Gold has all the potential to go unprecedentedly high. But silver will be gold on
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METALS & ENERGY UPDATE JAN 10th: Major Military Event Could Have Significant Impact On U.S. Dollar & Global EconomyJanuary 10, 2023
A Major Military Event this year in Ukraine could significantly impact the U.S. Dollar and Global Economy. Why? Well, it depends upon the outcome of Russia's Massive Military Winter Offensive that could begin within the next few weeks...
For most of US history — 1789 to 1971, a period of 182 years — the United States embraced the idea of a currency that is stable, reliable, and definite. In practice, this meant a currency whose value was linked to gold, the best real-world way to achieve these goals. There was nothing very creative about this. Britain had done the same for hundreds of years prior, as did all the leading countries for many centuries.
The leading gold holders are some of the world's most powerful nations, such as the US, Germany, Italy and France; they are keeping 60% of their foreign reserves as gold. This is a testament to the significance of gold in the central banking system.
Jan 9, 2023 - 13:04:04 PST
Those later lessons concern the diversification failure of Commodities once high price trigger demand destruction and price reversal in resources most sensitive to the business cycle, like Energy and Base Metals. Hence the need to rotate into defensives like Gold.
XAU/USD increased by +9.9% in the fourth quarter. Negative real yields favour a rising Gold price, economists at Erste Group Research report.
There will be corrections along the way, and Gold will have to chew through significant resistance from $1870 to $1950. But aside from that, there is nothing that will stop it.
Most people under the age of 40 have no financial experience in a world of positive interest rates for most dates of maturity… When Ben Bernanke pushed his new policy [back in 2008], he was flipping all economic and financial logic on its head.
NY Fed Survey Finds 1-Year Inflation Expectations Drop To 5.0%, Lowest Since July 2021Jan 9, 2023 - 12:51:32 PST
With long-term inflation expectations (those 3-Years ahead or more) peaking more than a year ago, and even shorter inflation expectations - at least according to the NY Fed Survey of consumers - now sliding after hitting a record high 6.8% in June and dropping alongside 2Y breakevens which recently hit the lowest level in 2 years, wiping out two years of gains...
The World Bank is concerned that “further adverse shocks” could push the global economy into recession in 2023, with small states especially vulnerable.
Bubbles eventually burst. The bigger and more prolonged the Bubble, the greater the systemic monetary disorder and associated price distortions, along with deepening financial and economic structural maladjustment.
Hedge funds are growing ever more bearish on the dollar, underscoring speculation the Federal Reserve will slow the pace of its interest-rate hikes.
An emboldened conservative flank and concessions made to win votes could lead to a protracted standoff on critical fiscal issues, risking economic pain.
"It remains to be seen whether data experts and policymakers will come up with a tax that encapsulates 'fairness, certainty, convenience, and efficiency' as Adam Smith argued for, but each idea is worth hearing in today’s data-governed market." ~ Virginia Fournari & April Liu
Euro Inflation without Energy Hits Record, Services CPI Hits Record. Subsidies, Drop in Energy Push Down Overall CPIJan 9, 2023 - 11:47:10 PST
The ECB reacts to raging inflation, unloads a massive chunk of assets, hikes rates.
Jan 9, 2023 - 11:44:47 PST
Anticipating where the 3-month yield will be in May is much easier than figuring out where the 10-year yield will be. The Fed has penciled in quarter-point hikes in February and March with decent odds of yet another hike in May. The market agrees with that assessment.
Jan 9, 2023 - 11:38:57 PST
US headline inflation began to soar as soon as Joe Biden became President. A combination of massive stimulus spending related to the Covid economic shutdown and his war on fossil fuels, driving up gasoline and diesel fuel prices. In other words, headline inflation rose from 1.4% Year-over-year (YoY) at the end of December 2020 to 9.1% YoY in June 2021. It has now simmered down to 7.1% YoY as The Fed continues to remove monetary stimulus.
If a domestic money consists of a commodity, [such as] a pure gold standard or cowrie bead standard, the principles of monetary policy are very simple. There aren’t any. The commodity money takes care of itself. (emphasis added)
If you want to understand modern CBDC, it may be worth considering the context of history, the philosophy of man, the math of debt and the geology of gold.
People like to remark that governments foster innovation, especially during wartime. They also like to ignore the slaughter of millions which is usually part of this process. That is not to mention the innovators we missed out on as a result.
The heart of economic growth is an expanding subsistence fund, or the pool of real savings. This pool, which is composed of final consumer goods, sustains individuals in the various stages of the production process.