Mike Maloney (from GoldSilver.com and formerly a Rich Dad advisor) just put out a video today showing why he's convinced that we are now in an economic recession. Following up on a Zero Hedge article that US Federal Tax Receipts growth rate is at an anemic 1.2% year-over-year, down big time from its 13.4% YoY growth in June 2013, Mike goes on to show that every single time this happened in the past, the economy had been in recession. Shall we expect an announcement from the FED later this year or early next year, as Mike suggests?
Watch the video below for details...
A slowing economy impacts company earnings and stock prices negatively. In fact, most all other assets will get slammed as well (real estate, commodities, etc.). Bonds in the current interest rate environment are no longer a safe alternative, either.
Gold, however, traditionally has a negative correlation with the stock market. In times of economic downturn when all other assets decline in value, gold can perform really well.
credit: Hard Assets Alliance
As you can see from the chart, during five out of seven previous recessions (shaded areas), gold price rose - getting up to double digit rates on three occasions. Will it happen again? Well, it's happening already. Gold price has risen 25% since the beginning of the year. Will the trend continue? Nothing is guaranteed in the market, but considering the current global political and economic uncertainty, there is a good chance it will.
May we all prosper, in good times or bad. Om shanti.
