. To get a copy, click on the link below or call the number on your screen. If you liked the information today, please like and share this video, and if you're watching us from YouTube, please subscribe so that you don't miss a single episode. I'm U.S. Money Reserve's Patrick Brunson, and as always, thank you for watching Market Insights.