Precious metals news

Decades of alleged silver price manipulation could be giving way to a new era of higher prices. Silver has been suppressed for years due to extensive short selling, causing an artificial scarcity. The emerging physical shortage, coupled with the reluctance of major commercial shorts to add aggressively to their positions, may drive silver prices significantly higher. This represents a potential turning point in the silver market's dynamics.

Gold investment has surged in the past year, fueled by central bank acquisitions. JPMorgan Chase & Co. analysts report that implied allocations to gold by non-bank investors are at their highest since 2012. This trend, which began during the pandemic, has led to historically high implied allocations to gold. The rate of central bank buying is now the key factor influencing the future direction of gold prices, surpassing the importance of ETF flows, which held sway before the pandemic.

Boomers, born between 1946 and 1964, could see their Social Security Cost of Living Adjustment (COLA) drop to 3.1% in 2024 from this year's 8.7%. Smaller COLA increases may make it harder for boomers to pay off debt accumulated during periods of high inflation. This could impact those with median incomes of $41,000 to $44,000, as boomers often have fewer pensions to rely on than the Silent Generation.

Silver is much more than just a precious metal... It’s a marvel that has fascinated humanity for thousands of years.

The U.S. records a shocking 11% increase in homeless individuals living on the streets, reaching almost 600,000 rough sleepers. This spike is the largest since tracking began in 2007, with places like Oakland, San Francisco, Los Angeles, and Seattle becoming hotspots for homelessness. The issues of crime, drug abuse, lack of housing, and the end of pandemic relief programs exacerbate the problem. In downtown LA, tent cities struggle with an opioid crisis, while Seattle faces criticism for leaving hundreds of tiny homes meant for the homeless locked up.

U.N. Secretary-General António Guterres warns of a potential "great fracture" in global economic and financial systems, marked by divergent strategies in technology, AI, and conflicting security frameworks. He calls for debt relief mechanisms and re-channelling $100 billion of IMF's Special Drawing Rights through multilateral development banks to aid developing economies. This follows a 2021 agreement by rich countries to re-channel unused funds to poorer nations and a June 2023 initiative to boost lending by multilateral development banks.

Developing-nation currencies slid for a fourth day, almost wiping out 2023 gains. Concerns over prolonged Fed interest rates, China's iPhone ban, and weak German data hurt sentiment. Eastern European currencies, including the Polish zloty, performed poorly. Turkey's lira weakened for a fifth day. China's economic struggles and a stronger dollar weighed on emerging assets. The yuan hit a 16-year low against the dollar. To attract capital, Beijing may need significant reforms, while the Fed might need to signal rate cuts in early 2024.

Euro-zone GDP growth in the second quarter was only 0.1%, down from the initial 0.3% estimate. This could add weight to concerns of stagflation as the European Central Bank considers another interest rate increase to combat inflation. PMI data signals private-sector contraction, and the outlook for the rest of the year remains bleak. Germany's industrial production also declined in July. The ECB's previous 0.9% growth projection for the year may need to be revised downward in upcoming forecasts. Economists anticipate near-stagnation in the euro-area economy for the second half of 2023, possibly leading to a modest recession.

As the world descends into a much-heralded recession, the surprise will be that interest rates will continue to rise as economic activity contracts. This is not what the economic establishment expects.
This article puts the outlook in the context of classical economic theory, when it was the principles behind the division of labour which went unchallenged. Adopting the theme of Say’s law, this article permits a forecast with a high degree of certainly that far from a recession leading to lower prices, lower interest rates, and therefore investor heaven, it will lead to higher prices, higher interest rates, budget deficits soaring out of control, and liquidation of the dollar by over-exposed foreign holders.
Far from being the investor’s salvation, it will be the recession that will be the fiat dollar’s greatest challenge, and for the fiat currency system upon which it is based.

China's renminbi hits its lowest level against the dollar since 2007 as exports shrink for the fourth consecutive month, declining by 8.8% in August. The renminbi has fallen nearly 6% against the dollar this year due to disappointing economic data and a strong US dollar. Analysts suggest the People's Bank of China may weaken the currency further. China's economic recovery remains sluggish, with no major stimulus measures in sight. While some indicators improve, a shallow global trade recession is expected, with potential impacts on industrial expansion and commodity prices.

