A startling disconnect as we edge closer to the 2024 general election: On one hand, so-called “experts” parade optimistic economic reports, but for the average American, the story is starkly different. In heated debates, economists squabble over whether the public is hoodwinking pollsters or if mysterious forces are at play. Our guest columnist reveals a shocking truth: our government is playing a smoke-and mirrors-game with the economy. It's subtler than making up numbers. They’re pumping up GDP and job figures through hefty spending and hiring. Unlike the struggling private sector, the government can spend tax dollars and create deficit-financed jobs without having to prove their worth:
In this week's Friday Gold Wrap Podcast, JD and Joel discuss why gold is up today, "doom spending," and other market and precious metals news.
Recent attacks by Iranian-backed Houthi militants in the Red Sea have caused disruptions in the Suez Canal, a crucial maritime route handling 12% of global container traffic. This poses a potential risk to the European economy, which is already grappling with high inflation and teetering on the brink of a mild recession. Prolonged disruption in this key shipping lane could threaten the economic outlook of Europe and potentially affect central banks' plans to reduce interest rates this year. However, so far, the impact on Europe's economy has been minimal. Germany's Economy Ministry noted only minor effects on delivery times, and the Bank of England's Andrew Bailey also acknowledged limited impact but expressed concern about ongoing uncertainties.
The S&P 500 is inching towards a record high, accompanied by rises in the Dow Jones Industrial Average and Nasdaq Composite. This growth occurs alongside a decrease in Treasury yields. Metal prices are on the rise as the U.S. dollar weakens, despite robust U.S. retail sales and reduced expectations of interest rate cuts by the Federal Reserve. Key metals like copper, aluminum, nickel, and zinc are all seeing price increases, with copper at $8,361.50 per metric ton and aluminum at $2,177 a ton. Gold also climbed 0.4% to $2,029.60 per troy ounce.
There's nothing like a little "MAGIC" to help deceive the public into believing something FAKE is REAL. And, that is precisely what is happening with newly inflated U.S. Crude Oil Production, as evidence of shale oil depletion has finally kicked in...
Recently, gold has become a focal point for investors, peaking at a record high of $2,100 per ounce in early December. This surge in value led to a significant increase in investor interest and portfolio additions. However, there's been a shift in this trend over the past week. This new decline, largely attributed to strong economic data and changing market expectations, might raise doubts about investing in gold. Yet, CBSNews shares 5 reasons this drop in prices presents a compelling reason to consider investing in gold now, offering a strategic entry point for potential investors.
Goldman Sachs Group forecasts a notable increase in global debt yields, driven by escalated government borrowing and central bank actions to downsize their balance sheets. In a recent report, the financial giant's analysis of major developed bond markets, excluding Japan, indicates a direct correlation between public debt and yield rates. For every one percentage point rise in the public debt-to-GDP ratio, medium-term yields are expected to jump by a minimum of two basis points throughout this decade. This prediction notably omits government bonds currently held by central banks, suggesting a broader impact on global financial markets due to these fiscal maneuvers.
The U.S. labor market has hit a new milestone with initial jobless claims dropping to their lowest level since September 2022. The Labor Department's recent report reveals that for the week ending January 13, 2024, jobless claims plummeted to 187,000, surpassing analysts' expectations of 208,000. This decline marks a significant 16,000 reduction from the previous week and stands as a testament to the enduring strength of the labor market. Notably, this robust labor market performance continues despite the Federal Reserve's interest rate hikes aimed at cooling the economy and easing the jobs market. Additionally, the report also highlights a surprising drop in continuing claims, which fell by 26,000, bringing the total to 1.806 million, below the expected 1.83 million.
In 2023, corporate debt defaults experienced a substantial 80% increase, with 153 companies failing to meet their debt obligations, compared to 85 the previous year. This rate was the highest in seven years, excluding the peak during the Covid-19 crisis. The defaults were predominantly among low-rated companies with negative cash flows, heavy debt burdens, and weak liquidity, especially in the consumer-facing sectors, such as media and entertainment. According to S&P Global Ratings, the situation may remain challenging in 2024. Corporate America, currently shouldering a $13.7 trillion debt load, may face further credit deterioration, especially among lower-rated issuers. Despite potential rate cuts, financing costs are expected to stay high.
