Precious metals news

Recent sharp fluctuations in rates, with the 30Y crossing 5% for the first time since 2007, are raising alarms about financial instability. The dramatic increases, including the largest hike in 30yr yields since 2009, have major banks like Goldman and JPMorgan warning of potential financial disasters. Such events could see JPMorgan profiting from regional bank failures, leaving taxpayers to shoulder the burden of toxic assets.

Perth Mint reported a surge in gold and silver sales in September due to a dip in prices. Gold coin and minted bar sales increased to 36,530 ounces from 34,875 ounces in August, a 59% drop year-on-year. Silver sales soared by 41% monthly to 1,116,779 ounces, but declined 57% annually. Notably, there was a significant demand for 2oz silver coins, particularly in the U.S. Gold and silver prices fell in September by 4.7% and 9.3% respectively, attributed to the U.S. Federal Reserve's hawkish stance on interest rates. Perth Mint is the world's leading producer of newly mined gold and the top refiner in Australasia.

DoubleLine Capital's Jeffrey Gundlach warns of a potential economic decline in 2024 and foresees Americans facing severe financial challenges. He criticized the excessive government stimulus, stating it inevitably led to inflation. Gundlach highlighted the unsustainable rise in credit card spending, describing it as a "death spiral" for personal finances. He also noted that traditional economic indicators predict increased market volatility, with an inverted yield curve and stagnant unemployment rate.

This article looks at the collateral side of financial transactions and some significant problems which are already emerging.
At a time when there is a veritable tsunami of dollar credit in foreign hands overhanging markets, it is obvious that continually falling bond prices will ensure bear markets in all financial asset values leading to dollar liquidation. This unwinding corrects an accumulation of foreign-owned dollars and dollar denominated assets since the Second World War both in and outside the US financial system.
Furthermore, collapsing collateral values, which are increasingly required backing for changing values in over $400 trillion nominal in interest rate swaps are a new driver for the crisis, forcing bond liquidation, driving prices down and yields higher: we are in a doom-loop.
What action can the authorities take to ensure that counterparty risk from widespread failures won’t take out inadequately capitalised regulated exchanges?
It seems that they ...

High interest rates, surging oil prices, and a robust dollar are endangering the economy. U.S. bond yields have skyrocketed, intensifying borrowing costs and home affordability issues. With the Federal Reserve slow to adjust to these economic shifts, the potential for stagflation and financial instability grows. The prolonged high rates suggest the U.S. and the rest of the world could face a severe economic downturn.

Investors are growing concerned as U.S. borrowing skyrockets, posing potential risks to markets and the economy. Historically, the U.S. has been the world's primary lender, stepping in during financial crises. However, the escalating trajectory of U.S. debt and the lack of political intervention now amplify market vulnerabilities. Recent spikes in Treasury yields can't be solely attributed to inflation or short-term rate changes but rather to rising government deficits.

Losses in longer-dated Treasuries are nearing record meltdowns in US market history. Bonds with maturities of 10 years or more have plummeted by 46% since March 2020, almost matching the 49% decline in US stocks after the dot-com crash. The 30-year bonds fared worse, dropping 53%, close to the 57% decline during the 2008 financial crisis. As the Federal Reserve aggressively tightens monetary policy to combat inflation, the combination of low initial yields, long-term debt, and surging rates has been devastating for investors. These bond losses have outpaced the average US equity bear market declines since 1970.

Americans filing for initial jobless benefits remained at a year-to-date low with 207k claims last week, almost consistent with the 205k the previous week. Continuing claims also hit a year-to-date low at 1.664 million. However, discrepancies arise as ADP and BLS job data trends weaker, while initial jobless claims improve, raising questions about the true state of the job market.

Soaring global debt levels have surpassed safe debt-to-GDP ratios, signaling looming financial instability. Although nations can avoid default by printing more money, this strategy risks severe consequences. The U.S., once a model for managing debt through gradual inflation, has recently adopted reckless fiscal policies. Countries like Japan mirror this pattern, with poor fiscal discipline and minimal inflation. A sudden, impending debt crisis threatens global economies.

