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6.21.24 - Will this be the AI bubble?

Gold last traded at $2,320 an ounce. Silver at $29.55 an ounce.

EDITOR'S NOTE: Does the current stock market frenzy resemble the same mania we saw before the dot-com bubble and the 2008 housing bubble? It does, but with one key difference, the addition of the massive fiscal stimulus in response to the pandemic. We have an overvalued market with the same levels of euphoria that proceeded past crashes, with the added stress of loose monetary policy and rapidly expanding debt.

AI stock frenzy resembles dot-com bubble and may explode disastrously, experts warn -Business Insider

by Theron Mohamed

bulls Experts say the frenzy around AI stocks resembles the last two major market bubbles — and could end in disaster if investors get spooked.

Every financial mania is different, but the current tech boom shows "some similarities with the run-up to both the dot-com and 2008 housing bubbles," Nathan Burks, Adetokunbo Fadahunsi, and Ann Marie Hibbert told Business Insider in an email.

The trio co-authored a paper titled "Financial Contagion: A Tale of Three Bubbles" in 2021. Burks was a member of West Virginia University's finance department at the time and now works as a researcher at a crypto options-trading platform called Panoptic.

Fadahunsi is an assistant professor of statistics at George Mason University, while Hibbert is the interim chair of WVU's finance department.

The bubble experts pointed to the Federal Reserve's "relatively loose" monetary policy as one common factor between this market and the last two big bubbles. But they underscored one big difference is the "unprecedented fiscal stimulus in the wake of the COVID-19 pandemic."

In other words, low interest rates and an ample money supply were contributors then and now, and the US government added fuel to the woodpile with its trillions of dollars in emergency spending during the pandemic, and its large-scale infrastructure and industrial programs since then.

"This combination of aggressive fiscal and monetary expansion, along with broader sentiment largely being driven by Big Tech (high-beta) stocks, has thus given way to an elevated level of overoptimism that is particularly similar to the foundations of the dot-com bubble as outlined in our paper," they told BI. READ MORE

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6.20.24 - Countries worried about the dollar are buying gold

Gold last traded at $2,359 an ounce. Silver at $30.74 an ounce.

EDITOR'S NOTE: More bad news for the dollar; the list of nations looking to abandon the greenback is growing rather long. And these countries intend to buy gold to hedge their bets.

More rich countries worried about the dollar want to buy gold -Business Insider

gold country Emerging economies, such as China and its allies, have been hoarding gold to diversify from the US dollar.

But they're not the only gold buyers.

Even central banks from advanced economies are planning to load up on gold, a World Gold Council survey released on Monday indicates.

This enthusiasm for the yellow metal has come even though the spot gold price is hovering at record levels, about $2,330 an ounce, after hitting nearly $2,450 last month.

The WGC survey, conducted from February to April, found that 29% of 70 central banks — the biggest share the WGC has observed since 2019 — were planning to buy gold over the next 12 months.

Among the central banks, about 15% of those in advanced economies said they planned to do so — also the most since 2019. Meanwhile, about 40% of emerging-market central banks said they'd be buying in the coming year.

The central banks' key reasons for more gold purchases included rebalancing their reserves and hedging against risks such as rising inflation, US dollar exposure, and market instability. Eight out of the 20 central banks that said they were planning to buy more gold also cited higher economic risks in countries where reserve currencies are from because of issues such as the rising US budget deficit. READ MORE

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6.19.24 - More companies file bankruptcy, citing inflation

Gold last traded at $2,329 an ounce. Silver at $29.79 an ounce.

Gold rush to endure through 2024 though $3,000 mark may prove elusive -Yahoo! Finance

There's no doubt gold is in a bull market and, given the global demand and building economic pressures, the run may have just begun. Some may question how high gold can really go, but the yellow metal is gaining more supporters by the day.

By Brijesh Patel and Ashitha Shivaprasad

SINGAPORE (Reuters) - Gold's lightning rally to successive record highs shows every sign of continuing in the second half of 2024 as the fundamental case for bullion remains firmly in place, though $3,000 per ounce looks just out of reach, traders and industry experts said.

Investors have flocked in droves towards the precious metal, driven by expectations for monetary easing, geopolitical tension in Europe and the Middle East and - most notably - central bank purchases led by China.

Spot gold is trading around $2,300 per ounce after hitting a record $2,449.89 on May 20, gaining more than 11% so far this year.

