Precious metals news

Amid escalating tensions with the West, Russia, under President Putin's oversight, conducted a simulated nuclear strike. This comes shortly after the Russian parliament's decision to withdraw from a global nuclear test ban treaty. Defense Minister Sergei Shoigu stated the drill practiced a retaliatory nuclear strike in response to an enemy's nuclear attack. With tensions rising due to the conflict in Ukraine, there's growing concern that Russia might resume nuclear tests, potentially destabilizing global relations further.

The Fed's touted inflation indicator, Core PCE Deflator, marginally improved to 3.7% YoY in September. However, on a monthly basis, it saw its most significant increase in four months. Despite slowing annual inflation figures, the data indicates inflationary pressures persist, driven by services and energy prices. Notably, while personal consumption surged, incomes lagged, resulting in private workers seeing a wage decline. Government workers, on the other hand, experienced a wage hike nearing record levels. The personal savings rate, having been adjusted multiple times, plummeted further, reaching near historic lows. This raises questions about the effectiveness of current economic policies.

The U.S. national debt has soared to a staggering $33 trillion, leading to a trillion dollars spent annually on just servicing this debt. This alarming rise is due to factors like wars, recessions, and the economic fallout of the COVID-19 pandemic. Financial experts, like Steve Moore, warn that soon, interest payments could become the biggest budgetary expenditure, surpassing even national defense. This year, interest payments reached $659 billion, nearly doubling from the previous year. The U.S. now spends more on debt interest than vital programs, like education. If unchecked, this escalating debt could cripple the nation's economy, with taxpayers already owing an average of $98,460 each.

Treasury Secretary Janet Yellen downplayed the role of the expanding fiscal deficit in the rise of long-term bond yields, attributing it instead to a "strong US economy." She made these claims despite mounting evidence and Federal Reserve Chair Jerome Powell's acknowledgment of several factors, including growing deficits, behind the yield surge. Yellen optimistically projected a 2.5% growth rate for 2023 and suggested that the pre-pandemic factors leading to low yields are still present, displaying a questionable read of the current economic landscape.

When it comes to economic data, context matters. In this episode of the Friday Gold Wrap, host Mike Maharrey explains how the Fed, many mainstream economists, and financial network talking heads get a lot wrong because of bad data, shoddy economic frameworks, and ignorance of history. Along the way, he covers the GDP and the latest price action for gold.

With the Israel ground invasion now starting in North Gaza today, energy and precious metals prices surged higher.  But, what happens if this Middle East conflict escalates further?  We are already seeing the U.S. attacking facilities in Syria, believed to be linked to Iran...

U.S. Treasury yields are alarmingly approaching 5% because of unexpected U.S. economic growth, causing global shares to plummet. Persistent recession warnings since 2022 have been overshadowed by wage surges, resulting in reckless consumer spending. This economic illusion has unnerved the bond market, leading to significant sell-offs. Quincy Krosby of LPL Financial warns of potential hastened Fed interest rate hikes to combat spiraling inflation. Major U.S. stock indices suffered sharp declines, further emphasizing the reliability of gold in these turbulent times.

Inflation is set to persist due to altered perceptions and increased fiscal spending. Millennials, once oblivious to inflation, now constantly see its effects in daily prices. While the government and the Federal Reserve try to manage these perceptions, rising prices remain evident. Unions and fiscal spending amplify the inflation issue. Surprisingly, the 1970s stagflation wasn't primarily about oil prices but the decoupling from gold.

With mountains of data pointing towards a looming recession (if we aren’t in one already), how does one invest during these periods? What asset offers a proven track record of protection from hard times?

The U.S. deficit for 2023 was $1.7 trillion, up from the previous year, making it the worst GDP growth excluding debt increases since 1929. This hints at a recession masked by excess deficit spending. Despite tax hikes by the Biden administration, revenues fell by 9.3% from 2022. Higher taxes didn't yield expected revenues, indicating a weak economy. The U.S. can't spend less than 22.8% of GDP, and taxing the wealthy can't cover the deficit. Rising public debt and inflation challenges the U.S. dollar's position globally. China is rapidly selling U.S. bonds, and the U.S. 10-year Treasury yield exceeds 4.5%. High government spending doesn't guarantee growth or wage increases. The U.S. must reduce its deficit to protect its currency and economy.

