Precious metals news

The 2024 presidential candidates are being urged to commit to not altering Social Security. However, such a commitment indirectly supports a 23% benefit reduction by 2033 due to the impending insolvency of the Social Security retirement fund. This reduction equates to a $17,400 yearly cut for a typical dual-income couple retiring that year. The Social Security program's trustees forecast the fund's reserves will run out by 2033, leading to mandatory benefit reductions for all 70 million beneficiaries. Candidates avoiding the issue are essentially supporting significant benefit cuts for retirees in the near future.

The decline in the office market is hitting small and regional banks hard. Delinquencies for commercial property loans rose to 4.41% in July. Forecasts indicate a significant drop in office values by 2025, possibly not recovering even by 2040. Over half of the $2.9 trillion in commercial mortgages will need renegotiation soon. However, an uptick in future delinquencies is expected as more property owners return their properties. Meanwhile, the Federal Reserve continues its money-printing.

Despite Wall Street's optimism about avoiding a recession, several industry executives have reported sector-specific downturns. Industries facing recessions include manufacturing, real estate, freight, and tech, among others. Statements from leaders like Jordan Kaplan of Douglas Emmett Inc. and Jonathan Johnson of Overstock.com indicate significant industry challenges. The increasing number of industries in decline might eventually lead to a broader economic recession.

A.P. Moller-Maersk, a leading global container shipper, anticipates a sharper drop in global demand for shipping containers due to subdued economic growth and inventory reductions by customers. Maersk faces challenges from falling freight rates, a slowing global economy. The company's Q2 earnings showed a decrease in EBITDA to $2.91 billion, down from $10.3 billion the previous year, and revenues plummeted 40% to $13.0 billion.

U.S. Treasury sales are under pressure, testing investor demand as they face the largest refunding auctions since last year. Surging yields, driven by a stronger U.S. economy and increased borrowing signals from the Treasury, highlight concerns about the rising U.S. budget deficit. Fitch Ratings' recent downgrade of the U.S.'s top credit rating underscores these fiscal worries. This week, the bond market grapples with absorbing over $100 billion in auctions amidst looming inflation reports.

The Biden administration's push for a central bank digital currency (CBDC) raises alarming privacy concerns, as such currencies could enable extensive government surveillance of individual transactions. Globally, skepticism is mounting: Nigeria's CBDC adoption flopped, and a mere 16% of Americans support a CBDC. As this distrust grows, U.S. lawmakers are proposing bills to limit CBDC development. The CBDC push is a worrying step towards reduced financial freedom and privacy.

U.S. consumers are facing significant debt issues. In May, consumer credit growth plummeted over 50% from April. While credit card debt increased, student and auto loans unexpectedly dropped for the first time since April 2020. By June, credit card debt decreased. Usually, a decline in this area suggests an impending recession. This comes as credit card interest rates surge to an alarming 22%. Additionally, student loans decreased by $9.1 billion, and with mandatory repayments resuming soon, more financial strain is anticipated.

Australia has become the front line in the war on cash with an aggressive effort to ring physical money out of the economy.
Over the last financial year, more than a billion dollars worth of physical cash disappeared from circulation, according to data released by the Reserve Bank of Australia (RBA). The Australian news service 9News called it "the strongest sign yet" that the country is moving toward a cashless society.

There is something brewing in the silver chart that Mike Maloney wants you to see. To unpack this, Mike has invited Tavi Costa, a renowned portfolio manager at Crescat Capital, onto the show. Tavi's insights have been spotlighted by Bloomberg, The Wall Street Journal, CNN, and many other major outlets. Together, they delve deep into what might be on the horizon for silver. In this riveting discussion, they explore:

Flashing another recession warning sign, credit card spending suddenly fell off a cliff in June.
American consumers have been using credit cards to make ends meet for months, but with credit card debt at record levels, rising interest rates appear to have slammed the door on spending. Credit card debt contracted in June for the first time since April 20201, according to the most recent data released by the Federal Reserve.