With more weakness in the primary silver mining stocks today, what are the important fundamental changes taking place that you need to know about?? The Primary Silver Mining Industry has changed considerably in the past decade, and this will be very Bullish for the price in the future...
The LBMA Precious Metals Market Report for Q4 2023 highlights the heightened interest and speculation around the future prices of gold and silver. Amid various predictions, some reaching as high as $10,000 for gold and $300 for silver by the end of the decade, the LBMA gold price notably achieved a record high of $2,078.40 on December 28. These optimistic forecasts are partly driven by gold’s appeal as a safe haven, especially following the Israel/Palestine conflict outbreak in early October.
There’s been lots of talk within the Biden Administration about forgiving student loan debt. But with chaos widely reported at companies that service student loans, some debtors can’t even figure out how much they owe — much less actually pay down their balances.
With consumer debt reaching record levels, the Federal Reserve contemplating rate cuts in 2024, and post-Covid inflation still yet to reach its peak, a storm is indeed brewing.
The gold price (XAU/USD) is under pressure following the release of strong U.S. Retail Sales data for December, which exceeded expectations. Retail sales increased by 0.6%, surpassing the forecasted 0.4% and the previous month's 0.3%. Excluding automobiles, sales rose by 0.4%, also exceeding predictions. This robust economic data reduces the likelihood of an interest rate cut by the Federal Reserve (Fed) in March. Further, a hawkish statement from Fed Governor Christopher Waller has raised doubts about a potential rate cut, as Fed policymakers favor keeping interest rates high, given the uncertainty about inflation returning to the 2% target.
At this year's World Economic Forum in Davos, Switzerland, while discussions include climate change, wars, and artificial intelligence, the most debated topic is the potential actions of the Federal Reserve regarding interest rates in 2024. The high stock prices of many companies present at the forum are partly due to the expectation of several rate cuts this year, which would lower financing costs and potentially increase return on investment. In December 2023, the Federal Reserve maintained its key interest rate at 5.25% to 5.50% for the third consecutive time but indicated at least three quarter-point rate cuts for the year. Investors, interpreting these comments, are expecting even more than three cuts, fueling higher stock prices.
U.S. Treasury Secretary Janet Yellen asserted that the strong performance of the U.S. economy validates the effectiveness of President Joe Biden's $1.9 trillion American Rescue Plan Act implemented in 2021 to counter the COVID-19 pandemic's impact. In her address to the U.S. Conference of Mayors, Yellen emphasized that the risks of underspending on recovery were significant and that the current economic indicators, such as robust GDP growth, declining inflation, the creation of four million more jobs than pre-pandemic levels, and a historically low unemployment rate, endorse the administration's approach. She contrasted this recovery with the prolonged and challenging aftermath of the 2008-2009 financial crisis, highlighting the broader wage gains across different worker demographics and the reduced economic hardship for workers and families.
Dive into the complexities of the global financial system with Mike Maloney as he explores the timeline of banking collapses.
JPMorgan Chase CEO Jamie Dimon expressed caution regarding the U.S. economy for 2024 and 2025 due to various financial and geopolitical risks, including the situation in Ukraine, terrorism in Israel and the Red Sea, and the impact of quantitative tightening by the Federal Reserve. Despite record profits at JPMorgan and a resilient U.S. economy buoyed by employment and savings, Dimon advised against complacency, citing the artificially stimulating effects of fiscal and monetary policies on the stock market.
Equity markets and corporate profit estimates have been growing due to a strong economy, but anticipated interest rate cuts by the Federal Reserve might not be positive for company earnings. Historically, rate cuts often signal an approaching recession, a factor not currently reflected in analysts' optimistic projections. With some expecting the Fed to cut rates as early as March in response to decreasing inflation and producer prices, concerns are rising that this could indicate a downturn in profits.
In his latest podcast episode, Peter uncovered the unsettling realities of recent job market trends, focusing primarily on the December jobs report. He casts a light on the sickly nature of recent job creation: