Gold has all the potential to go unprecedentedly high. But silver will be gold on
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The question is whether this return of QE will continue or whether it is a one-off. The Fed meets next week so we can expect lots of volatility as the markets grapple with this potential U-turn in policy.
Mar 24, 2023 - 08:43:32 PDT
So the choice for central bankers throughout the developed world is either to allow free markets to operate, or to embrace socialism. It’s a choice between a sudden-onset collapse and an unmanageable crisis, or “printing” all the currency needed to paper over the gaping financial holes in the system and having a amore gradual and more manageable unravelling. I think no central bank in the world will opt for the free market capitalism at this point.
The senior senator of Utah is in the van of burgeoning Congressional scrutiny of the Fed itself as the root of today’s economic crises.
This system of crisis-prone, hyper-financialized capitalism seems ever more like a junkie. If it doesn’t get its regular fix of public sector help, it will simply collapse and die.
Mar 24, 2023 - 08:12:18 PDT
It has been a wild few days for banks. The collapse of Silicon Valley Bank happened this month, but it feels like years ago. It was only on Sunday that the regulator-brokered deal between UBS and Credit Suisse was signed. Since then, stock prices have swung all over the place. We’ve seen interest-rate increases, fears about contagion, and mixed messages about what other help banks might get.
Liquidity in the office sector is drying up. The latest banking crisis will only make it worse. Approximately $17 billion in office-backed Commercial MBS (CMBS) is due for refinancing in 2023.
Yellen Convenes Emergency Financial Stability Meeting On Friday As Banking Crisis ExplodesMar 24, 2023 - 07:10:15 PDT
Bloomberg just reported that Treasury Secretary Janet Yellen - who was singlehandedly responsible for stoking and restarting the bank crisis on Wednesday which until that day was easing back, with her comments that nobody in charge was even talking about a uniform deposit insurance, let alone working on one - will convene the heads of top US financial regulators Friday morning for a previously unscheduled meeting of the Financial Stability Oversight Council.
So neither the market nor the Fed has really panicked yet. But they both will, in my opinion. On Friday, Deutsche Bank shares are down about 10% and swaps on the firm are spiking. So where do markets go from here?
Mar 24, 2023 - 07:07:58 PDT
The Federal Reserve never died. In fact, The Fed is growing its balance sheet again. Why? A slowing economy and weakness in the banking sector (thanks to inflation and the Fed trying to get inflation back to 2%.
Of course, all this 'good' news hit before the current 'credit-tightening' crisis occurred.
Recent trading around this psychologically significant level is bringing out a volume spike in physical markets.
Mar 24, 2023 - 07:01:33 PDT
The Federal Reserve’s digital payments system, which it promises will help speed up the way money moves, will debut in July. They will know who you are, and they can shut you down by limiting anything..
Traders quip that one of the few things to rally during bear periods is volatility. Add gold to the list. Its price has leapt about 7 per cent so far in March to one-year highs of just under $2,000 per ounce. With investors dumping stocks and corporate bonds, money has flowed into both government bonds and gold.
Wall Street’s ‘Dr. Doom’ Sees ‘Bermuda Triangle’ of Risks for Economy & Warns of a 2008-Like CrisisMar 24, 2023 - 06:00:00 PDT
“We avoided the debt crisis a couple of times...but now the game is over," economist Nouriel Roubini said in a new interview.
Elon Musk Says Jerome Powell Is So Bad at His Job That GPT-4 Would Be a Better Fed ChairMar 24, 2023 - 05:58:28 PDT
Elon Musk disagreed with the Fed describing the banking system as “sound and resilient,” tweeting, “banks are melting.”
Markets are signaling the Federal Reserve is wrong when it talks about the prospect for further interest-rate hikes, with bond investor Jeffrey Gundlach among the latest to predict cuts instead as the risk of recession grows.
Real Estate Billionaire Sam Zell Warns That Hot Inflation Isn’t Going Away Anytime SoonMar 24, 2023 - 05:54:27 PDT
“When you spread out free money for years at a time, you create significant drag, and I just don’t see how we are going to avoid a slowdown as that whole process comes to an end,”... “I think the Fed screwed up by allowing zero interest rates to go on too long, I think we are just beginning to pay the price for that,” Zell points out. “It would be nice to say that it would be great if the Fed got lucky. I’ve been around for 50 years and I’ve never seen the Fed get lucky.”
Two top former US economic policymakers sharply criticized the Federal Reserve’s 2022 stress tests of banks for failing to have probed potential vulnerabilities in the banking system to a sharp rise in interest rates.
Recession indicators a ringing loudly as the Fed maintains a "hawkish" bias despite the markets not listening.
US Durable Goods Orders Unexpectedly Drop In Feb; Weakest YoY In 2 YearsMar 24, 2023 - 05:51:01 PDT
After tumbling in January (thanks to no big Boeing plan order that juiced December's data), analysts expected a modest rebound (+0.2% MoM) in preliminary February data. However, they were wrong as durable goods orders dropped 1.0% MoM. And it's worse because this happened even after January's 4.5% drop was revised even lower to -5.0% MoM.