Stock Strategist Recommends Gold, Silver and Treasurys To Weather Recession

"We're in a recession now."

That is what one investing company CEO is saying. He sees that the Federal Reserve and the Biden Administration are ushering in an economic downturn and recommends investing in precious metals (gold, silver), U.S. Treasury bonds and stock market sectors that focus on people's needs, not wants.

He discusses the current state of the economy in an interview in MarketWatch. 

The article and interview (the first question is provided below) begins with:

The Federal Reserve keeps telling the financial markets to take its tough talk seriously. Yet many investors and even Wall Street professionals are pricing stocks as if a return to the good old days of easy money and low interest rates is just around the corner. They’re convinced that the U.S. central bank is about to end its rate hikes and then pivot — lowering rates and bringing the U.S. economy to a soft landing that ushers in a new bull market for stocks.

Keith McCullough isn’t having it. The CEO of investment service Hedgeye Risk Management expects the Fed’s restrictive actions will squeeze the U.S. economy too tightly. McCullough is keeping client portfolios geared to his view that in its zeal to curb inflation, the Fed ends up driving the economy into a recession — crushing consumer demand and the ability and flexibility of businesses to borrow, finance debt, cover expenses and meet payroll.

“Unfortunately the country is going to have to deal with that,” McCullough says.

Until the economic cycle shows signs of turning, McCullough is steering investors to precious metals, U.S. Treasury bonds and stock-market sectors that focus on what people need, rather than what they want. Think health care and utilities.

In this recent interview, which has been edited for length and clarity, McCullough outlines his current outlook for the U.S. economy and the financial markets in the second half of the year, and recommends investments you’ll want in your portfolio to weather the challenges McCullough expects investors will face.

Here's the first question and answer:

MarketWatch: When we last spoke at the end of January, you were adamant about holding secure assets including gold, silver and defensive stocks to weather a coming recession. Has your outlook changed?

McCullough: No. The recession will be deeper and potentially more protracted than even I think. What happened with SVB and the other banks is not inconsequential. The credit line of America is impaired. In a bear market these things appear quickly and then all at once. It’s why it’s really hard to see a recovery in the back half of 2023. Commercial real estate is at the core of American leverage. You have massive supply, vacancy rates skyrocketing, and $1.5 trillion in commercial real estate debt maturities is coming due.  

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