{"id":1048,"date":"2009-03-20T15:30:14","date_gmt":"2009-03-20T20:30:14","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=1048"},"modified":"2009-03-20T15:30:14","modified_gmt":"2009-03-20T20:30:14","slug":"the-state-of-the-economy-us-dollar-gold","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/03\/20\/the-state-of-the-economy-us-dollar-gold\/","title":{"rendered":"The State of the Economy, U.S. Dollar & Gold"},"content":{"rendered":"

By Sean Hyman<\/span><\/p>\n

Play Video<\/strong><\/a><\/span><\/span><\/p>\n

As you all know, I recently published an article that talked about the state of the U.S. economy and that it may be in the \u201cbeginning\u2019 stage of an economic recovery.<\/p>\n

I talked about the valuable indicator of copper and why it leads the way and tells you that the economy will recover long before the \u201cnightly news\u201d or even analysts tell you. Read more about it here<\/a><\/span><\/span>.<\/p>\n

Today, another site that I highly regard, also talked about the importance of copper in leading the way to an economic recovery. Daily Wealth.com<\/a><\/span><\/span> gave this checklist for an economic recovery.<\/p>\n

The<\/span><\/span><\/span><\/strong> <\/span><\/span><\/span><\/strong>True Wealth<\/span><\/span><\/span><\/em><\/strong> <\/span><\/span><\/span><\/strong>Script for Economic Recovery<\/span><\/span><\/span><\/strong><\/p>\n

\u2022 Investment-grade corporate bonds rally first,<\/span><\/span><\/span>
\n\u2022 then stocks rally. Around the same time,<\/span><\/span><\/span>
\n\u2022 the price of copper recovers.<\/strong><\/span><\/span><\/span>
\n\u2022 The CILI (aka “Silly”) Recession End-icator goes up for three months. This is a ratio of “coincident economic indicators” to “lagging economic indicators.” Dennis Gartman, one of my favorite newsletter writers, pointed out this indicator has called the end of recessions with remarkable accuracy for 40 years.<\/span><\/span><\/span> <\/span><\/span><\/span>
\n\u2022 The recession ends.<\/span><\/span><\/span>
\n\u2022 Consumer confidence indexes rise.<\/span><\/span><\/span>
\n\u2022 Housing begins its recovery.<\/span><\/span><\/span><\/p>\n

\n

So with all of that said, what does that mean for Main Street?<\/strong><\/p>\n

It means that as the economy recovers, inflation will grow. This means that your purchasing power is about to erode some more. This is why it\u2019s imperative to save more<\/a><\/span><\/span> than you typically do.<\/p>\n

It also means that it\u2019s time to invest in stocks for the long haul. Buy your ETFs and mutual funds with cash, no margin. But before you do this, make sure you have adequate savings set aside first. If that step is not done first, then if an emergency comes up, you are forced to sell the investments usually in a time when it\u2019s not prudent to do so.<\/p>\n

Make no mistake about it. Inflation is coming. Gold<\/a><\/span><\/span> is already pointing the way. Just as the Fed announced that it was buying up $300 billion of long term U.S. Treasuries, it shows that they are trying to push yields down artificially low and make money \u201ccheap\u201d in order to spur economic growth. This inflationary action boosted gold almost immediately from $880s up to the $920s and shortly thereafter it hit $950 an ounce.<\/p>\n

Not only is gold pointing to inflation but so is copper, oil, the CRB index (which is a basket of commodities). Remember, that commodities are things that you use every day on Main Street, whether you have one stock investment or not. Its things like wheat, sugar, gold, copper, oil, gasoline, etc. This is why the rise of commodities should matter to you on Main Street no matter whether you invest directly in a commodity contract or commodity ETF ever.<\/p>\n

Another sign that the purchasing power of Main Street is about to erode is that the \u201cdecline of the dollar\u201d. When the Fed made that statement about the purchase of treasuries, it\u2019s obvious that they will be printing more money \u201clike a mad man\u201d.<\/p>\n

This oversupply of dollars will only dilute the value of your dollar and boost the cost of goods that you buy and use in every day life.<\/p>\n

\n

So, most importantly, what can you do about all of this to protect yourself?<\/strong><\/p>\n

