Posts Tagged ‘Precious Metals’

The FOMC Meeting And Your Self Directed IRA

Wednesday, August 1st, 2012

The FOMC – Federal Open Market Committee just completed their most recent meeting. They decided to leave interest rates at historic lows. In prior missives we discussed the downsides and negative economic impacts of these low rate.

Without re-visiting prior articles, the downsides of such a continued policy is that retirees cannot move funds into safe havens an earn enough risk free interest to properly support their retirement incomes. Also, extremely low rates actually become disincentive for investing. This is primarily due to the fact that people with money and projects start doing the analysis of investment projects. They see that the economy is going into a double dip recession and therefore they want to sit on the sidelines to wait out the bad times. However, when they look at interest rates, they just opt to hold funds in cash rather than do anything.

What does this mean for your self directed IRA?

First and foremost, people looking for fixed income yields are not going to find any safe sources. People looking to invest in the market are going to continue to experience the same manipulation and volatility. The Fed will look for reasons to boost the banking system and the economy via printing. This all adds up to degradation of the US dollar, a weakening economy and some level of inflation or even hyperinflation.

These threats mean that you need to be assessing your self directed IRA portfolio and insuring that you have properly allocated it. You need to be looking at your traditional IRA portfolio and consider moving out of paper assets that are easily manipulated by Wall Street or Washington and moving into a self directed IRA.

Disclaimer: The information provided is for educational purposes only and are not a solicitation or offering of an investment, investment advice, or tax advice. You should consult with your tax, legal or financial advisor to determine the suitability of any investments made with a self directed IRA account.

Q2 2012 GDP And Your Self Directed IRA

Monday, July 30th, 2012

The reported, headline, GDP numbers just came in at 1.5% in the second quarter. This is a major revision downward from 2% in the first quarter of 2012. This brings the overall annual growth rate in at 2.2% versus the previous 2.4% in Q1 2012.

Overall these numbers are not statistically significant. In fact, it could be argued that we’ve actually seen negative GDP given the governments margin of error. What is significant and important about these recent numbers is that the supposed recovery which occurred in Q3 2011 actually has now shifted to Q4 2011 — a full quarter later. The significance of this is that the figures being reported are not reliable, accurate and maybe even not credible. If this line of logic hold true, then the fact that we are seeing a continued degradation and and downward pattern in key economic indicators means that the economy is likely already in recession.

What does this mean for my self directed IRA

We will continue to maintain that a self directed IRA, invested in non-traditional assets such as real estate, private placements, precious metals, etc. is a critical part of everyone’s retirement portfolio. The overall economic picture is not improving as evidenced by the recent GDP numbers. We are still advocating that investors allocate portions of their self directed IRA portfolio to precious metals. We also encourage investors to look at other non-traditional investments in real estate, small businesses and other non-publicly traded assets.

The Storm is Coming – Check Your Self-Directed IRA

Friday, July 27th, 2012

We wanted to show you a couple of simple graphs to tell a simple, but it’s a scary story. The first chart shows the federal debt since 1965. We would like to point out a simple inflection point of 1971. It was in 1971 that we moved off of the gold standard (thanks a lot, President Nixon). Removal of a gold standard removed all constraints on government spending. Notice how in a few years passed 1971 that the debt starts increasing.

Chart 1 – Federal Debt Of The US Government

Graph of Federal Government Debt: Total Public Debt

The next chart we want to draw your attention to is the value of the US Dollar. Notice the interesting reverse or negative correlation between chart 1 and chart 2. As you can see as the government continues to tax and spend, our purchasing power has continued to degrade. You should take special note of the significant decline that starts – guess when? 1971!!

Chart 2 – Value of the US Dollar

Us Dollar Value In Gold

What does this mean for self-directed IRAs?

The first lesson is that unrestrained government spending is hurting all Americans. We know that the government and the governments of the world are fully committed to printing their way out of any problem. In fact, we saw more clear signaling of that commitment this week from the ECB and our own Fed.

These charts paint a picture of failed central planning. Central planning is the current economic system that we now live under and have so for some time now. Central planning is not going away. Because of this, we know that there will be a point at which there is too much money in circulation, planning cannot restore the basic free market mechanisms that are needed to create a healthy economy. This will ultimately lead to that storm arriving in the form of some significant economic events internationally and here at home.

It’s our continued belief that you should be out of paper based assets as much as possible. You need to continue to look for and hold tangible, productive valued assets. Such assets are things like real estate, precious metals, your own business, patents, etc.

You need to be looking at your self-directed IRA and position it to hold these tangible assets.

Disclaimer: The information provided is for educational purposes only and are not a solicitation or offering of an investment, investment advice, or tax advice. You should consult with your tax, legal or financial advisor to determine the suitability of any investments made with a self-directed IRA account.

June Housing Numbers (Corrected) and Your Self Directed IRA

Friday, July 27th, 2012

Monthly changes in June home sales showed a decline of 8.4% for new homes, a decline of 5.4% for existing homes. Though large on a monthly basis, in the big scheme of things there numbers were not meaningful.  Both numbers continue to show a developed and established pattern of low-level stagnation.

Weakness in homes sales has been blamed on too-low inventories of houses for sale.  The low inventories are part of the issue, but there is something a self-fulfilling cycle at play, due to low prices likely keeping some houses off the market.  Also throttling down activity for both purchasers and sellers is the continued consumer liquidity and credit issues.

Inventories of homes for sale are relatively low at 6.6 months supply in June for existing home sales was up by 3.1% from May and was at its highest since December 2011.  For new home sales, June inventories reflected a 4.9 months supply, up by 8.9% from May, and at the same levels seen in March and April, which last were exceeded in January 2012.

How does this effect your self directed IRA?

Its clear that home sales are not recovering and really have not improved significantly for the last 5 years. Home sales are a key driver of the economy in the form of consumer spending. Until home sales become less volatile with a significant pattern of improvement, the economy is not going to recover. This spells opportunity for holding investment property in your self directed IRA.

This also presents the case where the Fed and the government will continue to interfere in the inner workings of the economy which ultimately leads to printing. This will drive inflation and more instability. This means that you should be considering having a proper allocation of precious metals in your self directed IRA.

Disclaimer: The information provided is for educational purposes only and are not a solicitation or offering of an investment, investment advice, or tax advice. You should consult with your tax, legal or financial advisor to determine the suitability of any investments made with a self directed IRA account.

Macroeconomic Gold Outlook And Your Self Directed IRA

Thursday, July 19th, 2012

In the recent World Gold Council report, they highlighted some important, forward looking, economic issues that will be in place for the second half of 2012:

  • Deflationary trends will continue raising the increased likelihood for more fiscal stimulus. This will debase the currency and increase the risks of inflation in the long run.
  • Despite some of the agreements and progress in Europe, there will continue to be an environment of uncertainty and market volatility.
  • Movement into the US Dollar will likely weaken and may even reverse.
  • The US is facing a debt ceiling debate in Q3
  • The US is facing a much contested, nasty presidential re-election in Q4
  • The US is facing a big debate over the fiscal cliff and no one in Washington has made any progress to reverse the pending massive tax increases.

What does this mean for your self directed IRA

These themes and issues are very significant and critical. They all paint a picture of uncertainty and instability. These are ideal conditions for holding gold, silver, and precious metals in your self directed IRA. So, its time to take action and check your self directed IRA portfolio and insure that your self directed IRA is properly balanced.

Disclaimer:
The information provided is for educational purposes only and are not a solicitation or offering of an investment, investment advice, or tax advice. You should consult with your tax, legal or financial advisor to determine the suitability of any investments made with a self directed IRA account.