Precious metals news

If you want to understand the foundation and implications of the ENERGY CLIFF, this interview with Jesse Day at Commodity Culture helps Connect-The-Dots.  Unfortunately, most individuals and investors still do not understand how much the world will change in a relatively short period of time...

A recent report by the world's fourth-largest asset manager reveals an intriguing plot twist. The millennials, not the baby boomers or Generation X, have emerged as the dominant players in the field of gold investment. State Street's report based on a survey identifies millennials as the largest contributors to gold investment, exceeding the older generations by a substantial margin. Millennials have exhibited an enlightened understanding of wealth preservation, allocating an impressive 17% of their portfolio to the timeless asset, outdoing the 10% invested by boomers and Gen X. This enlightened approach to investment indicates a profound shift in how the younger generation views wealth management, underlining their appreciation for enduring value in uncertain times. Gold continues to maintain its warm glow in 2023, with prices rising by almost 9%. As the economy continues to navigate turbulent waters, the demand for this timeless safe-haven asset remains buoyant, with the prospect of a recession doing li...

The alarming depth of the current yield curve inversion is signaling a potential major economic downturn, even a severe crisis. The degree of inversion is measured by the difference between long-term and short-term yields, usually the gap between 10-year and 3-month Treasury yields. The inversion is currently the most significant in over 40 years, with an average gap of -1.67 in June, a negative value unseen since 1981. Historical data shows such drastic inversions have always been followed by economic recessions, even going back 50 years. The only instance of a larger inversion occurred in the late 1920s, preceding the Great Depression. While some might question the absence of mass unemployment and recession despite the severe yield curve inversion, it's important to remember the lag between an inversion and the onset of recession. For instance, recessions started 13 and 16 months after the yield curve inversions of 1989 and 2006 respectively. While the curve inverted again in November 2022, we are only ...

Higher borrowing rates and stringent lending standards in 2023 have caused a 53% YoY increase in US corporate loan defaults, according to Moody's. The Fed's aggressive monetary policies, coupled with reluctance from banks to issue new loans, are driving companies into bankruptcy. Experts warn of a potential recession as the Fed continues to raise rates amidst economic uncertainty. The cost of debt has also soared to 9-13%, further hampering debt repayments. Bank of America predicts nearly $1 trillion in corporate debt defaults in the event of a full-blown recession. Sectors like business services, healthcare, and retail face the brunt, with record corporate defaults expected this year. Moody's projects the global corporate default rate to potentially reach 4.7% by year-end, and worst-case scenarios hint at a rate of 13.7%, surpassing the 2008 financial crisis levels.

The U.S. economy, while currently still growing, shows alarming signs of a looming recession. The leading economic index, a measure of ten key indicators, declined by 0.7% in June. This represents the 15th consecutive month of shrinkage, a recession red flag reminiscent of the Great Recession in 2007-2008. Furthermore, seven of the ten indicators tracked by the Conference Board have shown a downward trend, suggesting a broad-based economic slowdown. This continued contraction is worrying many economists, leading to an increased prediction of a recession within the next year. The potential downturn is driven by factors such as escalating prices, tighter monetary policy, increasingly difficult-to-acquire credit, and reduced government spending. The Federal Reserve's sharp uptick in borrowing costs, aimed at countering inflation, is an additional headwind for the economy. The Conference Board is forecasting a recession from Q3 2023 to Q1 2024. Although the current growth rate is higher than expected, the sus...

Ex-Fed Chairman Bernanke foresees that the Federal Reserve will likely raise interest rates again at its next meeting, potentially driving a slowdown in the U.S. economy. This rate hike, as per futures market predictions, could be the last for a while, but not before causing potential damage. Bernanke's forecast resonates with his infamous "No Recession On Horizon" statement before the 2008 crisis, raising doubts about the accuracy of his predictions. Inflation is expected to drop "more durably" to the 3% to 3.5% range over the next six months, according to Bernanke, but only after triggering substantial financial stress. He believes the Fed will then take time to get down to its 2% target, implying prolonged economic unease. Bernanke also voiced concerns about the overheated job market. Despite a decline in job vacancies, there remains about 1.6 positions open for each unemployed person. This imbalance between demand and supply in the labor market needs to be addressed before the Fed can claim victory ov...

Governments in dire straits often resort to devaluing their currencies, and surprisingly, this tactic often leads to positive outcomes, as found by an Institute of International Finance (IIF) study. It examined 51 of the most substantial and persistent devaluation instances since 1990 and reported an upturn in economic growth just three years following devaluations. Countries see a rise in export volumes and a narrowing of current-account deficits, with some even shifting to surpluses. However, the decision to devalue is not without significant downsides. It tends to diminish the purchasing power of citizens, causing potential social upheaval. Despite this, some of the most indebted countries globally, including Egypt, Pakistan, Lebanon, and Argentina, have opted for or are considering devaluations in a desperate bid to address fiscal challenges and secure International Monetary Fund bailouts. The IIF suggests that in light of these findings, policy consensus should shift towards viewing currency devaluat...

