That's the guessing game investors started 2016 playing with the Janet Yellen-led Fed about interest rate hikes going into the new year. Given the sudden China invoked carnage, investors will be nervous to see if it's more than just the blip that sent markets suddenly south last spring. Correlation, like karma, can be a beach.
You can also bet it will keep the worry-laden Fed members watchful and start the rumors about another recession floating around for a while. You can expect a lot of those we-told-you-so articles one usually sees in retrospect. You will also most likely see a raft of upgrade-to-quality-now pieces.
Gold finished 2016 down for the third consecutive year. Like the Donald, gold has it's enemies, those who love the status quo. Gold is a store of value. Forget that and you forget a fundamental tenet of history and Investing 101.
Gold is not about getting rich, albeit it could be. It's about survival, preserving some facsimile of what you already have. It might even prove a decent chest protector against chaos. And like the Donald, gold appreciating strikes fear in the entrenched. Change is the bet noir of many, but the entrenched despise it most. A news item over night in California noted Sacramento expects to take in roughly $3.2 billion more this year over last, so they will now ramp up previously cut welfare programs.
If that doesn't restore your faith that politicians always do the wrong thing at just the correct time, you're probably getting your wacky tobacco from a state sponsored store, too. Maybe even that is where some of the windfall revenue is coming from. Wacky tobacco proves something we've been saying for years and politicans have been exploiting since the beginning of humans, if it moves tax it.
The pot market has been pretty hot by our calculations for a long time. There's a not so subtle correlation many miss: If it's legal it's taxed. Some might call that a paradox. We don't know what you call it. But it sounds like a fine formula for wasting more money.
Magic is as magic does. And central banks around the globe chasing some phantasmagoria labeled 2% inflation should set you searching your medicine cabinet for the diazapines. And while you're at it, think anout picking up a little gold.
Just make sure you store it some place other than the medicine cabinet.
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