Precious metals news

Rising interest rates have led to substantial losses on global fixed income securities, totaling over $100 trillion. The Federal Reserve has incurred significant losses, with operating losses surpassing $111 billion. Despite these losses, the Fed remains financially unscathed due to its ability to print the world's reserve currency. Other central banks aren't as fortunate. The Bank of England required a bailout after suffering from the Quantitative Easing program. The Riksbank, Sweden's central bank, revealed a loss of SEK 80 billion in 2022 and requires a capital injection to restore its equity. Other central banks may soon follow suit, facing financial challenges from rising interest rates.

Ninety-four years ago, the optimism and prosperity of the 'Roaring Twenties' ended abruptly with the Crash of 1929...

What does it mean for gold and silver?

"We live in a shock-prone world, and adaptation is crucial," Kristalina Georgieva stated at the Future Investment Initiative. Inflation remains troublingly high, indicating persistent interest rates that will stifle growth for years. She urged for unity, cautioning against economic fragmentation. Side Note: Currency printing by global central banks is rarely discussed as the real issue.

The US Social Security Administration has hit a troubling deficit of $50 billion this fiscal year. Despite record income of $1.15 trillion, escalating retiree benefits surged outgoings to $1.20 trillion. The Trust Fund's eroded earnings, now at $2.67 trillion, can be partly blamed on historically low interest rates. If no corrective measures are implemented, the sustainability of the fund remains in jeopardy. The current state of Social Security underscores that relying on it solely for retirement is a risky proposition.

Japan's bond market is destabilizing despite aggressive interventions by the Bank of Japan (BoJ). The BoJ's unprecedented Quantitative Easing (QE) program, aiming to maintain the 10-Year Japanese Government Bond yield below 1%, is struggling. In the last month alone, the BoJ had to step in six times due to rising yields. As the Yen weakens, concerns grow over an imminent debt crisis, reminiscent of past financial bubbles.

The housing market in 2023 is heading towards its darkest period since the 2008 economic downturn. Current projections from Redfin estimate that only 4.1 million homes will be sold this year. Should this number decline below 4 million, it would represent the most dismal performance for the housing sector in nearly three decades, since 1995.

US bond yields are surging at a pace not seen since the early 1980s, a period that led to two recessions. The 10-year Treasury yield recently exceeded 5% for the first time since 2007. Despite the aggressive interest-rate hikes under Fed Chair Jerome Powell, the economy hasn't tanked, but the bond market is taking a hit. With increasing federal deficits and major central banks reducing bond purchases, there's growing uncertainty.

Federal Reserve Chair Jerome Powell has expressed concerns over the U.S.'s escalating fiscal deficits and warned of its unsustainability. Despite his previous push for fiscal stimulus during the pandemic's peak, Powell now remains largely silent on the ballooning federal deficit. This shift contrasts starkly from his 2020 stance, when he advocated for further financial stimulus to support the economy. The current deficit, reaching $2 trillion, poses significant concerns, influencing rising bond yields and market instability.

How in the world did the Toronto airport lose $15.3 million in gold bars along with $1.9 million in cash?
That remains unclear, but a lawsuit filed by Brink's shed a little bit of light on the situation.

HSBC's CEO, Noel Quinn, warns of an impending global debt crisis, emphasizing that nations are nearing a critical "tipping point" in borrowing. This is compounded by rising Middle East tensions and potential global recession risks. Both the IMF and World Bank have highlighted alarmingly high global debt levels. Furthermore, Europe faces sluggish growth and potential inflationary issues, with recent data showing economic declines in the region, and predictions indicating a continued eurozone downturn into 2024.

Prominent investors Bill Ackman and Bill Gross warn of an overheated Treasury bond market, with 10-year yields surpassing 5%. While both express concerns, Gross specifically predicts a recession by the fourth quarter, citing rising auto delinquencies and regional bank issues. Meanwhile, Fed Chairman Jerome Powell suggests the yield spike might mitigate future rate hikes.

Economists repeatedly misjudged inflation throughout 2021 and 2022, and their confidence in the U.S. economy's resilience seems misplaced as the Fed aggressively hikes rates. Despite enduring inflation for 30 months, traditional economic models failed to anticipate the spending power from pandemic savings. There's growing skepticism about returning to the low-inflation, low-rate environment of 2009-2020, given recent unpredictabilities. The looming question is whether the economy can withstand further pressures or if persistent inflation will derail growth.

Will the Federal Reserve raise interest rates again? Or is this hiking cycle over? Will it really hold rates higher longer, or will it cut in the near future? Everybody in the financial world is trying to predict the central bank's next move.
Fed members insist they are data-dependent and will go where the numbers lead them. But in an interview on CNBC, financial analyst Jim Grant said data alone isn't enough. You need to put the data into context.

Due to increased US federal spending and ongoing wars, bank lending is suffering. Commercial and industrial loan standards have tightened to recession-like levels. Bank credit growth has been negative for 12 consecutive weeks. The budget gap has doubled in the past year because of Biden's spending. CDS is now at its highest since the Covid shock.

Mortgage demand is at its slowest since 1995 due to rising interest rates. Application volume fell 1% last week, with the interest rate for 30-year fixed-rate mortgages reaching 7.90%. Refinance applications have also dropped, now constituting less than a third of total mortgage activity. The market for existing homes is nearly stagnant, exacerbated by limited supply and higher mortgage rates.

While U.S. and Global Auto Sales still haven't recovered since issues stemming from the 2020 Pandemic Shutdown, another culprit is at work.  No, it's not due to shortages of semiconductors, even though that has accounted for a small part of the weak sales rebound.  So, what is it? As always......

China is selling U.S. assets, potentially due to geopolitical tensions or to support its local currency. This has contributed to the surge in Treasury yields. With the U.S.-China relationship strained, China might divert its investments away from U.S. dominated financial systems. Given limited options, China may boost its gold purchases. If so, it's a positive sign for the gold market, potentially driving prices to new highs.

Spain seized gold artifacts worth $101 million, originally stolen from Ukraine. These pieces, previously exhibited in a Kyiv museum, were smuggled out in 2016 and recently surfaced in Madrid. Three Spaniards and two Ukrainians were arrested for their attempt to sell these treasures with forged documentation linking them to the Ukrainian Orthodox Church. This significant recovery highlights the global importance and value of gold artifacts.

Financial investor sentiment is increasingly positive towards Gold, as shown by recent CFTC data. By 17 October, net long positions on Gold rose to 15,100 contracts, marking a shift from the previous week's net short positions. This shift represents an equivalent of 130 tons of Gold bought in the futures market. With the rising Gold price, further increases in long positions and reductions in short positions are anticipated.