Precious metals news

In 2022, US Treasuries experienced their worst year in American history, with the 10-year Treasury falling almost 18%, and the 30-year Treasury plunging over 39%. This collapse challenged the long-held belief that Treasuries are a risk-free, reliable store-of-value asset, pushing many investors to rethink their strategies. The global bond market, worth an estimated $133 trillion, is predicted to become a capital graveyard as the value stored in it may have to move elsewhere. Underpinning these developments are several critical factors. The US federal government's enormous and rapidly growing debt (over $32.5 trillion) is unsustainable, with default being an inevitable but still uncertain outcome. The debt is expected to continue growing, and the recent weaponization of the US dollar and Treasuries, shown in the sanctions against Russia, has amplified political risks associated with these assets. Moreover, foreign interest in Treasuries has declined, with major holders like China significantly reducing the...

There's an ever-growing concern about who will purchase the skyrocketing US government debt that has ballooned to an alarming $32.5 trillion. The overwhelming demand for long-term Treasury securities can't be ignored, as it's causing yields to remain lower than anticipated. Instead of the 10-year yield being at an expected 6.8%, it is lingering at a mere 3.8%, with the 30-year yield not far behind. There are fears that yields may have to inflate to attract more buyers, with the simple principle of high yield equating to higher demand. Although this strategy works for junk bonds, the same can't be said for Treasuries, at least not yet. Foreign buyers, especially from Europe, are still piling on to the buying spree. However, China and Japan, previously the two largest holders of Treasury securities, are shedding their holdings. As per the Treasury Department's TIC data, the total amount of Treasuries held by foreign holders in May was $7.53 trillion, a slight drop from April's record holdings, yet up by a m...

The U.S. is irresponsibly wasting billions of dollars on energy subsidies, which is leading allied nations down a similar, damaging path. The Inflation Reduction Act (IRA) favors domestic production and allocates excessive subsidies to wealthy companies, creating a global financial imbalance. Even foreign firms stand to benefit, with projections suggesting that Korean battery manufacturers could receive $8 billion annually from US taxpayers by 2026. In a desperate bid to retain companies lured by U.S. subsidies, Japan, South Korea, and the EU have introduced costly incentives, further escalating this global subsidy war. An alternative approach of enhancing the business environment, instead of carelessly throwing around taxpayer money, is overlooked. Disturbingly, the Southern U.S. states are gaining dominance in automotive jobs, fueled by lower costs and the appeal of cheaper living. Most businesses base their investment decisions on factors other than subsidies, yet governments persist in this wasteful p...

In a grim testament to President Joe Biden's recklessness and incompetence, the federal government deficit has reached alarming levels. The Treasury Department reported a deficit of almost $1.4 trillion for the first nine months of the fiscal year, more than 2 1/2 times the deficit of the previous year. This massive borrowing surge is occurring despite near-record-low unemployment, which should result in a decreasing deficit. However, Biden's policies have exacerbated the problem, with extravagant spending and falling revenues. His American Rescue Plan, infrastructure law, Inflation Reduction Act, and other legislation have contributed to a projected $4.8 trillion increase in deficits between 2021 and 2031. The Federal Reserve's loose monetary policy, combined with Biden's spending binge, has fueled the worst inflation in four decades, leading to higher interest rates and increased federal interest payments of over $650 billion. Tax revenues have also fallen, partly due to Biden's regulatory agenda and hi...

Record-breaking heatwaves in the western U.S. are pushing already strained power grids to the brink, raising alarming concerns of imminent blackouts. While Texas, scarred by a devastating grid failure in the past, has managed to hold up due to increased battery installations and solar power capacity, the larger issue looms over the nation's outdated and inadequate infrastructure. The power grid's vulnerability to extreme weather events and its unpreparedness for the transition to renewable energy exacerbate the risks. Although the Biden administration's $13 billion investment through the Building a Better Grid Initiative is a step forward, it falls woefully short of the estimated annual investment of $4 trillion needed by 2030 to modernize and strengthen the power grids. Without substantial upgrades and investments, the likelihood of blackouts and the mounting challenges of an aging infrastructure will continue to cast a dark shadow over the stability and reliability of the power grids.

Keynesian policies, which involve extensive government spending and currency printing, have had unintended negative consequences in the United States. Despite the intention to stimulate the economy, these policies have resulted in a weaker labor market and financial hardships for citizens. Employment statistics reveal that the labor force participation rate and employment-population ratio remain below pre-pandemic levels, indicating a struggling job market. Furthermore, the country has experienced 26 consecutive months of negative real wage growth, meaning workers' earnings are not keeping up with inflation. Americans are heavily reliant on debt, with credit card debt reaching record highs and personal savings remaining significantly lower than before the pandemic. This has led to a decline in consumer sentiment, as evidenced by the University of Michigan Consumer Sentiment Index. The story raises concerns about the growing federal deficit, which has been exacerbated by stimulus measures, and warns that f...

