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The U.S. Federal Reserve is hiking rates again this week, and the Fed's reckless policymaking could drive the stock market over a cliff, according to Money Morning Liquidity Specialist Lee Adler.
Thankfully, we have a defensive stock that not only survives but thrives during an economic recession.
"Under quantitative easing, the Fed was funding all-new Treasury supply. Under quantitative tightening, the central bank is actually adding to supply at the same time as it is pulling money out of the banking system," Adler said.
"That's as bearish as can be."
On top of that, events around the world could help lead to a bear market.
There's no reason to panic. But we want Money Morning readers to be fully informed about what's going on - and how to keep making money no matter what happens...
These Are the Powder Kegs Waiting to Explode
The U.S. economy could survive one crisis, but when you bundle a bunch of economic powder kegs together, we could enter into a recession.
- Higher oil prices affecting a variety of industries and consumer decisions. Crude oil prices have climbed 10.76% since the end of 2017. Because of the surge in pricing, airlines are charging more for domestic fares and surcharges on international flights, according to The Wall Street Journal.
- Trade wars could cost tens of thousands of U.S. jobs. For every $37.5 billion in tariffs the United States places on China, GDP and wages could lower by 0.1%, and there could be 79,000 fewer full-time jobs, according to the Tax Foundation.
- Stock prices are trading at all-time highs, but if they tumble, most retail investors aren't prepared to handle a downturn. The Shiller P/E Ratio is at 33.12, trading nearly double the mean of 16.85. A bull market can't last forever.
- Global uncertainty from Brexit and the economic struggles of Italy and Greece could send stock prices plunging, especially if the euro collapses.
There's a lot to worry about.
Fortunately, you can be proactive instead of reactive by buying defensive stocks now.
Must See: This method may be the only way in history to turn a small sum of money into $100,000 without batting an eye. Read more...
We aren't rooting for an economic collapse, but if one were to happen, we want to help you take control of your financial destiny.
This company just appeared on our proprietary valuation system in the "Buy Zone," with a score of 4.75.
Stocks in quadrant 4 give you the best opportunity at the biggest returns, so you can't afford to miss this profit opportunity.
And this stock surged the last time the economy fell into a recession...