Governments ignore debt crisis signs. Despite inflation, the U.S. borrows heavily. Investors avoid sovereign bonds, causing central banks to buy and amplify inflation. U.S. debt rises sharply with impending maturities and global tensions. Trusting global dollar demand and the Fed's adaptability is risky as countries cut U.S. Treasury holdings. Global fiscal imbalances and monetary debasement since 2009 diminish savings. Gold emerges as a more secure option than failing sovereign bonds.

U.S. fiscal policy is undermining the Federal Reserve's autonomy, increasing inflation risks, and devaluing the dollar. Central banks are losing independence, threatening fiat currencies' real value. Despite a brief dollar rally, its long-term purchasing power is set to decline further due to rising government debt and deficits. Historically, reduced central bank independence leads to higher inflation. As the Fed aligns more with government needs, the quality of its assets decreases, exacerbating the dollar's decline.

In 2023 Q3, real GDP grew by 4.9%. However, when breaking it down, real final sales accounted for a 3.5% rise, with the remainder being inventory adjustments, which balance out over time. The growth from private domestic sales was even more modest at 3.3%. GDI paints a grim picture with real disposable personal income dropping by 1.0%, reversing a 3.5% gain from the last quarter. The gap between GDP and GDI seems to be widening. The Fed faces significant challenges, largely due to its own actions, with seemingly no solutions in sight.

Bidenomics benefits the top 1% but is detrimental for the middle class. In August 2023, pending home sales plummeted 7.1%, affecting all U.S. regions both monthly and annually. Rising mortgage rates have deterred buyers, causing an 11% drop in transactions from the previous year.

This article defines credit, a subject upon which there is a lack of public knowledge. What people call money is in fact credit, and money itself, which is physical gold without counterparty risk, rarely if ever circulates. Nearly everyone, including most economists, don’t understand credit and the importance of its value being tied to money.
Nor do they understand that bank credit is just a minor part of the colossal system of credit.
A common mistake is to think that bank notes are money, because unlike a bank deposit they are possessed in hand. But they are a credit liability of the issuers, which today are central banks. Their value depends entirely on the public and foreign creditors’ faith in terms of their purchasing power, like any other form of credit.
The expansion of credit is fundamental to economic progress, but that expansion can only be determined between creditor and debtor. This does lead to disruptive fluctuations in bank credit, but they are self-corre...

Chris Watling, CEO of Longview Economics, warned that the U.S. consumer is nearing a financial crisis. Despite recent strong retail sales, household savings are depleting, and real income growth has been negative for three consecutive months. While recent data projects strong U.S. economic output, concerns grow about a potential recession. Watling believes the labor market will decline significantly, triggering this recession. Additionally, he advises caution regarding the stock market, predicting challenges ahead for the U.S. economy.

The $52 billion offering's yield rose to 4.899%, indicating demand didn't meet expectations, with dealers getting a significant share due to low investor interest. Despite stronger September new home sales data, yields increased, with the 30-year bond yield reaching its highest since 2007. Rising Treasury yields are driven by expectations of the Federal Reserve's prolonged policy rate and an expanded supply of notes and bonds. Forecasts suggest auction sizes may grow further, though some major banks anticipate smaller increments for the upcoming auctions.

Households and businesses grapple with high prices as the Federal Reserve remains optimistic about receding inflation. The consumer-price index has risen 18.9% from pre-pandemic levels, with lower-income households bearing the brunt. The Fed's policies have inflated home prices, benefiting the wealthy but making housing unattainable for many. Root causes include excessive deficit spending, the Fed's strategies, and supply constraints. Current efforts to address inflation are insufficient, with both monetary and fiscal policies needing urgent reevaluation.

Bidenomics relies heavily on Federal spending and borrowing, leading to significant price hikes and market distortions. In just one month, the US Federal government accrued $600 billion in debt, with a staggering $10.47 trillion borrowed since Covid began in Q1 2020. Retail credit card APR has reached an alarming 28.93%, and credit card debt surpassed $1 trillion. Health insurance costs for families surged to $24,000 this year, the largest increase in over a decade. Despite GDP growth of 4.9% in Q3 2023, accelerating inflation is adversely impacting the middle class.

September saw a remarkable 4.7% MoM increase in preliminary durable goods orders, greatly surpassing the expected 1.8% and marking the largest monthly jump since July 2020. Yearly, orders have risen by 6.0%. Excluding transport, the orders climbed a modest 0.5% MoM, while orders excluding defense surged 5.8% MoM. Defense spending saw a significant drop of 14.4% MoM, but non-defense aircraft spending skyrocketed by 92.5% MoM. It's important to note that these figures are nominal and do not account for inflation.