What’s Killing the U.S. Dollar in 2017?
America breathed a collective sigh of relief this week as probable hurricane damage appeared to be less than had been feared. The stock markets and the U.S. dollar turned positive on Monday as a result.
Still, the damage has been done to lives and property across huge areas of the South. There are multi-year personal and economic challenges ahead for many people who have yet to return safely to their homes and jobs.
Expectations about deadly weather patterns were tough on the dollar last week – in fact, it hit 2 year lows! Many of our Gold IRA clients keep a close eye on the dollar, which was on the decline long before our recent storms struck.
In August, the U.S. dollar fell for the 6th consecutive month. This is the longest slide the currency has experienced in fourteen years. Gold rose above $1360 last week as well.
As George Saravelos at Deutsche Bank says: “the dollar is in trouble.”
Consider these factors that could further decimate the dollar:
1. Rising tensions with North Korea
2. Gridlock and endless fighting in Washington
3. Diminished expectations for a Federal Reserve rate hike
4. Economic slowness caused by Hurricanes Harvey and Irma
It is good news that the weather didn’t prove to be as completely devastating as predicted, but even so the negative fundamentals cited by some experts for the dollar are clearly still in place.
Even if they weren’t, Treasury Secretary Steven Mnuchin recently said that a weaker dollar is better for U.S. on trade!
EXPERTS SAY CONSIDER SAFE-HAVEN ASSETS
This is a clear signal to consider safe-haven assets like gold and silver as possible alternatives to assets that are tied to the U.S. dollar. Here is what the experts say:
1. Lukman Otunuga, research analyst at FXTM, thinks global uncertainty and a weak U.S. dollar is likely to stimulate the flight to safety to gold and remains a key support.
2. Nizam Hamid, ETF Strategist at WisdomTree, thinks there is a combination of events driving gold higher, including both political uncertainty and hedge fund buying. Hamid believes a continuation of extreme political circumstances could drive the price of gold to $1,400.
3. UBS strategist Join Teves and Louise Yamada of Louise Yamada Technical Research Advisors argue that gold’s gains can be attributed to higher demand for safe haven assets and a dollar index that has fallen to multi-year lows.
Bridgewater Associates chairman and chief executive officer Ray Dalio advises investors to stay liquid and diversify. It is well worth considering: a recognized safe haven asset that can also help build your family’s future.
EQUIFAX HACKING EXPOSES NEW VULNERABILITIES
You’ve probably heard the awful news: Equifax, one of the three credit reporting agencies in the US, was hacked between mid-May and July 2017, exposing Social Security numbers, credit card numbers and other personal information for up to 143 million Americans.
Americans everywhere are asking: how did this happen, and are my financial accounts safe?
Details are still emerging, and criticism of Equifax has been fierce. Sadly, there is no way to “opt out” of having every detail of your private financial life tracked and traded without your control.
However, while others play the blame game, we suggest taking a different approach and consider the benefits of physical precious metals.
No hacker can download your gold, or erase the records of your gold, or use your gold to open accounts for themselves. What you keep physically in your safe, stays physically in your safe!
This counts not only for the physical security of your gold and silver, which is very important. It also counts for the purchase and transfer of your gold to others, which can be done with a high level of privacy.
Privacy is of high concern to most of our clients. If you own physical gold, you enjoy a level of privacy, security and peace of mind no hacker can take away.
DON’T WAIT TO TAKE CONTROL
With natural disasters, the threat of major war and a broken political system as the backdrop, this is no time to be complacent.
Despite the recent Trump overtures to the Democrats, the U.S. remains deeply divided and gridlock continues to be the order of the day.
Data breaches are becoming the new normal, and the privacy of millions of investors is compromised almost on a daily basis.
At the same time, Mother Nature has done considerable damage to the Southeastern United States and the Caribbean and scientists are predicting more severe weather in the years ahead due to global warming.
These seem to be apocalyptic times, but it is not time to put your head in the sand. Owning physical gold could be a wise consideration in tumultuous times.