Money Morning Global Investing Strategist Martin Hutchinson cautions that even if lawmakers avoid the fiscal cliff by the most likely scenario of raising taxes on wealthy Americans while leaving the majority of the budget deficit status quo, the short-term outlook for the health of the U.S. economy is far from rosy.
"U.S. economic growth has been held back in the last few years by the blizzard of regulations coming out of Washington, and there's reason to believe there is an especially heavy storm of them in the next few months, having been held up before the election," said Hutchinson.
And despite the easy monetary policies of Fed Chief Ben Bernanke, and the latest round of QE3 (dubbed QE Forever), "the U.S. economy is not going back to robust growth in 2013," Hutchinson added. Creating more money, he said, will just increase inflation.
"In the long run, a recession is coming," Hutchinson warns.
Investors: Here's why Peter Schiff thinks we need the fiscal cliff - do you agree?
Five Ways to Prepare for Recession 2013 As Americans get ready for recession 2013, along with the largest tax increases ever imposed on U.S. taxpayers, here are five ways to prepare.
- Take Advantage of Special Dividends
A few who are presenting shareholders with an end-of-the-year bonus are Wal-Mart Stores Inc. (NYSE: WMT), Wynn Resorts Ltd. (Nasdaq: WYNN), Tyson Foods Inc. (NYSE: TSN), Carnival Corp. (NYSE: CCL), Franklin Resources Inc. (NYSE: BEN), and Sturm Ruger & Co (NYSE: RGR).
- Buy Gold and Silver
Pure plays include precious metal exchange traded funds (ETFs) like the SPDR Gold Trust (NYSE: GLD) and iShares Silver Trust (NYSE: SLV). Mining ETFs such as the Market Vectors Gold Miners ETF (NYSE: GDX) and Market Vector Junior Gold Minors (NYSE: GDXJ) are other options.
- Bargain Hunt
Money Morning Chief Investment Strategist Keith Fitz-Geraldexplains, "Because history's rearview mirrors show that fear, panic, crisis and stress are all classic signs associated with opportunity -- and profits."
He advises looking at stocks in the energy, resource and select technology sectors, "all of which the world needs, as opposed to wants, and all of which are backed by billions of dollars flowing their way whether we go over the fiscal cliff or not."
Two stocks to consider are Duke Energy Corp. (NYSE: DUK) and Freeport McMoRan Copper and Gold Inc. (NYSE: FCX).
Check out more of Fitz-Gerald's fiscal cliff opportunities here.
- Save More
Pay yourself first and stay liquid before you succumb to the urge to splurge.
- Ditch the Dependency
As lawmakers attempt to reduce the swollen U.S. deficit, Americans can't assume the government will help. It's time to be more self-sufficient.
That's why it's the perfect time to make an affordable investment in education. Check out this presentation on how you can learn the best ways to handle your money ahead of recession 2013.
Related Articles and News:
- Money Morning:
Fiscal Cliff: Both Sides Optimistic, But Still No Real Answers
- Money Morning:
Forget January-The Fiscal Cliff Effects are Here
- Money Morning:
The Fiscal Cliff is a Mole Hill Compared to This
- The Washington Times:
Obama: GOP resistance may trigger second recession
- Consumer Affairs:
What Happens If We Go Over the Fiscal Cliff?
Expect a Recession in 2013 Without A Quick Fix To The Fiscal Cliff
- FOX Business Network:
December's Dividend Bonanza
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