Precious metals news

September's Manufacturing Business Outlook Survey from the Philly Fed indicated a decline, moving back into contraction. The headline index fell sharply from +12 to -13.5, with significant decreases in new orders and shipments. Despite low jobless claims, the employment index contracted for the sixth consecutive month. Firms reported price increases, with 22% expecting the impacts of COVID-19 measures to intensify. Signs suggest building stagflationary pressures with slowing growth and rising prices.

U.S. unemployment claims dropped to 201,000 for the week ended Sept. 16. However, a UAW union strike impacting auto manufacturers may soon reverse this trend. The Federal Reserve maintains current interest rates but hints at a year-end increase. Strikes at Ford, GM, and Stellantis are disrupting supply chains, leading to layoffs. The labor market remains tight, but upcoming data will clarify its status.

U.S. Treasuries are now more volatile than gold for the first time in 45 years and that could mean trouble for your portfolio...

We thought we had learned our lesson from the last U.S. Housing Bubble, but unfortunately, we didn't.  The U.S. Housing Market is just as insane, or even worse than during the 2005-2008 period.  Americans have no idea that we are facing a massive Category 5 Storm in the U.S. Housing Market...

The BRICS group is expanding, with Saudi Arabia, UAE, Egypt, Iran, Argentina, and Ethiopia joining, strengthening its global economic and population influence. Post-expansion, the group will control around 41% of global oil production, boosted by the inclusion of significant Middle East oil producers. The bloc also has a combined gold reserve of 5,493 tonnes. The aim is to form a powerful coalition representing the Global South's interests, especially against Western dominance.

Equities and US Treasuries are now historically overvalued, indicating limited returns ahead, especially in an inflationary environment. As traditional 60/40 portfolios (equities/bonds) undergo reassessment, gold is gaining prominence. With Treasuries showing greater volatility than gold for the first time in 45 years, and central banks accumulating gold for stability, it's time to consider incorporating gold into the 60/40 portfolio for enhanced security and returns.

The CEO of DoubleLine Capital, a billionaire, warns of a weakening US economy due to factors like corporate layoffs, high credit-card debt, and increased mortgage rates affecting housing. He also expressed concerns about small businesses refinancing their debts at steeper rates. Gundlach, known as the "Bond King," anticipates a potential recession next year and believes the current economic growth is fueled by unsustainable government spending. With the Federal Reserve's rate hikes, the interest on government debt is set to surge significantly.

Apollo reports that a fresh default cycle has begun, with soaring default rates. U.S. corporate bond default rates have surged from roughly 1% in 2021 to 3% following the Fed's rate hikes. For speculative grade bonds, the default rates have climbed from 1.5% to 5% within a year. If the Fed manages to prevent a recession, it would be remarkable, especially as historical patterns suggest an impending recession.

The Federal Reserve maintained rates within the target range of 5.25%-5.5%, a 22-year high. Despite this, they indicated a 'soft landing' and increased growth forecasts. The 'Dot plot' reveals policymakers predict one more rate hike this year. By 2024 and 2025, rate projections increased by half a percentage point, indicating prolonged high rates. The growth forecast for 2023 is now 2.1%, up from the 1% predicted in June. Unemployment is expected to peak at 4.1%, down from the earlier 4.5% estimate. Since the last FOMC statement, the dollar has risen, while bitcoin and bonds have declined, gold basically unchanged

Jared Bernstein, chairman of the Council of Economic Advisers, displays alarming ignorance regarding economic realities. Despite rising national credit card debt and inflation, Bernstein falsely claims improved financial conditions for Americans. His analysis contradicts his administration's data, and with such misguided advice, the U.S. is on a concerning path towards recession.

The financial system teeters on collapse. Commercial real estate values and credit card defaults surge. A global dollar crisis emerges, with China offloading U.S. Treasuries. The banking system faces another potential crisis wave. Alarmingly, the Federal Reserve reports significant losses. Efforts to tame inflation falter as energy prices spike. With looming recession risks and potential rate hikes, the financial outlook is bleak. Investors, be wary.

U.S. Treasury yields declined, with the 10-year yield retreating from 15-year highs ahead of the Federal Reserve's latest update. Despite a recent dip, Treasury yields have soared to multi-year highs amidst fears of higher rates potentially leading the U.S. economy into a recession. While the market anticipates the end of the Fed's rate-hiking cycle, the possibility of further rate hikes remains. Even as the expectation for additional hikes by the Fed this year lessens, concerns over inflation and its impact on the economy persist.

Today, China faces concerning deflationary trends, with consumer prices dropping for the first time in two years, largely driven by falling meat prices. While there are isolated price surges, notably in tourism, a vast majority of sectors, including home appliances, transport, and the broader manufacturing sector, are seeing declines. This sustained deflation in China, the world's largest manufacturer, poses the risk of exporting this deflation globally, potentially impacting advanced economies.

For the majority of this century, Germany showcased remarkable economic achievements, leading global markets with luxury cars and industrial machinery. With exports driving half of its economy, employment flourished, and while other European nations grappled with debt, Germany's financial strength became a model for many. Now, Germany is the world’s worst-performing major developed economy, with both the International Monetary Fund and European Union expecting it to shrink this year.

Expectations are rising for the termination of the subzero rate policy by March, marking a significant departure from over a decade of extensive stimulus by the central bank. Such a move could lead to a stronger yen, a decline in stocks, and alter capital flows in Japan, signaling potential economic turbulence ahead.

US home sales are predicted to face their steepest decline since 2011, with Fannie Mae projecting sales to plunge to a mere 4.8 million this year due to soaring mortgage rates, reaching a staggering 7.18%, the highest since 2001. This financial strain, combined with a looming economic slowdown anticipated by Fannie Mae economists for next year, casts a bleak shadow over the housing market. Despite some pointing to current consumer spending as a positive sign, Fannie Mae warns of the unsustainability of these trends, especially given the drop in real disposable personal income.

The FOMC is anticipated to keep rates steady at 5.25%-5.50% tomorrow. Experts are divided on whether this is the final rate hike or if another is expected in November. Goldman's Jan Hatzius and UBS's Jonathan Pingle believe July might have been the last hike. Fed Chair Jerome Powell is likely to focus on addressing inflation concerns, while the possibility of a November rate hike remains contingent on future data.

With price inflation running rampant in Japan, Japanese households are rushing to buy gold.
The sudden surge in demand, along with the devaluation of the yen, has driven the price of gold to record highs in yen terms.

The Federal Reserve continues to bail out US banks as the financial crisis that kicked off last March continues to smolder behind the walls.
Banks borrowed an additional $2.2 billion from the Federal Reserve’s bank bailout program in August. This was on top of the $3.7 billion they borrowed in July.

Last month, the BRICS economic bloc extended invitations to six new members, including Saudi Arabia. What are the ramifications of this expansion? That remains to be seen.
But as Ron Paul pointed out, it could further erode the West's economic power, and ultimately threaten the status of the dollar as the exclusive global reserve currency.