Jim Rickards: 70% Market Decline Possible in 2017?

Jim Rickards: 70% Market Decline Possible in 2017?

With just two weeks to go in 2016, everyone is reading the financial tea leaves for what lies in the year ahead.

Will the dollar continue to climb? Possibly. Will the stock market reach new record highs?  We sure hope so.

If you’re saving for retirement, you can’t afford to bank on hope. Instead, the smart investor banks on diversification. If the dollar falls, if inflation surges, if the market dips, if global conflict erupts… safe haven assets stand to benefit.

That’s why many analysts are saying gold is destined to go higher in 2017. They are sounding the alarm about an overheated stock market in the U.S. and crumbling conditions overseas.

RICKARDS: A LOOMING FINANCIAL CRISIS TOO BIG TO IGNORE

Best-selling author Jim Rickards thinks there is a significant financial crisis just around the corner… one far worse than any we’ve experienced before.

The signals Rickards has been tracking are quite clear: a 70% stock market crash could be imminent.

Rickards warns investors to ignore any noise about a hawkish Fed.  He believes the central bank is just blowing smoke about the economy and will not call for a string of rate hikes ahead in 2017.

According to Rickards, the world is caught in the grind between two monetary “tectonic plates:” deflation and inflation. The natural force of deflation cuts straight into interventionist policies that spur inflation: money printing, currency wars, quantitative easing and negative or zero interest rates.

Rickards worries that the eventual end game of these conflicting forces could mean devastating effects for investors and holders of all fiat currencies like dollars or euros. Inflation could return with a vengeance.  Debt deleveraging, demographic shifts (i.e., aging and declining populations) and technology are powerful deflationary forces, for now.  But central banks can’t tolerate much deflation because it increases the real value of their spiraling debts.

Rickards favors gold when crisis hits rather than sovereign paper money. When confidence or trust is lost or cast away by debt default (such as has been suggested by the President-elect), it takes a long time to regain. Money is a much more fragile construct than people realize.

Central bankers have taken that confidence for granted and think they can print money endlessly. However, logic dictates that eventually there is a tipping point where confidence will collapse and inflation will quickly come roaring back in.

For Rickards, owning physical gold is a smart long term insurance policy, plain and simple.

GOLD: A NEW BULL MARKET TO BEGIN?

If you like price appreciation along with your safe-haven benefits (and who doesn’t), the new year could bring good news for you.

Rosland Capital LLC senior economic advisor Jeffrey Nichols predicts a surprising gold price increase in 2017, maybe even within striking distance of its historic highs. According to Nichols, 2017 prices will be bolstered by surging cultural demand in India and China. He also sees investor demand growing quickly as the global economy spirals down, the victim of imprudent economic policies pushed by irresponsible central banks.

Thomson Reuters GFMS Erica Rannestad thinks Britain’s decision to leave the EU and the contentious U.S. political climate will inevitably skewer investor confidence. As the reality of life under our new global conditions becomes painfully clear, non-traditional assets like gold and silver should benefit. Analyst David Morgan also sees gold prices rising in 2017 for the same reasons.

RBC Wealth Management managing director George Gero cautions that investors should not count gold out just because the dollar has been rising recently. Gero reminds us that there have been periods where both U.S. interest rates and the dollar were higher and yet gold prices performed well.

To Gero, gold is a kind of master asset… a liquid, portable, alternative investment that is readily convertible into any fiat currency when needed. That will always be desirable.

PREPARE TODAY AND THANK US TOMORROW

Are you ready if the stock market falls 70% or if a currency or trade war breaks out under President Trump? Uncertain times favor the well-prepared investor who stays diversified.

Are you confident your paper assets will retain their value as our national debt surges over $20 trillion? What type of retirement will you have if there is a run on paper assets in the next financial crisis?

One of the most priceless commodities available today is simple peace of mind in the face of “come what may.” The only guarantee in life is that the unexpected always hits us eventually. But we never give up hope, we just take action!

Whether optimist or pessimist, I guarantee you will sleep better at night with gold and silver in your safe and in your IRA. Are you prepared for a worst-case scenario?