Precious metals news

Over $10 trillion spent on Covid overreaction, with Trump and Biden contributing $6 trillion and $4 trillion respectively. Massive debt/contrived money added, but effects overlooked amidst panic and distraction. Funds created and distributed electronically, while most received stimulus checks. Vast sums remain unpaid and stolen due to fraud. Giveaways continue, but their profound and lasting effects are ignored. Hundreds of new billionaires created, hospitals and pharma companies profited, inflation surged. Inflation's ratchet effect worsens economic disparity. Lockdowns, masks, tests, and shots showed minimal differences in health outcomes. The toll: wealth loss, missed experiences, social stratification. A broken reality with irreparable losses.

The Jackson Hole symposium highlighted central banks' uncertainty in a shifting global landscape. Discussions centered on changing R* (neutral short-term interest rate) due to deflation concerns, labor market shifts, energy transition, and geopolitical shocks. The acknowledgment of errors and lack of guidance marked a shift towards wisdom in central bank narratives. Market forecasts still struggle to accept central banks' reduced control and the potential for deflation.

China's major banks are set to cut interest rates on existing mortgages and deposits, a move not seen since 2009's global financial crisis. State-owned lenders like Industrial & Commercial Bank of China and China Construction Bank are expected to reduce rates on most of the nation's $5.3 trillion outstanding mortgages, primarily on first-home loans. These measures aim to stimulate consumer spending, attract funds to the stock market, and ease pressure on banks' profit margins. However, skepticism remains about their effectiveness in boosting investor confidence and the overall economy.

Contrary to the expected slight decline to 9.5 million, the July job openings report delivered a significant surprise. The Bureau of Labor Statistics revealed a startling figure of just 8.827 million job openings, marking the first instance of sub-9 million since March 2021. This shocker ranked as the third largest miss on record. What makes matters worse is that, if not for the BLS's considerable reduction of the May count from 9.582 million to a questionable 9.165 million, the drop would have been nearly 800,000 job openings. This pattern of downward revisions has become a recurrent theme during the Biden administration, leading to skepticism about data accuracy and raising concerns of deliberate data manipulation.

After reaching two year highs in July, The Conference Board consumer confidence survey was expected to show a very modest decline in August. Instead it plunged from the best in two years to the weakest since May (July was revised down from 117 to 114 and then August printed 106.1, dramatically below the 116.0 exp).

San Francisco and Seattle are down near 10% year-over-year (YoY) while Chicago and Cleveland lead in price gains. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported 0.0% annual change in June, up from a loss of -0.4% in the previous month. The 10-City Composite showed a decrease of -0.5%, which is an improvement on the -1.1% decrease in theprevious month. The 20-City Composite posted a year-over-year loss of -1.2%, up from -1.7% in the previous month.

The federal government has added $1.3 trillion to the national debt in just three months.
When the fake debt ceiling fight ended and Congress suspended the federal government’s borrowing limit for two years in June, the national debt stood at $31.46 trillion. As of Aug. 26, the debt had surged to $32.81 trillion.
And with the Biden administration running massive deficits month after month, there's no reason to think the borrowing is going to slow down anytime soon.

China's economic troubles, including a real estate slump and high Gen Z unemployment, are causing deflation and sluggish growth, which experts like Brendan McKenna of Wells Fargo fear could infect the U.S. and lead to a global economic downturn. Key challenges include structural imbalances, inadequate social security, and unstable international relations. While some believe China's troubles may not significantly impact the U.S., the situation underscores the complexity and interconnectedness of the global economy, posing a threat to the global economy.

The Japanese government has signaled economic recovery with increasing prices and wages, but there is growing concern over higher living expenses. Despite the highest pay offers in decades and core inflation exceeding the Bank of Japan's target, the government did not officially declare an end to deflation, indicating continued uncertainty. This underscores the deeply rooted deflationary mindset of households and companies, despite significant fiscal spending and ultra-loose monetary policy, highlighting the ongoing struggles of the Japanese economy.