The New York Federal Reserve Bank's monthly Survey of Consumer Expectations has revealed worrisome trends in credit application rejections in the United States. The report shows that the overall rejection rate for credit applicants has soared to its highest level since June 2018, reaching 21.8 percent compared to 17.3 percent in February. This rise in rejections was observed across various age groups, with the most significant impact felt among individuals with credit scores below 680. The rejection rates for different types of credit applications also saw substantial increases. Auto loan rejections hit a record high since 2013, rising from 9.1 percent in February to 14.2 percent. Rejections for credit card applications, credit card limit increases, mortgages, and mortgage refinance requests climbed to 21.5 percent, 30.7 percent, 13.2 percent, and 20.8 percent, respectively. The survey further noted that the average probability of loan rejection sharply increased for auto loans, credit cards, credit limit...

The U.S. Federal Reserve's upcoming launch of "FedNow" has sparked concerns and criticism within the financial industry. While the service aims to modernize the payment system by enabling faster transactions, there are apprehensions about its potential negative consequences. Many major banks initially opposed FedNow, deeming it redundant compared to existing private sector real-time payment systems. However, they reluctantly joined in to expand their service offerings and maintain a competitive edge. This move has raised questions about the necessity and effectiveness of FedNow. Some market participants worry that the rapid outflows facilitated by FedNow could potentially lead to bank runs, especially in light of the recent failure of Silicon Valley Bank. These concerns are further amplified by the limited tools available to banks to mitigate such outflows. There are also uncertainties regarding the costs associated with FedNow. While it is stated that consumers will not be directly charged, it remains un...

While FedNow, the new instant payments service launched by the U.S. Federal Reserve, dramatically speeds up transactions, the central bank has clarified that it is not related to a central bank digital currency (CBDC). Despite the increase in discussions around the world about the implementation of CBDCs, the Federal Reserve has stated that FedNow is neither a form of currency nor a step towards eliminating any form of payment, including cash. FedNow is designed to improve the infrastructure of financial transactions, making it faster and more convenient, and operates 24/7. Its real-time payment network uses commercial banks as intermediaries and can process payments within seconds. On the other hand, a CBDC would represent a fundamental change to the monetary system, creating a digital form of a nation's currency managed by the central bank. The development and implementation of a CBDC would have broad implications for monetary policy, financial stability, and the banking sector. Officials such as Treasu...

The Precious Metals Rally since the beginning of July was due to a weaker Dollar.  So, what's next... especially after the Dollar rallied today, pushing the metals lower.  In this update, I show longer-dated charts that may provide us with some interesting clues...

A significant financial development may be on the horizon as the BRICS nations—Brazil, Russia, India, China, and South Africa—are reportedly considering the introduction of a joint currency backed by gold. This proposal, which aims to "de-dollarize" the global economy, will be discussed during the BRICS summit in Johannesburg from August 22 to 24. The move to establish a gold-backed currency comes as a response to concerns over the potential weaponization of the US dollar through economic sanctions. With over 40 countries, including Algeria, Argentina, Egypt, Mexico, Nigeria, Saudi Arabia, and the United Arab Emirates, expressing interest in joining BRICS, the initiative is gaining momentum. While some experts believe the creation of a common BRICS currency similar to the euro is unlikely to happen soon, the possibility of a commodity-backed currency has sparked intense discussions on social media. Authors like Robert Kiyosaki, known for "Rich Dad Poor Dad," have highlighted the potential impact of a gold...

Democratic presidential candidate Robert F. Kennedy Jr. has unveiled an ambitious plan to back the United States dollar with hard assets, particularly gold and silver, in an effort to strengthen the American economy. Speaking at a Heal-the-Divide PAC event, Kennedy emphasized the historical value and stability of precious metals in supporting the currency. According to Kennedy, backing the U.S. dollar with gold and silver would help restore confidence in the currency, combat inflation, and promote long-term financial stability. He highlighted the track record of these precious metals as a store of value and their ability to mitigate the risks associated with fiat currencies. Kennedy's plan proposes a gradual implementation, starting with a small percentage of Treasury bills being backed by gold and silver. He intends to assess the impact and adjust the level of backing based on the success of the initiative. This approach allows for a cautious transition and minimizes potential disruptions to the economy....

The deliberate concealment of information by the global banking industry raises serious questions about its integrity and accountability. The decision by the Swiss Parliamentary Commission of Inquiry to lock away its findings on the collapse of Credit Suisse for 50 years is a blatant affront to transparency and the public's right to know. This secretive approach is not an isolated incident but a recurring pattern. During the 2008 financial crisis, the Federal Reserve withheld crucial details of global bank bailout information, including the names of banks and the amounts borrowed. The Fed's resistance to transparency and its lengthy legal battle to prevent the release of this information raises suspicions of misconduct and hidden agendas. It is deeply troubling that major global banks, including Citigroup and JPMorgan Chase, have faced minimal consequences for their involvement in fraudulent activities, while critical documents and evidence are sealed, protective orders are granted, and information is hea...

