Watch and listen to U.S. Money Reserve's Coy Wells talk about the U.S. economy and how we might be entering another depression due to interest rates. Coy Wells advises shareholders to start investing in gold the way Reagan brought gold back to hedge against inflation.
Take Profits Now- Video Transcript
Coy Wells: 00:00
Good morning and thank you for watching daily market insights. One thing we're going to be talking about today is Jerome Powell, the Federal Reserve chairman that had his congressional hearing yesterday. For those who watched that meeting yesterday, what was very interesting is that the states and representatives that were talking to Jerome Powell had all had concerns about the economy with inside their own states. And if you remember several months ago, we talked about the Fiscal states of America. In this report it talked about exactly what the Congressional hearing was about yesterday. Now, Jerome Powell talked about how he felt that the economy of 2017 was very healthy, but he also stated yesterday that they were going to start incrementally start raising interest rates. And interest rates, and inflation is exactly what we've been talking about for the last six to seven months. Interest rates is ultra crucial to understand. The government of the United States under the Obama administration did not raise interest rates for almost eight years.
Coy Wells: 00:50
That means we printed $4 trillion, but we didn't start adjusting the money on the back end. At this point in time we have to raise interest rates. And the reason that's important to understand is because US treasury bonds, as we've talked about in the past, is at the center of the crisis. Countries around the world are concerned about the US economy. We've gone here going on nearly 10 years. Eight to 10 years without a recession or depression happening. And I hate using the word depression because that means a severe instance and the only depression we've had was back in 1929. But the economy of the United States and the states with inside the United States are in severe trouble. If you look at the report that we've been talking about, the Fiscal States of America, it talks about how much money each one of these states has borrowed against the pension plans of the workers.
Coy Wells: 01:33
That means they're not bringing in enough income. When that starts happening at that level it starts putting additional pressure at the municipal level with inside of each one of the states. The reason why this is important to understand is just like you and I as individuals, we all know that we cannot spend more money than we have, its just not as physically possible. we can do it with credit cards, we can do it for a short period of time, but eventually someone has to pay the price, has to pay the Piper. And that's what's starting to happen with United States and raising interest rates is what's going to happen. These countries around the world are worried about US treasury bonds and they have been liquidating them. They're holding onto them at the Federal Reserve, at the balance sheet that's negative for the Federal Reserve. And the only way to get that off of the Federal Reserve's balance sheet is to incrementally start raising these interest rates.
Coy Wells: 02:18
And by doing so it puts on pressure here on the United States. And yesterday was a key example of that. The US stock market yesterday almost hit 400 points and deposited by the first half of the day. By the end of the meeting that Jerome Powell held yesterday with the congressional meeting or- the Congressional hearing. At the end of the day, the stock market ended down 300 points. That was a 700 point swing between opening and closing bell yesterday. And that whole entire meeting was all about interest rates and the concern that the states with inside the United States have about the actual true economy of the United States. So for those of you that are retired, this is very crucial to understand. Our money is at risk. We can't spend more money than we have and neither can the country. The other interesting note is that no one's talking about is that right now, do you realize that the US national debt has increased by $1 trillion in six months?
Coy Wells: 03:12
That's one of the fastest increases in the US national debt that we've seen in years. On top of that, we also saw the US dollar see its quickest decline that we've seen in over 15 years going back to the year of 2003. Ask yourself, with the money in the market making these types of moves or maneuvers with it swinging 6, 700 points in a day or losing a thousand points like it did four and five weeks ago, three days in a row, one being 700 points and two being a thousand points: how much money is at risk there for you as an individual? It also confirms that interest rates being raised in the market reacting to it is that the stock market is built on borrowed money. We've all made a lot of money in the market. For those of you that have made money, you have to start looking at the profits you've already made.
Coy Wells: 03:56
If you leave your principal there and pull your profits out, you're ahead of the curve. But if you leave your money there and leave your profits there and don't leave your initial earnings there, that money is going to be in severe risk in the near future. They're setting up for this. They're telling you what's fixing to happen here. You have to understand and hear the warning signs. Bonds is going to be the catalyst. The catalyst of that is going to be interest rates. The cause and effect of interest rates being raised is inflation and inflation is already being discussed on every major news station in America. It's being talked about. And if you're a consumer that buys any services and goods today, you already know that that's happening. Go and try to buy a car or get a new credit card and see what the interest rates are on those credit cards.
Coy Wells: 04:35
Get a home loan, see what the interest rates are on those right now. They're not where they were 12 months ago. As always, thank you for watching daily market insights. Uh, look for this report. You can click on the link or give us a phone call at the bottom there and also there's a comment section. If you have any questions or concerns, uh, leave us a comment. We'll be more than glad to give you some feedback. Give you a phone call, try to help you understand what's taking place. Maybe break it down. Uh, more so if need be. But those three key elements are happening right now in the US economy. US bonds are in trouble. They're having to raise interest rates because of countries trying to liquidate and dump those. They've been trying to keep them from coming back any further.
Coy Wells: 05:14
At the reverse side of that, again, is going to be interest rates being raised because of that. And the flip side of that is going to be inflation over the long term. Some of the top experts, including Ray Dalio, just two days ago, three days ago, said that he believes by the end of Trump's term, he just announced yesterday he's going to be running till 2020 or running again in 2020. Ray Dalio, largest hedge fund manager in the world. Bridgewater associates, 70% chance of recession by 2020. If you've got profits, you need to start looking at moving those profits. Protect your money now. Gold is an excellent area and one of the reasons Reagan brought it back was to hedge against inflation. That's what's fixing to happen folks. Start watching the news and you'll start hearing that word again. Thanks for watching. Click on the link below. Uh, give us a phone call or leave a message in the comment section. As always, thank you for watching daily market insights.