Precious metals news

Major retailers like Best Buy, Lowe’s, and Kohl’s are reporting sales declines and expect a downturn in holiday spending due to cautious consumer behavior amid inflation and higher interest rates. Holiday sales growth is projected to slow dramatically to 1%-3% this year, compared to a 14% rise in 2021. Shoppers are cutting back on non-essential purchases, focusing on essentials and seeking value, which may benefit discount retailers. Overall, the retail sector faces a challenging holiday season with reduced spending.

Rubino warns of a severe financial crisis in the U.S. due to high deficits and rising interest costs on a national debt of $33.5 trillion. He believes this debt spiral, coupled with excessive military spending, signals a loss of financial control. He views the U.S. as at the end of a 70-year credit cycle, heading towards a significant economic downturn, particularly affecting the dollar's value. He predicts a disorderly decline in the dollar, paralleling Japan's financial crisis, with no apparent solution. Rubino also anticipates declining real estate values and recommends gold and silver as key assets.

Housing affordability is at a record low since the early 1980s, leading to a significant 4.1% month-over-month drop in existing home sales in October, much worse than the expected 1.5% decline. This downturn continues a trend with sales down 14.6% year-over-year. The sales rate has fallen to its lowest since August 2010. Despite these challenges, Lawrence Yun, NAR's chief economist, notes some optimism due to recent drops in mortgage rates. However, the housing market remains tight, with the number of homes for sale at historic lows for October and first-time buyers making up only 28% of purchases.

The commercial real estate (CRE) sector's share in the S&P 500 has dwindled to just 5%, a low not seen even in the 2008 crisis. This decline is accompanied by decreased demand for CRE loans, falling property prices, and a surge in delinquencies, signaling deepening troubles in the sector. In contrast, the U.S. housing market's reliance on the 30-year fixed-rate mortgage poses hidden financial risks, burdening lenders and taxpayers. The system's sustainability is questionable, indicating a need for more balanced mortgage options like Adjustable Rate Mortgages (ARMs).

The world faces a significant platinum supply shortfall due to record industrial demand.
According to a report by the World Platinum Investment Council (WPIC), the platinum market faces a 1.07-million-ounce deficit in 2023. The supply shortfall is expected to extend into 2023.
With two years of significant market deficits, we will like see upper pressure on platinum prices.

Gold and silver prices have risen significantly, with gold reaching $1993 per ounce and silver hitting $23.82 per ounce, due to a weakening US dollar and anticipation of the Federal Reserve's meeting minutes. This increase aligns with the US dollar falling to a two-month low. Market analysts are closely watching the Federal Reserve's minutes for hints of possible changes in interest rate policies, amidst speculation about a potential rate cut in May.

Moody's has downgraded the ratings of JPMorgan Chase, Wells Fargo, and Bank of America from stable to negative, citing concerns about the U.S. government's reduced capacity to support major banks. JPMorgan's downgrade is partly due to risks in its complex capital markets business. Despite these downgrades, all three banks' stocks have seen an uptick in November. This move aligns with the recent downgrade of the U.S. sovereign credit rating. Moody's highlights significant risks for U.S. banks, including potential deposit flight, and forecasts a mild recession in early 2024, which could lead to tighter credit conditions and increased loan losses.

The U.S. Congress is under increasing pressure to address the nation's escalating budget deficits and debt, especially after Moody's recent warning about the potential downgrade of the federal government's credit rating due to political dysfunction. The primary solutions to tackle the national debt, which has doubled in the past decade to $33.7 trillion or about 124% of GDP, are straightforward: raise taxes, cut spending, or implement a mix of both.

The freight market is currently facing one of its worst downturns in history, not merely a reversion to the mean. This severe recession in the freight industry is attributed to an excessive buildup of capacity. Since early 2022, numerous companies, including major players like Yellow Corp. and Convoy, as well as smaller, lesser-known firms, have either gone out of business or significantly downsized, leading to widespread bankruptcies, closures, layoffs, and substantial financial and human losses.

The Consumer Price Index (CPI) drives markets and motivates policy, but it is nothing but speculation, estimation and wild guesses.
A recent "tweak" to the health insurance CPI reveals the formula is basically a scam.

