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9.30.22 - Gold Holds through "Everything Selloff"

Gold last traded at $1,662 an ounce. Silver at $19.04 an ounce.

News Summary: Gold attempted to stabilize Friday, factoring in higher rates and safe haven demand. Stocks continued their slide on the final day of a rough quarter.

Gold Has Served As An Impressive Store Of Value During The Current "Everything Selloff"- Forbes

"'Gold is no longer a safe haven.' 'Gold isn't an effective hedge against inflation.' 'Gold is dead.'

You may have heard and read these comments, and others like it, numerous times over the course of the recent 'everything selloff.' This is staggeringly shortsighted to me. Gold is down only around 9.5% for the year, despite surging bond yields, and despite the U.S. dollar being at its strongest level ever relative to other major currencies.

Given these incredible headwinds, you would expect gold to have lost far more of its value than it has. But compared to other assets, from stocks to bonds to digital currencies, the yellow metal has been remarkably resilient.

And that's gold priced in the U.S. dollar. When we price it in other world currencies, gold has done even better since many currencies have declined significantly in value relative to the greenback. This week, the British pound sterling fell to an all-time low against the dollar, as did the Chinese renminbi....

There are a number of signs that the global economy could be headed for a recession (or that we're already in one), the most recent of which is that U.S. home prices are in freefall. This week, the Case-Shiller 20-City Index posted its first month-over-month decline in 10 years. Although released this week, the data records prices as of the end of July, meaning home prices may have slipped even further since then....

If it all comes crashing down, I would want to have some gold in my portfolio, which has historically been an attractive store of value when markets cratered."

housing Mortgage rates rise for the sixth consecutive week- Fox Business

"The 30-year fixed-rate mortgage averaged 6.70 percent with an average 0.9 point as of September 29, 2022, according to government-sponsored mortgage securitize Freddie Mac. The rate is up from last week when it averaged 6.29 percent. A year ago at this time, the 30-year FRM averaged 3.01 percent...

'The uncertainty and volatility in financial markets is heavily impacting mortgage rates,' said Sam Khater, Freddie Mac's Chief Economist. 'Our survey indicates that the range of weekly rate quotes for the 30-year fixed-rate mortgage has more than doubled over the last year. This means that for the typical mortgage amount, a borrower who locked-in at the higher end of the range would pay several hundred dollars more than a borrower who locked-in at the lower end of the range.'

Khater continued, 'The large dispersion in rates means it has become even more important for homebuyers to shop around with different lenders.'

Freddie Mac's latest report comes as higher mortgage rates are making it more difficult for potential homebuyers. Bank of America strategists said the average interest rate on the most popular U.S. home loan could soon climb above 7%, hitting the highest level since the early 2000s....

National Association of Realtors Chief Economist Lawrence Yun expects the economy will remain sluggish throughout the remainder of this year, with mortgage rates rising to close to 7% in the coming months."

As the Market Falls, New Retirees Need a Plan -Kiplinger

"Anyone newly retired or nearly so must feel like they have the worst timing in the world. A portfolio tends to be largest near retirement, just before those savings are about to be drawn down. These days, however, most portfolios have lost value; the S&P 500 is down about 20% so far this year.

The financial industry has a name for this scenario: sequence of return risk. 'It matters most at retirement when you're selling assets for income,' says Wade Pfau, a professor of retirement income at The American College of Financial Services in King of Prussia, Pa. 'You need to sell a larger number of shares to get the same amount of money. Those shares are then gone so even if the market bounces back, your portfolio won't recover as much.'

The newly retired are particularly vulnerable because they're 'relying on this pot of money to finance the next 20 to 30 years of their life,' says Amit Sinha, head of multi-asset design at Voya Investment Management in New York City.

Sequence of return risk is less of a concern for someone further along in retirement because retirees typically shift to safer, more conservative investments and have fewer years to pay for. Plus, these investors may have benefited from portfolios boosted by strong returns early in retirement....

If cashing out now is the worst thing you can do, what are some smart steps to take instead...

Further diversify your portfolio. Greater investment diversification could speed up how quickly your portfolio recovers....

