Many messages from political and financial leaders this week were warning Americans about possible economic crises that lie ahead.
Yet, news broke Thursday morning that Democrats and Republicans reached a deal to avert the U.S. defaulting on its debt.
ABC News reported that lawmakers agreed to raise the debt ceiling by $480 billion through early December.
That’s the amount the Treasury Department said it would need to get to Dec. 3.
The vote will now move to the House before heading to President Biden’s desk.
House Speaker Nancy Pelosi hinted in a letter that the House may have to return early from recess to vote on the legislation. The House was expected to return Oct. 19 — one day after the potential default.
With the Oct. 18 deadline approaching the lack of movement was starting to worry some people. One of which was Treasury Secretary Janet Yellen.
On Tuesday, she told Squawk Box that she believes our economy would fall into a recession if Democrats and Republicans failed to address the borrowing limit before the default.
Yellen said, “…It would be catastrophic to not pay the government’s bills, for us to be in a position where we lacked the resources to pay the government’s bills.”
In market news, personal finance guru Robert Kiyosaki believes the whole market is going to have a serious crash in October. He told Kitco News that, “It’s going to be the biggest crash in world history.”
He said, “We have never had this much debt pumped up. Debt is the biggest problem of all…the debt to GDP ratio is out of sync. So, when it comes down, and it’s going to bring everything down with it, that’s when I’m going to be buying more gold, silver, and Bitcoin.”
However, a recent CNN article encourages investors to not be too worried about a crash. While October has been a spooky month for Wall Street in years prior and many expect tricks and no treats to happen, data experts say the month has historically been average.
In fact, the Chief Market Strategist at LPL Financial seems to challenge Kiyosaki’s warning, claiming that this October could be better than average because there are no election results coming in November.
While experts debate the future of the market, others are saying it will soon be gold’s time to shine.
Analysts say that uncertainty with Fed tapering puts the U.S. dollar in a weaker position which drives more people to the yellow metal.
They say the market will continue to struggle in the near term, but also predict that gold prices will push to $5,500 an ounce in the long term.
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