Precious metals news

Credit Suisse Group AG's workforce is set to be cut by more than half as a result of an emergency takeover by BS Group AG. Bankers, traders, and support staff in the investment bank, particularly in London, New York, and parts of Asia, will bear the brunt of the cuts. Expectations are for three rounds of job cuts this year, with the first round anticipated by the end of July. UBS, the acquiring bank, aims to save $6 billion in staff costs and plans to reduce the combined headcount by approximately 30%, or 35,000 people. The job cuts at Credit Suisse contribute to the overall decline in financial sector jobs globally.

Investors withdrew $6 billion from open-end funds and ETFs tracked by Morningstar Direct, signaling ongoing challenges for Credit Suisse's asset management unit. This marks the fifth consecutive quarter of client outflows and is a key concern for the merged entity with UBS. The investment unit's assets under management have steadily declined, dropping from 477 billion Swiss francs to 399 billion francs by the end of the first quarter.

The current scenario of inverted yield curves and tight credit spreads is likely to exacerbate the decline in lending, raising concerns about an impending recession. Based on historical patterns, a recession could strike as early as Thanksgiving, reflecting the typical 16-month timeframe from inversion to economic downturn. It is crucial to be cautious and acknowledge the unprecedented economic impact of the pandemic recession and recovery. Despite the likelihood of a recession, the lingering effects of previous stimulus measures on the economy remain uncertain and difficult to assess, adding to the gloomy outlook.

Some European Central Bank officials are considering ways to speed up the reduction of the institution's bond holdings, adding to the tightening of monetary policy and inflation control measures. This includes potential sales of securities from the ECB's portfolio and phasing out reinvestments of pandemic-era bonds. No formal discussions or decisions have been made, and the ECB declined to comment. Euro-area inflation remains a concern, despite a slowdown, and policy makers received favorable inflation data from Italy. The ECB has already reduced net asset purchases and will halt reinvestments under the Asset Purchase Program next month.

China is expected to cut interest rates and increase fiscal stimulus to boost its slowing economy, according to economists surveyed by Bloomberg. The People's Bank of China is likely to reduce its one-year policy loan rate and lower the reserve requirement ratio for banks. On the fiscal side, tax breaks for consumers and increased financing for infrastructure investment are anticipated. China faces pressure to counter a slowdown caused by a weak property market, subdued consumer spending, and a decline in export demand. The timing of further rate cuts may be cautious due to growth targets and concerns over the currency's depreciation.

President Biden will present his case for "Bidenomics" on Wednesday, highlighting economic recovery and low inflation as evidence of success. However, critics point to less flattering numbers on inflation and voter dissatisfaction with his handling of the economy. While Biden's policies have contributed to positive economic indicators, such as solid labor market and GDP growth, initial inflation concerns remain.

Tech stocks faced pressure due to concerns about restrictions on AI chip exports, leading to lower futures for Nasdaq Composite. S&P 500 futures also fell, while Dow Jones futures remained unchanged. Nvidia declined after reports of potential restrictions on AI chip sales to China. Investors are awaiting Federal Reserve Chair Jerome Powell's remarks for insights into the central bank's next steps following strong economic data.

Silver demand set a record in every category in 2022 and is expected to continue growing. Meanwhile, silver production flatlined. Record global silver demand and a lack of supply upside contributed to a 237.7 million ounce market deficit in 2022.
The trends indicate that this deficit will expand in the next several years as demand continues to surge as supply begins to shrink, and there are some concerning trends indicating supply may contract rapidly in the coming years.

There has been a lot of economic data this month that looks strong. But when you dig a little deeper, you find that this "strength" is an illusion.
Following is a breakdown of several of these data points with some help from our friends at Passant Gardant.

If you listen to the mainstream financial media, you might think gold has fallen out of favor. Most people remain fixated on the surging stock market or the next move by the Federal Reserve. But perception doesn't always line up with reality - especially mainstream perception.
While the trendy kids are ignoring the yellow metal, there are plenty of people buying gold. In fact, gold demand hit an 11-year high in 2022.
So, what do these folks know that the mainstream might be missing? Are there good reasons to buy gold now?

As the world continues racing toward the coming ENERGY CLIFF, these regions are the most vulnerable.  This is an update for 2022, as the 2023 Statistical Review of World Energy Report was just released.  Amazingly, Economists and MSM are totally clueless...

