Precious metals news

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.

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.