The Good News About the Stock Market Sell-Off
Gold is up. Stocks are down.
At RME Gold, we’re in the business of helping people protect their wealth and prosper, so we don’t like to see anyone lose money.
But some good can come out of this week’s treacherous stock market: It
is proving to be a wakeup call for a lot of people who are now beginning to realize just how badly exposed they are.
A sell-off like this calls attention to the stock market bubble. It is a bubble created by the Fed and its manipulation of rates. It is a bubble inflated by unsustainable practices such as corporations borrowing money to buy back their own stock.
Borrowing at artificially low interest rates to buy back stock is little different than the home buying frenzy a decade ago. It, too, was driven by interest rate manipulation. Just as homebuyers found themselves in deep trouble as their adjustable rates began to climb, corporations will have to face the pain of higher rates on the money they borrowed to play the stock market.
It reminds me of Warren Buffett’s remark that when the tide goes out, you see who has been swimming naked.
Well, the tide is going out.
Fed manipulation of the real market conditions of money and credit ALWAYS creates malinvestment.
A volatile stock market can be a wakeup call. It should create urgency to move to the safety of gold.
As you can tell by gold’s strong response to stock market weakness, some have already gotten the message.
We hope you have, too.
As always, I encourage you to speak with your broker at RME for more market updates. Expert brokers are available Monday-Friday from 9 AM- 5 PM or by special appointment after hours. Call today at 602-955-6500 or toll-free at 877-354-4040.
