Precious metals news

Amid growing global political and economic uncertainties, factors such as escalating public debt, geopolitical tensions, the "weaponization" of the US dollar, and waning US dollar credit pose significant challenges. Bolstering gold reserves serves as a strategic move to mitigate these risks, stabilize reserve assets, and fortify the financial system's resilience.

Gold and silver prices showed resilience on Wednesday, marking their fourth consecutive gain. Gold, particularly, rebounded impressively after a series of declines, with December delivery rising by $12 or 0.6%, closing at a near two-week high of $1,887.30 an ounce.

Paper money allows governments to print without needing taxes, reducing reliance on citizens. The Song Dynasty's overprinting led to hyperinflation and collapse. Today's global economies show similar risks with increasing inflation. The proposed solution is tangible asset-backed currencies like gold or Bitcoin, aligning government and citizen interests for stability and prosperity.

David Webb's book, "The Great Taking," claims there's a 50-year plot by central bankers to confiscate assets, including securities and debt-financed properties. With the decline of paper share certificates, most assets are only seemingly owned, making them vulnerable in a crisis. He warns of a designed financial crash that will enable this asset seizure. Webb advises being debt-free and holding tangible assets, especially physical gold or silver, to protect oneself.

The Federal Reserve's recent Minutes indicated a hawkish stance with a probable rate increase. However, Bloomberg Intelligence suggests a more neutral position. Since the hawkish announcement, the dollar has strengthened, and bonds have dropped in price. The minutes suggest a balanced view on upcoming policy decisions, leaning towards a pause in the November meeting unless significant CPI data changes arise.

Central banks globally are buying gold in record amounts to diversify from the dollar. State Street Global Advisors reports that these purchases reached 387 metric tons in the first half of 2023 alone, after an unprecedented 1,083 tons the prior year. This shift is partly attributed to the de-dollarization movement, led by nations like China and Russia, aiming to lessen the dollar's dominance in global trade. This move is also a response to the U.S. using the dollar's supremacy to enforce economic sanctions. The trend is anticipated to persist due to ongoing economic and geopolitical risks.

Billionaire Ray Dalio sounded the alarm in a Fox Business interview, asserting that the Federal Reserve's stubborn stance on maintaining high interest rates is pushing them into a precarious financial situation. Highlighting the global trend, he pointed out that central banks are hemorrhaging money. Dalio ominously predicts that the U.S. Federal Reserve, in a desperate move, will be forced to print money to counterbalance these significant losses.

House prices are set to plummet for the first time in a decade, claims a former Oppenheimer analyst who was dubbed the 'Oracle of Wall Street.' Meredith Whitney, known for her Wall Street predictions, anticipates a decline in U.S. house prices for the first time in a decade. The ageing Baby Boomer population downsizing and current high mortgage rates contribute to this trend. Recent data shows an uptick in reduced home listing prices, hinting at a market shift.

Real estate and banking authorities have issued a stern warning to the Federal Reserve, urgently pressing them to cease interest rate increases amidst skyrocketing housing prices and a severe lack of available homes. Their letter to the Fed and Chair Jerome Powell paints a dire picture of the housing market, emphasizing the detrimental consequences of the current monetary policy.

Janet Yellen, via a recent statement to the press, implies that interest rates will be much lower than current levels for the next 10 years. She is treading carefully amidst rising interest expenses. Though the Fed is combating inflation, the critical need for lower rates is clear. A CBO graph by Bianco Research shows interest costs could overwhelm tax revenues, suggesting that without maintaining lower interest rates, the nation faces potential bankruptcy.

High interest rates are causing concern among World Bank officials due to potential impacts on nations with large debts. The World Bank predicts prolonged elevated borrowing costs leading to slowed global growth. Past situations with high rates resulted in many economies going bankrupt, suggesting similar challenges may arise for heavily indebted countries.

Former Walmart U.S. CEO, Bill Simon, warns that consumers are facing challenges not seen in a decade, due to factors like inflation, higher interest rates, budget issues, polarized politics, student loan debts, and escalating tensions in Israel. These pressures are causing consumer caution, leading to a potential slowdown in spending.

The US is flagged as one of the worst performers among major economies, with its debt trends alarming. Government debt is predicted to approach 100% of global GDP by decade's end. The US deficit is set to exceed 8% of GDP this year and hover around 7% in five years. The surge in the 2022-2023 deficit is attributed to a sharp revenue drop. After recent political disputes in Washington, the IMF emphasizes the need to adjust policy ambitions or tax approaches to ensure financial stability.

Wholesale prices in September surged more than anticipated, underscoring escalating inflationary pressures in the U.S. economy. The producer price index shot up by 0.5%, significantly surpassing the predicted 0.3%, according to the Labor Department. This inflationary trend was predominantly fueled by goods prices, notably with gasoline prices skyrocketing by 5.4%. Despite the Federal Reserve's aggressive interest rate hikes to curb inflation, these mounting pressures show no sign of abating.

After a more than 3-year pause, government student loan repayments started again this month and it's already putting the squeeze on borrower's wallets. This is bad news for an economy already strained by massive levels of debt and rising interest rates.
Interest accrual on student loans resumed on September 1 with the first payments coming due in October.

The Reserve Bank of Zimbabwe (RBZ) has launched a digital payment system backed by physical gold.
The RBZ rolled out its digital gold-backed token in April after successfully implementing a program to produce physical gold coins in 2022. On Oct. 5, the central bank announced that these gold-backed digital tokens could be used as a method of payment for domestic transactions.

I write a lot about the national debt.
And most people don't care.
That's because there's a widespread belief that the dollar is invincible.
It isn't.

Today's big news was the Giant Shale Permian Merger of Exxon & Pioneer.  But, why would Exxon buy Pioneer if there is BIG TROUBLE brewing in the Permian?  Good question.  I provide my analysis with an update on the Texas & New Mexico Permian and why Exxon overpaid dearly for Pioneer...

Hedge fund magnate Paul Tudor Jones expressed concerns over increasing geopolitical risks and the U.S.'s rising debt, making stocks less appealing. Speaking on CNBC's Squawk Box, he highlighted the precarious U.S. fiscal situation, the worst since World War II. Jones warned of a vicious cycle where rising interest rates amplify funding costs and debt, leading to further financial strain. He believes bitcoin and gold offer better investment opportunities in the current scenario.

Germany, a leading global economy, is heading towards a recession, facing consecutive monthly drops in wholesale prices, indicative of a broader deflationary trend. Both exports and imports have plummeted, with trade being a significant driver of the German economy. Past supply chain disruptions masked this decline, but deflation is now highlighting the issue. Challenges like an energy crisis, strained relations with Russia, and dependence on a slowing China further weaken Germany's position. The country is in no shape to stimulate global economic growth.