Despite being controversial among economists, the concept of "greedflation" linking profits to inflation gains validation from the IMF. It reveals that businesses prioritize their returns over market share, unlike previous periods of inflation. The IMF's confirmation undermines the effectiveness of the Fed's higher interest rates as a remedy. In Europe, rising corporate profits significantly contribute to inflation, while wages have a minimal impact. To achieve inflation targets, businesses may have to sacrifice profits and adjust wages, but the lack of response and clarity from the UK's authorities and economists raises concerns about their priorities.

he Federal Reserve's announcement about exploring the potential benefits and risks of a Central Bank Digital Currency (CBDC) should be viewed skeptically. Despite their claim of no decision-making, it is doubtful that the powerful central bank would dismiss the idea of issuing its own CBDC. The Fed's report on the U.S. Dollar in the Age of Digital Transformation raises concerns about the compatibility of central banking with public confidence and financial stability, given the inherent boom-bust cycle and negative externalities. The massive volume of public comments received during the submission period casts doubt on their influence on decision-making. The principles outlined by the Fed, such as protection and privacy, mask potential privacy infringements and the risk of government overreach.

The belief that political centralization promotes economic growth is challenged by the historical evidence, particularly in the case of Europe. Europe's economic success and technological advancement can be attributed to its political decentralization, where competing powers and jurisdictions allowed for the flourishing of private enterprise and the diffusion of best practices. Decentralization limited the power of ruling classes, attracted capital, and protected private property. However, recent trends of political centralization in the European Union and the United States have led to stifled innovation, increased regulations, and trade barriers. Despite the benefits of decentralization, those in power are unlikely to relinquish their control easily.

The fallacy of Modern Monetary Theory (MMT) lies in its misguided belief that governments can print unlimited money without consequences. While technically true that sovereign governments cannot go bankrupt, the consequences of excessive money printing are far-reaching. Such actions disrupt the economy's intricate production pathways, leading to the misallocation of resources and the collapse of long-term projects. The short-term benefits sought by politicians through unrestricted spending have long-term detrimental effects on societal well-being. Moreover, the inflationary impact of printing money and the potential inefficiency of government-run programs like healthcare exacerbate the problem. MMT proponents fail to acknowledge the negative implications and ignore the need for continual tax increases to mitigate inflation. In the end, MMT risks turning court intellectuals into jesters, with devastating collateral damage as a result.

Gold poised for a new phase in the bull market, according to Goehring & Rozencwajg (G&R). After stepping back for a couple of years, G&R sees signals to reenter. Central banks' behavior and factors like gold-to-oil ratio favorability contribute to the positive outlook. G&R's price target for gold is in the US $12,000 to US $15,000 per ounce range, driven by various factors. A promising forecast for gold's long-term potential.

US Treasury Secretary Janet Yellen is scheduled to visit Beijing in early July for high-level economic talks with her Chinese counterpart, marking an important step in US-China relations. The trip, initially postponed, is part of the Biden administration's efforts to engage with China while prioritizing national security and shared values. The White House has briefed G7 allies on its approach, receiving broad endorsement. Yellen emphasized that US policies towards China aim to safeguard national security and values, rather than seek economic advantage.

Could a new BRICS currency challenge the dominance of the dollar? While obstacles exist, the push for de-dollarization and a joint currency gains momentum. BRICS countries seek to reduce reliance on the dollar and explore alternatives, including diversifying currency reserves with gold. The focus is on establishing an efficient payment system and potential currency interoperability. Challenges lie ahead, but the determination of BRICS nations to reshape the global financial landscape remains promising.

Fed Chair Jay Powell testified that inflation has come down but attributed it to factors other than monetary policy. He emphasized that the service sector, where the Fed's influence is limited, hasn't shown significant progress. Research suggests monetary policy has little impact on service sector prices. This raises questions about the effectiveness of the Fed's tightening measures and the government's authority to constrain credit.

Three of the largest bank failures in U.S. history occurred recently, raising concerns about the stability of the banking system. Truist Bank and Bank of America have experienced significant declines in market value. The merger of SunTrust and BB&T to form Truist Bank led to concerns about uninsured deposits and potential challenges in resolving a failure. U.S. Treasury Secretary Janet Yellen suggests more bank mergers may be necessary.