Deflation is becoming a growing concern for stocks, reminiscent of the challenges faced during the 2008 financial crisis, according to Morgan Stanley's chief stock strategist, Mike Wilson. He warns that falling prices erode firms' pricing power, leading to a negative impact on earnings and stock valuations. While easing consumer and producer prices have initially been interpreted as positive news for stocks, Wilson cautions that the shift from disinflation to deflation could pose a significant headwind. The effects of rate hikes take time to surface, and there is a possibility that prices may actually decline. This scenario is particularly worrisome as companies have relied on passing on higher costs to customers during a period of inflation. Signs of deflation are already emerging, including declining housing and car prices, as well as price drops in sectors such as airlines and hotels. Wilson emphasizes the need for caution among equity investors, as the current market conditions mirror the slippery slo...

In the midst of a mounting wave of corporate bankruptcies, fears are deepening on Wall Street as the global economy teeters on the brink of deflation. The surge in corporate debt distress, which has already surpassed $500 billion, threatens to impede economic growth and strain credit markets that are still recovering from historic losses. This distressing scenario is fueled by the weight of soaring debt levels accumulated during a period of unprecedentedly low interest rates. Central banks, caught off guard by surging inflation, are deliberately tightening monetary policy to slow down economies and restrict credit flow, resulting in an inevitable wave of business failures. The vulnerability is particularly acute in sectors burdened by excessive debt, as companies struggle to cope with ballooning obligations. In the US, high-yield bonds and leveraged loans more than doubled to $3 trillion since 2008, before the Federal Reserve embarked on aggressive rate hikes. Non-financial Chinese companies also grapple ...

On July 17, 2023, fears intensified regarding China's economy, which appeared to be on the verge of deflation. The latest economic data showed underwhelming performance, causing concerns about stagnating growth and prompting calls for more significant policy intervention. Beijing announced that the country's GDP growth for the second quarter was 6.3% year-on-year, falling short of market expectations of 7.3%. This marked a slower growth rate of 0.8% from the previous quarter's 2.2% quarter-on-quarter pace. Adding to the worries, China's producer prices experienced a significant decline of 5.4% in June compared to the previous year, marking the ninth consecutive drop and the steepest decline since December 2015. Additionally, annual consumer price inflation remained flat in June, driven by a substantial 7.2% decrease in pork prices, which missed expectations. Although the People's Bank of China pushed back against the deflation narrative, some economists pointed to other indicators indicating a serious ris...

Investment banks are growing increasingly pessimistic about the dollar as they anticipate a soft economic landing, leading to a reduced need for the US Federal Reserve to raise interest rates. Major lenders such as Morgan Stanley, JPMorgan Chase, Goldman Sachs, and HSBC have abandoned their bullish dollar calls or predicted further declines in the currency following last week's significant drop in US inflation. The US currency hit a 15-month low against a basket of currencies, fueling expectations that the Fed could soon end its monetary tightening campaign without pushing the world's largest economy into a recession. Analysts at HSBC believe that the signs of global growth improvement and a US soft landing will pave the way for dollar weakness, anticipating a breakout from the tight trading range seen since late 2022. Goldman Sachs analysts also expect a substantial decline, suggesting that the recent move is just the beginning. Morgan Stanley and JPMorgan have adjusted their positions, with the former s...

The recent University of Michigan survey indicates that one-year inflation expectations rose to 3.4% in July, while the five-year outlook increased to 3.1%. There is a mainstream narrative that is growing all over the financial media: We must accept three percent annual inflation as a success at combating rising prices. This is enough to pivot and return to monetary easing. It is not. Sustained three percent inflation over a decade results in a 34% loss in purchasing power, exacerbating the already dire inflationary environment. Rising long-term inflation expectations not only erode wages and savings but also incentivize the persistence of inefficient sectors while discouraging innovation and technological advancements. Despite this, there is a demand for more quantitative easing, driven by the desire for market bubbles, even at the expense of weak economic growth and declining wages. The reality is that a three percent average inflation rate leads to higher costs of essential goods and services, as seen ...

Over the last two months we have seen an unprecedented acceleration of what Mike Maloney refers to as ‘The Death of the Global US dollar Standard’.

A recent Bankrate survey reveals that financial regrets are pervasive among U.S. adults, with a staggering 74 percent expressing remorse over their financial decisions. From failing to save for retirement early enough to taking on excessive credit card debt or not setting aside enough for emergencies, it's clear that many Americans are grappling with the consequences of past choices. Greg McBride, Bankrate's Chief Financial Analyst, highlights the striking trend: "Despite rising debt levels and higher interest rates, regrets over lack of savings continue to outpace regrets related to debt." This sentiment is echoed by a substantial portion of Americans who feel that their top financial regret stems from not saving enough for retirement, emergencies, or their children's education, rather than regretting the accumulation of credit card debt or student loan debt, or buying a home beyond their means. The survey findings also shed light on generational differences. Baby boomers, aged 59-77, are most likely to ...