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Recession Coming...Investors Need Gold.


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Recession Coming Within 12 Months; Investors Need Gold – Pal


A former Goldman Sachs banker and founder of the macro investment advisory group Global Macro Investor told MarketWatch the U.S. will be hit by a recession in the next 12 months. As such, investors need to “park their cash” in gold.

“Mirror, mirror on the wall, which asset is most mispriced of all? According to a Goldman Sachs alum who predicted the financial crisis in 2008, it’s gold. The precious metal should be a lot more expensive when the likelihood of a global financial collapse and a move toward negative interest rates is accounted for, says Global Macro Investor founder Raoul Pal, who now sees a U.S. recession within 12 months…

“’As we get to negative interest rates, gold is a good place to park your cash,” said Pal, who discussed his outlook with MarketWatch in a September interview and a follow-up conversation over email. ‘I’m not a gold bug,’ the former GLG Global Macro Fund co-manager — who is also watching the dollar closely — “’but this is the currency I would choose now… All the really serious thinkers are interested in gold,’ he said…

“Pal’s core presumption — one he’s held since 2014 — is bad news for the U. S: He is convinced the country is headed for recession within a year. ‘The business cycle points to that,” he said, “and 100% of all two-term elections have had a recession within 12 months since 1910.’

“His view contrasts with the Federal Reserve’s own indicator, based on corporate-bond spreads, that predicts just a 12% chance of a pullback in the next year. But Pal does have some prominent company: Savita Subramanian, Bank of America’s head of equity strategy, recently predicted the same; Janus Capital’s Bill Gross spoke of a lagging U.S. recovery in his September investment note; and bond investor Jeffrey Gundlach showed a chart during a recent webcast that revealed the start of a recession.

Should his prediction come true, Pal says, gold prices could double. If central banks want to get active and combat a slowing economy, he says, they will try to stimulate the economy via printing money or more easing, all of which plays ‘into the hands of gold….’”

(“A recession is coming — so hide in gold, says influential investor Raoul Pal,” MarketWatch, 10/14/16.)

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Seems like more and more financial experts are recommending gold and, to a lesser extent, silver.  If you believe that the dollar is great and will always be the world's best currency, spending more dollars than are brought into the US Treasury coffers each year, and if you believe that the national debt is meaningless and is just a really big number, then gold is probably not for you. (Sort of like the vast population in the "Matrix" movie.)

But, if you are concerned about the slide of the value of the US dollar over the last many years and are concerned that printing money out of thin air is not a good idea and do believe that the national debt does carry ever increasing interest costs, then gold and many other commodities may be something you should look into (and pretty quickly if you think the former Goldman Sachs is correct about a recession in the next 12 months).

There are several ways to hedge against the value loss of the dollar: Buy physical gold (allocated or un-allocated), purchase of stocks of gold and silver miners and gold and silver ETF's. In fact, this is a classic hedge against the drop in purchasing power of the USD.

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4 hours ago, SocalDinar said:

Found a great deposit of chunky gold prospecting near Blythe . Lots of 1-3 gram nuggets and plenty of large pickers.  A day of hard work and two tanks of gas but i dug up over 1  oz 8 grams

 

Yahoo!!  Going back next weekend 4 sure. 

Awesome SoCal.  Wish I lived closer, and it wasn't the holidays.  Would love to join you on a trip.  Best of luck on your next hunt.

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16 hours ago, SocalDinar said:

Found a great deposit of chunky gold prospecting near Blythe . Lots of 1-3 gram nuggets and plenty of large pickers.  A day of hard work and two tanks of gas but i dug up over 1  oz 8 grams

 

Yahoo!!  Going back next weekend 4 sure. 

Do you prospect on public or private land? If public, are you allowed to take the gold without paying something to the Fed or State governments?

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I was on a claim of a club I belong to. All BLM land. And yes you must claim the income when you sell the gold . That's why I keep all my receipts for gas equipment etc...

This was my best day ever. Usually only dig up a gram or two. Unless I really hit it big I will probably never sell anyway.

 

My kids will probably find it in a shoe box someday.

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