RSSCategory: Category: Economy

Get Ready for a Post-Election ‘Fed Wave’ of Inflation

| November 5, 2020 | Category: Economy
Get Ready for a Post-Election ‘Fed Wave’ of Inflation

As accusations of voting irregularities mount, President Donald Trump’s legal team is descending on Pennsylvania and Georgia as well as multiple battleground states that have been called by media outlets for Joe Biden. It will be an uphill battle for Trump to get to 270 electoral votes. As of this writing on Thursday morning, the final outcome of the presidential election remains uncertain. One thing that is now certain: Voters denied Democrats the “blue wave” many pollsters and pundits had been forecasting. Instead of a Biden landslide, a takeover of the Senate, and an expanded House majority, Democrats will instead have to share power with Republicans. The promise of divided […]

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Goldman Sachs Likes Silver; Trump Wants Even More Stimulus

| October 16, 2020 | Category: Economy
Goldman Sachs Likes Silver; Trump Wants Even More Stimulus

Gold and silver markets slumped this week as stimulus talks faltered again in Washington. Even though the White House upped its offer to $1.8 trillion, House Speaker Nancy Pelosi refused it – not wanting to give President Trump any kind of political victory ahead of the election. Meanwhile, the President continues to campaign for stimulus. He is bucking Senate Republicans by offering to go even higher than $1.8 trillion. Here’s what President Trump told Stuart Varney of Fox Business on Thursday: Stuart Varney: You don’t expect a phone call from Speaker Pelosi, but you would go higher. How much higher would you go? How much higher would you go? President […]

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The Fed’s Quest for Higher Inflation: What Could Go Wrong?

| October 8, 2020 | Category: Economy
The Fed’s Quest for Higher Inflation: What Could Go Wrong?

The Federal Reserve is warning investors in no uncertain terms that higher rates of inflation are coming. Yet markets, for the most part, have disregarded that warning. Bond yields, for example, remain well below 2% across the entire duration range. Stock market valuations continue to reflect a sanguine outlook for inflation. And crude oil futures suggest limited upside pressure on prices. It seems the Fed has a credibility problem. In August, Fed Chairman Jerome Powell announced that the central bank would begin targeting an inflation “average” of 2%. By the Fed’s measures, inflation has been running below 2% in recent years. So getting to a 2% average in the years […]

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Billionaire Hedge Fund Manager Warns of 10% Inflation

| September 11, 2020 | Category: Economy
Billionaire Hedge Fund Manager Warns of 10% Inflation

Over the past month, gold has traded in a range with support around $1,900. Bulls have made a couple unsuccessful attempts to retake and hold above the $2,000 level following the sharp plunge below it on August 11th. But we are likely to see a more decisive move in the gold market one way or the other in the days ahead. The near-term outlook for precious metals markets may be determined by where the U.S. Dollar Index heads next. It has been basing out since August after trending lower earlier in the summer. The Federal Reserve Note appreciated modestly against foreign currencies ahead of the European Central Bank’s policy meeting […]

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Fed Chairman: “We’re Not Even Thinking about Thinking About Raising Rates”

Fed Chairman: “We’re Not Even Thinking about Thinking About Raising Rates”

Market volatility has suddenly spiked in recent days came after the Federal Reserve vowed last Wednesday to keep its benchmark rate near zero through 2022. That’s an unusually long period for the Fed to be projecting rate policy. It reflects the fact that it will take many months and perhaps years for the tens of millions of jobs that were recently lost to return. During his press conference, Chairman Powell stumbled and stammered his way into stating that he would be happy to let inflation continue to rise until the economy approaches full employment. Jerome Powell: We’d be looking to get inflation back up and we’d be prepared to tolerate, uh, […]

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What’s Next, Trillion-Dollar Coins?

What’s Next, Trillion-Dollar Coins?

The massive set of stimulus measures rolled out last month by the Treasury Department and Federal Reserve has left many Americans wanting more… and politicians scheming for new ways to dole out additional trillions in cash. Most taxpayers have already received their $1,200 “stimulus” payments. However, that one-time payment will do little to repair the long-term financial health of the 26 million (and rising) who are newly unemployed. And it surely won’t bail out all the small business owners who were callously deemed “non-essential” and forced to shut down during this pandemic. A national WalletHub survey found that 84% of Americans want another stimulus check. The idea of getting free money is […]

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Markets Completely Decouple from Reality

Markets Completely Decouple from Reality

Investment demand for physical gold and silver is unrelenting. Buying activity actually picked up slightly last week as paper gold and silver prices drifted sideways to lower. Once again, anyone simply watching the gold price on CNBC would be shocked to know just how many people are buying gold. The Fed, and the cabal of Wall Street Banks it represents, are undoubtedly relieved to have metals prices under control. But they have a serious problem and it is bigger than the gold market. The disconnect between virtually all paper asset prices and real-world fundamentals has never been greater. The screen capture below pretty well sums it up: The ponies at […]

