Precious metals news

Last week, Federal Reserve Chairman Jerome Powell delivered a speech at the Economic Club of New York luncheon. In his podcast, Peter Schiff broke down some of the Fed chair's comments and concluded that Powell is not qualified to be a member of any economic club.

With the depletion of U.S. conventional gas reserves, and just in the nick of time, we made it up with the Great Shale Gas Miracle.  And, indeed... it is quite amazing to have more than doubled U.S. domestic natgas production over the past 15 years.  How fast the years have gone by...

The Bloomberg Commodity index rose for the fourth consecutive week, influenced by concerns over the Israel-Hamas conflict potentially escalating and impacting crude oil and natural gas supplies to Europe. Deteriorating crop conditions in the Southern Hemisphere boosted the agriculture sector. Additionally, the spike in US bond yields has driven investors towards the Swiss Franc and gold. Gold's significant $160 increase over the past two weeks underscores growing apprehensions about geopolitical events, US fiscal policy, and whether the recent jump in both real and nominal yields will break ‘something.’

Escalating government debt, unprecedented in peacetime, has pushed 10-year Treasury yields to levels unseen since 2007. The surge from $23 trillion in debt in 2019 to $33 trillion now has pressured bond prices, driving yields up. This fiscal year's federal deficit exceeds $1.5 trillion, a 61% jump from last year. By 2025, rising yields and debt might make debt service costs surpass defense and, by 2026, Medicare spending. The U.S. is in a concerning debt spiral, risking either skyrocketing debt payments, increased inflation, or harsh austerity measures.

The U.S. government's interest payments are soaring, reaching $659 billion this year. As the Federal Reserve hikes rates, borrowing costs are skyrocketing. With the growing national deficit and increasing interest expenses, analysts warn of a looming financial crisis. These escalating costs could soon challenge major federal programs, threatening the country's fiscal stability and impacting everything from mortgages to corporate financing.

The US Fiscal Doom Loop presents a severe financial concern. Government spending has escalated, rising 14% year-over-year, while tax revenues have declined by 7%. Astonishingly, the 2023 fiscal year is predicted to conclude with a deficit exceeding $2 Billion, equating to roughly 8% of GDP. Historically, such significant deficits were linked to major economic crises, making the current situation alarming given the relative strength of the economy. If the FED's aggressive rate hikes trigger a recession in 2024, the US might face deficits nearing 20% of GDP, potentially reaching a staggering $5 Trillion if the downturn is severe.

Home sales plummeted to a decades-low, worse than the 2010 foreclosure crisis. Despite plummeting sales, prices surged, echoing pre-2008 trends. Goldman Sachs foresees an even bleaker 2024. Most homeowners are financially trapped with lower mortgage rates, discouraging moves. With a grim outlook, even potential rate drops won't help current homeowners. The market's future looks dire.

The world is seeing heightened geopolitical tensions. In Ukraine, escalations persist with U.S. involvement; Kosovo-Serbia confrontations risk becoming a proxy war between the U.S. and Russia; Israel has declared war against Hamas after a significant attack; Syria's situation remains complex with U.S., Turkey, and Russia involved; and China-Taiwan relations are cautiously watched. For investors, amidst these uncertainties, diversifying portfolios, particularly with inclusion of hard assets, is crucial.

Mike Maloney and Alan Hibbard prove beyond a shadow of a doubt who is the winner in the contest between physical gold and mining stocks.

Friday saw a significant drop in regional bank stocks, with unsettling declines in just one day. Earnings reports showed that the banks' challenges are far from over. Zions Bancorp and Regions Financial suffered massive share drops, and Comerica's Q3 earnings plunged by 29%. Fed Chairman Powell's remarks hinted at tightening policies, which could strain these banks even more. Early signs suggest the upcoming week might bring further challenges for the banking sector, as U.S. Treasury note yields rise ominously.

**No one predicted that creating trillions would lead to inflation.** In a recent speech, Fed Powell touched on the unpredictability of inflation, evoking memories of the 2008 crisis. The debate is whether the Fed acts on or shapes market expectations. Its presence inherently distorts the economy, as seen with the 2002-2004 housing bubble. The Fed's influence often results in market imbalances, and its history suggests it might repeat past mistakes, sometimes disregarding legalities.

Geopolitical tensions threaten the global economy, with the Federal Reserve warning of severe financial repercussions. The heightened risks of increased inflation, disruptions to supply chains, and declines in asset prices loom large. Amid the backdrop of Middle East conflicts and the war in Ukraine, the US faces its own internal challenges with surging borrowing costs and a rising federal deficit. Industry leaders predict dangerous times ahead, and the fallout from rising interest rates may soon hit businesses and households, potentially slowing economic activity.

In the wake of aggressive monetary tightening, the cost-of-living crisis has exploded, casting doubt on central bank strategies. With markets reeling from heightened interest rates and geopolitical instability, debates intensify over inflation goals, asset purchases, and policy coordination. Most economists predict a shift away from past tactics, but persistent challenges spotlight glaring flaws in global financial approaches.

The Federal Reserve's actions have put the U.S. economy at risk. After inflating the M2 money supply post-pandemic, they contracted it sharply in 2022, mirroring conditions before the 1987 market crash. Their focus on lagging indicators rather than monetary signs threatens a severe downturn. The economy is on the brink, and the Fed's oversight may push it over the edge.

Trust in American institutions is eroding. Over 50% have little to no confidence in Congress, with only 3% expressing strong trust. The executive branch, led by Democrat Joe Biden, sees 39% of adults expressing distrust, with 56% of Republicans being particularly skeptical. Meanwhile, the conservative-majority Supreme Court faces skepticism from 36% of the population. This decline in trust extends to other pillars like religion, policing, and banking.

The Biden administration ran a $1.695 trillion budget deficit in fiscal 2023. It was the third-largest deficit in US history. The only time the US government ran bigger deficits was during the COVID years of 2020 and 2021.
The government closed out the year with a $170.98 billion deficit in September, according to the final Monthly Treasury Statement of the fiscal year. That was more than double the projection.

Bidenomics favors the top 1%, leaving the 99% struggling with low-wage jobs. A severe auto loan crisis looms, with delinquencies at a decades-high. Consumers face crushing debt and economic pressures, and a potential 2024 recession could worsen things. The Fed's interventions are further destabilizing an already shaky economy.

Biden's excessive federal spending has resulted in severe inflation, causing The Fed to hastily increase rates. The 10-year Treasury yield exceeds 5%, and the 30-year mortgage rate hits its highest since 2000 at 7.63%. Despite the economic strain, Biden seeks an additional $100 billion for Ukraine and Israel. Continuous reckless spending by the administration may lead to a predicted recession in 2024.

The US housing market is declining. Federal Reserve's Jerome Powell indicates potential rate hikes, suggesting concerns over high inflation. National Association of Realtors reports a 2.7% drop in active inventory and a 4.4% decrease in new listings from last year. The Fed's balance sheet remains near $8 TRILLION, with Powell giving no indication of significant reductions.

The mainstream continues to insist that the economy is fine. Inflation is beat. A soft landing is in play. But in his podcast, Peter Schiff said we're in the early stages of a financial crisis. It should be obvious, but very few people see it coming.