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If the Federal Reserve’s policy of printing money is supporting the markets, why should investors be overly concerned?

Robert Wiedemer
July 29, 2014
Video Transcript

The more we print this money... in a sense the more the stock market goes up... the more it seems's actually the more you're at risk. It's that simple-- as you print more as you borrow more... your entire economy, your stock markets are at increasingly greater risk, and hence the need for greater insurance, greater awareness of alternatives, and alternative investments that do well even when things go wrong.

Let me tell you, I'm certainly not the only person who’s aware of this problem. I talk about the fact that we have a "fake recovery". Well, we also have "fake markets" now and I think that's one reason you're seeing a lot of people now talking about the need for correction. So many people have said, "Wow, we've gone two years without any kind of significant correction in the stock market. That's getting increasingly unprecedented" and they almost want a correction because they know that deep in their hearts that there's something wrong here. That the market almost looks fake. I mean, if it never corrects, is that a real market? I mean, real markets correct, they go up, they go down, they correct, they respond to geopolitical issues, they respond to earnings, they respond to bad economic news. This market doesn't do anything like that it just keeps going up. I think that in itself is bothering a lot of people and when it does change and when that mentality changes when that underlying fear comes out... something will break it and make it come out... that's when things are going to be really bad for your traditional investments and they're going to be really good for your non-traditional investments that tend to do very well when stocks and bonds go down.

Gold is an obvious example. One of those investments that tends to do very, very well, maybe not always initially but in general tends to do very well when people are fearful of those traditional stock and bond investments. Especially, when there's fear all around. Remember when there's so much faith in the Fed right now, if that faith is shaken, there's nothing else underneath it. When that goes, that's when a lot of people are going to lose faith in that traditional financial investment and get a lot of quick faith in something like gold.

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