Delay retirement. If you haven't retired yet and can keep working, you could wait for your portfolio to recover. You would avoid spending down your savings at a low point and could invest some of your earnings now at bargain prices....

'Find an acceptable level of risk and remember it's impossible to time the markets.'"

How the United States is exporting inflation to other countries - CNN Business

"The Federal Reserve is laser-focused on stemming price increases in the United States. But countries thousands of miles away are reeling from its hardball campaign to strangle inflation, as their central banks are forced to hike interest rates faster and higher and a runaway dollar pushes down the value of their currencies.

'We're seeing the Fed being as aggressive as it has been since the early 1980s. They're willing to tolerate higher unemployment and a recession,' said Chris Turner, global head of markets at ING. 'That's not good for international growth.'

The Federal Reserve's decision to raise rates by three-quarters of a percentage point at three consecutive meetings, while signaling more large hikes are on the way, has pushed its counterparts around the world to get tougher, too. If they fall too far behind the Fed, investors could pull money from their financial markets, causing serious disruptions...

'The dollar doesn't strengthen in isolation. It has to strengthen against something,' said James Ashley, head of international market strategy at Goldman Sachs Asset Management...

The global financial system is 'like a pressure cooker' right now, Turner said. 'You need to have strong, credible policies, and any policy missteps are punished'"

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9.29.22 - A Hard Landing Scenario is Inevitable

Gold last traded at $1,658 an ounce. Silver at $18.71 an ounce.

News Summary: Gold prices eased back Thursday as Treasury yields rose. Stocks saw sharp losses with the Dow now back in bear market territory as a decline in Apple shares weighed on the major averages.

Gold Buying Once Again on the Agenda for Central Banks- International Banker

"According to the latest figures from the World Gold Council (WGC), central banks stepped up their purchases of gold in May, marking the second consecutive month of clearly bullish sentiment for the yellow metal, thus adding to the long-term trend of central banks’ growing appetite for gold.

Having added a net 19.4 metric tons (t) of gold to their reserves in April, central banks added a further 35t in May, with the same banks largely responsible for the main additions during both months—Turkey (13.3t), Uzbekistan (9t), Kazakhstan (6.3t) and India (3.8t). Qatar also added 4.7t of gold to its reserves in May to replenish all of the gold it had sold earlier in the year, the WGC noted, while Germany was the only major country to be a net seller in the month, shedding its gold reserves by 2t. All this means that 2022 is shaping up to be a year for considerable gold acquisition by many countries worldwide, particularly emerging markets....

As such, recent gold-buying activity extends a multi-year trend of central banks adding to their gold reserves. Last year saw them buy a net 463t, 82 percent more than they acquired in 2020 and the 12th year in a row in which they were net buyers. The WGC reported earlier in the year that central banks hold more than 35,000t of gold, equivalent to around one-fifth of all the gold that has ever been mined, further underlining their insatiable appetite for the yellow metal."

markets How low could stocks go? Much further, say Wall Street analysts- The Hill

"In the midst of a bear market and with the Federal Reserve expected to hike interest rates even further, leading Wall Street analysts are eyeing one question with increasing concern: Just how much further could stocks fall? The precise answer is impossible to predict, but experts told The Hill they expect investors to see more pain before growth in the economy resumes.

'Based on our client discussions, a majority of equity investors have adopted the view that a hard landing scenario is inevitable and their focus is on the timing, magnitude, and duration of a potential recession and investment strategies for that outlook,' Goldman Sachs analysts David Kostin and Ben Snider wrote in a note to investors last week.

Major stock indices have now entered a bear market, indicating a drop of 20 percent from recent highs....

Most of those losses have come since the Federal Reserve started raising interest rates in March from around zero percent to between 3 and 3.25 percent now. The central bank will raise rates as high as 4.6 percent next year, according to its median forecast released last week. "

Bank of England steps in to calm markets- BBC News

"The Bank of England has said it will step in to calm markets after the government's tax-cutting plans sparked a fall in the pound and caused borrowing costs to surge.

It warned that if the market volatility continued there would be a 'material risk to UK financial stability'.

The Bank will start buying government bonds at an 'urgent pace' to help restore 'orderly market conditions'.

