Precious metals news

China is facing significant economic headwinds, evidenced by its recent slide into deflation. The once robust economy, which experienced growth rates above 10% in the 2000s, now confronts a slower GDP growth, currently pegged at 5.2% for this year. Additionally, the country grapples with decelerating exports, skyrocketing youth unemployment rates, and a turbulent property market highlighted by potential debt crises for leading developers. Xi's government has responded by tightening control over economic narratives and taking measures to silence negative economic news, further raising concerns over transparency and the nation's actual economic stability.

Despite the recent tech rally driven by generative artificial intelligence, concerns rise as Nvidia's shares have almost tripled in 2023, with some attributing this surge to speculative mania. Its substantial weight in benchmark stock indexes poses risks to everyday investors regardless of their belief in AI. The rapid stock growth of major tech companies has intensified worries about market concentration. With Nvidia trading at 41 times its last 12-month sales, doubts emerge about its valuation versus actual growth, suggesting potential for a significant market correction reminiscent of the dot-com bubble crash.

Producer prices rose by 0.3% MoM in July, surpassing expectations and marking the most significant jump since January 2023. This pushed the YoY rise to 0.8%. The increase was mainly driven by a 0.5% surge in final demand services, particularly in portfolio management, which saw a 7.6% price hike. Final demand goods only saw a slight increase of 0.1%, with meats seeing a notable 5.0% rise. Despite these hikes, diesel fuel prices dropped by 7.1%. The data suggests a more persistent inflation than anticipated.

The Bundesbank's gold revaluation account (GRA), representing unrealized gains from gold assets, stands impressively at €176 billion, highlighting gold's enduring strength as a financial asset. As central banks, including the Bundesbank, navigate the complexities of rising interest rates and financial losses, tapping into their robust GRAs can serve as a beacon of stability. Joachim Wuermeling of the German central bank, in a 2023 press conference, confirmed the bank's confidence in its GRA as a solid financial bulwark. Similarly, the Dutch central bank had expressed confidence in gold the previous year. The increased reliance and trust in gold assets by major central banks hint at a modern era where gold's prominence and relevance in the financial system are once again in the spotlight.

Key updates on the banking crisis, indicators challenging the Fed's outlook, and research on why now is the time to add to your silver portfolio...

The surging demand for silver, fueled by green technologies like electric vehicles and solar panels, is set to skyrocket in the upcoming decade. In 2023 alone, the silver requirement for solar tech is projected at 160 Moz. Silver's pivotal roles in these technologies, from solar cell coatings to electric vehicle connections, have led to a staggering record deficit of 237.7 Moz in 2022. Although new mines, such as Mexico's Cordero project, are being developed to address this demand, the Silver Institute forecasts a decrease in mined silver output over the next five years. Even with the introduction of new mines, the rapid consumption suggests that the world might be on a trajectory to running out of this essential metal.

Conservatives are concerned about Congress granting excessive power to executive and regulatory bodies. The U.S. faces a potential fiscal crisis, with projections suggesting the need to borrow over $100 trillion in the next three decades, four times its historical borrowing. This impending crisis is largely driven by underfunded entitlement programs like Medicare and Social Security. As the population ages, these programs grow in importance, with political pressures resisting reforms. If unchecked, this trajectory threatens economic stagnation and a potential catastrophic fiscal crisis, eclipsing past financial downturns. Recent downgrades of U.S. Treasury bonds by major credit agencies highlight this challenge. A fiscal commission might break the current policy deadlock, but past attempts by Congress have repeatedly failed.

The Federal Reserve's attempts to curb relentless inflation appear futile. Market indicators project a persistent inflation rate exceeding 2% for the foreseeable future. The 5-year breakeven inflation rate stubbornly remains above the Fed's target, showcasing their inability to control the situation. Notwithstanding aggressive interest rate hikes, inflationary pressures show no sign of abating. With crude oil and wheat prices on a worrying upward trajectory and geopolitical tensions mounting, global financial stability hangs in the balance. Wall Street's heightened alarm suggests an impending economic catastrophe.

Amid rising anxieties for the upcoming refunding week due to alarming forecasts of an impending deluge in Treasury supply, the Treasury's latest endeavor to offload $23BN in 30Y paper proved to be a dismal affair. Despite the sky not falling, this was undeniably the worst auction of the lot. The auction hit an alarming yield of 4.189%, the most unfavorable since July 2011, and a sharp increase from last month's 3.910%. The low bid-to-cover ratio and lackluster internals further accentuated the gloomy outcome.

The U.S. economy is under strain as many Americans tap into their retirement funds due to financial distress. With household debt, especially credit card balances, surpassing $1 trillion, concerns are rising about a potential slump in consumer spending. Bank of America's recent report reveals a 36% surge in "hardship distributions" from 401(k) plans compared to last year, indicating a troubling financial landscape for many.