David Rosenberg, veteran economist and president of Rosenberg Research, draws chilling parallels between today's frenzied stock market and the investment manias leading up to devastating financial crashes like those of 1929, the early 2000s, and 2008. In a recent research note, he points out the dangerous similarities between investors' current unflinching confidence and the misguided optimism from past catastrophic periods. This includes Irving Fisher's 1929 proclamation of a 'permanently high plateau' for stocks and Abby Joseph Cohen's erroneous prediction of 'profit expansion' ahead of the tech bubble burst. According to Rosenberg, today's surge in the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average is fueled by a fear of missing out (FOMO), similar to past speculative manias. He suggests the current market 'balloon' is filled with hot air and warns it's uncertain when it will burst and fundamentals will regain their rightful place. He also paints a bleak picture of the US economic outlook....

Janet Yellen recently said she doesn't think the US economy will slip into a recession. Friday Gold Wrap host Mike Maharrey explains why he doesn't think we should put a lot of stock on Janet's prognostications, and he goes on to point out some major fissures in the economy and financial system that are opening up under the surface.

The US existing-home sales have been on a consistent decline since February 2022, with only slight upticks in May and February, according to data from the National Association of Realtors (NAR). June 2023 saw a further 3.3% drop in sales to a seasonally adjusted annual rate of 4.16 million, a significant 18.9% decrease from the previous year. Despite the median existing-home sales price for June reaching $410,200, the second-highest ever recorded since NAR began tracking in January 1999, sales have not recovered. Inventory of unsold homes remained static at 1.08 million, equivalent to a mere 3.1 months' supply at the current sales pace. First-time buyers, a vital component of the housing market, were accountable for only 27% of sales in June, a decrease from 28% in May and 30% in June 2022. Furthermore, all-cash sales rose to 26% of transactions, indicating a decrease in traditional financing. The slump in home sales mirrors the scenario of the mid-1990s and appears to be directly linked to higher mortgag...

Barry Sternlicht, the billionaire investor and head of Starwood Capital Group, recently warned of a growing crisis in US commercial real estate (CRE), characterizing it as a "Category 5 hurricane." Sternlicht's firm recently defaulted on a $212.4 million mortgage for an Atlanta office tower. His warnings stem from the Federal Reserve's 16-month campaign of aggressive interest rate hikes to combat inflation, which he states is the primary cause of the CRE downturn, not speculation. In the aftermath of the regional bank crisis in March, refinancing existing buildings has become challenging for landlords, especially as vacancies increase. Sternlicht recalled his firm's attempt to secure a bank loan for a small property, where out of 33 banks, only two responded with offers. Adding to the distress, Morgan Stanley has identified a debt maturity wall of CRE loans amounting to $500 billion in 2024, ballooning to $2.5 trillion over the next five years. Landlords' inability to refinance properties, coupled with ri...

A potential strike by 340,000 unionized workers at United Parcel Service (UPS) could significantly exacerbate the already pressing issues of inflation and supply-chain disruptions in the U.S. economy. If an agreement isn't reached by August 1, a walkout by the International Brotherhood of Teamsters could not only halt the delivery of 19 million packages per day but also lead to a rise in shipping prices by competitors like FedEx Corp. This labor unrest may boost the inflation rate, which has already been soaring to a four-decade high of 9.1% last year, challenging the Federal Reserve's aggressive efforts to rein it in. Additionally, if UPS agrees to the Teamsters' demand for significantly higher wages, it may instigate a trend of large wage increases across industries, further impeding the Fed's attempts to stabilize price growth. As per Kathy Bostjancic, chief economist at Nationwide Mutual Insurance Co., this could lead to a change in the employer-employee relationship, pushing other workers to negotiat...

The world's largest gold miner saw its costs explode to record highs due to increased costs and declining production.  The company's decline in gold production may be temporary, but I believe the costs will continue to increase in the quarters and years ahead...

We're thrilled to bring you a full-length interview featuring the highly respected and widely followed precious metals expert, Rick Rule.