It comes after the currency hit a record low on Monday following the chancellor's mini-budget, which pledged $45bn worth of tax cuts, funded by borrowing, as part of a plan to boost economic growth...

The Bank of England was forced to intervene after the market turmoil heaped huge pressure on pension funds, which are required to invest in government bonds because they are usually so stable.

So called Liability Driven Investment funds - which support defined benefit pensions schemes - were facing a collapse in the value of the bonds they hold, which in turn could have forced them to rush to sell other assets, sparking yet more market panic.

The Bank has already said it will 'not hesitate' to hike interest rates to try and protect the pound and try and stem surging prices. Some economists have predicted the Bank of England will raise the interest rate from the current 2.25% to 5.8% by next spring...

'It wouldn't be a huge surprise if another problem in the financial markets popped up before long.'"

U.S. economy shrank in the first half of 2022, updated GDP figures confirm- Market Watch

"The U.S. shrank in the first six months of the year, revised government figures confirm, and painted a picture of economy buffeted by strong headwinds and tailwinds.

Gross domestic product, the official scorecard of the economy, fell at a 0.6% annual clip in the second quarter, the Bureau of Economic Analysis said Thursday. That’s unchanged from the prior estimate....

Political partisans have sparred over whether the U.S. had slipped into recession ahead of the pivotal fall elections in which control of Congress is at stake. An old but informal rule-of-thumb defines a recession as two consecutive quarters of negative GDP.

Yet while U.S. growth has clearly slowed, the strongest labor market in decades signals the economy is still in expansion mode. Businesses are hiring, layoffs are at a record low and the unemployment rate is near the lowest level since the 1960s.

In any case, the debate might already be moot. The U.S. economy is facing stronger headwinds this fall and another recession might be looming.

Big picture: The updated GDP figures offer a slightly clearer view of what’s happened to the economy since the pandemic, but it tells us nothing about the future. And the future looks dimmer.

While the third quarter is likely to show the economy expanding again, the latest forecasts show, a storm is brewing as 2023 approaches."

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9.28.22 - There is a quick way to help the poor, but Democrats won't do it

Gold last traded at $1,659 an ounce. Silver at $18.93 an ounce.

News Summary: Precious metals jumped Wednesday on safe-haven buying amid a nervous marketplace. U.S. stocks turned higher amid a fall in U.S. Treasury yields and a surprise intervention from the Bank of England in the U.K.

Gold price up on safe-haven demand amid anxious marketplace - Kitco

"Gold prices are moderately higher and near daily highs in early U.S. trading Wednesday, on safe-haven buying amid a very nervous marketplace as the calendar is set to turn to what can be a tumultuous month of October for stock and financial markets. Traders and investors are keeping a very close eye on the currency markets...

The U.S. dollar index is higher and hit another 20-year high today. A Barron’s headline today reads, 'The greenback has gone ballistic.' The strong U.S. dollar is putting serious pressure on the currencies of many smaller countries, which is very worrisome to those who endured currency crises of past decades. The main concern is a general marketplace contagion developing if secondary currencies dislocations and illiquidity spill over into extreme anxiety and lack of confidence in the global financial transactions system....Major economies have taken steps over the years to prevent another global financial market crisis, but when everyone runs for the exit doors at once, even robust systems can be over-run. Any investment bank or big hedge fund that appears to be in trouble may provide the first clue of a much bigger problem developing. Such a scenario would likely prompt a bigger into the hard assets, safe-haven gold and silver.

Global stock markets were mostly lower overnight. U.S. stock indexes are pointed to modestly lower openings when the New York day session begins and at or near for-the-move lows. The marketplace was somewhat assuaged overnight when the Bank of England made a surprise announcement that it will begin purchases of U.K. government bonds in order to stabilize the rattled U.K. bond market. The International Monetary Fund said the U.K. government should re-examine its stated plan to stimulate its economy through massive borrowing and bond sales."

bears Rickards: How Far Could Stocks Fall?- Zero Hedge

"The stock market was down again yesterday, the exchanges beginning where they left off last week. But it’s the larger trend that’s really disconcerting.

