Precious metals news

Milei, following his election victory, plans to drastically reduce government spending to avoid hyperinflation, which is currently exceeding 140% annually in Argentina. He warns that without fiscal adjustment, the country risks spiraling into hyperinflation. Milei's focus will be on addressing the central bank's balance sheet and reducing interest payments on peso bonds, which constitute a significant portion of the GDP. He emphasized that spending cuts would target the political class, not ordinary citizens, and public works projects would seek private capital. Milei criticized the outgoing administration for excessive spending and pledged to eradicate inflation, avoiding a situation similar to Venezuela.

The US Treasury's four-year cumulative deficit has soared to $9.0 trillion, with daily debt accumulation averaging $6.2 billion. This rapid increase signifies a drastic acceleration in national debt growth, raising serious concerns about fiscal management. Contributing factors include high interest rates and a declining commercial real estate market, marked by increased delinquencies and a slow recovery. This fiscal trajectory suggests an impending financial crisis, driven by unchecked government spending and rising debt service costs. The outlook for the US economy appears increasingly challenging with limited immediate solutions.

The commercial real estate market is experiencing a significant downturn, especially in the office sector where vacancy rates have surged. Experts predict up to 1 billion square feet of unused office space by decade's end. The current vacancy rate is close to historical highs. With higher interest rates reducing property appeal and causing asset value declines, the market's recovery appears to be years away. This slump extends beyond offices to sectors like hotels and shopping centers, compounded by rising commercial mortgage delinquencies. The situation is part of a broader economic downturn, with a recession and stock market declines expected. The commercial real estate correction is just beginning, signaling more difficulties ahead.

"Resilient" American consumers are digging into their retirement funds to pay their bills.
Mainstream financial pundits, politicians, and Fed officials keep telling us the economy is strong because Americans keep spending money. They just assume this is a sign of economic strength without ever asking exactly how they're paying for all of this "robust" spending.

Inflation robs you of purchasing power by driving up the price of everything you buy. You see the impacts of inflation every time you go to the store. But sometimes inflation hits you in a more subtle way that's difficult to see - through "shrinkflation."
I experienced shrinkflation first-hand last weekend.

Is the International Monetary Fund suggesting that "Gold is no longer a barbarous relic? "  Many central bankers are considering this excellent question.  Unfortunately, the IMF Gold Report totally excludes the most important factor why central bank gold reserves will surge in the future...

His hedge fund returned a staggering 4,200% over a 7-year span. Now, he’s turning his attention to gold and silver...

Gold futures have surpassed $2,000 an ounce, the highest since late July, buoyed by strong central bank buying and easing U.S. inflation expectations, which suggest a possible end to Federal Reserve interest rate hikes. The surge is partly due to increased gold imports by India and sustained interest from global central banks. Factors like lower interest rates, a weaker U.S. dollar, and geopolitical risks are positioning gold to potentially exceed record highs.

The period after 2005 marked the boom phase of the gold and silver bull market, peaking in 2011. Despite debates about whether this was the final high, many believe it wasn't due to ongoing global fiat currency debasement. The bear market that followed since 2011 is often compared to the mid-1970s' two-year downturn, which came after a strong rally and was followed by a significant parabolic increase. The expectation is that precious metals will regain prominence once the current asset bubbles in other markets burst, an event that appears imminent.

The European Central Bank alerts to increasing losses and high debt burdens in the Eurozone property sector, surpassing levels seen before the 2008 crisis. Higher financing costs, reduced property values, and declining rental income are key issues. This distress in the commercial real estate market, a significant part of eurozone bank loans, could lead to considerable losses in the financial system. With ECB interest rate hikes, borrowing costs have risen sharply, and Moody's Analytics has downgraded numerous European real estate firms. The ECB warns of a potential surge in bank loans to unprofitable real estate businesses, exacerbating the sector's financial strain.

The Federal Reserve, using its power to set interest rates, attempts to influence economic and social outcomes, often exacerbating problems. Global mortgage rates are rising sharply due to central bank tightening post-Covid, as they try to control inflation fueled by excessive government spending. This situation has led to most homeowners being locked into low borrowing rates, negatively impacting home sales. Under the Biden administration, the U.S. conforming 30-year mortgage rate has increased by 156%, and the 10-year Treasury yield has risen by 304%.