The US dollar's recent rally could be reaching its limits, potentially driving up bond yields. While the dollar has surged against a basket of currencies this year, other central banks are expected to hike rates. This dollar strength has implications for Japan, which might intervene to protect its yen, and China, which could also take action. These moves could push the dollar down and add pressure on US rates to rise further. Carry trades, like those involving the Mexican peso, are already showing strain, hinting at potential shifts in foreign exchange trends.

Dollarizing Argentina, as some suggest, could plunge the nation into a devastating and prolonged economic crisis, mirroring Ecuador's grim fate, warns economist Robin Brooks. Ecuador's dollarization has led to chronic economic stagnation, and Argentina must steer clear of this perilous path, Brooks strongly advises. The Argentine peso's catastrophic decline, hyperinflation, and mounting debt issues have prompted calls for dollarization, but Brooks and other experts caution against it, highlighting potential catastrophic consequences. The ongoing currency crisis is deepened by a severe shortage of the US dollar, aggravated by challenges in agricultural exports.

Initial jobless claims unexpectedly remained low, hitting the lowest levels since February, despite predictions of a rebound. This may be linked to previous data distortions, including potential fraud cases in Ohio and expanded unemployment insurance in Minnesota. Continuing jobless claims also fell below 1.7 million, reaching the lowest point since January. Despite this, the unemployment rate remains elevated since February 2022, indicating ongoing job market challenges.

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Falling energy prices were a significant factor in the big decline in the Consumer Price Index (CPI) earlier this year.
Bad news: energy prices are now heading up. That means the CPI relief was almost certainly transitory.

After returning to net gold buying in June, central banks continued to add to their gold reserves in July.
Globally, central banks reported net purchases of 55 tons in July, according to the latest data compiled by the World Gold Council.

In 1933, Herbert Hoover's advice on currency devaluation was ignored, leading to Roosevelt's pro-inflation tactics. Fast forward to August 1, 2023, Fitch Ratings downgrades the US government debt as the nation's debt-issuing spree continues unchecked. US public debt is projected to rise by $5.2 billion daily for the next decade, reaching well over $33 trillion. The downgrade escalates the threat to the US dollar's reserve currency status, especially with BRICS nations meeting to counter Western dominance. Diversifying portfolios with gold remains wise, as gold exposes the dollar's shortcomings and Central Bank demand for gold remains robust, signaling a shift away from the US dollar.While caution is advised, buying gold during dips can offer protection against potential currency crises.

The BRICS alliance, expanded by adding six new countries: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates. Saudi Arabia, a linchpin in the dollar's reserve status due to the petrodollar, recently signed a deal with Brazil to accept Brazil's currency for oil purchases.Their shared objective is to challenge US political and economic dominance, with a central focus on undermining the dollar's global reserve currency status. This move signals growing international discontent with the dollar's weaponization and mounting concerns about the staggering US national debt.

Taxpayers are unknowingly bailing out Federal Reserve member banks. Historically, the central banking system generated profits and contributed to the U.S. Treasury. However, a shift has occurred due to sharp rate hikes. The interest expenses the Fed now faces outweigh its earnings, accumulating nearly $93 billion in cash operating losses since September 2022. Rather than assessing member banks for these losses, the Fed is borrowing to cover them, adding to the consolidated federal debt. This alarming trend is escalating, with several district banks teetering on insolvency, raising concerns about the growing financial burden on taxpayers.

The rise of "debanking," where banks close accounts of those with differing views, is a growing concern. This trend disproportionately affects conservatives. Central bank digital currencies (CBDCs) are expected to exacerbate this issue. Owning decentralized cryptocurrencies like Bitcoin and gold can provide individuals with financial sovereignty, offering an alternative to the discriminatory banking system and ensuring financial independence from repressive institutions. Gold, in particular, is regaining popularity as a safe haven asset amid increasing financial uncertainties.