Source: Tom Beck for The Gold Report 03/24/2017
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Since March 15, when the Federal Reserve raised rates for the second time since Trump was elected, gold has rallied and stock outflows have been extremely high, says Tom Beck, senior editor of Portfolio Wealth Global, and he discusses how Ray Dalio is turning to precious metals and industrial commodities right now.
Ray Dalio, founder of Bridgewater Associates, the largest hedge fund ever, is officially bearish on stocks, and he has now changed his tune towards a severe depression outlook in the major indices.
At Portfolio Wealth Global, we have been studying Ray Dalio’s investment returns going back all the way to the 1970s, and the one thing he always gets right is economic slowdown.
In fact, his fund performs better when the market is correcting.
Dalio is famous for saying that Buffett is making a huge mistake by not owning gold, and he remarked that investors “who don’t own gold don’t know history or economics.”
At the moment, the “Trump honeymoon” is losing serious ground, with the S&P 500 having its worst one-day performance in 38 weeks a couple of days ago.
What’s causing this is the fact that investors were betting on frequent Fed rate hikes, thus a higher U.S. dollar, but Fed Chairwoman Janet Yellen just flashed a reluctant outlook for additional hikes. The Fed is once again rigging rates!
The market was forecasting much higher rates, and now, seeing the debt ceiling on the agenda and the polarization in D.C. over the healthcare issue and the insistent calls for impeachment, investors are beginning to set their expectations back to reality.
Trump has to fight for every item on his agenda, and progress will be slow.
Meanwhile, …read more