Investors don’t need to be told about the stock market collapse in recent months. The Dow Jones Industrial Average is down over 20% since January. The S&P 500 is down 23% since January. And the Nasdaq Composite is down 32% since its all-time high last November.

Those falls are not as bad as the crashes in March 2020 during the pandemic or late 2008 during the global financial crisis, but those comparisons offer little comfort since they were among the worst in history.

The real problem for stock investors today is not that the crash is bad so far, but that it might just be getting started.

We may be looking at losses that more closely resemble the over-80% collapse of the Dow Jones from 1929–1932 or the 80% collapse of the Nasdaq in 2000–2001 in the wake of the dot-com bubble....

The Fed is trying to crush inflation by reducing demand in the economy. They’re focusing on 'demand pull' inflation where consumers are buying in anticipation of even higher inflation to come.

But the inflation we’re seeing is called 'cost push' inflation. This comes from the supply side, not the demand side. It comes from global supply chain disruptions and the war in Ukraine.

Since the Fed has misdiagnosed the disease, they are applying the wrong medicine. Tight money won’t solve a supply shock. Higher prices will continue. But tight money will hurt consumers, increase savings and raise mortgage interest rates, which hurts housing among other things....

History shows that the Fed will overshoot. There won’t be any 'soft landing.'"

There is a quick way to reduce inflation and help the poor, but the Democrats won't do it - American Thinker

"The media and other Democrats come up with all sorts of ways to reduce inflation, but they ignore the elephant in the room.

First, they have a slush fund where they raise taxes, hand out mass subsidies to their political contributors and they falsely call it the Inflation Reduction Act. The only potential to reduce one component of inflation is down the road on prescription drug prices, which haven't been rising very fast compared to other necessities like food, gas, utilities, and housing.

Most of the poor already get their drugs for free so it doesn't help them, now or in the future. They also don’t have enough money to buy electric cars or solar panels no matter what the subsidy is....

Another fallacy we hear is that getting rid of the tariffs will lower inflation. Inflation didn't go up with the tariffs so why would it go down without them?

Reliance on China for so many of our products has contributed greatly to our supply chain and inflation problems. Getting rid of the tariffs will increase that reliance It is an ignorant and dangerous solution...

What we rarely, if ever, see is the recognition by the media of the disastrous inflation that is caused by the Democrats’ intentional destruction of industries that supply plentiful, practical, affordable, and reliable energy. That is the elephant in the room. Cost-push inflation will continue until they get rid of these policies where they falsely claim they can control temperatures, sea levels and storm activity forever to justify the destruction of the fossil fuel industry."

John Templeton’s Way- SmeadCap

"We marveled for years listening to Sir John Templeton talk about the stock market. His best advice was shared during the most difficult stock market environments of the 1980s, 1990s, and 2000s on 'Wall Street Week' with Louis Rukeyser....

What does this review of the 'Sir John Templeton Way' tell us about the current bear market that we are sitting through?

First, shares purchased between now and the end of this bear market are likely to get rewarded in the future. Second, the shares we own today trade at very low multiples of earnings, book value, and free cash flow. It doesn’t matter in a market suffering indiscriminate selling, but it should matter a great deal over the next 5-10 years.

Third, bear markets bottom on a rotational basis just like bull markets do on the upside. We like buying very depressed mall REITs like Simon Properties (SPG), home builders like D.R. Horton (DHI), e-commerce yard sales like eBay (EBAY), and oil and gas companies like Occidental Petroleum (OXY).

Lastly, in the remainder of this bear market in stocks, there will be companies that fit our eight criteria for common stock selection which become available for purchase. We will get interested when the folks who have owned them on the way down give up and professional and amateur investors are afraid to go there.

In conclusion, this is a very difficult bear market with an unknown end date. However, just like the Crash of 1987, the Dotcom Bear of 2000-2003, and the Financial Crisis Bear of 2007-2009, this too shall pass. When it does, we believe that stock selection will be at a premium and valuation will matter dearly as it did for Sir John Templeton."

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9.27.22 - Paulson Warns US Housing May Fall, Touts Gold

Gold last traded at $1,630 an ounce. Silver at $18.42 an ounce.