According to recent data from Fidelity Investments, more Americans are withdrawing from their retirement savings to manage increasing living costs, particularly for housing and medical expenses. There was a rise in hardship withdrawals to 2.3% of workers in the last quarter, up from 1.8% the previous year. The primary reasons for these withdrawals are to prevent foreclosure or eviction, and to cover medical bills.

The International Monetary Fund (IMF) released a handbook for central banks on implementing central bank digital currencies (CBDCs), suggesting they could reduce global reliance on the U.S. dollar. The IMF highlights risks, including potential bank runs and impacts on commercial bank lending. Meanwhile, U.S. lawmakers, concerned about privacy and financial surveillance, are pushing back against a U.S. government-issued CBDC. Republican Representative Tom Emmer introduced the CBDC Anti-Surveillance State Act to prevent the Federal Reserve from issuing CBDCs to individuals, citing risks to Americans' financial privacy and the independence of the financial system.

Discover what mainstream media isn't telling you about today's housing market

The Conference Board's Leading Economic Indicators (LEI) fell 0.8% in October, continuing its longest decline since the 2007-2008 financial crisis. This downturn, driven by lower consumer expectations and a decrease in new manufacturing orders, signals an impending recession. The Conference Board forecasts a brief recession, influenced by high inflation and rising interest rates, with only 0.8% GDP growth in 2024. The LEI's significant year-over-year drop of 7.6% highlights the stark impact of the Federal Reserve's tightening policies, casting doubt on the prospects of a 'soft landing' for the economy.

UBS forecasts central banks will begin reducing interest rates in 2024 amid global political events and geopolitical tensions. The firm advises shifting equity allocations towards quality stocks, particularly in technology. Rate cuts are expected to start in the UK by May, followed by Europe and the US. UBS also anticipates declining government bond yields, suggesting a move away from large cash holdings towards quality bonds. Emphasizing the significant impact of global politics on markets, UBS recommends hedging market risks with strategies focused on capital preservation, macro hedge funds, oil, and particularly gold.

Aerdt Houben, Director of Financial Markets at the Dutch Central Bank, discussed the bank's gold holdings, now at 612 tonnes worth 35 billion euros, as a financial safety net. This gold, representing 4% of the Netherlands' GDP, is stored across various global locations. Houben views this amount as sufficient for economic stability, highlighting gold's value and liquidity. The move reflects a broader trend among European banks, suggesting a cautious stance towards the euro and possibly hinting at a return to a gold standard. Meanwhile, China has also been increasing its gold reserves, now exceeding 2,113 tonnes.

The expected deficits in copper, silver, and gold, coupled with rising industrial demand for copper and silver due to the global shift towards greener economies, are set to drive up their prices. Additionally, as investment demand for silver and gold increases, the moment the Federal Reserve recognizes the limits of interest rate hikes – to avoid destabilizing the U.S. Treasury and weakening the dollar – these metals' prices are likely to see a significant increase.

Wall Street figures, grown comfortable with the Federal Reserve's easy money policies, are now protesting the Fed's Quantitative Tightening (QT) and reduction of its Overnight Reverse Repurchase agreements (ON RRPs). The ON RRP balance has decreased from $2.3 trillion to $935 billion and is expected to approach zero, significantly reducing liquidity. Critics argue that this reduction could lead to a liquidity crisis in banks, potentially destabilizing the financial system, and are urging the Fed to halt QT. However, this perspective often overlooks the typical long-term trend of RRPs, which is usually close to zero.

In January 2007, before the 2008 financial crisis, Citigroup's stock closed at $55.25. Yesterday, adjusted for a 1-for-10 reverse stock split in 2011, it effectively closed at $4.20. This means long-term shareholders have seen a 92% decline in share value over nearly 17 years. Additionally, Citigroup may cut up to 24,000 jobs, 10% of its workforce, further highlighting its struggles.

The Federal Housing Finance Agency (FHFA) released a report recommending changes to the Federal Home Loan Bank system, following questionable practices prior to the recent banking crisis. The 11 regional Federal Home Loan Banks, primarily tasked with providing liquidity for housing finance and community development, deviated from their core mission. Notably, the banks involved in the crisis were engaged in activities like crypto lending (Silvergate and Signature Bank), loans to the wealthy (First Republic Bank), and IPO financing (Silicon Valley Bank). The report responds to these deviations and aims to realign the banks with their intended purpose.