As an Accountant it's my fiduciary duty to help hedge you from the economical consequences from our government policies. I have been following the government programs very closely and the type of printing of money that is going on in the last 6 months has been insane. 

To put this into perspective for you. The amount of money spent in the USA/Canada in the last 6 months was more than the entire world war 2 spending where the war lasted 6 years. If this pandemic is going to continue a couple of things could and might happen. 

1) Negative interest rates are expected to come in Jan 2021 which is an economical concept that has never happened before. This means that you will be charged to keep money in the banks. The banks would be more willing to lend which is good. Logically speaking this should entice people to spend more in the economy but I feel it will have another inherent impact which is that it will spike up the price of Gold and Silver. This is possible considering that oil has gone negative $37 a few months ago and that was considered impossible. I don't discount anything to be impossible anymore. Any money that you are not using and is sitting in your bank accounts I would recommend diversifying into Gold/Silver through your banks. 

2) A look back into economical history. Fiat currencies have failed every single time. The Romans did the exact same thing that our governments are doing and the currencies broke down. This is not a question of what if but more of a when this will happen. I expect our entire economical currency structure to go bankrupt within 2 years. This means the gold and silver prices will go sky high. In order to match the inflation that has occurred over the last 50 years the US government (reserve currency) will have 2 options. 

• Increase the prices of all goods and services to match the printing of money that has taken place. This is impossible to do by      design as you can't control the prices of goods and services across so many industries and sub-sectors. 

• Increase the price of gold and silver to match the inflation that has taken place in the last 50 years. I expect Gold prices to hit around the $7k to 8k. I know it sounds crazy but if you asked someone if Gold would hit $1800 in 2002 they would have called you crazy too. 

Side note Silver is 50% below the all time highs so I would go silver heavy here and have Gold exposure. 

3) As many of you know, I'm a very progressive Investor and Accountant. I have been tracking a crypto currency which many of you would know about called "Bitcoin". I consider bitcoin to be an insurance policy for the future. It's a very risky investment and not for the faint of heart but what it does do for you is it gives you insurance in the case scenario that our economies go completely bankrupt and our currencies are destroyed then at least you have a hedge with Bitcoin. I think everyone should have some exposure to bitcoin 

4) Stock securities are great and if you're looking at investing they should be carefully selected. The simple question I need you to ask yourself is the business you are investing in is it pandemic proof? This isn't the first pandemic and it won't be the last. Invest rationally not irrationally. So investing in airlines is probably a bad idea but maybe investing in Costco/Walmart is a solid idea. Remember investing has risks and be careful when treading the waters. The S&P500 has always gone up over the long term horizon and is one of the best index funds I can recommend for newbie investors. The stocks should do well for as long as the government keeps pumping money into the markets and I expect this to go on until 2022. More liquidity in the markets means that the chances of bankruptcies are eliminated to close to zero for as long as Uncle Sam has the money printing machine on which they have confirmed they will have on until at least 2022. 

5) Inflation is a real thing. It's probably the worst tax you are paying without even realizing it. Federal, Provincial and Personal taxes are nothing compared to Inflation. To understand inflation simply think about the price of groceries 20 years ago and compare to the prices of groceries today. The first sign that you will see that inflation is hitting you is when your grocery bill is going up. If this starts to happen please remember to buy gold/silver and buy aggressively.  

6) Housing crisis is coming. I am predicting there will be a big correction in real estate commercial units and some high end residential properties. What the banks did for Mortgage backed securities in 2008 for residential they did the same thing for commercial lending in 2012 to 2020. The reason for this is attributed to human greed and banker bonuses. I know many people who have invested into real estate who are over leveraged and are house rich and cash poor. During recessions cash is king and a lot of these types of investors will be squeezed out of the real estate market as they invested with less than 20% down payments to buy houses for investment purposes. Most have even picked up line of credits to pay for those down payments which I think is the perfect recipe for a financial suicide. However, for those smart investors that will have cash ready and are ready to strike the time will be coming soon for real estate deals. Don't get fooled with the current deals in the market the real deals are coming in October 2020 to September 2021. That would be the time period to buy real estate and if you can buy, buy aggressively. 

7) Generally, it's a good idea to buy Bank stocks or REITs during a recession as they are considered 'safe investments'. Remember this is not 2008 recession this is a Pandemic Recession and the rules of the game have changed. I am confident in the Canadian banking system but I would not keep more than $100,000 in any one bank. I believe RBC is the strongest bank in Canada and TD follows as a close second. The rest have a big question mark. The USA banks are pretty much doomed minus Bank of America, JPMorgan and Goldman Sachs.

I don't want you to think that I have a bearish look on the economy but I am being proactive to hedge against a future down-turn. I think it's imperative that you make some financial moves today to help secure your future. 

It took me a long time to decide to write this post and send to you all as my Accountant reputation depends on it. I take my reputation very seriously. I would rather be wrong and the economical consequences I am predicting do not unfold but if i'm right at least your financial fortunes will not be destroyed. The downside of me being wrong is you will end up with a lot of silver and gold that would have appreciated in value and you can liquidate for cash at any time. So no damage done!

Enjoy your day and just as a reminder: More millionaires are made during recessions when the times are bad and everything seems like it's never ending chaos. During these times you need to stick to your plan and stay the course. I understand the trust you have all put in me and I don't take it lightly and take that responsibility very seriously. Look forward to seeing you all grow and come out stronger from this Pandemic.  

p.s. I have been considering to set up a Hedge Fund to help clients with investing. Still toying with the idea but if you're interested let me know and i'll put you on a waiting list. 

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- The Capex Team