Alright, it’s a new year. 2017. We have a new administration. President Trump! None of us thought we’d ever say it, but nevertheless he’s in charge, and I think he has a plan. And his plan is to spend money. So now we need to understand what the next four years or eight years is going to mean for our investment choices.
Hi, I’m Scott Carter, CEO of PM Capital. It’s the end of January and I wanted to give you an update about what’s going on in the metals market. Really talk to you about our national debt because I think this is a critical component of what you have to consider when you’re making your investment choices.
Did you realize our Dow is at 20,000? It’s not surprising that our national debt just hit $20 trillion. Is that an aberration? I don’t think so. I can go back to 1981, when Ronald Reagan was in office. Our national debt was $994 billion. Guess what our Dow was. 994. When Bush 41 was in office, our national debt was $3.5 trillion, and the Dow was at 3,500. Bush 43? The same pattern. A 9,500 Dow and the national debt $9.5 trillion.
Here we are in 2017 when Trump is taking over and we have a Dow at 20,000 and a national debt at $20 trillion. Seems like there’s a direct correlation with us borrowing money to try and increase our stock market. You and I both know this can’t last forever. You can’t borrow your way into prosperity. And as investors and savers, we need to take this fact into account. We can cheer and be excited that we’ve made money in the Dow, but we’re doing it on the backs of future generations. And we’re doing it with arbitrarily low interest rates. It will not last forever.
When you’re a prophet, and I’m not saying I’m a prophet, but when you’re a prophet, no one really likes you. I don’t care if you’re Noah or Jonah, or the guy I’m quoting here–Michael Snyder–who is an economic prophet. But he says that we’re going to see the Dow at 10,000 before we see it at 30,000, even though we’ll probably be at $30 trillion in debt.
So if you’re an investor and you’re concerned about our national debt and what’ going on, you need to pause and evaluate your portfolio. One of the best ways to guard against losing your buying power in this potential catastrophe that Michael Snyder is talking about, is to diversify into hard assets.
Many of you may have already considered investing in precious metals as a hard asset. And you’ve probably taken a look at real estate as well.
I want to encourage you to take a fresh look at gold and silver again. Have it in your portfolio. We recommend between 10 and 20 percent in your portfolio as a way to hedge against exposures that we have. Like our staggering national debt.
We have great offers right now so call your consultant and see if now is the right time for you to add precious metals to your portfolio.