**Summary**: Banks are increasingly engaging in "de-banking," where individuals' accounts are closed without clear reasons, often due to differing opinions or beliefs from the prevailing narrative. This trend is alarming as it weaponizes the banking system against those who challenge mainstream views. Prominent figures and ordinary citizens alike are being targeted. However, banks have shown double standards, allowing accounts of controversial figures and those promoting false narratives to remain open. The argument that banks are just private entities exercising their rights is flawed because banking today is more influenced by the government than free market principles. The ideal solution is a free market in money and banking, but that's not foreseeable. Cash is not a sustainable solution due to ongoing debasement and potential elimination efforts. Gold provides some protection but doesn't replace banking conveniences. A new alternative to the banking system, devoid of counterparty risks, is needed.

The annual increase in the Consumer Price Index (CPI) ticked up in July, after two months of big drops, revealing that price inflation might be down, but it certainly isn't out.
On an annual basis, CPI rose 3.2% in July, a tick higher than the 3% yearly increase in June, according to the latest data from the Bureau of Labor Statistics.

Ever heard of the "creep" phenomenon? It's where seemingly good intentions can, over time, lead to unexpected and often negative outcomes. In Mike Maloney's latest video, he delves deep into this concept, shedding light on some alarming trends:

Mortgage applications to purchase a home: -40% from 2022 and 2019, 3rd worst week since 1995, behind only two weeks in February. Mortgage rates have surged over 7%, the highest since 2002, leading to a significant drop in home sales. This spike in rates was influenced by the Treasury's announcement to issue long-term notes and bonds to fund government deficits, coupled with Fitch's downgrade of the US credit rating from 'AAA' to 'AA+'. As a result, mortgage applications for home purchases have seen drastic declines compared to previous years. Additionally, there has been a significant drop in refinance applications, severely affecting mortgage lenders and brokers. Despite these conditions, some homeowners are still opting for cash-out refinances either in anticipation of a rate drop or out of immediate necessity.

Developed economies are seeing a decline in the middle class, despite massive financial interventions. This isn't capitalism's fault but results from policies that lean towards heavy government control. Many misunderstand inflation, viewing it as mere price rises rather than the devaluation of currency due to excessive printing. This often benefits governments at the citizen's expense. In essence, inflation is a covert tax, diminishing wealth from savers. Central banks, not private ones, primarily drive artificial money creation. The Honest Money Initiative seeks to spotlight these issues and advocate for stable monetary policies. Unrestrained currency manipulation endangers both economic freedom and civil liberties.

The U.S. credit rating was downgraded by Fitch from AAA to AA+. Though this isn't a short-term market concern, it signals the country's unsustainable fiscal trajectory. Meanwhile, Moody's has flagged immediate threats, downgrading several U.S. banks due to looming recession in 2024 and potential profitability pressures. The anticipated crisis might not emerge from subprime mortgages, but from commercial real estate defaults. With changing dynamics in the post-pandemic world, both the CRE space and the banking sector are showing cracks. Investors should proceed with caution.

The money supply has sharply contracted, marking the deepest decline in 28 years and reminding many of the Great Depression era. From a peak in April 2022, the money supply has plummeted by $2.8 trillion or 15%, the most severe drop since the Depression. This decline has been accompanied by rising interest rates, with the Federal Reserve increasing the federal funds rate to its highest in over two decades. Companies, facing the weight of these interest rates, are declaring bankruptcy, resulting in massive layoffs. Loan accessibility has tightened, mortgage rates are soaring, and alarming levels of credit card debt are emerging despite increasing interest rates. Indicators suggest an economic bubble on the verge of bursting, with the Fed caught in a dilemma. If they pump more money, it will escalate inflation, further burdening the average American already grappling with skyrocketing living costs. This downturn, fueled by years of easy money policies, now puts the economy and ordinary citizens at risk.

After three straight months of net sales, central banks globally became net buyers of gold again in June.
On net, central banks bought 55 tons of gold in June as the Central Bank of Turkey switched from selling back to buying, according to the most recent data compiled by the World Gold Council.

The increase was majorly driven by shelter costs, which constituted a whopping 90% of the July increment. This might be a good thing for inflation measures, as rent increases in the real world are already easing, and the CPI index is merely catching up. This report gives the Federal Reserve more data to consider before their upcoming meeting, hinting at a generally favorable direction for inflation, despite the predominant role of a single weakening category.

First-time jobless claims spiked from 227k to 248k last week, notably in Ohio, California, and Texas. Potential fraudulent filings and eligibility changes in two states cloud the data, reminding us of January's concerning levels. While continuing claims seem to decrease, standing at 1.68 million, seasonal distortions might be misleading. The rise hints at vulnerabilities in the labor market amidst the Fed's tightening.