With the United States currently enjoying the longest-running bull market in its history, there is plenty of cause for celebration and optimism. However, past performance is not a guarantee of future growth, and many are now advocating caution when analyzing the market’s movements going forward. One reason for this prudent approach is the developing economic crisis in Turkey and its effect on the country’s currency, the lira. A prominent voice speaking about this issue is U.S. Money Reserve, a leading distributor of government-issued legal tender that helps families build a better future with physical precious metals. Through the release of a recent video, the company educates buyers on what is quickly becoming a precarious situation. Read on for a look at the crisis and the company behind the advice.
Current Economic Conditions
According to the video, the United States is not only enjoying its longest-running bull market in history, but the economy will also hit 10 straight years of growth by 2019 if current trends continue. This level of growth would set a record for the country and would be a favorable economic indicator. Additionally, GDP has risen steadily over time, and unemployment rates have decreased. By these measures, the current economic conditions seem quite desirable.
However, U.S. Money Reserve highlights a growing concern that an economic crisis in Turkey could bring the current economic prosperity to a screeching halt. This concern focuses on the rampant devaluation of the lira and how this is affecting Turkey’s economy. The country’s political instability has spilled over into financial markets, causing economists to grow increasingly concerned that the Turkish economy is experiencing a full-blown meltdown.
It is tempting to believe that an economic crisis in a distant country would have no effect on the domestic economy of the U.S. But that is not always the case, despite the fact that the lira makes up only about one percent of the currency used in world markets. In the modern global economy, it has become increasingly difficult to separate the individual economies of different countries, and when one country experiences hardship, there is always the danger that economic trouble in one country could spill over into neighboring regions and thus into global financial markets.
As the lira devalues and the Turkish economy dives deeper into turmoil, the country’s ability to repay foreign debts becomes heavily compromised. This concept represents a major problem, since Turkey has been an extremely active borrower in global markets in recent history. France, Italy, and Spain, in particular, hold a large amount of Turkish debt. If Turkey’s ability to repay those countries becomes hindered for an extended period of time, the economies of those countries could suffer as well. Since those three economies represent a sizable portion of the European economy as a whole, a potential downturn for them could have broad implications for the entire continent.
As for the potential for impact on the United States domestic economy, it is too early to say how severe the turmoil abroad will be. What is clear is that the domestic financial market is highly affected by global news and market moves, especially in European economies. Many U.S. corporations have offices in Europe, and Europeans are consumers of a wide range of U.S. goods, so hardship on the continent could have a sizable impact on the bottom line of American companies. This type of profit loss could be the impetus for the reversal of the current bull market into a bear market.
U.S. Money Reserve details this type of reversal in an e-book entitled Why This Bear Market Will Be Different. In it, the company offers information on what to expect from a potential bear market, especially regarding the impact on buyers and the assets they hold for retirement and wealth protection. The document also outlines some guidelines to consider in advance of such a market downturn to stave off some of the most negative effects.
One long-running recommendation of U.S. Money Reserve is that consumers take a look at opportunities to buy coins and precious metals, such as gold. As many economists predict an impending downturn in global economies, whether caused by the lira or some other factor, they also predict the possible devaluation of many holding vehicles, such as stocks. Such a devaluation could cause a massive loss of wealth and negatively impact retirement plans, which center around stocks holding their market value. By contrast, the company highlights the relative stability of gold in past times of economic instability, gold is up more than 375 percent since 2000.
A Rare Company
The information from U.S. Money Reserve is the latest in a long line of company-issued resources that many consumers have come to value as cogent takes on the modern economy. This value is rooted, in part, in the legacy of trust that the company has built through its team of knowledgeable account executives and other company employees. This reliance on top-tier talent is apparent even at the highest levels of the company, as it is the only gold company led by a former director of the U.S. Mint, Philip N. Diehl.
Though we are currently experiencing a period of economic prosperity and sustained market performance, many events taking place in the world warrant caution moving forward. One such event that has many experts concerned is the possibility of the economic turmoil in Turkey spreading to the rest of Europe and ultimately to the world at large. Through the release of its informational video and e-book, U.S. Money Reserve has taken steps to keep consumers up to date on the crisis as it unfolds.
Follow @USMoneyReserve on Twitter to get more updates on the economy.