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7 Reasons Not To Expect

Smooth Sailing In 2019

Election euphoria is over, tax incentives have run their course, and our ten-year bull market has grown more than a little long-in-the-tooth. So what major factors will be affecting our economic course in 2019?

Unemployment, reached record lows for almost all gender and ethnic groups at some point this year, which is fantastic news. Unfortunately, it’s also now history, which probably won’t be revisited for a long time to come. 14,000 GM layoffs were just an opening salvo in what many experts describe as the beginning of a serious recession.

Yield rates have flattened and are inverting, which historically has served as a good barometer indicating a change and coming recession.

Millennials represent a generation of Americans that have racked up $1.5 trillion in student loan debt and are now or will soon be facing the perils of payback, just as the next recession begins to take root. A Barron’s report earlier this year announced that nearly 20% of those loans are already delinquent or in default and Brookings Institution reported that the number could balloon to 40% by 2023.

Standard & Poor’s announced that $1.4 trillion in corporate bonds is currently outstanding and more than a third ($500 billion) of all corporate bonds issued are just a single downgrade away from a “junk” classification.

Reuter’s reported that at the close of November, new home sales tumbled to a more than 2 ½ year low, adding to credit concerns related to qualifying, as well as not defaulting.

This year’s surge in dollar value has been extremely difficult for China and other emerging market countries whose debt is greatly denominated in American dollars. It’s caused many companies to have to scramble and struggle to keep up with their loans.

With literally hundreds of choices, financial companies, as well as Fed Chair Jerome Powell pick cyber risk as the “greatest risk to the broader economy.” A successful, large scale attack, able to cripple one of America’s major financial institutions, could sow fear and instability across the entire banking system. It was caused by a different source in 2008 nevertheless it’s the same type of financial chain reaction that brought the banking system to its knees ten years ago.

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These factors indicate a very difficult course ahead for the U.S. economy. Precious metals offer unique protection from a great deal of potential economic calamities and pitfalls. 

And a Gold IRA offers precious metal protection to all sorts of tax-deferred retirement accounts.