With all the geopolitical tension between Russia, Syria, and the U.S., should we be turning to hard assets? Watch U.S. Money Reserve's Coy Wells discuss the benefits of gold.
Geopolitical Tensions Turn to Hard Assets- Video Transcription
Coy Wells: 00:00
Speaker 1: 00:00 Good morning and thank you for watching daily market insights. As most of you are watching the television today, you're seeing the conflict that's taking place over in Syria. A lot of people are now concerned about the decisions that are being taken place with the Trump administration and what is taking place with Russia. I think this is a big issue for a lot of consumers. Obviously knowing that Russia is a superpower that they are and how long they've been a superpower, are we going back to the Cold War? Long-term, I don't think that Russia is going to do anything in regards to retaliation with the United States. I think they know that what's going on with Assad and taking place with Syria has been a conflict that's been going on for a long time and Trump is putting his foot down, standing his ground, doing and making the decisions that he said he would do.
Coy Wells: 00:38
Speaker 1: 00:38 and also sending a signal to the entire world, such as North Korea, that if we are pushed we will retaliate in regards to what the rules are. With that being said, I think a lot of people misunderstand what's taking place over there. About 2014, there was an alliance. That alliance was called the Brics nation that stands for Brazil, Russia, India, China, and South Africa. They set up a financial alliance and when the US places sanctions on Russia, it's not as effective as it used to be. Even when the United States places sanctions on North Korea. It's not nearly as effective as it used to be and it's because of that financial alliance. The reason I'm telling you this information is because people have to understand that there has been a long, slow play against the United States for a very, very long time and it has been a financial play against the United States.
Coy Wells: 01:26
Speaker 1: 01:26 If you've noticed, the GDP of the United States has continued to stay stagnant for years now I mean for a very, very long time and it's no coincidence and it's the reason for that is because the countries don't need us like they used to. If we go back to the reaganomics back in the early era's or the early years, we have to understand that we are the ones who develop these nations. These nations are becoming like we are, they're becoming industrialized and becoming self sufficient. They don't need the United States the way or in the same manner that they did going back 20, 30, 40, 50, even 60, 70 years ago. So these countries are emerging nations, they are the new kids on the block and they are building themselves up as a their own independent power and they are developing their own financial system and if you understand how the brics nations have developed and turn it into what they call the AIIB make Asian infrastructure investment bank held in Shanghai.
Coy Wells: 02:16
Speaker 1: 02:16 They have developed essentially the exact same financial structure that is held here in the United States. So what you're seeing is is yes, the United States is taking measures on what had to be done in regards to some of the policies that are put in place in regards to a chemical warfare that is being used. But from a geopolitical standpoint, there's a ton of financial stuff that is taking place underneath the surface and that's really what people have to understand and it ties into the very things that we've been talking about this entire year. Going back to treasury bonds to interest rates, the misappropriation possibly of terrorists. We haven't really seen tariffs like this since about 1913, uh, interest rates they're being played with to try to balance out the economy, the United States and in one play one way or one play the other way. Raising rates or lower rates can push the stock market one way or it can push it to the other way.
Coy Wells: 03:04
Speaker 1: 03:04 These are things that we really haven't seen in a very, very long time. So right now, those of you who are retired and have money in financial markets, you're kind of, your money is sitting around being kinda like a pinball machine right now. And it's being bounced around in that machine and really wondering how it's going to play out. What I encourage you to do is when you start having geopolitical issues like we're having right now, and when you start seeing the volatility in the market, these massive swings 300 up one day, by the end of the day, it's down to negative 200, starts out negative 500 at Zen's positive, 150 200 points. When you start seeing that erratic behavior in the stock market, buyer beware, be cautious, be cautious with your money. A lot of people right now that understand that those who were hedge funds and managers, financial advisors, those who play in the market on a daily basis, a lot of them were taking that money.
Coy Wells: 03:52
Speaker 1: 03:52 They're pulling it out, they're setting it to the side, waiting for the dust to settle, and then reenter at that point in time. when we start having these types of geopolitical and uncertainty in the US economy and stock market, the number one place that most people go, is gold, it's a safe haven and right now the dollar is still holding at 89 point four nine to ninety cents. It's one of the lowest points we've seen since the year 2003, which is another signal that the economy of the United States is not nearly as robust. One is they'd like it to be your way. It shouldn't be. With that being said, you have to start looking at hard assets to be able to preserve the purchasing power of your dollar. That's really what we try to teach clients. What I've been trying to teach clients for the past few years is that you've got to understand if the goal doesn't do anything and you can stop the bleeding on your dollar, sometimes in a crisis, preserving 20, 30, 40, 50 percent of your money.
Coy Wells: 04:41
Speaker 1: 04:41 It's not about the return of your money at that point in time. It's about the return of your money, not losing that initial money that you put in. We also know that when there is uncertainty like this, that precious metals is an area that tends to skyrocket. We know that in 2000 gold rose significantly in six years or so, about 300 percent increase. Now, of course, some years were greater than others, but the average was about 48 percent a year. We know in 2008, again, gold spiked and went off to up nearly $2,000 an ounce, breaking about 1926. We're talking about a 252 percent increase over about five years folks, that's a big return, if we're overdue for a recession, which most of you know we are, you have to start looking at taking those profits where you're at today, taking them and putting them aside and protecting that money, riding out the wave.
Coy Wells: 05:24
Speaker 1: 05:24 The difference is those who are retired are the ones who will bear the brunt of the crisis. Two thousand eight was 10 years ago. You're 10 years older now. You don't have the luxury to play with your money at this point in time. You're 10 years older. You don't have the ability to go back to work if the finances or finances are lost accordingly. You have to start thinking about those things. You have to start being reactive, not proactive. Again, as always, thank you for watching daily market insights. Uh, if you have any comments, please click on the comments section below. We're starting to get more of those. Click on that and write in a comment. We'll get back to you right away. Also, we've talked about the pension plans here in the United States. Here is the Fiscal State of America. This talks about the pension plans here in the United States.
Coy Wells: 06:04
Speaker 1: 06:04 This is an area that is going to become a hot topic within the next 12 to 18 months. This is a big, big article here. It's a huge review on every state inside the United States, how much is borrowed against Medicare, Medicaid pension plans, those who are state employees and workers, government employees. This is a big, big deal here, folks. I ensure you that you need to read the information and find out where your state stands. This will become a big issue. As always, thank you for watching daily market insights. Click on the link below or give us a phone call.