There is a growing consensus that the Federal Reserve can slay price inflation while guiding the economy to a “soft landing.” In fact, Fed economists now project the US economy will not spin into a recession. Other mainstream pundits and prognosticators have taken up this narrative. But there are plenty of reasons to doubt it.

The economic outlook is grim as the former Bank of England economist and adviser to the UK Chancellor forecasted a recession due to necessary high borrowing costs. The lack of confidence among policymakers in achieving a sustainable 2% inflation, combined with persistent concerns about price pressures and the market's failure to adjust to economic weaknesses, underscores a bleak "higher-for-longer" rate scenario. This dismal outlook is further compounded by the prediction that only a recession can quell the rampant inflation, signifying a dire situation ahead.

Mike Maloney explores the remarkable surge in technology that blurs the boundary between manipulation and reality.

The United States is in serious trouble after exporting a record amount of gold since 2001 while domestic mine supply collapsed.  This will likely go down in history as one of the United States' biggest Blunders.  So, how much gold did the USA export??  A Bunch... LOL...

Morgan Stanley's wealth-management business sees a buying opportunity in gold as it remains resilient despite the surge in real interest rates. Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, notes that gold's resilience may be due to the view that the rate hike is temporary and "purely technical," or because gold is holding up as an alternative currency when the dollar is vulnerable due to inflation and ballooning deficit-financed spending. This presents a favorable intermediate outlook for gold, encouraging buying on weakness or declines in rates.

Western democracies are unprepared for the impending shift from the fiat dollar to an alternative international trade settlement system based on commodities, including gold, initiated at the BRICS summit. This move challenges the Keynesian economic theory, promoting production over aggregate demand, and is accelerated by the fiat dollar's debasement and Russian sanctions. The new gold settlement system will encourage sound economic practices, minimize government spending, and ultimately lead to the demise of fiat currencies, making them the "barbarous relics" as predicted by Keynes.

The US national debt is surging, with $97.7 billion added in one week, reaching a total of $32.759 trillion. Finance expert Larry McDonald warns of upcoming "financial repression," as the Fed plans to keep real returns on savings below inflation. This tactic, part of a long-term strategy, is designed to decrease government debt and enhance the debt-to-GDP ratio without triggering hyperinflation, a delicate balance that requires a slow, 15-year approach rather than a quick, 15-month fix.

Home prices have massively diverged from real disposable personal income (DPI), with prices being roughly 80% above where they should be, indicating an understated bubble. This discrepancy is attributed to the Federal Reserve's tendency to create financial bubbles by maintaining low rates for extended periods. Despite the Fed committing to a 2% inflation target, there is skepticism about their ability to measure it accurately, leading to increasing bubbles over time and a shrinking middle class.

The housing market is currently the least affordable since 1984 due to the Fed's monetary stimulus during Covid, causing a surge in home prices while real median weekly earnings dropped. A recent increase in home prices and a 22-year high in 30-year fixed mortgage rates have worsened the situation. Now, 38.6% of median household income is needed for average home payments, a 92% increase from two years ago, straining budgets already hit by inflation. To restore home affordability to its 25-year average, a significant decline in home prices, reduction in mortgage rates, or growth in median household incomes is necessary, according to Black Knight.

At the Jackson Hole meeting, global officials expressed concern over the new challenges brought by the pandemic and Ukraine war, disrupting established economic relationships. They called for a revised approach to address persistent price pressures, market volatility, and the global debt problem, particularly in emerging economies. Despite confidence in battling inflation, officials warned against early victory declarations and highlighted the need for new models to address sector-specific shocks. There was also doubt about the capacity to provide significant fiscal support in another large shock, indicating a precarious position.

Gold and silver rallied from the lows of last week in quiet Comex trade for gold, but more active trade in silver. In Europe this morning, gold was at $1916, up $27 from last Friday’s close, and silver was up $1.30 at $24.14.