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The economy’s “going to pivot from low growth into recession and from artificial stability into instability…”
So says Allianz’ chief economic adviser, Mohamed El-Erian. Allianz is the world’s largest insurance and financial services company (with about $140 billion in annual revenue).
In a new Yahoo Finance interview, El-Erian gives the world under two years before a major economic shift occurs.
He says the whole globe’s become hooked on central bank monetary interventions as the key driver of nominal growth. It’s 100% unsustainable… as the long U.S. bull market in stocks enters its seventh year.
But that didn’t stop the Yahoo interviewer from downplaying El-Erian’s warnings. He quipped, “But isn’t there always uncertainty, Mohamed?”
El-Erian’s response was a tour-de-force on the absurdity of global economic policy:
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I don’t remember a world in which a third of government debt was trading at negative nominal interest rates. I don’t remember a world in which anti-establishment parties were gaining such traction on both sides of the Atlantic. I don’t remember a world in which we relied on one partisan instrument, which is central banks. |
Eight years of extraordinary monetary interventions have eroded markets’ natural pricing mechanisms. El-Erian reminds us this interventionism is reaching its limits. Change is coming—soon.
Bottom line: Markets will experience wrenching volatility as the central banks’ artificial stimulus measures stall out. Ensure your risk management is laser sharp right now. And make sure you own gold as “wealth insurance” if you don’t already.
Reeves’ Note: To round out your defensive plan, Tom’s crafted his ultimate market “survival guide.” It’s a 360-degree “financial fortress” of safety that spans multiple asset classes. It includes a safe way to buy gold… and several “quick-hit” profit opportunities as the markets roll over. Learn the details right here.
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Rickards: “Don’t Buy A Single Ounce Of Gold…”
**This is an URGENT warning from Jim Rickards.** If you’ve seen the writing on the wall, like me, you know that gold could soon hit $10,000 per ounce. However, today I’m urging you NOT to buy a single ounce of gold till you read what I have to say. |
