Precious metals news

The US debt has surpassed $33 trillion. Contrary to Biden's claims, the budget deficit remains high due to continuous spending and ongoing conflicts. The Federal Reserve is grappling with the repercussions of this massive debt. Effective monetary policy requires fiscal responsibility, which is currently lacking. Rising yields are impacting the long end of the yield curve and bank balance sheets. Despite Yellen's praise, Biden's approach to debt and foreign affairs remains questionable.

The US government under Bidenomics has massively increased its debt, whereas households and businesses have reduced theirs. This rise in government debt is causing inflation concerns and pushing up yields. While households have decreased their debt since the pandemic, the government's debt-to-GDP ratio has surged. This trend could risk the US experiencing economic stagnation similar to Japan's lost decades. Additionally, private sector bank credit has recently dropped.

The number of Americans filing first-time jobless claims dropped to 198k, below expectations. Ohio saw a significant decrease in claims, reaching near-record lows. However, continuing claims rose to 1.734 million, the highest since July. Despite recent increases in WARN notices, which indicate potential mass layoffs, there was a sudden large drop in these notices, the most significant since November 2020. Seasonal factors may be influencing these numbers.

When Black Monday brought the largest one-day crash in history, nearly every corner of the market plummeted...

Every time retail sales come in higher than expected, the mainstream media breathlessly reports this as proof that the American consumer is strong and resilient. In his podcast, Peter Schiff explained that these retail sales numbers aren't a sign of a strong economy. They just reflect Americans paying more for less. And what's worse, they're burying themselves in debt to do it.

Gold experienced a significant surge on Friday, which many believe is not just a short-term rally but the beginning of a more substantial upward move, driven by growing concerns in the Mid-East and increasing global debt. Despite arguments about the strength of the dollar and rising interest rates, the accelerating debt suggests potential hyperinflation in the future. This could lead to an unprecedented rush into tangible investments like gold and silver, positioning gold for a potentially robust performance ahead.

Bank of America, the second-largest US bank, has seen a significant drop in deposits since the start of 2022, losing $161 billion by September 2023. In comparison, JPMorgan Chase lost $248.38 billion during the same period. With the Federal Reserve's interest rates no longer artificially low, mega banks now face stiff competition for deposits from credit unions, regional banks, and money-market funds. Additionally, Bank of America reported increasing net charge-offs and provisions for credit losses, indicating further challenges.

Financial stocks are facing a significant downturn today. Notably, Morgan Stanley's stock has taken a nosedive, experiencing its steepest drop since the covid collapse and hitting a three-year low. While the larger financial institutions are under scrutiny, concerns are mounting over the solvency of smaller, regional banks. Goldman's financial trader, Sarah Cha, provided insights into the stocks' performance projections for today. Rankings from best to worst, based on investor feedback, are as follows: NDAQ, STT, TRV, USB, MTB, CFG, ALLY, MS, and IBKR. These views represent the perspective of Goldman's trading desk.

Right now, there are several large tailwinds in gold’s favor.

Market bubbles have historically taken time to develop and subsequently burst. Often, during the ascent, many investors misinterpret every rally as the dawn of a new bull market. The market currently stands at one of its highest risk positions, as per certain predictive measures. Historically, for the market to yield reasonable returns, there would need to be a significant drop, possibly over 50%. Given these factors, the present market exudes a misleading optimism. A significant correction is highly probable, making the current investing environment fraught with risk.

Amidst soaring inflation, the Federal Reserve faces intense pressure to intensify their policies, pushing bond yields to alarming levels. This threatens to destabilize the stock market and potentially plunge the economy into a downturn. The bond market, already fraught with volatility, saw the 30-year bond yield breach 5% for the first time since 2007, a worrying indicator. Mohamed El-Erian's cautionary statement about the Treasury bond market heading towards an "unknown destination" paints a bleak picture. The increasing instability and geopolitical concerns compound the crisis, casting doubts over who might absorb the swelling supply of US debt.

