The financial market has been volatile in the recent months, causing people to wonder if the United States is about to enter a recession. The Great Recession in the United States started around December 2007, and most people still remember the financial hardships it caused.
Recent market analysts are making headlines and sounding off warning signs that the United States is currently displaying signs of a coming recession. If the country continues down its current path, it is possible that we could enter yet another recession. However, U.S. Money Reserve does have ways to help you get through economic downturns.
Let’s look at three prime signs that the country is about to enter a recession—and then look at ways to protect your finances from it.
Rising Interest Rates
On June 13 of this year, the Federal Reserve raised interest rates. Raising interest rates often has a significant impact on the financial markets. Historically, the stock market typically takes a downturn after the Fed raises interest rates.
Think of it this way. When the Federal Reserve increases interest rates, this essentially decreases the amount of money that is available since the move makes money more expensive to borrow.
Raising interest rates is viewed as a way to tighten monetary policy. That tight hold on money has huge consequences on the stock market. As we know from history, a tanking stock market can turn into a recession in no time. That’s why it is one of the three signs of a recession.
Declining U.S. Treasury Bonds
Treasury bond performance can be another indicator of a recession. If bonds aren’t performing well, that can be bad news for the economy.
Right now, Treasury bond yields are on a decline, and that makes it harder to sell additional bonds. On top of that, more bonds are coming back from foreign countries, hurting the market even more.
Why is this happening? The Shiller PE Ratio indicates that the stock market is currently overvalued, and that’s likely what is hurting Treasury bonds. In fact, the market is more volatile than it’s been in a decade or so, largely because many analysts believe it is overvalued. That could spell bad news for Treasury bonds and the U.S. economy as a whole.
A Weakened U.S. Dollar
The final sign of a recession is the declining value of the U.S. dollar. The value of the dollar has been going down quickly, losing more than 12 percent of its value against a variety of foreign currencies since the start of 2017. As the dollar weakens, buying imported products starts to cost more money, making it harder to conduct business abroad. This also makes goods and services more expensive for consumers. Consumers having less purchasing power can lead to a recession.
U.S. Money Reserve Suggests a Solution
A possible recession is certainly not happy news, but with the right moves, you can help protect yourself against financial risk. In fact, some people are buying gold and silver assets to hedge against a falling dollar, rising interest rates, and an inflated stock market. Gold and silver coins are different financial vehicles than paper currencies, stocks, and bonds. That makes precious metals a worthy hedge during uncertain times.
While interest rates and dollars can be manipulated, the same is not true for gold and silver. There is a finite amount of gold and silver in the world, and the market value is based on supply and demand. Precious metals can also have a numismatic value, which means they can be worth even more than their market value.
The market value of gold and silver can go up when the stock market goes down. Since the market value of precious metals is not tied to the dollar, it can increase, even as the value of the dollar diminishes.
Buying Gold and Silver
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If you are ready to buy gold and silver, U.S. Money Reserve can help. U.S. Money Reserve has created a system to make buying gold and silver coins as easy as possible.
First, the company offers free literature that can be shipped directly to your home. This will help you understand how gold and silver coins can act as a hedge against a volatile stock market and a failing economy.
You will also get access to your very own account executive when you contact U.S. Money Reserve. This isn’t just a customer service representative. The trained account executives at U.S. Money Reserve understand how gold and silver coins perform in various economies and can help you make an informed decision for what is best in your particular situation. This takes the stress off your shoulders when purchasing gold and silver coins.
Based in Austin, Texas, the U.S. Money Reserve can even help you fund a self-directed IRA if you wish. You can purchase gold and silver coins with the help of your account executive and put them in your self-directed IRA account.
You might wonder why U.S. Money Reserve offers all these services. Why is it so different from other gold and silver coin companies?
The differences come down to leadership. U.S. Money Reserve’s President is Philip N. Diehl. He served as the 35th Director of the U.S. Mint.
As you can imagine, Diehl learned quite a bit about gold and silver during his time at the U.S. Mint, and he saw how precious metals could benefit people in times of recession. He brings that knowledge to U.S. Money Reserve.
If you want to add some gold and silver coins to your portfolio, contact U.S. Money Reserve today. Your account executive can help you purchase the right coins for your financial situation.