"There are lots of reasons driving gold right now..., but one of the major factors is China," Ruth Crowell, CEO of the London Bullion Market Association, told Reuters on the sidelines of the Asia Pacific Precious Metals conference in Singapore.

"Usually China and Japan have been budget shoppers, but given the state of the economy, real estate challenges and equity markets, gold is a safe choice... I think gold is going to be of interest for some time."

Central banks across the globe, especially China, have been ramping up reserves held in gold due to currency depreciation and geopolitical and economic risks.

Bullion is traditionally known as a favoured hedge against geopolitical and economic risks, thriving in a low-interest rate environment.

"Physical demand for gold is strong, but we have not seen retail investment demand coming in yet like exchange-traded funds, demand from the United States...I see prices reaching $2,600 - $2,700 very easily this year," said Amar Singh, Head of Metals - Asia Pacific and Middle East at StoneX. READ MORE

More companies announce bankruptcies, shutter operations, citing inflation -The Center Square

The consequences of sustained inflation are taking their toll. While consumers have been feeling the pinch for some time now, retailers are now the victims of this "higher for longer" inflationary period; and they are beginning to fall like dominoes. As the dollar continues to erode, and more and more Americans have to tighten their belts to the bare essentials, prepare for more news of decades and centuries-old companies having to close their doors forever.

by Bethany Blankley

inflation More companies are declaring bankruptcy and shutting down operations, citing inflation and high costs. Inflation and the economy remains a top issue among all voters, according to a recent The Center Square Voters' Voice Poll.

Retailers are closing nearly 3,200 stores this year, according to a recent analysis from CoreSight Research. The closures are a 24% increase from 2023.

U.S. drug stores and pharmacy closures led to 8 million square feet of shuttered retail space this year, the research company said. It also notes that retailers are losing inventory and customers due to retail theft. “Retail shrink” is closely connected to “organized retail crime,” it notes.

Out of the 3,200 being closed, the majority are being closed by roughly 30 retailers, with Family Dollar closing the most of over 600, according to the data, CBS News reported .

Tupperware is the latest to announce it's permanently closing its last operating production plant in the U.S. in Hemingway, South Carolina. All of its 148 workers will be laid off, the first in September, followed by others in waves through next January. Tupperware announced its plans last week, stating it would continue to produce its products in a plant in Lerma, Mexico. READ MORE

Russia Makes Major Announcement About BRICS Currency -Watcher.Guru

Russia has announced that they have encountered a few speed bumps in their quest to establish a BRICS currency and de-dollarize the globe; but rest assured, these setbacks have not dampened their resolve. If anything these hurdles have made their mission of dethroning the dollar more focused.

by Vinod Dsouza

Russia is all set to host the BRICS+ Forum 2024 meeting on June 21 and a delegation of 21 countries, including 200 mayors will attend the summit. The forum is held in the Kazan region of Russia where the alliance is looking to connect with leaders of the grassroots levels. On the heels of the summit, Russia’s Deputy Foreign Minister Sergei Ryabkov provided the latest update about the forming of the BRICS currency.

Ryabkov made a major announcement that the idea of a BRICS currency to challenge the US dollar has not been shelved. However, he explained that the alliance is facing challenges in the implementation of the upcoming currency. Despite the obstacles, Ryabkov revealed that the currency formation will be decided in the upcoming BRICS summit in October. “I would not say that this idea (BRICS currency) has been shelved,” said Ryabkov. “But this does not mean that this idea has been postponed,” he said. Ryabkov revealed that the bloc aims to provide an update on BRICS currency in less than a year.

He confirmed that the formation of a BRICS currency will be kick-started faster than expected. “Quite bold, quite innovative scheme in this area will be worked out. And in a future that is not calculated in years and decades, but much faster,” he said. READ MORE

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6.18.24 - Thousands of Americans are Going “Off Grid”

Gold last traded at $2,329 an ounce. Silver at $29.54 an ounce.

EDITOR'S NOTE: There has been no shortage of upheaval in the economy over the last several years. As a result, there has been a considerable rise in Americans wanting to go off the grid; the number of those who consider themselves preppers has doubled in the US since 2017. Given the world's volatility, a little prepping may go a long way.