BREAKING: US debt has skyrocketed by $275 billion in a single day, setting a new record at $33.44 trillion, according to Zerohedge. Just two weeks ago, the US debt reached $33 trillion. This rapid increase equates to a daily debt accumulation of $32 billion over the past 14 days. If this rate continues, the US will add another $1 trillion in debt within a month. The debt ceiling is uncapped until 2025. All as a part of the debt ceiling bill. The debt ceiling “crisis” is far from over.

JPMorgan and Goldman Sachs have highlighted the plummeting sentiment in US consumer stocks. Following a short-lived surge at September's end, the XRT retail ETF is now at its lowest since June. With Q4 approaching, stakes are high in the consumer sector. Goldman's Prime Brokerage observed that shorting in consumer discretionary stocks has reached its peak this year due to mounting macroeconomic challenges.

The White House announced loan relief benefiting 125,000 Americans, due to modifications in federal programs. This includes $5.2 billion for 53,000 public service employees, $2.8 billion for 51,000 borrowers with over 20 years of payments, and $1.2 billion for 22,000 borrowers with disabilities. This action follows the Supreme Court's rejection of Biden's initial plan to reduce $430 billion in student debt.

Amid the era of "Bidenomics," college students are grappling with surging credit card debt as interest rates soar. Despite record-high credit card debt signifying financial strain, certain Republicans, like Senator Josh Hawley, are suggesting solutions reminiscent of Biden's economic policies. Hawley's proposed government rate regulation might deny some Americans credit access altogether or provide credit under unfavorable terms. Instead of government-led fixes, a genuine solution requires reduced federal spending, improving credit access, and beneficial tax policies. Government "solutions" like regulating credit card rates merely mirror the issues of Bidenomics.

Services PMI has dropped to its lowest since January, barely indicating growth. Costs have surged, causing service providers to increase prices rapidly. Consumer services demand, including travel and tourism, has diminished, and financial services are in a slump. As the year ends, indicators suggest slowing GDP growth coupled with rising prices, confirming stagflation.

Jeff Gundlach of DoubleLine Capital warns that rising bond yields indicate an imminent U.S. recession. He emphasized the rapidly de-inverting U.S. Treasury yield curve and stated that even a slight increase in the unemployment rate will trigger a recession alert. Historically, an inverted yield curve has foreshadowed every U.S. recession since 1969. Other Wall Street experts also foresee potential economic turmoil due to the bond-market shifts.

Rising interest rates are destabilizing Wall Street's outlook. The Federal Reserve's previous low-rate stance is being upended, leading to significant financial market declines. Banks face major risks from increased government debt. As foreign investors and the Federal Reserve reduce their holdings in U.S. government bonds, fears of an impending recession intensify. Critics argue the Fed's aggressive actions might necessitate policy reversals.

Surging interest rates, coupled with escalating investor wariness and excessive borrowing in recent years, have plunged numerous developing countries into severe debt predicaments. As these nations grapple with the repercussions, resolving this escalating crisis will dominate discussions at the upcoming IMF and World Bank annual meetings in Marrakech.

Mortgage rates soared last week, leading to a 6% decrease in mortgage demand, hitting its lowest point since 1996, according to the Mortgage Bankers Association. The 30-year fixed-rate mortgage interest surged to 7.53%, up from 6.75% a year ago. Consequently, applications to refinance homes dropped 7% and purchase applications fell 6%, marking a 22% decline from the previous year. The spike in rates is discouraging potential homebuyers, and while adjustable-rate mortgage applications rose, overall confidence in the mortgage market is dwindling

Growth prospects and concerns over mounting government debt are driving long-term interest rates to a 16-year high, threatening economic stability. The Federal Reserve's attempts to address inflation with higher short-term rates have been overshadowed by this unexpected surge. The 10-year Treasury note yield has reached levels unseen since the 2007 crisis, causing significant stock market declines. If these elevated borrowing costs persist, they could hinder global and U.S. economic momentum, leaving experts puzzled over the precise causes of this rapid ascent.

ADP's job report showed a significant drop, adding only +89k jobs, the lowest since January 2021. Sectors like Manufacturing and Professional & Business Services experienced notable job losses. Additionally, wages have consistently declined over the past year. The Employee Motivation and Commitment Index unveiled dwindling worker motivation, which could negatively impact productivity. The reasons are ambiguous, but the decline suggests the need for workers to adapt to the changing job market. The slide in work motivation further underscores the shortcomings of 'Bidenomics'.