Markets

Greater risks than in 2008 – precious metals and short investments protect you

Dear readers,

“We have eliminated the risk of a collapse of the financial system.” These full-bodied words were spoken by the US central banker and President of the Federal Reserve Bank of Minneapolis, Neel Kashkari, on August 14, 2020. This reassuring message appeals to connoisseurs of the younger generation Financial history brings up troubling memories.

Beware of full-bodied promises

On March 17, 2008, Dick Fuld, who was then Chairman of the Board of Lehman Brothers, spoke almost word for word. Commenting on the recent rescue of the investment bank Bear Stearns: “The rescue eliminates the liquidity problem of the entire financial industry.”

A few months later, the bank he managed, Lehman Brothers, went bankrupt, and the entire financial system could only be saved from collapse through a gigantic rescue operation by central banks and governments. The world economy went into a severe recession and the S&P 500 fell around 60%.

Sharp increase in debt and speculation

Twelve years have passed since then. Years in which debt and speculation in the financial markets have increased dramatically and the fundamental overvaluation of the US stock market has set new records. As a result, the risks to the financial system, the global economy, and your wealth are significantly greater today than they were then. You should therefore be prepared when the current speculative bubble bursts and at least partially – also as a hedge – be involved in the precious metals sector.

Huge top formation of the S&P 500

In keeping with the enormous risks associated with this speculative bubble, a huge top formation has formed in the world’s leading S&P 500 index since the beginning of 2018. This formation results in a very large downside potential. Specifically, I expect at least a third of the share index and emphasize that this is not a worst-case scenario. On the contrary.

S&P 500 monthly chart, 2010 to 2020

The entire course since 2018 can be interpreted as a large top formation, a so-called megaphone formation.

Source: StockCharts.com

The final phase of the world monetary system

Because there is one thing you shouldn’t forget: We are in the final phase of a global monetary system with uncovered funds. As you saw in 2008, things can get dramatic very quickly. That’s why you need to position yourself as a forward-looking investor with gold and select mining stocks for the endgame. After all, no one knows how long governments and central banks will be able to postpone the inevitable fresh start.

As I wrote to you here last week, my analyzes come to the conclusion that the next strong upward wave in the precious metals sector will not be long in coming. The correction that began in early August is slowly coming to an end. My price range indicator has not yet given the next buy signal. But everything speaks for the fact that this will happen in the coming weeks.

These 7 silver stocks are worth checking out

My analyzes show that at the moment, selected silver mines may show even higher profits than gold mines. That is why Roland Leuschel and I have published our special issue “Silver and silver mining stocks”, which appeared at the same time as the October issue of my stock market letter Dedicated to this exciting topic and closely examined 7 silver stocks for you.

Because the next upward wave in the precious metals sector promises to be even stronger than the previous ones, especially for some silver mines. Take this chance. Try out crisis-proof investing now – 30 days free of charge including the current thematic issue “Silver and Silver Mining Shares”, which is now available as a gift, so to speak.

I wish you a nice weekend,

you

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Claus Vogt, Editor-in-Chief of Crisis-Safe Investing

P.S .: By the way, Warren Buffett’s gold mine position is already having the effect I expected: You can find out which US pension fund has invested in gold in Crisis-proof Investing.

P.P.S .: If you want to get through this crisis week after week, please request the free Claus Vogt market comment here today easily with your email at.

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