The federal government isspending and redistributing newly created cash so rapidly, it’s becomingdifficult to keep track of which trillions are going where.
This week, President JoeBiden will pitch a $3 trillion “green” infrastructure package. That’s on top ofthe $1.9 trillion economic “relief” bill he recently signed into law.
Next month, Biden isexpected to roll out plans for additional trillions to be spent on healthcare,education, housing, and more.
Republicans in Congressmay object to some of the proposed spending. But they have a lousy track record– even during times when they were the majority – when it comes to actuallyreining in federal outlays.
A bevy of new taxes couldbe just the thing to spook Wall Street and bring the bull market in equities toan unceremonious end.
When investors perceivingrising threats to paper wealth, they are more likely to hunker downfinancially. And among the safe havens they may find attractive for shelteringwealth are physical precious metals.
Paper liquidations ofprecious metals traded on futures exchanges are possible during periods ofdistress in financial markets.
But these types ofselloffs, like the one experienced last year amid the COVID panic, are usuallyfast-unfolding technical events. They aren’t indicative of fundamentally driventrends.
Although the paperselling in March 2020 was quite extreme, strong physical buying in responsehelped lift the gold market to a record high by late summer – and pushed the silver market to a multi-year high.
Given the extreme natureof the inflationary policies now being pursued in Washington, investorsshouldn’t expect the 2020 highs in gold and silver to be any kind of ceiling.
The more rapidly thatofficials depreciate the currency in the months ahead, the greater the upsidepotential for precious metals.
Stefan Gleason isPresident of Money Metals Exchange, the national precious metals company named 2015"Dealer of the Year" in the United States by an independent globalratings group. A graduate of the University of Florida, Gleason is a seasonedbusiness leader, investor, political strategist, and grassroots activist.Gleason has frequently appeared on national television networks such as CNN, FoxNews,and CNBC, and his writings have appeared in hundreds of publications such asthe Wall Street Journal, Detroit News, Washington Times, and National Review.
© 2021 Stefan Gleason - All Rights Reserved
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