MARKETS ARE FAR MORE VOLATILE NOW IN THE WAKE OF BREXIT AND TRUMP'S ELECTION:
What will happen to you when your savings and retirement account are completely worthless? Gold is the only asset that cannot be created. It has to be mined and pulled out of the earth through a natural process. Against all odds, the US has elected Donald Trump as its new president and no one can predict how the next four years will go. As a commander in chief, Trump now has the power to declare a nuclear war and nobody can legally stop him. Britain has left the EU and other European countries are planning to follow their example. No matter where you are located in the western world, uncertainty is in the air like never before.
THE US GOVERNMENT HAS ITS EYE ON RETIREMENT ACCOUNTS:
In 2010 Portugal seized retirement account assets to help plug holes with government deficits and debt. Ireland and France did the same in 2011, as did Poland in 2013. The US government has been watching. Since 2011, Treasury has taken money from government workers' pension funds on four separate occasions to cover deficits in federal spending. Investing billionaire legend Jim Rogers believes that private accounts will be the next ones the government raids.
TOP 5 US BANKS NOW LARGER THAN BEFORE THE CRISIS:
You learned about the five largest banks in the US and their systemic importance as the unfolding financial crisis threatened to collapse them. Legislators and regulators promised they would address this issue once the crisis was contained. Over five years after the crisis ended, the five biggest banks are even bigger and more critical to the system than before the crisis began. The government made the problem worse when it forced some of these so called "too big to fail" banks to absorb the failing ones. Any of these banking behemoths failing now would be absolutely catastrophic.
DANGER FROM DERIVATIVES THREATENS THE BANKS MORE NOW THAN 2007/2008:
The derivatives that crashed the banks back in 2008 did not disappear as regulators promised. Today the derivatives exposure of the five biggest American banks is a whopping 45% greater than before the economic collapse of 2008. The derivative bubble is over $ 273 trillion now versus the $ 187 trillion of 2008.
US INTEREST ARE ALREADY AT ABNORMAL LOWS SO THE FED HAS LITTLE ROOM TO CUT RATES:
Even after raising interest rates once last year, the Federal funds rate is still in the range of ¼ to ½ percent. Consider that before the crisis erupted in August of 2007, the Federal funds interest rates sat at 5.25%! In the next crisis, the Fed will have less than half a percentage point total it can reduce rates to stimulate the economy.
AMERICAN BANKS ARE NOT THE SAFEST PLACE FOR YOUR MONEY
Global Finance magazine puts out a yearly list of the top 50 safest global banks. Only 5 of those are US based. The top spot an American bank commands is only # 39.
THE FED BALANCE SHEET IS STILL EXPANDED FROM THE FINANCIAL CRISIS OF 2008:
The Fed still has nearly $ 1.8 trillion in mortgage backed securities on its balance sheet from the 2008 financial crisis. This is more than double the less than $ 1 trillion it held before the crisis began. When mortgage backed securities go bad again, the Federal Reserve has a lot less maneuverability to absorb bad assets than before.
THE FDIC ADMITS IT LACKS RESERVES TO COVER ANOTHER BANKING CRISIS:
The latest FDIC's annual report shows that they will not have sufficient reserves to adequately insure the nation's banking deposits for minimally another five years. This stunning revelation admits that they can only cover 1.01% of US bank held deposits, or $ 1 out of every $ 100 of your bank account deposits.
LONG TERM UNEMPLOYMENT IS STILL HIGHER THAN BEFORE THE GREAT RECESSION:
Unemployment was 4.4% in early 2007 before the last crisis began. While the unemployment rate has finally reached the 4.7% levels seen as the financial crisis began to ravage the US economy, the long term unemployment remains high and the employment participation rate is significantly lower more than five years after the previous crisis ended. Joblessness could be much higher in the wake of the coming crisis.
AMERICAN BUSINESSES FAILING AT A RECORD PACE:
In the beginning of 2016, the Gallup CEO Jim Clifton announced that American business failures are now greater than new business startups for the first time in over three decades. The dearth of medium and small businesses has huge implications for an economy long driven by free enterprise. Bigger businesses are not immune to the problems either. Even American economic heavy weights like Microsoft (reducing 18,000 jobs) and McDonald's (shutting down 700 stores for the year) are suffering from this dismal trend.
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