Precious metals news

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.

The freight market is currently facing one of its worst downturns in history, not merely a reversion to the mean. This severe recession in the freight industry is attributed to an excessive buildup of capacity. Since early 2022, numerous companies, including major players like Yellow Corp. and Convoy, as well as smaller, lesser-known firms, have either gone out of business or significantly downsized, leading to widespread bankruptcies, closures, layoffs, and substantial financial and human losses.

The Consumer Price Index (CPI) drives markets and motivates policy, but it is nothing but speculation, estimation and wild guesses.
A recent "tweak" to the health insurance CPI reveals the formula is basically a scam.

According to recent data from Fidelity Investments, more Americans are withdrawing from their retirement savings to manage increasing living costs, particularly for housing and medical expenses. There was a rise in hardship withdrawals to 2.3% of workers in the last quarter, up from 1.8% the previous year. The primary reasons for these withdrawals are to prevent foreclosure or eviction, and to cover medical bills.

The International Monetary Fund (IMF) released a handbook for central banks on implementing central bank digital currencies (CBDCs), suggesting they could reduce global reliance on the U.S. dollar. The IMF highlights risks, including potential bank runs and impacts on commercial bank lending. Meanwhile, U.S. lawmakers, concerned about privacy and financial surveillance, are pushing back against a U.S. government-issued CBDC. Republican Representative Tom Emmer introduced the CBDC Anti-Surveillance State Act to prevent the Federal Reserve from issuing CBDCs to individuals, citing risks to Americans' financial privacy and the independence of the financial system.

Discover what mainstream media isn't telling you about today's housing market

The Conference Board's Leading Economic Indicators (LEI) fell 0.8% in October, continuing its longest decline since the 2007-2008 financial crisis. This downturn, driven by lower consumer expectations and a decrease in new manufacturing orders, signals an impending recession. The Conference Board forecasts a brief recession, influenced by high inflation and rising interest rates, with only 0.8% GDP growth in 2024. The LEI's significant year-over-year drop of 7.6% highlights the stark impact of the Federal Reserve's tightening policies, casting doubt on the prospects of a 'soft landing' for the economy.

UBS forecasts central banks will begin reducing interest rates in 2024 amid global political events and geopolitical tensions. The firm advises shifting equity allocations towards quality stocks, particularly in technology. Rate cuts are expected to start in the UK by May, followed by Europe and the US. UBS also anticipates declining government bond yields, suggesting a move away from large cash holdings towards quality bonds. Emphasizing the significant impact of global politics on markets, UBS recommends hedging market risks with strategies focused on capital preservation, macro hedge funds, oil, and particularly gold.

Aerdt Houben, Director of Financial Markets at the Dutch Central Bank, discussed the bank's gold holdings, now at 612 tonnes worth 35 billion euros, as a financial safety net. This gold, representing 4% of the Netherlands' GDP, is stored across various global locations. Houben views this amount as sufficient for economic stability, highlighting gold's value and liquidity. The move reflects a broader trend among European banks, suggesting a cautious stance towards the euro and possibly hinting at a return to a gold standard. Meanwhile, China has also been increasing its gold reserves, now exceeding 2,113 tonnes.

The expected deficits in copper, silver, and gold, coupled with rising industrial demand for copper and silver due to the global shift towards greener economies, are set to drive up their prices. Additionally, as investment demand for silver and gold increases, the moment the Federal Reserve recognizes the limits of interest rate hikes – to avoid destabilizing the U.S. Treasury and weakening the dollar – these metals' prices are likely to see a significant increase.

Wall Street figures, grown comfortable with the Federal Reserve's easy money policies, are now protesting the Fed's Quantitative Tightening (QT) and reduction of its Overnight Reverse Repurchase agreements (ON RRPs). The ON RRP balance has decreased from $2.3 trillion to $935 billion and is expected to approach zero, significantly reducing liquidity. Critics argue that this reduction could lead to a liquidity crisis in banks, potentially destabilizing the financial system, and are urging the Fed to halt QT. However, this perspective often overlooks the typical long-term trend of RRPs, which is usually close to zero.

In January 2007, before the 2008 financial crisis, Citigroup's stock closed at $55.25. Yesterday, adjusted for a 1-for-10 reverse stock split in 2011, it effectively closed at $4.20. This means long-term shareholders have seen a 92% decline in share value over nearly 17 years. Additionally, Citigroup may cut up to 24,000 jobs, 10% of its workforce, further highlighting its struggles.

The Federal Housing Finance Agency (FHFA) released a report recommending changes to the Federal Home Loan Bank system, following questionable practices prior to the recent banking crisis. The 11 regional Federal Home Loan Banks, primarily tasked with providing liquidity for housing finance and community development, deviated from their core mission. Notably, the banks involved in the crisis were engaged in activities like crypto lending (Silvergate and Signature Bank), loans to the wealthy (First Republic Bank), and IPO financing (Silicon Valley Bank). The report responds to these deviations and aims to realign the banks with their intended purpose.

Industrial demand for silver is expected to set a record in 2023.
According to a forecast by Metal's Focus in conjunction with the Silver Institute, industrial silver demand is on pace to rise by 8% to a record 632 million ounces.  Investment in photovoltaics, power grid, and 5G networks, along with growth in consumer electronics and rising vehicle output are key drivers behind the elevated industrial demand.

President Biden's economic policies have strained the Federal Reserve, leading to a $76 billion payment to the Treasury in 2022 and a drop in bank lending. The Fed's extensive use of reverse repo operations and daily interest payments on bank reserves are costing it heavily. Additionally, Biden's move to replace gas furnaces with electric heat pumps under 'wartime powers' is criticized for overreaching and inefficiency in colder regions, adding to the administration's controversial economic decisions.

Under President Biden, turkey prices have soared, with a staggering 321% increase, making the Thanksgiving tradition of eating every part of the turkey more relevant than ever. Interestingly, both turkey prices and M2 Money growth are now showing a year-over-year decline. This trend is evident from the initial surge in M2 Money growth, followed by a sharp rise in turkey prices, and now, a simultaneous decrease in both.

The latest buzzword in the mainstream financial media is "soft landing." Everybody seems convinced the Fed has beaten inflation, and that it has completely avoided pushing the economy into a recession. According to the mainstream narrative, we may see a bit of an economic slowdown in the months ahead, but a recession is pretty much off the table. In his podcast, Peter Schiff explains why a soft landing is impossible.

The World Economic Forum (WEF) promotes Environmental, Social, and Governance (ESG) investing, but ESG faces declining interest, with reduced investment flows in 2022 and 2023. In the U.S., sustainability-linked loans have decreased by 80%. The rise in ESG investments coincided with President Biden's term and high government spending on green initiatives. However, U.S. states are divided on ESG, with some states supporting and others opposing ESG-focused legislation.

A government report revealed major flaws in President Biden's now-defunct $430 billion student loan forgiveness plan, particularly in verifying recipient incomes, raising fraud concerns. Over 12 million applicants were approved without proper income checks. The report's findings and the administration's withholding of certain details have sparked criticism for lack of transparency and accountability.

The US dollar weakened, hitting a two-month low as traders increasingly believe that US interest rates have peaked. This shift in market sentiment is leading to speculation about when the Federal Reserve might start reducing interest rates.