NEWS SUMMARY: Precious metals rebounded Tuesday on bargain hunting and a weaker dollar. U.S. stocks rose as the DJIA and S&P 500 attempted to bounce back from their lowest closing levels in nearly two years.

John Paulson Warns US House Prices May Fall, Touts Gold As Haven Asset -Business Insider

"John Paulson, who called the implosion of the mid-2000s housing bubble, warned US home prices could slump again, but ruled out the decline sparking another financial crisis.

'We're not at risk of a collapse today in the financial system like we were before,' he told Bloomberg in a recent interview. 'Housing may be a little frothy. So housing prices may come down or they may plateau, but not to the extent it happened.'....

Paulson also took aim at some of his fellow short sellers during the interview. He called them out for hyping up stocks to unwitting retail investors in order to drive up their prices, then stopping the promotion so that the stocks plummeted in value and the sellers' short positions paid off....

Paulson predicted last year that stubborn inflation would lead to higher interest rates, spurring investors to ditch cash and bonds for gold. He noted to Bloomberg that the yellow metal has served as a haven asset this year, given its smaller decline relative to stocks and bonds.

Moreover, he suggested gold could jump in value if the Federal Reserve's campaign of interest-rate hikes fails to crush inflation. He argued that investors would lose faith in the central bank and their long-term inflation expectations would rise, boosting demand for the metal as a hedge."

inflation The Inflation Reduction Act Won’t Reduce Inflation -Acton Institute

"But you knew that already.

President Biden has signed the Inflation Reduction Act (IRA), his attempt at delivering on his campaign promises of new investments to combat climate change, improve healthcare, and impose 'fair' corporate taxes. The IRA is a revival of the now defunct and unpopular Build Back Better (BBB) Act, ushered in at a whopping $3.5 trillion.

Penn Wharton estimates that the IRA will reduce cumulative budget deficits by $264 billion over the 10-year budget window. The Tax Foundation estimates come in at a $178 billion reduction - and both studies suggest a near-zero effect on inflation. The promise for the inflation reduction lies in the new spending being offset by increases in taxes, as well as promises to lower prices in healthcare and energy. But keep in mind that this just piles on to massive existing spending and the new student-debt relief, to the tune of $1 trillion....

There are several significant issues the IRA emphasizes, including corporate tax provisions, healthcare, and the ubiquitous climate. Uncoincidentally, these are of great importance to the elite progressive left, which fully intends to delegitimize corporations and instill greater federal governance.

Just this week, Lindsey Graham offered to team up with Elizabeth Warren and Josh Hawley to spawn a new regulatory agency that would oversee and license companies like Twitter and Facebook. Bernie Sanders wants to make healthcare 'free,' and AOC is pursuing a radical climate-change agenda to battle a crisis she asserts only the government can wage. Our brave new world has arrived.

The IRA establishes a corporate alternative minimum tax of 15%, which, according to the White House, is aimed at leveling the playing field by making corporations pay their 'fair share.' It also imposes a 1% excise tax on the corporate net repurchase (buyback) of stock. It provides $79 billion in new IRS funding over the next 10 years, which will in part be used to hire more IRS agents.

Biden promises that if you make less than $400,000 per year, you will face no new tax burdens. It leads one to wonder how all the new IRS agents will spend their time. Certainly, they will come after more than just the billionaires. The obvious answer to all this is to simplify rather than complicate the tax code....

The IRA also includes $368 billion for energy and climate programs, including tax credits and efforts to encourage domestic production of solar panels, wind turbines, and batteries. This is nothing more than old-fashioned mercantilism dressed up as modern industrial policy. Don’t worry if you can’t afford a high-end Tesla - there’s are subsidies for that, like the $7,500 tax credit for new electric-powered vehicles and $4,000 for used ones.....

Just this week, Biden celebrated the IRA at the White House, calling it a bill that will cut costs for families, is pro-worker, and will raise taxes on 'billion-dollar corporations.' This is hard to reconcile with pressing inflation and constant fears of a looming recession. This bill seems much more like a Hail Mary to pacify voters ahead of the midterm elections. We shouldn’t be fooled."

