Precious metals news

The U.S. Treasury Department is ramping up debt auction sizes to manage its soaring debt amid rising financing costs, with yields at their highest since 2007. Next week's auctions aim to raise additional funds, with increased future auction sizes signaling potential for even higher yields and market stress. This move reflects concerns over maintaining demand for Treasury securities as the Fed fights inflation.

Japan's government is rolling out a 37.4 trillion yen stimulus package, including tax cuts and low-income support, to combat inflation and support wage increases. Despite these efforts, Prime Minister Kishida's popularity is waning, with public skepticism about the package's effectiveness as real wages fall for the 17th month in a row.

In 2023, 516 U.S. firms went bankrupt amid increasing 'zombie firms'—companies surviving on debt despite low sales. The IMF suggests this trend negatively impacts the economy. While some banks have propped up these firms, the Fed observes a shift towards healthier corporate balance sheets and continued high-interest rates, suggesting a tougher environment for at-risk businesses.

Increased benefits such as extra vacation and family leave contribute to labor shortages and lower productivity. Data shows that while average hours paid per job rose during the pandemic, actual hours worked have been declining since 2015, with a widening gap due to more paid time off. Despite higher benefits, real earnings are falling when adjusted for inflation, pointing to a drop in productivity and inflationary pressures.

For the third consecutive month, ADP's job addition figures fell short, with October adding only 113k jobs versus the expected 150k. This underperformance comes after a significantly lower ADP number in September compared to BLS data. The discrepancy continues, with ADP's number well below BLS's anticipated +180k. Service sector hiring remained prevalent, but significant wage increases are now considered a thing of the past. Professional and business services reported job losses again, and overall wage growth has been on a decline for 13 months, the weakest since Q3 2021, despite remaining above the Fed's inflation target.

Silver is expected to play a significant role as the "green economy" evolves. The Silver Institute recently participated in a panel discussion titled “Silver’s Role in the Green Economy” at the London Bullion Market Association’s Global Precious Metals Conference in Barcelona, Spain.
This is one of several silver-related stories in the latest edition of Silver News published by the Silver Institute.

Japan is in the midst of a slow-motion train wreck. The country has a massive national debt and it is starting to feel the pressure of rising interest rates. In his podcast, Peter Schiff talked about the situation in Japan and pointed out some disturbing parallels to what's happening in the US.

Investors have no idea how the ENERGY CLIFF is already impacting the cost of producing gold.  The world's largest gold mining company is struggling to remain profitable as the production costs have surged over the past five years, much higher than energy price inflation...

If geopolitical tensions avoid major oil regions, the Fed's current high-rate stance may dampen gold's safe-haven demand temporarily. However, as the Fed eases its policy, central banks continue their robust gold purchases, and the U.S. dollar weakens, expect gold to surge past $2,100 with strong momentum.

The Retail Apocalypse: Post-pandemic, American storefronts remain empty, not just due to COVID-19 but banking rigidity. Banks control retail rents, stopping landlords from adjusting them to market demands. This results in long-lasting vacancies despite the potential for lower rents to attract tenants. Landlords are trapped by bank-imposed financing terms that discourage leasing to anyone but 'credit tenants' like national chains. The financial system is failing cities, prioritizing empty spaces over vibrant communities.

Lending for commercial real estate has nosedived amid rising interest rates, marking a grim period not seen since 2011. Banks are pulling back, debt markets are stagnant, and property values are under scrutiny. This pullback in lending is hitting all sectors, especially offices, with refinancing becoming costlier and new developments stalling. The market is facing its most significant challenges since the 2009 downturn, with recovery prospects bleak.

Sky-high mortgage rates and soaring home prices are plunging the U.S. housing market towards recession. With borrowing costs at a 20-year peak and affordability crumbling, Wells Fargo warns of a bleak future akin to the troubled 1980s. Demand is drying up, construction is stalling, and the once resilient market faces a prolonged downturn.

Central banks around the globe have aggressively ramped up their gold reserves this year, purchasing a staggering 800 tons in the first nine months, including substantial amounts of unreported buying. Notably, China, Poland, and Singapore have been leading this charge. This surge in central bank demand has been a key pillar supporting gold prices against the headwinds of global monetary tightening, with the precious metal peaking over $2,000 an ounce. As geopolitical tensions rise and inflation concerns loom, gold's allure strengthens, inching it closer to its all-time high record.

Consumer confidence plunges continuously, hitting a new low since May, as inflation fears and political instability rattle households across all ages and incomes. Rising grocery and gas prices, higher interest rates, and Middle East turmoil feed the gloom. Despite steady job availability, the overall outlook is bleak, with soaring inflation expectations and a persistent belief that a recession looms. Meanwhile, business conditions worsen, evidenced by Chicago PMI's contraction—the longest since the early 2000s—underscoring the grim economic landscape under current policies.

IRS Commissioner Danny Werfel faces tough questioning over potentially breaking a pledge by auditing Americans earning under $400,000, risking the agency's integrity and fueling concerns that the IRS will disproportionately target lower earners in its enforcement ramp-up. Despite previous assurances, a watchdog warns the lack of a clear "high-income" definition could ensnare those with lesser incomes in the agency's dragnet, potentially contradicting promises and undermining taxpayer trust.

Stanley Druckenmiller blasts Treasury Secretary Janet Yellen for a colossal oversight in not locking in low rates with long-term bonds amid the pandemic, a move he brands as arguably the worst Treasury blunder ever. As a result, he predicts a grim future where soaring interest costs strangle the federal budget, dwarfing discretionary spending and burdening generations to come with unsustainable debts.

Under Bidenomics, the rich get richer, and the middle class suffers with unaffordable housing—median income at $78,000 can't keep up with the $111,000 needed to buy a home. Credit card delinquencies are the highest in over three decades, and the interest on the national debt for 2023 matches the entire debt from 1980. Investments faltered in 2022, and while Bitcoin, NASDAQ, and gold are up in 2023, Treasuries and REITs lag with losses over -10%.

The financial strain on American households is intensifying, with 62% living paycheck to paycheck amidst relentless inflation and rising interest rates. Despite static income levels, the cost of necessities is forcing many to defer essential spending and deplete savings, with 49% reporting lower reserves than a year ago. Economic indicators suggest a grim outlook, with real earnings declining and the Federal Reserve signaling rates will remain high, exacerbating the financial distress for the majority already in a precarious position.

Discover the incredible insights shared by Tavi Costa in this thought-provoking discussion about the gold market.

The Federal Reserve is in a dire situation, grappling with an economy battered by persistent inflation and volatile markets. Despite economic growth, the specter of unyielding inflation persists, casting a long shadow over the Fed's ability to manage a soft landing. With investor nerves frayed and borrowing costs soaring, the risk of tipping into a deep recession looms larger, questioning the efficacy of the Fed's toolkit in this fraught economic landscape.