Mainstream America may regret placing so much confidence in the central planners at the Fed.
Bullion.Directory precious metals analysis 27 November, 2023
By Clint Siegner
Director of Money Metals Exchange
Demand for publicly traded stocks and demand for physical bullion aren’t always correlated, but stock investors and metal investors do have something in common. Both groups are grappling with uncertainty, and that means some people are on the sidelines.
The Wall Street Journal reports investors sitting on record amounts of cash.
They are a bit worried and don’t know what else to do.
There isn’t consensus in the financial press. One story suggests investors punch the accelerator while the next urges them to pump the brakes.
Meanwhile, ordinary Americans who increasingly say they disapprove of “Bidenomics” don’t seem to be buying the government statistics the media is reporting.
Surprisingly strong GDP, ultra-low official unemployment and federal CPI reporting which shows price inflation coming down are all examples of data which doesn’t match Americans’ lived experience.
Many of the people making the bullish case for owning stocks don’t seem to be buying the official statistics either. They aren’t suggesting the U.S. economy is great. Instead, their argument hinges, in large part, on the thesis that as the economy hits the skids, the Fed’s response will be to cut interest rates.
Mainstream America may regret placing so much confidence in the central planners at the Fed. There is far more to a healthy economy than interest rates, but these days little else seems to matter.
The record amount of cash on the sidelines isn’t entirely attributable to uncertainty. People have been incentivized by higher interest rates available in money market funds.
However, Americans might be well served to contemplate how safe this cash really is. Money market funds aren’t going to keep pace with inflation over the long run. Nor are they immune from credit risk, which could manifest at any time.
Bullion investors would like to see some of this capital pour into the gold and silver markets. They are looking for a catalyst which pushes people away from conventional assets and toward alternatives.
Clint Siegner
Clint Siegner is a Director at Money Metals Exchange, a precious metals dealer recently named “Best in the USA” by an independent global ratings group.
A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals’ brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.
This article was originally published here
Keeping all your money in cash because you trust the Fed? Good luck with that! This article hits the nail on the head. Inflation is eating away at cash savings like termites in a wooden house. Time to wake up and look at other options like gold or real estate. Diversify or risk watching your hard-earned money shrink!
in finance, as in life, not putting all your eggs in one basket is usually a wise strategy