Treasury Secretary Janet Yellen stated on Monday that despite the towering U.S. debt-to-GDP ratio of 122%, the country will still support both Ukraine and Israel in their war efforts. During an interview with Sky News, when questioned about the nation's capability to provide military aid considering its staggering debt, Yellen responded affirmatively. However, her optimism contrasts with the nation's swelling debt concerns, casting doubts on the long-term economic implications of such commitments.

Gold prices surged due to Middle East tensions, especially after a deadly explosion in Gaza. This escalated concerns, impacting US President Joe Biden's scheduled trip to the region. Prior to this, there were fears of the conflict spreading, prompting Biden to send two aircraft carriers and place troops on alert. Following the explosion, Iran proposed a boycott and oil embargo on Israel. Despite claims of Israel's non-involvement by Biden, the situation remains tense. Bullion benefited, rising about 6% since Hamas's attack on Israel. Meanwhile, US economic data strengthened the case for sustained high interest rates, typically bad for gold. Currently, gold stands at $1,943.57 an ounce.

Footage from Wednesday showed Russian President Vladimir Putin in Beijing with officers carrying the "Cheget," a nuclear launch briefcase. This rare public display comes amid heightened tensions between Moscow and Washington due to the Ukraine conflict. Similar to the U.S. "nuclear football," the briefcase holds missile launch codes. As China bolsters its nuclear stance, Russia reconsiders withdrawing from the Comprehensive Nuclear Test Ban Treaty. The briefcase connects the president to military command.

The Federal Reserve is grappling with the US's soaring $33.5 trillion debt, leading to unexpected US bond yield increases and second thoughts on rate hikes. This debt threatens growth, unemployment, and inflation risks. The recent downgrade of the US's credit rating by Fitch and a 20% surge in the deficit to $1.7 trillion have amplified concerns about the nation's fiscal stability, with decreased foreign investments adding to the worries.

Mortgage rates rose for the sixth consecutive week, leading to the lowest home loan demand since 1995. Application volume decreased by 6.9% from the previous week. The 30-year fixed-rate mortgage interest increased to 7.70%, its highest since November 2000. Home purchase applications fell by 6% from the previous week and were 21% down from the same week a year ago. Refinance applications dropped 10% weekly and were 12% below last year's figures. As rates and home prices rise, more borrowers are considering adjustable-rate mortgages (ARMs) to increase purchasing power.

Surging benchmark interest rates have severely impacted the $10.6 trillion US corporate bond market. A hypothetical high-quality debt portfolio by BondCliQ Inc., which includes top companies like Coca-Cola, Boeing, and Microsoft, declined in value. Originally worth $1 million in early 2022, it's now valued at $612,863. Despite these bonds being from highly-rated companies, the rise in interest rates has caused their value to diminish. This situation poses a financial dilemma for those depending on these bonds for income.

Following a concerning dip in the NAHB sentiment survey, housing data disappointed. While starts increased by 7.0% MoM, they missed the 7.8% expectation and saw a downward revision for August. Permits dropped by 4.4% MoM, outperforming the anticipated 5.7% decline. Notably, multi-family permits suffered a significant drop, hitting their lowest since Nov 2022, while single-family permits inched up. This downturn, alongside strong construction employment, raises questions about housing affordability and The Fed's stance on the issue.

The Federal Reserve's strategy of debt-driven economic growth with low interest rates has backfired. Banks face near-record paper losses, especially smaller ones, due to rising interest rates. As the U.S. government's $33 TRILLION debt sees rising interest costs, the public is also grappling with surging personal debt. Despite Treasury Secretary Yellen's confidence in the U.S. economy, indicators like declining multifamily rents and low homebuilder confidence suggest otherwise. Meanwhile, inflation, once seen as a tool to devalue debt, is now hurting the middle class and low-income workers.

A bank run is unfolding at the Bank of Cangzhou in China due to fears of its exposure to the bankrupt property developer, Evergrande. While the bank assures its exposure is manageable and has taken legal actions to recover its loans, public panic persists. In response, Chinese authorities have arrested individuals spreading alleged rumors and are implementing measures to prevent further financial contagion. These include capital replenishment at banks, aiding in bad asset disposal, and regional operation restrictions.