The Bear Market Is Back -Commonwealth

"We are now in another downswing in the ongoing bear market. Using the S&P 500 as a measure, as I write this the markets are down 22 percent from the peak at the end of last year and just under 14 percent from the end of the most recent rally in August. This year, there have been four drops and three rallies - and we are down quite a bit. That doesn't feel good. But, feel good or not, here we are. So, the real question is: what should we do about it? To figure that out, we need to look at two things.

First, let’s look at history. Have we seen this before? Is the current pullback unusual, or is it fairly typical? If it looks pretty normal, that in itself is reassuring. History doesn’t repeat itself, but it does tend to rhyme. And history can give us an idea of how the song is likely to go.

Second, why is this happening? Is there a reason that we can understand behind all of this? If there is a reason, then that understanding provides a basis for looking to the next steps.

Although history is on our side, we still need to understand why this decline is happening. The primary reason is rising interest rates. There is an old Wall Street saying, 'don’t fight the Fed,' which basically asserts that when the Fed is raising rates, the market will have a tough time. Just as the phrase bear market speaks to how normal the phenomenon is (normal enough to have a name), this too is normal enough to have a catchphrase associated with it. Not only the drawback itself but also the reason behind it are normal - and things we have seen before.

That answers the questions we started with. Yes, this pullback, although scary, is normal and something we have seen many times before. And, yes, we know why the market is pulling back, and again it is normal and makes sense. Given those two conclusions, we can think about what comes next.

When we look at the primary cause of the pullback (i.e., inflation and the consequent Fed tightening of interest rates), we see reasons for both caution and hope. The Fed has committed to raising rates until inflation is brought under control, which is what sparked the current renewed downturn and is a reason for caution. We can expect continued market turbulence for some time."

What is the Fed Doing? -Wealth of Common Sense

"Don’t fight the Fed used to be a positive slogan.

That’s not the case anymore.

If anything, it feels like the Fed wants to fight us, all of us, including the stock market and the economy.

The Fed is actively trying to crash the stock market, break the housing market and push the economy into a recession.

How do I know this? Because Fed officials are literally telling us this every time they speak....

When asked how long Americans should be prepared to experience economic pain, Powell said he wants wages to fall:...

In some ways, I understand why the Fed is so hell-bent on slowing rising prices. People REALLY don’t like sky-high inflation.

But in other ways, I think what the Fed is doing is INSANE.

What are they doing?!

The pandemic seriously messed up the economy and markets in a multitude of ways. The Fed was responsible for some of those problems....

They want the stock market to go down. They want people to lose their jobs and make less money. They will take the economy down if they have to so prices will stop rising.

The Fed is more or less telling us they are willing to raise interest rates high enough to crush the economy.

Should we believe them? For now I guess."

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9.26.22 - Frank Holmes: Gold - Buy the Dip and HODL

Gold last traded at $1,625 an ounce. Silver at $18.38 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday on bargain hunting despite a firmer dollar. U.S. stocks fell as surging interest rates and foreign currency turmoil threatened to push the S&P 500 to a new closing low for the year.

Frank Holmes: Gold Advice as Price Falls - Buy the Dip and HODL -Investing News

"Speaking to the Investing News Network, Frank Holmes, CEO and chief investment officer at US Global Investors, pointed out that the yellow metal's decline is a buying opportunity.

'Buy the dip and hold on for dear life, as the crypto kids say - HODL,' he said. HODL (Hold On for Dear Life) is a term that originated in the cryptocurrency community, although it’s since gained mainstream usage through popular memes.

Even as the gold price dips, Holmes said that physical demand for the yellow metal is high, and gold companies continue to produce strong results. 'A lot of the gold stocks are doing well - 60 percent of the gold producers have free cash flow,' he said, noting that this is a crucial element for him.

Speaking to the Investing News Network, Frank Holmes, CEO and chief investment officer at US Global Investors (NASDAQ:GROW), pointed out that the yellow metal's decline is a buying opportunity."

chart What Does Declining Faith in Capitalism and in Socialism Leave? -Reason

"Americans don't much like each-other and many are willing to fight each other over their differences. But what do the opposing factions believe in?