Since the Fed's meeting on November 1st, the dollar has dropped over 3%, boosting stocks, bonds, and bitcoin, with a marginal increase in gold. Markets now expect more rate cuts in 2024, forecasting nearly 100 basis points reduction next year. Concurrently, the yield curve has significantly flattened. Despite this, recent U.S. economic data has been underwhelming, and financial conditions have loosened. The market anticipates an end to rate hikes and potential rate cuts soon, though the Fed maintains a hawkish stance with Chair Powell emphasizing persistent inflation challenges.

Major retailers like Best Buy, Lowe’s, and Kohl’s are reporting sales declines and expect a downturn in holiday spending due to cautious consumer behavior amid inflation and higher interest rates. Holiday sales growth is projected to slow dramatically to 1%-3% this year, compared to a 14% rise in 2021. Shoppers are cutting back on non-essential purchases, focusing on essentials and seeking value, which may benefit discount retailers. Overall, the retail sector faces a challenging holiday season with reduced spending.

Rubino warns of a severe financial crisis in the U.S. due to high deficits and rising interest costs on a national debt of $33.5 trillion. He believes this debt spiral, coupled with excessive military spending, signals a loss of financial control. He views the U.S. as at the end of a 70-year credit cycle, heading towards a significant economic downturn, particularly affecting the dollar's value. He predicts a disorderly decline in the dollar, paralleling Japan's financial crisis, with no apparent solution. Rubino also anticipates declining real estate values and recommends gold and silver as key assets.

Housing affordability is at a record low since the early 1980s, leading to a significant 4.1% month-over-month drop in existing home sales in October, much worse than the expected 1.5% decline. This downturn continues a trend with sales down 14.6% year-over-year. The sales rate has fallen to its lowest since August 2010. Despite these challenges, Lawrence Yun, NAR's chief economist, notes some optimism due to recent drops in mortgage rates. However, the housing market remains tight, with the number of homes for sale at historic lows for October and first-time buyers making up only 28% of purchases.

The commercial real estate (CRE) sector's share in the S&P 500 has dwindled to just 5%, a low not seen even in the 2008 crisis. This decline is accompanied by decreased demand for CRE loans, falling property prices, and a surge in delinquencies, signaling deepening troubles in the sector. In contrast, the U.S. housing market's reliance on the 30-year fixed-rate mortgage poses hidden financial risks, burdening lenders and taxpayers. The system's sustainability is questionable, indicating a need for more balanced mortgage options like Adjustable Rate Mortgages (ARMs).

The world faces a significant platinum supply shortfall due to record industrial demand.
According to a report by the World Platinum Investment Council (WPIC), the platinum market faces a 1.07-million-ounce deficit in 2023. The supply shortfall is expected to extend into 2023.
With two years of significant market deficits, we will like see upper pressure on platinum prices.

Gold and silver prices have risen significantly, with gold reaching $1993 per ounce and silver hitting $23.82 per ounce, due to a weakening US dollar and anticipation of the Federal Reserve's meeting minutes. This increase aligns with the US dollar falling to a two-month low. Market analysts are closely watching the Federal Reserve's minutes for hints of possible changes in interest rate policies, amidst speculation about a potential rate cut in May.

Moody's has downgraded the ratings of JPMorgan Chase, Wells Fargo, and Bank of America from stable to negative, citing concerns about the U.S. government's reduced capacity to support major banks. JPMorgan's downgrade is partly due to risks in its complex capital markets business. Despite these downgrades, all three banks' stocks have seen an uptick in November. This move aligns with the recent downgrade of the U.S. sovereign credit rating. Moody's highlights significant risks for U.S. banks, including potential deposit flight, and forecasts a mild recession in early 2024, which could lead to tighter credit conditions and increased loan losses.

The U.S. Congress is under increasing pressure to address the nation's escalating budget deficits and debt, especially after Moody's recent warning about the potential downgrade of the federal government's credit rating due to political dysfunction. The primary solutions to tackle the national debt, which has doubled in the past decade to $33.7 trillion or about 124% of GDP, are straightforward: raise taxes, cut spending, or implement a mix of both.