We're living in extreme times. Oil prices plunging below zero (what was once thought to be impossible), over 22 million Americans unemployed, thousands of businesses facing bankruptcy, and plenty more negative data to come as COVID-19's fallout continues to unfold.
By the looks of things, it looks like the beginnings of a crumbling economy.
Yet last week, the market rallied, with some investors heralding a new bull market. If anything, such optimism warns us that most investors have no clue as to what's about to hit.
Perhaps they cite monetary stimulus as the answer to a world gone awry.
But there's something they don't quite get.
The medicine that's keeping markets somewhat afloat is the very poison that's going to crush the dollar's buying power...and then the market itself, the overall economy, and all of the investors foolish enough to drink the bullish kool-aid.
What good is a rising portfolio--assuming that it continues to rise--if your purchasing power continues to sink?
The CARES Act: A Rare Opportunity
The government did something right (though not in the way they conceived it).
It's called the Coronavirus Aid, Relief, and Economic Security Act--aka, the CARES Act.
This law allows almost anyone under the age of 59 ½ to withdraw up to $100,000 from their IRA or 401(k) without having to pay a 10% penalty.
You can do this as long as it's a "coronavirus related distribution" (CRD), meaning you either have been diagnosed with COVID-19 or you are facing financial hardships due to the pandemic.
If you were laid off, furloughed, given reduced hours, or if you can't work due to child care responsibilities, you can take a coronavirus related distribution from your retirement savings.
In addition to this, you're eligible to delay income tax on your distributions over three years. See FAQ's from one of our favorite regulated trust custodians Strata Trust Company here. CARES ACT Key Points
The good news is that if you recontribute your funds, you will be allowed to go over your annual contribution limits--the IRS will see it as a "rollover."
And this is where the unprecedented opportunity comes in.
If used wisely, the CARES Act can provide you with an opportunity to hedge your wealth against the negative effects of the monetary policies enacted to save it.
Converting Depreciating Cash Into Sound Money
The investing public is betting on the Federal Reserve's ability to "reinflate" the markets.
As made evident in the most recent rally, the Fed played a hand in bolstering optimism among mainstream investors.
It's as if sunshine somehow magically appeared on the economic horizon.
But there's a flip side to this coin, and it should concern everyone.
Zerohedge summed it up beautifully in a comment to Fed Chief Powell:
“So congratulations, Jerome Powell: You have succeeded in the impossible — with the U.S. economy entering a depression, with U.S. GDP set to plunge as much as 50%, with U.S. unemployment already 15% and set to hit 20% or more, the Fed chair has single-handedly disconnected stocks from all fundamental anchors and made the S&P the most overvalued in history as it's forward P/E hits the highest number ever recorded.”
When the market disconnects from the fundamental reality that grounds it, then we can say with near certainty that the economy is in serious trouble.
And that's what we're facing today--not a paper tiger, but a paper rally that's likely to get shredded and burned.
If you have to withdraw from your retirement via CARE act distributions to survive financially on a day-to-day basis, then you have to take care of your basic needs first.
But if you do have flexibility with your distributions, then use it immediately to buy precious metals to protect your wealth from the coming erosion in purchasing power.
This is an unprecedented (and perhaps the last) opportunity to save your money from the economic destruction that's about to take place.
If you have any questions or need professional guidance, contact us at GSI exchange. GSI Exchange has industry trained professionals to assist you during all of this uncertainty. Together with just one phone call, we can find out if you are eligible, how to access your funds, and how precious metals can protect your wealth.
Don't bet on sunshine when the economic data before us clearly shows that a storm like no other is brewing on the horizon.
About the Author: An industry veteran, Mr. David Honor, has an innate ability to work with IRA custodians and back-office personnel at the highest levels of money-management. His passion for solving critical challenges present in the unlocking customer funds from the shackles of Annuities, Hedge-Funds, Money-Market Accounts, and 401(k) 's has made him the most sought after IRA specialist in the Precious Metals business. To contact David for a free consultation, please call Danielle Anderson at 800-474-9159 ext. 239.