Precious metals news

When the precious metals bull market arrives history suggests silver has more upside potential than just about any other asset...

In March 2023, I highlighted the link between high inflation and subsequent unemployment. Historical data suggests a two-year lag between inflation peaks and unemployment surges. With a 9.1% inflation peak in June 2022, we might expect rising unemployment by June 2024. The recent 3.7% CPI increase warns of more employment challenges around 2025. Worryingly, the Federal Reserve's 2% inflation target, diverging from a 1978 Congressional mandate of zero, exacerbates the issue, pointing to a bleak job market future.

Jobless claims have alarmingly risen to 220k from 215k, despite Ohio's attempts to rectify its fraudulent filings. These efforts have only marginally reduced the national figure. Ohio, once plagued with the most significant fraudulent claims, now showcases a decline. However, continuing claims remain precariously close to the worrying 1.7MM mark. Goldman Sachs warns of seasonal distortions that could pull down continuing claims, potentially impacting 375k by September's end. The unemployment rate is ominously at its peak since February 2022.

Mortgage applications plummeted 0.8% in just a week, as per the Mortgage Bankers Association. Even after Labor Day adjustments, a concerning 12% slump was observed from the prior week. Refinancing took a nosedive by 5%, and the year-on-year data shows a startling 27% decline in purchase applications.

Russia and the Saudis are driving up oil and diesel prices. But these moves are likely to undermine the rouble more than they undermine the dollar, euro, and other major currencies. Therefore, higher energy prices will rebound on the Russians this winter: if they shiver in Germany, they will freeze in Russia. If the dollar is king of the fiats, the rouble is just a lowly serf.
There is little doubt that Putin and his advisers are aware of this problem. Plan A was to introduce a new gold-backed BRICKS currency which might be expected to weaken the dollar and euro relative to the rouble. Plan B was more drastic: to back the rouble itself with gold. This is the financial equivalent of dropping a hydrogen bomb on the dollar and the global fiat currency system upon which it is based.
As well as demonstrating why there is no option for Russia but to back her currency with gold, this article shows why it is perfectly possible for Russia to do so during wartime and explains how it c...

Real median household income dropped for the third year in 2022, with a significant inflation surge of 7.8%. Despite some positive economic indicators, many Americans feel financially strained under Biden's tenure. Critics argue excessive welfare spending contributed to the inflation spike. Current data, especially from Gross Domestic Income, hint at looming economic challenges.

Inflation continues unabated, with the Consumer Price Index (CPI) accelerating to a year-over-year rate of 3.7%. The Core CPI, which removes volatile sectors like food and energy, has risen by a concerning 4.3%. Despite a 33.6% drop in the health insurance CPI, monthly surges in gasoline prices signal further inflationary pressures. As these trends persist, it's evident that the economy is grappling with an ongoing inflationary period.

Producer Prices surged by 0.7% MoM in August, marking the highest increase since June 2022 and surpassing expectations. This uptick suggests a rapidly intensifying inflation environment. Notably, goods prices are increasing quickly year-over-year, and indications point to the continued growth of production costs. This unfavorable inflation trajectory is likely not in line with the Federal Reserve's preferred scenario.

Retail sales in August surprisingly rose by 0.6% MoM, defying BofA analysts' predictions of a decline. The main boost came from a 5.2% MoM spike in spending at gasoline stations, even as overall economic conditions showed mixed signals. Critics advise caution in interpreting this nominal data, especially given rising gas prices.

The European Central Bank (ECB) hiked its main interest rate for the 10th straight time, prioritizing combatting inflation over the region's slowing economy. Rates have surged from -0.5% in June 2022 to a record 4%. New ECB projections show inflation at 5.6% this year, and while further hikes may pause, the bank stressed rates will remain at these high levels "for as long as necessary" to manage inflation. Economic indicators suggest downturns, especially in Germany, Europe's largest economy, with business sentiment dropping. With the ECB's aggressive stance on inflation, there's uncertainty about the region's economic outlook.

Rising interest rates and the aftermath of COVID-19 have created an unprecedented challenge for homebuyers.

Despite silver's recent underperformance, it presents an attractive entry point. The gold-silver ratio, historically between 50 and 60, now exceeds 80, suggesting silver's undervaluation. As demand for silver grows in sectors like solar and EVs, and supply challenges loom, prices are expected to rise significantly. The current market dynamics make a compelling case for silver investment.

Jeff Gundlach, CEO of DoubleLine Capital, anticipates the U.S. Federal Reserve to reduce benchmark rates in early 2024. After a rigorous rate increase to address persistent inflation, Gundlach believes the U.S. economy's fragility might prompt the Fed to halt these hikes. He mentioned that for the Fed to stop the rate increases, the U.S. core PCE should drop below 4%.

Rep. Tom Emmer reintroduced the "CBDC Anti-Surveillance State Act" to the U.S. House, aiming to block the Federal Reserve from issuing a surveillance-focused digital currency. Emmer asserts this could endanger Americans' financial privacy. The bill restricts the Fed from giving a CBDC to individuals and using it in monetary policy. Critics, including Robert F. Kennedy Jr., warn of potential financial control over dissenters.

The Federal Reserve posted a staggering $57 billion loss for the first half of 2023, forecasting losses beyond $100 billion by year's end. Their strategy? They print money to purchase Treasury bonds but then borrowed short-term and lent long-term at dismal interest rates, plunging them into this deficit. With their assets now devalued by over $1 trillion, the Fed, by standard accounting, seems technically insolvent, raising grave concerns about its financial prowess.

In August, small business optimism declined, as highlighted by the NFIB, due to concerns about sustained inflation and hiring challenges. Despite the U.S. economy's growth, higher interest rates intensified these worries. With U.S. households bracing for economic challenges, inflation remains a significant concern.

Major corporations are rapidly entering the bond market this September, anticipating even higher interest rates. These companies are not waiting for potential Federal rate cuts, suggesting a belief in sustained inflation and rising long-term interest rates. There's a significant increase in debt issuance this September compared to last year. As inflationary signals mount, businesses are racing to secure the current rates. Market experts predict further inflation surprises in the coming months, intensifying the urgency.

The lag effect looms like an impending storm. Every day, more borrowers grapple with the repercussions of escalating interest rates. The financial strain is subtle yet progressively intensifying. Couple that with the swift withdrawal of pandemic-related stimuli, and the economy faces turbulence. As we strive for normalcy, this growing lag effect may steer us towards a recession. The economy's heavy reliance on leverage means that sustained high rates are unsustainable without causing significant disruptions.

The consequences of the Fed's decision to raise rates in March 2022 have been devastating for many. Auto loan delinquency rates have soared alarmingly, nearly doubling in a short span. By Q2 2023, the situation worsened, with the US auto loan delinquency rate escalating to a troubling 7.3%, surpassing even pre-pandemic figures. The forecast from Moody’s paints an even grimmer picture, predicting that by 2024, a staggering 10% of auto loans will be delinquent.

The liquidity crisis is looming large. JP Morgan's data indicates a concerning trend: current excess household liquidity is at a dwindling $1.4 trillion. Alarmingly, this reserve is projected to hit rock bottom by May 2024. With household savings vanishing at a staggering rate of $100 billion monthly, they're on track to be drained entirely within this quarter. This dire state of finances is clearly reflected in the surging household debt levels.