Jamie Dimon: It's ECONOMIC Hurricane season!
Recently JPMorgan Chase’s CEO Jamie Dimon changed his economic outlook from just stormy, to dire hurricane warnings! What made him do this?
First, the Federal Reserve is signaling that they will begin “quantitative tightening” instead of easing. They will REDUCE their bond holdings by up to $95 billion a month. I remember when it was a crazy idea that the Fed would create money by buying bonds by the billions every month AT ALL. Now the idea that an emergency program from a decade ago needs to possibly wind down is sending Wall Street into panic mode.
Also, the Ukraine war concerns him and its impacts on prices of commodities like food and fuel. Of course, oil and gas prices are up for several reasons. Our sanctions against Russian oil certainly didn’t help (us) but even more than that, the administration’s abandonment of energy independence had an immediate and escalating effect on gas prices. The administration is unapologetic about their war on US energy. They did it all in the name of climate change and the Green New Deal.
Not to get too political, but the point is: it is a trend that is not likely to reverse soon because the powers that be don’t consider it a problem to be solved, but part of an overall agenda. Get used to the high gas prices, if you can. They are here to stay, and they will ripple into the broader economy like the surge of flood waters during and after the storm.
In a hurricane, you worry about several threats. The immediately damaging effects of the wind, the rain and the floods, but then also the community wide power outages that can last weeks and cause misery on many levels. You prepare by boarding up and tying down anything you don’t want swept away. You might lay sandbags to keep flood waters at bay. You shelter in an inner room with no windows. You keep food essentials on hand and stockpile clean drinking water. You might have an electric generator or some other way to generate some power for a few essentials.
And then you pray for the best.
How do you prepare for an economic hurricane?
You consider the economic forces that threaten you.
Volatility in the markets can thrash your portfolio as badly as a boat lashed to the marina during the storm. You need to seek out something steady and reliable that is able to weather the storm.
Precious metals have historically been calm relative to the markets during recessions and depressions. In fact, they usually move opposite the markets, evening out the deep losses you can experience during volatile times. Your gold and silver holdings are attractive safe haven assets and demand usually surges during market volatility, potentially bringing you enough solid gains to keep your head above water until the skies clear.
Lastly, inflation throughout the economy is like a power outage that lasts for weeks after a big storm. It affects everyone and everything around you and no one knows when the situation will normalize, just that it makes everything highly dysfunctional for a while. But if you have the tools you need to get by, you’ll be ok in the end. Precious metals are like a powerhouse to your portfolio, keeping it running while your other assets and holdings might be dead in the water. Inflation is running hot right now, but this could be just the beginning… It can get so much worse. And Jamie Dimon expects that it will.
So batten down the hatches and consider adding to your precious metals holdings. We are bracing for a massive economic hurricane.
Your gold is your port in the storm.