About ten years after the financial crisis that left the U.S. economy on its knees, stocks have hit a record high. Upon simple analysis, record highs in stocks should herald the best days and give hope for the near future. However, that is not the case according to top analysts. Even with the soaring stocks, some analysts still believe it is too early to celebrate. In a video, U.S Money Reserve took a critical look at this situation when it talked about the current state of the economy and how things could unfold.
The Critical Factors
While some people think that the rise in stocks is a result of a repaired economy, U.S. Money Reserve thinks otherwise. Most countries that are coming from a recession choose a quick fix to get the economy back on track. This is what the federal government did after 2008. We saw large amounts of money being printed and injected into the economy.
The result was access to free money. However, recessions are caused by a lot of problems, not just a lack of funds. What we saw during that time was a lack of proper regulations and unethical behavior among big company accountants. Today, these issues have not been fixed. The federal government ignored everything about them and, therefore, there is no doubt that we could be close to another economic downturn.
The Problem with Federal Reserve Policies
Based on the way it reacted to the last recess, there is no doubt that the Federal Reserve only wants to increase access to free money. This is called a quantitative approach, which may not be a long lasting solution. It is good to provide money for people to start spending again. However, it does not make sense when it becomes the primary solution.
In the video, the speakers say that the government is starting to tighten the interest rates slowly, and the quick money is fading out. This is a reliable way of introducing Americans to the reality, but not what we should be doing.
What Needs to Change?
A lot of changes have to be effected in the policies of the Federal Reserve. It is true that the current systems have jump started the economy, and that is the reason we see stocks rising. However, since we know that it is not a sustainable solution, there needs to be a shift in the way the government does things. Most importantly, proper laws should be formulated that give the Federal Reserve adequate control.
About U.S. Money Reserve
U.S. Money Reserve, the company that released the video discussed here, is responsible for the distribution of precious metals, such as gold, issued by the government. Over the years, the company has focused on giving its customers information that helps them purchase precious metals from a place of knowledge. Everything is based on the understanding that, should there be another recess, customers with their wealth stored in precious metals will not be hit too hard. The fact that these metals have been appreciating since the year 2000 is an indication that if you store your wealth in them, which is a simple process, you have very little chance of losing it.