"Janet Yellen, You're Fired!"

by Lear Capital EditorialMay 11, 2016

Imagine The Donald saying that familiar catch phrase to the Federal Reserve Chair as president! It could happen! He has indicated he would replace her, but what policy changes, if any, would there be with a Trump-appointed Fed chair? What does it all mean for precious metals and your portfolio?

Perhaps you’re a big fan of The Donald, but it is hard to see Trump’s policies getting us out of the debt/spending quagmire in which we find ourselves. After all, he loves low interest rates and just suggested with an absolutely straight face that we would always be able to just print our way out of debt. Weimar Republic, anyone?

On the other hand, he has expressed admiration for Paul Volcker for “doing what had to be done” when he raised rates in the 80’s and ending the inflation of the 70’s.

Will a new Federal Reserve Chair make a difference? Will our debt be paid down? (No.) Will the spending ease up? (No.) But what will happen to interest rates and inflation?

Low interest rates happen to be great for Wall Street and big business, two very important influencers of policy. Wall Street loves low interest rates because it forces savings into the stock market in search of returns not available to “idle cash” or treasuries. Big business loves low interest rates because it makes debt cheap when they are looking to spend money they don’t yet have on capital improvements and whatnot.

Plus, low interest rates weaken the dollar which puts our global exports on sale.

There is a definite conflict of interest here however, because what is good for Wall Street and Big Business is bad for you, the worker saving for retirement. Retirement savings have a fraction of a fraction of the yield they should be getting. You are forced to gamble your savings in stocks looking for some return whether you want that level of risk or not.

No wonder Wall Street loves low interest rates. It forces YOU to be their customer!

All of this has made the entire stock market a huge bubble with no upwards momentum left before a crash, and Trump is well aware of this, actually. He said as much in 2014 and 2015 when he liquidated much of his stock portfolio.

It’s a dangerous and risky world out there for your nest egg. And it’s not so much that gold and precious metals are going up in value – it’s the dollar going down. And there are so many other dollar negative forces at work going into the future.

It’s time to consider: Do you want to hold your savings in risky dollars that either candidate would continue to print into oblivion, or do you want gold that has held its value for thousands of years?

It’s a great time to buy gold, but you still have questions. Great! We have answers.

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