Precious metals news

Rising interest rates are pushing middle-class Americans to the brink, with a Harris Poll for Bloomberg highlighting deeper anxieties. Higher borrowing costs have hit 57% of families, with credit card interest and fees alone costing a record $130 billion last year. Groceries and utilities add to the squeeze, as households feel increasingly left behind with stagnant wages failing to keep up with surging costs. Economic optimism dwindles as the middle-class struggles become a stark reality.

Wall Street banks predict the U.S. Treasury's massive borrowing needs will continue, with estimates of $1.5 trillion needed through early 2024, exacerbating the steep increase in long-term yields to the highest since 2007. This borrowing surge is straining the Treasury market and poses sustainability concerns, with Treasury yields peaking and stocks closing lower amid ongoing financial stress.

After setting a record through the first half of the year, central banks continued to gobble up gold in the third quarter.
Globally, central banks added a net 337 tons of gold in Q3, the second-highest third-quarter total on record behind 2022.
Through the first nine months of the year, central banks bought a net of 800 tons of gold. That's 14% more than through the same period in 2022.

Does the massive national debt matter?
A lot of people don't think it does, at least not yet. They point to Japan as an example of a country that has a much higher debt-to-GDP ratio and is doing fine. Peter Schiff said they're looking at the wrong country. The US is more like Argentina than Japan.

Central banks purchased the most gold over the past year, as the U.S. and ECB printed trillions in new treasuries and bonds.  It seems as if many central banks are becoming worried that U.S. Treasuries may no longer be safe assets in the future.  I agree...

Amid Middle East tensions and European recession fears, spot gold prices soared over 10% in a month, from $1,815 to around $2,000 per ounce, the highest since May 2023. Bloomberg's Mike McGlone suggests gold could potentially reach $3,000 by 2024, especially if the anticipated US recession hits by year-end. Contrarily, US equities are facing a sell-off, with expectations of a brief rally before a continued bear market into 2024.

Renaissance Macro Research warns of a triple threat to the US economy: escalating debt, rising interest rates, and protectionist trade policies. These factors are expected to shape the economic and investment climate for years, with the federal debt at $33 trillion and interest rates increasing the cost of government debt. Protectionist measures could further strain the economy by raising costs and fostering dependency on government aid.

Senator Paul criticized excessive government spending on international aid in a Fox News interview, stating it threatens national security and could lead to the country's bankruptcy. He highlighted the national debt as a major risk, pointing out recent borrowing of a trillion dollars. Paul also noted a shift in policy with the new Speaker, Mike Johnson, blocking further large-scale funding, specifically an additional $60 billion for Ukraine.

U.S. cardholders faced a burdensome record high of $130 billion in credit card interest and fees in 2022, reflecting a distressing trend as debt soared and interest rates climbed amid the Federal Reserve's inflation measures. This financial strain, highlighted by the Consumer Financial Protection Bureau (CFPB), has exacerbated the challenge for Americans struggling to manage rising debts and punitive costs.

US inflation and consumer spending rose, signaling potential further rate hikes. UK employment dropped again, and Israel cut growth forecasts amid conflict. The US economy grew sharply, but deficits widened, pushing treasury yields higher. Global economic signals remain mixed, with central banks worldwide monitoring the situation closely.

Bankers and investors are wondering when something will snap. The significant drop in government bond prices, particularly with U.S. Treasury yields rising above 5% for the first time since 2007, has caused unease among bankers and investors. Despite market moves being orderly, there's a quiet alarm over the state of corporate debt due to increasing borrowing costs and a slowdown in bond issuance. Defaults are up notably, with distressed exchanges hinting at deeper issues for companies under financial strain. This tension in the bond market is a clear sign of stress, even if a full-scale disaster has not yet unfolded.

The U.S. is masking economic weaknesses through borrowing. Despite high GDP growth and low unemployment, real wages are down, and consumer spending is debt-fueled, with credit card debt hitting new highs. Investment is declining, and government spending is artificially inflating GDP figures. The growth of public debt far outpaces GDP growth, signaling a potentially weaker economy ahead.

Rising interest rates pose significant threats to the economy and markets, magnified by the rapid pace of increases and prior risk-taking spurred by extreme monetary policies. Corporate debt, inflated by previously low interest rates, may become burdensome as higher rates increase the cost of debt servicing. This is also disrupting the long-term treasury market. Furthermore, the stock market is starting to acknowledge that the new higher "risk-free" interest rates are becoming a formidable alternative for investors, challenging the attractiveness of stocks for the first time in years.

Gold's value should be primarily viewed as a barometer for monetary instability, not merely as an inflation hedge. With ample global financial turbulence, it's crucial to highlight gold's role as a safeguard in times of economic disarray. The last fifty-plus years since the gold standard was abandoned could be seen as a mere blip in monetary history, with indications that the era of unrestrained paper money and excessive sovereign debt might be judged harshly by future historians. This suggests a potential pivot back to gold as a critical asset in response to unchecked monetary policies.

Fiat economies face hyperinflation when central banks, like the Federal Reserve, overprint money. Austrian economic theory warns that such policies may lead to a "crack-up boom"—a severe crash after a fake economic boom fueled by low interest rates and bad investments. The Fed's continuous interventions prevent necessary market corrections, potentially ending in hyperinflation and a collapsed monetary system. Political resistance to reform points to a looming crisis, suggesting that local self-reliance may become essential.

The US commercial real estate sector is in crisis, with widespread underutilization of office spaces leading to financial strain on regional banks holding unrecognized losses. Occupancy levels post-pandemic are stuck at about half, and property values have dropped by up to 45%. With $5.5 trillion in debts and interest rates rising, the sector faces distressed sales and significant lender losses. Banks are cautious about refinancing, potentially leading to a wave of consolidations and a broader financial impact. The situation mirrors the pre-conditions of previous financial crises, with the Fed's temporary measures failing to address deeper solvency issues.

President Biden hailed the latest job numbers as a success of his economic policies, but many working-class Americans remain skeptical. Distrust in the government's economic figures is rising as the USDA reports a surge in food insecurity to the highest since 2014, affecting nearly 13% of households. The situation may be worsening in 2023, with persistent inflation hitting low and middle-income families hard, leading to depleted savings and increased credit card debt. Wall Street banks are also signaling a downturn as consumer financial strain is reflected in record-high subprime auto loan delinquencies.

81% of Americans haven't increased their emergency savings this year, with many dipping into savings for regular expenses due to inflation and high costs, according to a Bankrate survey. Meanwhile, withdrawals from retirement funds are on the rise, and nearly half of Americans feel inflation is lowering their living standards.

A Georgia couple nearly lost more than $186,000 in a gold scam. But they ended up turning the tables and scamming the scammers.

The Biden administration's aggressive energy standards could impose an extra $9,100 burden on U.S. households, per a consumer watchdog report. The Alliance for Consumers criticizes these regulations for significantly hiking prices of basic home appliances and limiting consumer choice, branding the move as economically punitive and overly restrictive. Experts slam the policies for sacrificing appliance performance and market freedom under the guise of climate change, with small businesses facing potentially crippling compliance costs.