Hundreds Of Thousands Of Americans Are Going “Off Grid” In Anticipation Of What Is Coming -The Economic Collapse

treehouse As our society descends into chaos, vast numbers of people are choosing to pull the plug and walk away. Of course it is nearly impossible to completely escape the ubiquitous madness that is seemingly all around us, but many are finding that an “off grid” lifestyle gives them the best opportunity to insulate themselves as much as possible. When you become less dependent on the system, what happens to the system has less of an impact on you. Unfortunately, it appears that our system is heading into a full-blown meltdown, and a significant portion of the population is feverishly making preparations in anticipation of what is coming.

According to Reuters, it has been estimated that there are now approximately 20 million “preppers” in the United States…

Brook Morgan surveyed booths at the “Survival & Prepper Show” in Colorado that were stocked with boxes of ammunition, mounds of trauma medical kits, and every type of knife imaginable.

A self-described “30-year-old lesbian from Indiana,” Morgan is one of a new breed of Americans getting ready to survive political upheaval and natural catastrophes, a pursuit that until recently was largely associated with far-right movements such as white nationalists since the 1980s. READ MORE

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6.17.24 - Nvidia, Apple and GameStop: The Entire Stock Market

Gold last traded at $2,319 an ounce. Silver at $29.47 an ounce.

EDITOR'S NOTE: If you were to listen to the talking heads on Wall Street, you'd likely be convinced that everything is coming up roses in the stock market. According to this author, whatever "strength" exists is these few stocks controlling the averages. The rest of the market? It should be a major concern.

Nvidia, Apple And GameStop Are The Entire Stock Market Right Now…And That's Dangerous -ZeroHedge

Submitted by QTR's Fringe Finance

bull tattoo Everybody knows it but nobody is giving it any serious consideration: the entire market is being driven by Nvidia, Apple and even GameStop. And when one, if not all three of these names starts to experience some selling, they are likely taking the whole market with it.

I have been making note of the fact that Apple and Nvidia could be the market's black swans for the better part of a year now. And forget about cash on the sidelines eventually drying up as a result of savings running out, the market is also not taking into account multiple looming red flags for these names.

Zero Hedge has been all over the story of "bad" market breadth that no one on Wall Street seems to want to notice or talk about out loud. They wrote on X today: Forget about the Mag 7: it's all about the Top 3 where it is now daily race who can buyback the most stock.

For Apple, the company remains in the crosshairs of a massive antitrust investigation, the likes of which threw a cold blanket on Microsoft for the better part of a decade in the early 2000s. This is a very real risk that looms under the surface of the company's buybacks, which are likely a large portion of the bid now. The company's most recent 'innovation', the Vision Pro has also all but disappeared from public discourse after receiving tepid reviews.

Also, Apple and Nvidia share something in common: their valuations, at 33x and 77x ttm earnings, respectively, are extremely aggressive. There is a far better case for an air pocket under these valuations than there is over them. So on top of 5.5% rates, bone dry consumer savings, record high credit card debt, unmarked commercial real estate books and continued debilitating inflation, there's valuation risk. READ MORE

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6.14.24 - $3,000/oz gold

Gold last traded at $2,332 an ounce. Silver at $29.54 an ounce.

EDITOR'S NOTE: We began 2024 with some fringe forecasts of $3,000/oz gold by year's end; at the time, this seemed optimistic. Now here we are at the half-way mark of the year and $3,000/oz is being regarded as an inevitability, it's just a matter of when.

Gold prices likely to reach as high as $3,000/oz over the next 12 months: Citi

by Vahid Karaahmetovic

gold coins Gold prices could surge up to $3,000 over the next 12 months, Citi analysts said, as a combination of strong physical demand, central bank purchases, and macroeconomic factors continue to support a bullish outlook for the yellow metal.

“The gold price path is unlikely to be linear, but average prices should trend higher in 2024 and 2025,” Citi analysts wrote in a note.

“We see the market supported well above $2,000-2,200/oz and regularly testing nominal ATHs into end-2024,” before surging to $3,000 in 2025, the firm added.

Several key factors underpin this bullish outlook.

Firstly, the market’s asymmetric risk skew has already demonstrated resilience, with gold prices rallying to $2,400 per ounce despite a strong US dollar, high interest rates, and robust equity markets.

“A negative turn in US growth exceptionalism should be positive for gold, enhancing bids for duration and haven assets, all-else equal,” the note continues. READ MORE

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6.13.24 - Is a crash worse than 1929 on the horizon?

Gold last traded at $2,304 an ounce. Silver at $28.95 an ounce.

