Why Are Economists Predicting a Market Crash?

With the Silicon Valley Bank crashing, and others like it predicted to follow, some economists are predicting a market crash in the near future. But what other factors are leading to this crash? And how can you protect your assets? There are several things that may be the root cause of the impending crash, and an easy way to protect yourself is to start investing in gold, silver, and bitcoin as soon as you can.

Factors Leading to the Crash

Why are economists predicting a market crash?

Banks Crashes

In March, Silicon Valley Bank (SVB) and Signature Bank crashed causing the second and third-largest bank failures in U.S. history. This not only led to the loss of thousands of jobs, but companies with similar banks had to scramble to secure their funds in fear that their bank would also fail. The failure of these banks is leading to a large disruption in the economy since so many businesses relied on SVB for essential financial services such as lending, cash management, and investments.

Inflation

With the price of nearly everything in the U.S. on the rise, we will begin to see many negative consequences very soon if inflation isn’t controlled. According to USNews.com, “While year-over-year inflation did slide in October, if inflation rebounds or if the Federal Reserve is forced to continue to aggressively raise interest rates to keep it in check, that could be a negative scenario for stock prices.” Although the Federal Reserve is “strongly committed” to reducing inflation to 2%, we may see a crash soon if they are not able to achieve this goal.

Interest Rates

A rise in interest rates means that companies have to borrow more money to invest in their growth. Many economists are predicting that the rates are going to continue to rise during 2023 if inflation doesn’t slow down soon. This same problem is occurring in the housing market as well with interest rates on housing also expected to continue to rise.

Geopolitical Events

We are still seeing the effects of Russia’s invasion of Ukraine. This event has caused stress on economies all around the world and caused a massive wild card for investors. We’re also seeing supply chains at risk in China and Taiwan as tensions between the two countries remain high. However, the political events on our home turf are also causing strife in the economy. With the left and right more divided than ever, members of the House and Senate continue to cause problems for American citizens.

Supply Chain Disruptions

Because of events in Ukraine, Russia, and China, we are seeing a major disruption of the U.S. supply chain in these countries. This is part of the problem with our rising inflation rates as well. With nearly everything in shortage, the supply and demand of the economy is deeply disrupted and leading to a potential crash.

How to Protect Yourself in the Event of a Crash

 

Invest in Gold

MarketWatch.com says that “Gold futures settled Monday at their highest in about 11 months, after briefly topping the $2,000-an-ounce mark for the first time in over year, as the takeover of Credit Suisse by UBS stoked fears about more banking-sector fallout.” Despite the concerns over the economy, gold still remains to be a stable investment.

 

Invest in Silver

Like gold, investing in silver also works as a great hedge against inflation. Although it isn’t as valuable as gold, it’s still an excellent investment in times of economic uncertainty. Since silver is one of the most common metals used in jewelry, you may even already have items at home that have some value to them.

Invest in Bitcoin

Bitcoin is a super secure investment with low transaction fees and tons of potential. Bitcoin not only has unlimited growth potential, but it also carries long-term value. However, that’s not saying that Bitcoin doesn’t also come with some risks. If you are new to Bitcoin, make sure to do lots of research before you invest.

 

Ready to Start Investing In Silver or Gold? We Buy and Sell!

If you’re ready to start securing your assets, come to our location in Upland, California and we can help you start your gold or silver investing journey. Contact us today if you have questions.

(Always talk to your CPA or Financial Advisor before making investments.)

 

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