Bill’s Blog November 18, 2020
By far this has been the one of the most challenging years in many peoples lives on a global scale and of our lifetimes. I regularly talk with business owners in the Fraser Valley. Some businesses are booming and others are deeply struggling depending on what sector they are in.
My heart goes out to those who have lost loved ones, businesses, jobs, those struggling with mental health issues, relationship problems and economic set backs. Remember you are not alone and I encourage you to reach out and get help if you need support. We all need added support from time to time in our lives.
As we watch the calendar of 2020 soon come to a close, there are many important observations we need to look at and several real risks to consider to your financial well-being.
- We are possibly witnessing the most corrupt US election in history with possible massive fraud and tampering of votes. This is a very serious issue as it undermines democracy itself, especially this being the most powerful Nation on the planet and with the largest economy. If this is found to be true, then it is a serious blow to the USA international reputation. If this was a banana republic, totalitarian government or communist country you would expect this…this is standard practice. My only hope is, the full truth will come out and that there will be real justice to those involved in this scandal. Also, that the proper President will be appointed to lead the USA. The outcome of the election will not be fully known until the early New Year. This uncertainty will continue to create volatility in the stock markets…both big ups and downs!
- The Federal Reserve and Central Banks globally are bent to creating inflation, massive money printing, monetizing select debts/bonds and keeping interest rates the lowest level in 5000 years. This has many serious and for seen consequences.
- Extreme over-valuations of the stock and bond markets is the first. The US stock market is currently at the 2nd highest market value in US history…just a little lower than the Dotcom Bubble…and you know how that ended! Dow has reached 30,000 and the S&P hit all time highs. The problem is the majority of the US companies do not have the earning or profits to justify these stock prices. Buyer BEWARE as a possible large correction or even crash may occur again. The sobering thing is, the markets can continue to rise with the massive money printing that will continue in 2021… even with economic fundamentals screaming the opposite.
- With actual real negative interest rates adjusted to inflation, we are seeing an epic real-estate purchasing binge with double digit growth in many markets. I promise you this in NOT sustainable. When we get interest rate hikes in the future, this will create a massive bank crisis and countless numbers of Canadians will lose their homes…believe me I do not want to see this happen. But history, does have a way of repeating.
- We are also seeing governments continue with huge deficit spending. In our own country there seems to be little or no accountability with the record debt expansion. Working people and our children will be burdened with large tax increases in the future. Canada has surpassed the 100% debt to GDP ratio (130%) which can trigger downgrades in our credit rating. This will create higher interest payments on our national debt. Provinces are doing the same thing!
- I am deeply concerned about the economic fall out from the Covid-19 issue, especially when governments around the world are bent on locking down economies. Millions of businesses will be permanently closed and 10’s of millions will lose their jobs. About 300 million people have lost jobs since March…this is staggering and tragic. In 2021, we will most likely see the consequences of all this lost economic activity.
- Is it just me… it doesn’t make sense when there is almost a 99% recover rate after people get the virus to continue the lockdowns. There is a small percentage of people that seem to have prolonged issues after recovering from the initial infection. We are all aware that Covid-19 can be very serious for people with compromised health, and the elderly. We all need to do our part to protect the vulnerable, and make special efforts to support our friends, colleagues and family who are in this situation.
- Again I state, the economic crisis will far out weigh the health risks from this virus. It also shocks me that health officials are not recommending proven supplements like Vitamin D, C, Zinc, and a few others that are very powerful against all viruses and support our immune systems. I am not a health professional, nor am I making a recommendation. However, I have personally taken all of the above vitamins/minerals and several others for decades at optimum levels and I seldom get sick. If I do catch something, thankfully I have recovered very quickly. You may want to look into this if you haven’t already.
- I have tried to state many times we are NOT in normal times and I suspect 2021 will continue to very challenging to all of us. It is very important you re-evaluate your current financial situation and make necessary adjustments if needed. It is wise to seek out professional guidance if you are uncertain what to do. So much of the markets are severely distorted with all the rising global debts and suppressed interest rates. It is very important you minimize your personal financial risks.
- On a positive note, there are several assets that have and will do very well in this type of market. I have encouraged and consulted with many people to learn about Crypto/Blockchain. After doing research for themselves, most have taken a small portion of capital and a position in a select basket of cryptocurrencies. Bitcoin just surpassed $24,000CA this week…over a 100% return this year…not bad. Gold and silver are in a consolidation phase right now and both have risen over 20% this year. Another asset class to seriously consider for diversifying your wealth.
- Lastly, I want to thank those who joined me with for my first webinar last Saturday. I am planning my next one in a couple weeks, “Why Gold & Silver in 2021” …you won’t want to miss it. I will soon announce a date and time.
Best regards,
Bill