5 Signs of a Weakening Global Economy

While it’s tempting to slip into the comfortable notion that the domestic and global economies are getting better, some strong signs of trouble suggest otherwise.
One of these signs, interestingly enough, is the current strength of gold. There’s now every reason to believe the Fed will grace us with a rate hike in December. Ordinarily, this kind of news helps hammer the gold price. But the yellow metal held its own this past month, and is currently at over $1290 per ounce.
Gold is a safe-haven or just-in-case asset. So it’s instructive to discover what’s behind any risk-off sentiment that’s bedeviling investors. Financial journalist Anthony Fensom has zeroed in on five areas of potential trouble.
First of all, he cites the difficulty associated with protectionist restrictions on free trade that could easily inhibit the U.S. and global economies after the U.S. election. Both Clinton and Trump have come out against the Trans-Pacific Partnership. And Trump, if elected, has promised to withdraw from the North American Free Trade Agreement.
Clearly, neither a Republican nor Democratic win in November will provide the global economy a way out. Yet International Monetary Fund (IMF) managing director Christine Lagarde has candidly characterized policies that restrict trade as a form of “economic malpractice”. She feels such policies will hamstring jobs and wages, and impair global economic growth. IMF chief economist Maurice Obstfeld refers to such efforts as “turning back the clock on trade.”
Fensom identifies a second troublesome trend threatening the global economy as the after-effects of Brexit coupled with the national elections in France, Germany, and the Netherlands that will occur next year. All three countries will have a far-right candidate running for office – each of whom has pledged to implement draconian trade restrictions.
The third area of concern Fensom cites is the fact that central banks have run out of miracles in their bags of tricks. They’ve gone the limit of quantitative easing and negative-interest-rate initiatives. And Fensom observes, as a fourth trouble spot, developed economies will most likely not be forthcoming with needed government spending programs.
Finally, according to Fensom, we’ll see only a “modest recovery” in commodity prices in 2017.
Meanwhile, Barron’s has documented a noticeable decline in consumer confidence in October.
These signs of weakness, then, all point to gold as a logical safe haven for investors looking to protect their retirement funds.
What about you? How secure is your nest egg? Doesn’t it make sense in this uncertain economy to move at least some of your paper assets into physical gold at its current low price?

For more information, call 800-777-6177 now, and ask to speak to a Fortress Gold Group representative.

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