Regardless of individual views over the political candidates and processes, this campaign cycle has introduced some intriguing comments, concepts, and rhetoric. Several of these are of interest to those who buy gold and silver. Not the least of those dealing with finances and economics is Donald Trump’s prediction of a “very massive recession” in the near future. 1
Facts, Fear or Both?
In early April, “the Donald” predicted during one of his stump speeches that “…the United States is on course for a ‘very massive recession’.” He went on to explain the factors he saw driving this future, including:
- High unemployment
- Overvalued stock prices
- A $19 trillion dollar national debt
As a part of his campaigning, Trump vowed he would “wipe out the more than massive national debt over a period of eight years,” and would start with a renegotiation of trade deals. The candidate has continued to surprise media and election pundits with his unorthodox style and often controversial statements.
In responding to further questions about his comments, Trump dismissed Wall Street insiders who bemoaned that such comments would negatively affect the financial markets. He has missed the mark on previous such predictions about the markets, but dismissed that by simply saying he didn’t respect the views of those supposed experts with, “I don’t need them.”
Pro-Trump or Not, Economy Is Not Doing Well
While many economists and market observers sought to quickly discredit Trump’s scary prognostications, others supported him. An analyst at the French bank Societe Generale, Albert Edwards, noted, “Newly released U.S. whole economy profits data show a gut wrenching slump. Whole economy profits never normally fall this deeply without a recession unfolding.” 2 He was not alone in pointing out many of the U.S. and global financial issues facing all nations.
Whether you love Trump, hate him, or have not formed an opinion, his comments on this issue command attention for those who invest in gold and buy precious metals. There is a tendency in this campaign to focus on issues of personality and trivial items instead of the very serious concerns over debt, deficit spending, and ongoing weaknesses in the economy and financial markets. With or without a truly serious recession, it is difficult to see a near-to-intermediate term scenario where many of these economic pain points do not come home to roost. Investing in precious metals is a valuable way to protect your wealth against negative economic fluctuations.
Additional Sources:
1 – https://www.yahoo.com/news/trump-predicts-very-massive-recession-u-020221541–business.html
2 – http://www.cnbc.com/2016/04/07/trump-right-socgen-bear-sees-imminent-recession.html