Americans purchased more gold bars & coins in the first half of 2023 than any other period since the 2008 Global Financial Crisis.  More importantly, Americans' physical gold bullion buying is greater than during the Pandemic shutdown in 2020....

Russia and China are hinting at introducing a gold-backed trade settlement currency at the upcoming BRICS summit. This could pave the way for a return to gold standards using the currency board model. Both nations have sufficient gold reserves to implement such standards, allowing allied countries to align with the renminbi. Recent shifts of gold from the West to the East have left western nations with less bullion to back their currencies, emphasizing gold's stability. A rising sentiment against the dominance of the fiat dollar emerges, suggesting that gold-linked trade currencies might gain traction. This development could encourage nations to re-evaluate their relationship with gold and credit, with Russia and China leading the way.

During high-growth periods, interest rates rise as businesses vie for funds, while during low-growth, rates drop due to decreased borrowing and lending. Central banks often misinterpret these dynamics and resort to devaluing their currency as a strategy. However, in a globalized world, a cheaper currency can increase export costs and risk retaliation from trading partners. Such currency wars, a race to the bottom in devaluing currency, lead to more harm than benefit, as seen in prolonged economic downturns like the Great Depression. Japan's continuous economic struggles exemplify the pitfalls of this approach.

Claims of defeated U.S. inflation are misleading. Despite the CPI's presentation, real indicators show high, ongoing inflation caused by Federal Reserve stimuli and COVID-19 economic responses. Temporary tactics, like releasing strategic oil reserves, only offer short-term relief. Geopolitical disruptions in wheat and rice exports further fuel inflation. The U.S. economy is caught between inflationary and deflationary pressures.

The U.S. national debt has surged by over $276 billion in a month, reaching $32.608 trillion by July 31st. Recent data suggests that if this fiscal trajectory continues, the U.S. could accumulate a debt of $143.895 trillion within three decades. Immediate solutions are required, including changes in both spending and revenue, and addressing complex issues like entitlements. As of August 3rd, the federal debt stands at $32.604 trillion.

Bidenomics favors large-scale government intervention, resembling FDR's approach. Recent job data caused bond market fluctuations, with 10-year yields briefly dropping below 4.05% before rising to 4.12%. The upcoming CPI report could influence the market further. Despite a current trend towards a flatter yield curve, inflation concerns hint at a steeper curve. The challenges faced by central banks in managing large reserves amid inflation are becoming a topic of political attention.

Major US banks, including JPMorgan Chase and Bank of America, have seen a $262 billion drop in customer deposits. In contrast, Kansas's Heartland Tri-State Bank failed, with Dream First Bank, N.A. assuming its assets and deposits. While big banks are losing deposits, JPMorgan still reported a 67% rise in quarterly profits. Analysts believe smaller banks are attracting customers by offering better rates.

Goldman Sachs, JPMorgan Chase, and other lenders are facing challenges in selling commercial real estate debt due to rising concerns about the sector's stability. The shift to remote work and job cuts have particularly impacted office property values, causing a market slowdown. While many banks are looking to offload such loans, possibly at discounts, actual distressed sales remain limited. The uncertain valuation of these assets has also led some lenders to stop issuing new commercial real estate loans altogether.

Increasing numbers of Americans, unable to access their funds, are turning to local news outlets for assistance. A CBS News report highlighted several bank customers, including Charlotte Warren, Peter Spyropolous, and Gene Krichevsy, who struggled for months or years to access their accounts. In total, almost $90,000 was inaccessible to them. Once CBS intervened, the banks quickly resolved the issues.

A looming fiscal standoff in Washington could disrupt the Federal Reserve's upcoming policy decisions and further dent America's global economic reputation. Fitch Ratings recently downgraded the US debt's AAA status, intensifying political tensions over spending. With Congress not addressing these issues, the risk of a government shutdown after September 30 rises. This situation could affect the Fed's September interest-rate decision and impact consumer spending and GDP growth.