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Supply, Demand, and Depreciation: Key Drivers for Metals as the Economy Reopens

Supply, Demand, and Depreciation: Key Drivers for Metals as the Economy Reopens

The metals markets are being pulled in multiple directions simultaneously like never before. The global virus-triggered economic freeze has caused industrial demand for all commodities to crater. At the same time, mining output is also crashing as virus fears force many mines around the world to suspend operations. What is the “right” equilibrium price for copper, silver, gold, and other metals in an environment of such extreme and unstable supply and demand stresses? The verdict of the market changes – often dramatically – day by day. In March, hard assets tumbled along with stocks as investors priced in increasingly dire scenarios for the economy. A double-digit contraction in U.S. GDP and double-digit spike […]

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All of the Economic Recovery Models Will Be Wrong Too

All of the Economic Recovery Models Will Be Wrong Too

“All of the projection models were wrong. All of them,” admitted New York Governor Andrew Cuomo in an interview last week with MSNBC. Governor Cuomo had been issuing frantic demands for tens of thousands of ventilators… that turned out not to be needed as the rate of new hospitalizations for COVID-19 infections in New York plunged with surprising speed. Governor Cuomo had warned America that New York City was the canary in the coal mine, that other cities would soon suffer similar death rates. And based on models cited by Dr. Anthony Fauci just a few days ago, the United States was expected to rack up around 200,000 deaths from […]

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Gold Price Relationship to the Economy

| February 25, 2020 | Category: Economy
Gold Price Relationship to the Economy

Too often, you will hear people talk about how the economy affects gold prices and not how gold prices affect the economy. However, whether you are a gold collector, investor, or merely interested in this subject, it is vital to understand why gold prices matter and have a 360-degree image of the precious metals. Whenever there is a crisis in the economy, the prices of gold always seem to benefit. Currently, the Brexit uncertainties are the primary concern, and studies have shown that the prices of gold might surge to $5000 in 2020. The prices of gold in 2020 are still holding on to strong gains, and recently, the Federal […]

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U.S. Senators Bash Gold during Fed Confirmation Hearings

| February 18, 2020 | Category: Economy
U.S. Senators Bash Gold during Fed Confirmation Hearings

The U.S. Senate weighed the issue of pegging the currency to a gold standard last week. Not surprisingly, the mere mention of gold ruffled the feathers of some Senators. More on that in a moment. In recent days, the monetary metals have contended with a rising U.S. dollar versus foreign currencies, a familiar story. The Dollar index has risen steadily since the beginning of the year and got an added boost from fears over the China virus outbreak. The USDX is now close to taking out its 2019 high, although it may be getting overbought near term. We have already seen most major commodities including copper and crude oil come […]

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Axel Merk: Fed to Stimulate in Any Crisis; Don’t Let Short-Term Events Bother You

| February 7, 2020 | Category: Economy
Axel Merk: Fed to Stimulate in Any Crisis; Don’t Let Short-Term Events Bother You

Mike Gleason: It is my privilege now to welcome in Axel Merk President and Chief Investment Officer of Merk Investments and author of the book Sustainable Wealth. Axel is a well-known market commentator and money manager and is a highly sought-after guest at financial conferences and on news outlets throughout the world and it’s always great to have him on with us here on the Money Metals Podcast. Axel, it’s a pleasure to have you back and thanks for joining us again. Welcome. Axel Merk: Good to be with you. Mike Gleason: Well, I’d like to start by getting your take on the coronavirus since that has been dominating headlines in recent days. There is […]

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Michael Pento: THIS ONE THING Will Tell Us When the Bubble Economy Is Bursting…

| January 27, 2020 | Category: Economy
Michael Pento: THIS ONE THING Will Tell Us When the Bubble Economy Is Bursting…

Mike Gleason: It is my privilege now to welcome back Michael Pento, President and founder of Pento Portfolio Strategies. Michael’s a well-known money manager, market commentator and author of the book, The Coming Bond Market Collapse: How to Survive the Demise of the U.S. Debt Market. He’s been a regular guest with us over the years and we always love getting his fantastic insights. Michael, thanks for the time again today, and welcome back. Michael Pento: It’s always a pleasure to be on with you. Thank you for inviting me back on the program. Mike Gleason: Well, we’re having a hard time seeing a big move higher in metals prices until one of two […]

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Will Negative Interest Rates Be the Last Straw?

| December 23, 2019 | Category: Economy
Will Negative Interest Rates Be the Last Straw?

Zero Interest Rate Policy (ZIRP) was considered “extraordinary” when central bankers rolled that out roughly ten years ago. At that time, people would still have laughed at the idea of negative interest rates. Lenders didn’t pay borrowers and nobody paid their bank to hold their deposits. So much has changed in the past 10 years. Now negative interest rate policies (NIRP) look set to go viral. German banks will soon start toeing the European Central Bank line and pass negative rates on to depositors there. Germans who endured zero interest rates and somehow still want a savings account will now have to pay for the “privilege.” The idea is preposterous, and […]

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