The New Year is here, and it’s the year which everyone has been waiting for to discover if America will rise up to become great again following the November elections.
The markets already are worried. Wall Street is in turmoil in response to events occurring in China and the Middle East.
This week, famed investor George Soros warned that we are heading for another financial crisis, similar to 2008. Last Sunday, Fed Vice Chairman Stanley Fischer (see photo below) said he expected the Fed to raise rates 3-4 times this year.
Your editor meets with Fed Vice Chairman Stanley Fischer in San Francisco.
Fischer is clearly worried about negative interest rates in Europe, and he said that the Fed would do everything in its power to keep it from happening in the United States. According to Fischer, negative interest rates would hurt money market funds and disrupt the financial system. He also said that with the economy near full employment, the Fed would be willing to fight asset bubbles by raising interest rates.
Speaking of asset bubbles, Harvard economist Martin Feldstein was concerned that the Fed’s zero-interest-rate policy, which lasted for seven years, has created significant new risk and financial instability in the stock and bond markets. Because of low interest rates on traditional investments in certificates of deposit (CDs) and bonds, investors have switched into “highly leveraged, high risk” speculative alternatives in dividend-paying stocks. Witness how many investors had bought high-yielding oil stocks only to see the dividends get cut or eliminated. He thought the stock market was overvalued.
Feldstein also warned that the national debt could get out of hand in the next few years with more retirees going on Social Security and Medicare.
Should you be worried? The Fed’s actions certainly have been artificial in stimulating the economy, but you also should remember that the private sector and major corporations have adjusted to the new environment and are much more prepared to deal with any recession this time around. They have cut costs and generally built strong cash positions. I don’t think we are seeing a repeat of the 2008 financial crisis.
Safe Havens? My Outlook for 2016
Here at Forecasts & Strategies, we believe we have put together a well-diversified portfolio that keeps us relatively safe and ahead of the game by investing in quality, profitable companies in finance, health care, defense, consumer products and energy that have had a rising dividend policy for many years. We made a profit last year, even as most portfolios were down in 2015, including Warren Buffett’s Berkshire Hathaway. Of the 15 Forecasts & Strategies’ positions in stocks and mutual funds, 12 were in the black last year.
Gold is rallying this week as investors are seeking a safe haven other than U.S. Treasuries. I still have not given a buy signal on gold — I’m waiting for inflation to pick up — but I do recommend buying American Eagle Silver Dollars. I showed Stanley Fischer a 1-ounce legal-tender silver dollar at the AEA meeting. Like many other U.S. government officials, he had never seen one before. Those leaders are out of the loop when it comes to precious metals, even though the minting of gold and silver coins is an official policy of the U.S. government.
By the way, I was quoted in the latest issue of Barron’s by Gene Epstein on “New Year’s Economic Resolutions.” He talks about the importance of my new Gross Output (GO) statistic and the neverending “doom and gloom” predictions that have failed to materialize. Check out the Jan. 4 issue.
You Blew It! Government Leaders Fail to Recognize Their Own Gold and Silver Program
Last Sunday, I was at the American Economic Association (AEA) meetings in San Francisco and met with Stanley Fischer, vice chairman of the Federal Reserve. I showed him an American Eagle Silver Dollar, and asked, “Have you ever seen one of these?” At first, he thought I was showing him one of those “BS” (his word) privately minted coins. “No,” I responded, “it’s an officially minted coin of your country!”
“Oh, you mean Israel?” he asked. (Fischer is the former president of the Central Bank of Israel.)
“No,” I said, “the United States!”
And thus it went. Once again, a top U. S. government official failed to recognize a coin from his country’s own program of minting gold and silver. I’ve shown American Eagle Silver Dollars to Larry Summers, former secretary of the Treasury; Alan Greenspan, former Fed chairman; and other government officials. None of them had ever seen these officially minted legal tender coins. Fischer was unaware of that even though 47 million silver dollars and half a million gold coins were minted last year by the U.S. Mint!
American Eagle gold and silver coins have been issued by the U.S. government since 1985, when President Reagan signed the American Liberty Coin Act.
The reason that they (and most Americans) have never seen these beautiful coins is that they are hoarded by private investors, coin dealers and gold bugs in safe deposit boxes.
I’ve been on a one-man campaign to encourage people to circulate these coins and give them away as gifts for anniversaries, birthdays, graduations, employee rewards and tips. The American Eagle Silver Dollar is the official symbol of liberty and sound money at our big FreedomFest show, www.freedomfest.com, in July.
Gold bugs wonder when we are going to return to the gold and silver standard. We already have one with the American Eagle coins. All we need to do is start circulating them.
Special Announcement: Subscribers to the Skousen CAFE should be happy to know that for the first time in two years, I am hosting the Global Financial Summit, a special private investment seminar, in The Bahamas. The focus will be on “High Income & Fast Money Investing” — combining my two most successful trading services!
My “All Star High Income & Fast Money” experts for this exclusive private meeting will include Alex Green, investment director of the Oxford Club, and editor of three trading services (Momentum Alert, Insider Trader and True Value Alert). Alex is rated the #5 best investor according to Hulbert Financial Digest. I’ve also confirmed Martin Truax, vice president at Raymond James, whose “income & growth” portfolio has more than tripled during the past 10 years. He and his partner Ron Miller also have developed a highly successful trading system using “red” and “green” signals to determine when to get in and out of markets (they flashed “sell” in May and now are flashing “buy” — good calls!)
Our keynote speaker will be Steve Moore, the chief economist for the Heritage Foundation and the #1 columnist for the Wall Street Journal, who will speak on “Money & Politics 2016: The Inside Story for Private Investors.”
The dates are March 16-19, 2016, at the five-star Atlantis Resort on Paradise Island, Nassau, The Bahamas. This is during high “Spring Break” season, so I urge you to make your flight reservations now.
I soon will be announcing more top experts in portfolio management, tax and estate planning and foreign investing. But I want to encourage you to sign up now and take advantage of our special “early bird” discount — $200 off the retail price for Skousen CAFE subscribers if you register by Dec. 31. The price is only $495 per person/$795 per couple with the discount. And hotel rates at the five-star Atlantis Resort are only $209 per night. We are limiting this private meeting to 200 attendees only. To sign up, call Karen or Jennifer at 855-850-3733 ext 202, email firstname.lastname@example.org or go to gfs.freedomfest.com.
Former Islamic Radical to Address FreedomFest
In response to the growing threat of radical Islamic terrorism both here and abroad, FreedomFest will host Dr. Tawfik Hamid, one-time Islamic extremist from Egypt, former member of Al-Qaeda and author of the bestseller, “Inside Jihad.” A physician, he has appeared on CNN and Fox News and has written op-eds for The Wall Street Journal. He has lectured at the Pentagon and the FBI on his strategic plan to defeat radical Islam. Dr. Hamid will also participate in an important debate, “Can Islam be Reformed?” That debate is not to be missed.
Join these speakers as well as Steve Forbes and John Mackey, co-ambassadors of FreedomFest, and find out why they attend all three days! As Forbes says, “FreedomFest is the best place to find out what’s really going on in the world.”
In case you missed it, I encourage you to read my e-letter column from last week about the why silver coins are in such high demand. I also invite you to comment in the space provided below my Eagle Daily Investor commentary.
Good investing, AEIOU,
Presidential Fellow, Chapman University