EDITOR'S NOTE: We could be looking at the rise before the fall for the S&P 500, this according to Mark Spitznagel. He's referred to as a "Black Swan" investor due to his prediction of a devastating market downturn to come. He's not alone, as there seems to be trouble brewing in the equity markets.

'Black Swan' investor sees the S&P 500 jumping another 12% — followed by the worst crash since 1929 -Markets Insider

By Theron Mohamed

market chart A "Black Swan" investor expects the S&P 500 to climb another 12% and breach 6,000 points for the first time — and then suffer its worst crash since the Great Depression.

Mark Spitznagel, the founder and chief of Universa Investments, told Business Insider in an email:

"I've been saying this for a year and a half because people got 2022 so incredibly wrong (we're not in the 70s!). The Fed recklessly popped the greatest credit bubble in human history and now as people realize that the Fed needs to about-face, they're going to get increasingly juked the other way in a face-ripping rally. At the point of euphoria — which is coming — the high will be in and the market will crash worse than the global financial crisis."

He added: "What matters more than my views on this are how Universa's clients are positioned for it — for both a face-ripping rally and for the worst crash since 1929."

Universa specializes in protecting portfolios against extreme and unpredictable "tail risks" in markets. The firm's scientific advisor is Nassim Taleb, the author of "The Black Swan: The Impact of the Highly Improbable."

The S&P has soared by nearly 30% from its October lows to trade at record highs of more than 5,300 points. Investors have piled into stocks like Nvidia — up over 150% since the start of this year — as they wager Big Tech will be big winners from the artificial intelligence boom. READ MORE

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6.12.24 - Dollar and euro trade halted on Russia’s biggest exchange

Gold last traded at $2,318 an ounce. Silver at $29.58 an ounce.

Bond giant PIMCO sees another wave of bank failures coming as commercial mortgage trouble mounts -Markets Insider

The regional banks are indeed in trouble, and the mainstream media are finally admitting it. 120-130 regional banks have high concentrations of CRE. With high rates, low profitability and drastically reduced values; there is really no way out.

by Filip De Mott

A "very high" concentration of distressed commercial real estate loans will be drive another spate of bank failures, Pimco's global head of real estate, John Murray, told Bloomberg.

"The real wave of distress is just starting," Murray said.

Ever since interest rates spiked two years ago, heavy attention has been paid to commercial real estate as doubt grows over property owners' ability to refinance debt.

Defaults have risen across the sector amid higher borrowing costs and slumping demand, with the latter especially true for office buildings, which have struggled against remote work trends.

This week, Fitch Ratings revised its office delinquency forecasts up to 8.4% and 11% for 2024 and 2025, respectively.

The main lenders to the sector have been mid-sized regional banks, and worries of fallout have intensified on Wall Street. According to Bloomberg, regional lenders who jumped into real estate have watched assets fall to a fraction of their peak value. READ MORE

Dollar and euro trade halted on Russia’s biggest exchange due to new U.S. sanctions -CNBC

This would be unsettling news on its own; but this is on the heels of the BRICS announcing it is the final stages of its de-dollarizarion movement. The new BRICS payment system has been confirmed and will now be a global competitor of the US dollar.

by Reuters

broken dollar New U.S. sanctions against Russia will shut down trading in dollars and euros on its leading financial marketplace, the Moscow Exchange, the bourse and the central bank said on Wednesday.

“Due to the introduction of restrictive measures by the United States against the Moscow Exchange Group, exchange trading and settlements of deliverable instruments in U.S. dollars and euros are suspended,” the central bank said.

It added that it would use over-the-counter trading data to set official exchange rates for the dollar and euro.

The bank rushed out a statement, despite a public holiday in Russia, to reassure people that their dollar and euro bank deposits were secure.

“Companies and individuals can continue to buy and sell U.S. dollars and euros through Russian banks. All funds in U.S. dollars and euros in the accounts and deposits of citizens and companies remain safe,” it said.

The Moscow Exchange, Russia’s biggest bourse, also said share trading and money market trades settled in dollars and euros would cease. READ MORE

Consumer Prices Hold At Record Highs - Up 20% Since Biden Elected -ZeroHedge

Our biggest takeaway from this article ... overall, prices are up over 19.5% since Bidenomics was unleashed. The administration may keep claiming inflation is slowing, but those of us who buy groceries know the opposite to be true.