Beef \tup your savings like never before.<\/strong><\/a><\/span><\/span> With the \temployment situation still \u201ctouchy\u201d and inflation \tcoming, it\u2019s only prudent to take this step NOW.<\/p>\n

Invest \tin stocks through ETFs or Mutual Funds for the long term.<\/strong><\/a><\/span><\/span> If your dollar is eroding and the Fed wants stocks to rise again, \tthen you\u2019d better align yourself with their wishes because \tthey will eventually win this battle.<\/p>\n

Buy \tCommodity based ETFs through your stock brokerage account.<\/strong><\/a><\/span><\/span> One way to fight inflation and to hold your purchasing power is by \tbuying the things that are going to go up on you. There are ETFs on \tgold, silver, oil, natural gas, etc. All of these things will rise \tin value as inflation returns and as the dollar falls (which as \tbegin already).<\/p>\n

Buy \tforeign currencies.<\/strong><\/a><\/span><\/span> Now for Americans, this may \tsound \u201cforeign\u201d and even difficult since we aren\u2019t \tas familiar with the exchange of currencies as much of the rest of \tthe world is. However, this is simple. You never have to \u201chold\u201d \tor \u201cphysically exchange\u201d any currency. You can open a \tforex \t(currency investing) account<\/a><\/span><\/span> and buy foreign \tcurrencies against the U.S. dollar. As the dollar falls against \tthese major currencies like the euro, Australian dollar, New Zealand \tdollar, etc., your account will gain and help offset the erosion of \tthe purchasing power of the money in your wallet. To learn more \tabout currency investing, click \there.<\/a><\/span><\/span><\/p>\n

Get \tEducated about these BEFORE you invest in them.<\/strong><\/a><\/span><\/span> Believe it or not, you can have a very good understanding of these \tareas in about a week\u2019s time through our online courses which \tonly cost $20-$25 and you can take them in your spare time. In this \tday and age we live in, I think you can see that Main Street has to \t\u201ctake charge\u201d of their own financial future and not just \tentrust it to Wall Street. This is an inexpensive and convenient way \tthat you can do this<\/strong><\/a><\/span><\/span><\/p>\n

Help \tsomeone else out.<\/strong><\/a><\/span><\/span> It\u2019s always good for \teveryone to \u201cgive back\u201d. You can do this by emailing \tthis article to a friend, relative or co-worker, by buying them an \tonline course so that they can also directly ask us their own \tfinancial questions which will allow us to directly help them. The \tpeople that are the most blessed generally are the ones that think \tof others and not just about themselves. This is a practice that \tI\u2019ve held for over 30 years now and it\u2019s served me well.<\/p>\n

\n

I\u2019d encourage you to print out these steps and post them somewhere where you can review them from time to time.<\/strong> This is the roadmap to help you in the coming days and years.<\/p>\n

Thanks for reading my articles. I value my readers and the insights that I\u2019m able to pass along to you all.<\/p>\n

Feel free to post these articles on your <\/strong>Facebook<\/strong><\/a><\/span><\/span>, <\/strong>MySpace<\/strong><\/a><\/span><\/span>, <\/strong>Digg<\/strong><\/a><\/span><\/span> them, <\/strong>Stumble upon<\/strong><\/a><\/span><\/span> them, <\/strong>Twitter<\/strong><\/a><\/span><\/span> them, email them, send them <\/strong>You Tube links<\/strong><\/a><\/span><\/span> and IM the links to friends and family, etc. Help us to spread the word and therefore help others. As you can see by watching the nightly news, people are in dire need out there and you can bring them a solution.<\/strong><\/p>\n

\n

Sean Hyman<\/p>\n

Head Course Instructor<\/p>\n

\n

Follow us at the following links:<\/strong><\/p>\n

http:\/\/www.mywealth.com<\/a><\/span><\/span><\/p>\n

You Tube<\/a><\/span><\/span><\/p>\n

Facebook<\/a><\/span><\/span><\/p>\n

MySpace<\/a><\/span><\/span><\/p>\n

Twitter<\/a><\/span><\/span><\/p>\n

Seeking Alpha<\/a><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

By Sean Hyman – As you all know, I recently published an article that talked about the state of the U.S. economy and that it may be in the \u201cbeginning\u2019 stage of an economic recovery…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-1048","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/1048","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=1048"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/1048\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=1048"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=1048"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=1048"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}