Precious metals news

Billionaire Ray Dalio warns of the U.S. resorting to printing more money as its debt escalates, leading to potential economic instability. As debt surpasses income, consumption gets strained, pushing the government towards quantitative easing to increase dollar supply. The current national debt is at $33.044 trillion. Dalio also points out a looming risk: if the U.S. prints more money, leading to a drop in the dollar's value, bondholders might liquidate their holdings due to reduced bond value.

Indonesia has taken steps against the dollar's global dominance, launching a National Task Force to promote local currency transactions with partner nations. This move is in line with the growing trend of "de-dollarization," with countries like China, Russia, and India seeking alternatives to the dollar in global trade. The push to distance from the U.S. dollar is seen as an irreversible shift, as stated by Russian president Vladimir Putin.

Among the many problems currencies and markets face, there is one which is undocumented: the eurodollar market, which is yet another very large elephant in the room. This article quantifies eurodollars and eurodollar bonds, which are additional to US money supply and credit.
Research by the Bank of International Settlements puts this market at $93 trillion, of which on-balance sheet debt (i.e., customer deposits) of non-US banks is $15 trillion, a sum which should be added to US M2 money supply of $21 trillion for a truer picture of total dollar bank credit. Only a small of this debt is in other currencies.
In this article, I describe the origin of eurodollars and why they have grown to such an enormous quantity. They introduce unrecognised risks to capital markets, and particularly the dollar at a time of growing financial instability. While the factors leading to a Triffin-style crisis are already in place, the unwinding of eurodollar credit will be an additional, unexpect...

The U.S. Senate's last-minute move to raise the debt ceiling only delays the looming crisis as the national debt soars past $33 trillion. Treasury Secretary Yellen's attempts to downplay concerns ring hollow, especially as the deficit balloons by a staggering 61% from last year, pushing inflation. This reckless financial path risks our global position, diminishes our economic agility, and threatens to saddle future generations with insurmountable financial burdens.

First-time jobless claims in the U.S. dropped to 201k last week, marking the lowest since January. This decline wasn't influenced by previous irregularities from Ohio and Minnesota. Continuing claims fell below 1.7 million, also a low since January. This robust employment data supports Powell's hawkish position.

September's Manufacturing Business Outlook Survey from the Philly Fed indicated a decline, moving back into contraction. The headline index fell sharply from +12 to -13.5, with significant decreases in new orders and shipments. Despite low jobless claims, the employment index contracted for the sixth consecutive month. Firms reported price increases, with 22% expecting the impacts of COVID-19 measures to intensify. Signs suggest building stagflationary pressures with slowing growth and rising prices.

U.S. unemployment claims dropped to 201,000 for the week ended Sept. 16. However, a UAW union strike impacting auto manufacturers may soon reverse this trend. The Federal Reserve maintains current interest rates but hints at a year-end increase. Strikes at Ford, GM, and Stellantis are disrupting supply chains, leading to layoffs. The labor market remains tight, but upcoming data will clarify its status.

U.S. Treasuries are now more volatile than gold for the first time in 45 years and that could mean trouble for your portfolio...

We thought we had learned our lesson from the last U.S. Housing Bubble, but unfortunately, we didn't.  The U.S. Housing Market is just as insane, or even worse than during the 2005-2008 period.  Americans have no idea that we are facing a massive Category 5 Storm in the U.S. Housing Market...

The BRICS group is expanding, with Saudi Arabia, UAE, Egypt, Iran, Argentina, and Ethiopia joining, strengthening its global economic and population influence. Post-expansion, the group will control around 41% of global oil production, boosted by the inclusion of significant Middle East oil producers. The bloc also has a combined gold reserve of 5,493 tonnes. The aim is to form a powerful coalition representing the Global South's interests, especially against Western dominance.

Equities and US Treasuries are now historically overvalued, indicating limited returns ahead, especially in an inflationary environment. As traditional 60/40 portfolios (equities/bonds) undergo reassessment, gold is gaining prominence. With Treasuries showing greater volatility than gold for the first time in 45 years, and central banks accumulating gold for stability, it's time to consider incorporating gold into the 60/40 portfolio for enhanced security and returns.

The CEO of DoubleLine Capital, a billionaire, warns of a weakening US economy due to factors like corporate layoffs, high credit-card debt, and increased mortgage rates affecting housing. He also expressed concerns about small businesses refinancing their debts at steeper rates. Gundlach, known as the "Bond King," anticipates a potential recession next year and believes the current economic growth is fueled by unsustainable government spending. With the Federal Reserve's rate hikes, the interest on government debt is set to surge significantly.

Apollo reports that a fresh default cycle has begun, with soaring default rates. U.S. corporate bond default rates have surged from roughly 1% in 2021 to 3% following the Fed's rate hikes. For speculative grade bonds, the default rates have climbed from 1.5% to 5% within a year. If the Fed manages to prevent a recession, it would be remarkable, especially as historical patterns suggest an impending recession.

The Federal Reserve maintained rates within the target range of 5.25%-5.5%, a 22-year high. Despite this, they indicated a 'soft landing' and increased growth forecasts. The 'Dot plot' reveals policymakers predict one more rate hike this year. By 2024 and 2025, rate projections increased by half a percentage point, indicating prolonged high rates. The growth forecast for 2023 is now 2.1%, up from the 1% predicted in June. Unemployment is expected to peak at 4.1%, down from the earlier 4.5% estimate. Since the last FOMC statement, the dollar has risen, while bitcoin and bonds have declined, gold basically unchanged

Jared Bernstein, chairman of the Council of Economic Advisers, displays alarming ignorance regarding economic realities. Despite rising national credit card debt and inflation, Bernstein falsely claims improved financial conditions for Americans. His analysis contradicts his administration's data, and with such misguided advice, the U.S. is on a concerning path towards recession.

The financial system teeters on collapse. Commercial real estate values and credit card defaults surge. A global dollar crisis emerges, with China offloading U.S. Treasuries. The banking system faces another potential crisis wave. Alarmingly, the Federal Reserve reports significant losses. Efforts to tame inflation falter as energy prices spike. With looming recession risks and potential rate hikes, the financial outlook is bleak. Investors, be wary.

U.S. Treasury yields declined, with the 10-year yield retreating from 15-year highs ahead of the Federal Reserve's latest update. Despite a recent dip, Treasury yields have soared to multi-year highs amidst fears of higher rates potentially leading the U.S. economy into a recession. While the market anticipates the end of the Fed's rate-hiking cycle, the possibility of further rate hikes remains. Even as the expectation for additional hikes by the Fed this year lessens, concerns over inflation and its impact on the economy persist.

Today, China faces concerning deflationary trends, with consumer prices dropping for the first time in two years, largely driven by falling meat prices. While there are isolated price surges, notably in tourism, a vast majority of sectors, including home appliances, transport, and the broader manufacturing sector, are seeing declines. This sustained deflation in China, the world's largest manufacturer, poses the risk of exporting this deflation globally, potentially impacting advanced economies.

For the majority of this century, Germany showcased remarkable economic achievements, leading global markets with luxury cars and industrial machinery. With exports driving half of its economy, employment flourished, and while other European nations grappled with debt, Germany's financial strength became a model for many. Now, Germany is the world’s worst-performing major developed economy, with both the International Monetary Fund and European Union expecting it to shrink this year.

Expectations are rising for the termination of the subzero rate policy by March, marking a significant departure from over a decade of extensive stimulus by the central bank. Such a move could lead to a stronger yen, a decline in stocks, and alter capital flows in Japan, signaling potential economic turbulence ahead.