When the Federal Reserve stepped in to save the day after the 2008 financial crisis, it cushioned the blow of the Great Recession by artificially lowering interest rates, making debt everyone’s new friend. Debt was used as a tool by the Federal Reserve to push the economy forward. With the U.S. debt now reaching a seemingly unsustainable level, it appears we are reaching a tipping point.
The Escalating Burden of Household and Global Debt Risk Amid Financial Crises
The prolonged offering of practically free debt has loaded up not only corporate ledgers but household accounts as well. Global debt continues to push the envelope of what’s possible and U.S. household debt has now hit $17.29 Trillion as of Q3 2023, according to Federal Reserve Bank of New York.
As interest rates hold at higher levels, downward pressure will persist throughout global markets.
The Role of Precious Metals in Economic Uncertainty
In times of geo-economic uncertainty and downward global market trends, precious metals are viewed as a hedge against market uncertainty and can offset the risk in debt instruments. Precious metals should be viewed as the concrete foundation to your financial future. However, many investors mistakenly view precious metals as an investment option instead of a key ingredient to a properly diversified portfolio.
This is why China and Russia have been accumulating precious metals at a feverish pace, and the Brick nations have taken steps to move away from the debt involved with the U.S. dollar.
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