The headline consumer price index was unchanged MoM in May - the smallest change since July 2022 - just less than the +0.1% MoM expected. On a YoY basis, headline CPI rose 3.3% (less than the 3.4% exp) - but very much stuck in a range well above the 2% target for over year now...

Energy was the biggest drag on the headline CPI MoM...(Gasoline prices tumbled 3.6% in May from April, one key reason why the headline CPI was flat on the month.)

Core CPI rose 0.2% MoM (below the 0.3% exp) pulling the YoY change down to 3.4% (from 3.6% and below the 3.5% exp). That is the lowest Core CPI YoY since April 2021...

Core CPI has not had a down-month since President Biden was elected.

Core Services inflation slowed notably MoM...

The shelter index increased 0.4 percent in May and was the largest factor in the monthly increase in the index for all items less food and energy. VIEW CHARTS AND READ MORE

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6.11.24 - UBS: Buy the Dips

Gold last traded at $2,316 an ounce. Silver at $29.28 an ounce.

EDITOR'S NOTE: Trying to time markets when it comes to buying and selling can be difficult to get right; however, UBS is recommending to their clients to buy the dips. Their analysts see geopolitical tensions, under-reporting by the IMF and the upcoming US election all as reasons to have an allocation in gold.

UBS: Gold dips to be bought, not sold -Yahoo! Finance

gold coins In a note Monday, UBS analysts advised that recent dips in the gold price are opportunities to buy, not sell. The firm's note follows a more than 3% decline in the yellow metal on Friday after the latest US employment data.

Employment and earnings data sprung positive surprises. Key factors to watch this week include the May US Consumer Price Index (CPI) and the Federal Reserve meeting.

Furthermore, China's reported lack of gold reserve additions in May sparked some concern. however, UBS highlights potential under-reporting by the International Monetary Fund (IMF). They reiterate their previous recommendation of buying gold on dips around $2,250-$2,300 per ounce.

UBS acknowledges that near-term upside surprises in the CPI could put downward pressure on gold prices. However, they believe the strong job market data may not reflect the whole picture, pointing to a rise in the unemployment rate and a decline in the job openings-to-unemployment ratio.

Looking ahead, UBS expects the Fed to adjust its projections to reflect two rate cuts in 2024, with inflation still moderating. They maintain a base case of a rate cut in September.

Central bank gold buying remains a factor, with Poland adding to their reserves in May. UBS anticipates total demand reaching 950-1,000 metric tons in 2024. Given ongoing geopolitical tensions and the upcoming US elections, UBS sees gold as a valuable portfolio hedge, recommending an allocation of around 5% for a USD-balanced portfolio. READ MORE

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6.10.24 - 'Dirty Little Secret Called Zelle'

Gold last traded at $2,310 an ounce. Silver at $29.72 an ounce.

EDITOR'S NOTE: As we continue to move forward into a completely digital world, more and more reasons to be wary are coming to light. This most recent instance involves Zelle, a payment platform used by many. Does the convenience outweigh the risk?

JPMorgan Chase, Bank of America and Wells Fargo Customers Lose $456,000,000 in One Year To 'Dirty Little Secret Called Zelle': Senate Committee Chairman -The Daily Hodl

fraud JPMorgan Chase, Bank of America and Wells Fargo are failing to protect customers from hundreds of millions of dollars in scams and fraud per year, according to a US Senate panel.

At a hearing held by the Permanent Subcommittee on Investigations, Democratic Senator and Chairman Richard Blumenthal said the banking giants’ customers submitted claims to recover $456 million in 2022 – all due to fraud and scams on the payments network Zelle.

“The banks of America have a dirty little secret. It’s called Zelle…

Zelle markets itself as ‘A fast and easy way to send and receive money.’ But, as this Committee has found, a fast and easy way to lose money is often what happens on Zelle.”

Senator Blumenthal says Zelle – a network owned by seven US banks including Chase, BofA and Wells Fargo – creates a veil of security while leaving customers far too vulnerable to fraud.

“Zelle transfers are nearly instant and irreversible, and by the time a consumer knows they’ve been scammed, usually it’s too late to do anything about it – at least according to Zelle and according to the banks that own, control, and in effect operate Zelle…

Zelle and the banks that own it offer to customers the appearance of the trust they feel they deserve. But the risks there are real and present, and they simply are failing to protect consumers in the way that they deserve.” READ MORE

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