Ishabaka shared valuable insights from the book "The Great Depression, a Diary." The lessons learned from this historical account hold significant relevance to our current global economic situation, particularly the 2023 "Everything Bubble." Key takeaways from the diary include: 1. Diversification: Investments varied in success during the Depression. In the U.S., those invested in stocks and real estate suffered, while those who held Treasury bonds did well. Conversely, in Germany, bondholders faced ruin, but real estate investors thrived. 2. Cash Reserves: A common problem during the Depression was a lack of liquid assets. Roth, the diary's author, repeatedly expressed regret for not having cash on hand to seize investment opportunities in depressed stocks or real estate. 3. Repeated Failure of Market Predictions: The book underlines the difficulties, even for an intelligent individual like Roth, of predicting market trends. It stresses the dangers of investing based on market predictions, which are ofte...

In 2022, US Treasuries experienced their worst year in American history, with the 10-year Treasury falling almost 18%, and the 30-year Treasury plunging over 39%. This collapse challenged the long-held belief that Treasuries are a risk-free, reliable store-of-value asset, pushing many investors to rethink their strategies. The global bond market, worth an estimated $133 trillion, is predicted to become a capital graveyard as the value stored in it may have to move elsewhere. Underpinning these developments are several critical factors. The US federal government's enormous and rapidly growing debt (over $32.5 trillion) is unsustainable, with default being an inevitable but still uncertain outcome. The debt is expected to continue growing, and the recent weaponization of the US dollar and Treasuries, shown in the sanctions against Russia, has amplified political risks associated with these assets. Moreover, foreign interest in Treasuries has declined, with major holders like China significantly reducing the...

There's an ever-growing concern about who will purchase the skyrocketing US government debt that has ballooned to an alarming $32.5 trillion. The overwhelming demand for long-term Treasury securities can't be ignored, as it's causing yields to remain lower than anticipated. Instead of the 10-year yield being at an expected 6.8%, it is lingering at a mere 3.8%, with the 30-year yield not far behind. There are fears that yields may have to inflate to attract more buyers, with the simple principle of high yield equating to higher demand. Although this strategy works for junk bonds, the same can't be said for Treasuries, at least not yet. Foreign buyers, especially from Europe, are still piling on to the buying spree. However, China and Japan, previously the two largest holders of Treasury securities, are shedding their holdings. As per the Treasury Department's TIC data, the total amount of Treasuries held by foreign holders in May was $7.53 trillion, a slight drop from April's record holdings, yet up by a m...

The U.S. is irresponsibly wasting billions of dollars on energy subsidies, which is leading allied nations down a similar, damaging path. The Inflation Reduction Act (IRA) favors domestic production and allocates excessive subsidies to wealthy companies, creating a global financial imbalance. Even foreign firms stand to benefit, with projections suggesting that Korean battery manufacturers could receive $8 billion annually from US taxpayers by 2026. In a desperate bid to retain companies lured by U.S. subsidies, Japan, South Korea, and the EU have introduced costly incentives, further escalating this global subsidy war. An alternative approach of enhancing the business environment, instead of carelessly throwing around taxpayer money, is overlooked. Disturbingly, the Southern U.S. states are gaining dominance in automotive jobs, fueled by lower costs and the appeal of cheaper living. Most businesses base their investment decisions on factors other than subsidies, yet governments persist in this wasteful p...

In a grim testament to President Joe Biden's recklessness and incompetence, the federal government deficit has reached alarming levels. The Treasury Department reported a deficit of almost $1.4 trillion for the first nine months of the fiscal year, more than 2 1/2 times the deficit of the previous year. This massive borrowing surge is occurring despite near-record-low unemployment, which should result in a decreasing deficit. However, Biden's policies have exacerbated the problem, with extravagant spending and falling revenues. His American Rescue Plan, infrastructure law, Inflation Reduction Act, and other legislation have contributed to a projected $4.8 trillion increase in deficits between 2021 and 2031. The Federal Reserve's loose monetary policy, combined with Biden's spending binge, has fueled the worst inflation in four decades, leading to higher interest rates and increased federal interest payments of over $650 billion. Tax revenues have also fallen, partly due to Biden's regulatory agenda and hi...

Record-breaking heatwaves in the western U.S. are pushing already strained power grids to the brink, raising alarming concerns of imminent blackouts. While Texas, scarred by a devastating grid failure in the past, has managed to hold up due to increased battery installations and solar power capacity, the larger issue looms over the nation's outdated and inadequate infrastructure. The power grid's vulnerability to extreme weather events and its unpreparedness for the transition to renewable energy exacerbate the risks. Although the Biden administration's $13 billion investment through the Building a Better Grid Initiative is a step forward, it falls woefully short of the estimated annual investment of $4 trillion needed by 2030 to modernize and strengthen the power grids. Without substantial upgrades and investments, the likelihood of blackouts and the mounting challenges of an aging infrastructure will continue to cast a dark shadow over the stability and reliability of the power grids.