When it comes to economic systems and whether production and consumption should be dictated from above or guided by free exchange, a growing number of Americans don't seem to believe in much at all. Both capitalism and socialism are losing support, especially among Democrats.

'Today, 36 percent of U.S. adults say they view socialism somewhat (30 percent) or very (6 percent) positively, down from 42 percent who viewed the term positively in May 2019,' Pew reports. 'And while a majority of the public (57 percent) continues to view capitalism favorably, that is 8 percentage points lower than in 2019 (65 percent).'

Among Republicans, support for capitalism declined from 78 percent to 74 percent, and for socialism from a rock-bottom 15 percent to a slightly rock-bottomier 14 percent. With Democrats, capitalism became a minority taste, dropping from 55 percent support to 46 percent, while socialism's favorable standing eroded from 65 percent to 57 percent....

'Americans see capitalism as giving people more opportunity and more freedom than socialism, while they see socialism as more likely to meet people's basic needs, though these perceptions differ significantly by party,' Pew notes in partial explanation of the disagreement. OK, but that's aspirational; do Americans really understand the differences between the economic systems?....

'The vast majority of Republican voters - 85 percent - believe anyone who works hard can get ahead, while 53 percent of Democrats feel that way,' a recent Wall Street Journal poll reveals. 'Democrats often say that hard work isn't sufficient for all Americans to advance, partly due to systemic hurdles based on class or race, and that the government should help.…'Republicans, by contrast, say the government should as often as possible get out of the way of efforts by individuals, businesses and charities to help people advance economically.'....

In terms of capitalism and socialism, Americans may not entirely know what they're talking about, but it seems clear that many of us have very different visions for the country in which we want to live. If there's one thing on which we can agree, it's that we'll continue to strongly disagree."

Will Higher Interest Rates Tame Inflation? -RealClearMarkets

"Ludwig von Mises once said that the value of money is at least as important to a society as its Constitution. The value of money should be sacrosanct, and Government, if that’s who’s in charge of it, has a responsibility to keep it stable.

Fourteen years ago the Federal Reserve completely changed the way it manages the value of our money when it shifted monetary policy from a 'scarce reserve' model to an 'abundant reserve' model, and we believe there is a direct connection between these actions, and the dramatic decline in the value of our money the likes of which we haven’t seen in 40 years. Inflation undermines work, living standards, investments and is a nightmare for future planning. The Fed has failed....

In other words, while under the old system the market was involved in setting interest rates, today, the Fed now artificially sets interest rates. And as you might deduce, if the government sets interest rates, they likely set them lower than they would be if markets decided what interest rate was correct....

So, while raising interest rates may reduce economic growth and may throw the US into recession, there is no guarantee that this will fix inflation. Interest rates don’t determine inflation; the amount of money circulating in the economy determines inflation. And this is where the problem lies....

If the Fed raises rates to 4% under this new method of managing monetary policy, it will pay private entities $200 billion per year! Wait until politicians who love to hate banks find this out! Moreover, the Fed is now losing money on much of its bond portfolio because it bought so many bonds at low interest rates. At some point the Fed will be paying out more in interest than it is earning on its securities....

Like the rest of the government, the Fed has become way too big. Too many resources, and too much power in the hands of so few is antithetical to free markets. To say we are worried about this is an understatement. We just wish more people understood it and called the Fed to task. The Fed should return to a scarce reserve model as soon as possible."

US housing recession could send home prices tumbling 20%, economist says -Fox Business

"U.S. home prices are finally falling from a record high notched earlier this year, and could tumble by as much as 20% by mid-2023, according to a top economist.

Ian Shepherdson, the chief economist at Pantheon Macroeconomics, said in an analyst note published this week that home prices have already declined 5% from their May peak. His projections show that seasonally adjusted existing home sales slid 0.7% in August, the third monthly decline.

'The plunging trend in sales has further to go, and prices are falling,' Shepherdson wrote in the note.

Painfully high inflation and rising borrowing costs have proven to be a lethal combination for the housing market, forcing potential buyers to pull back on spending. Many experts – including Shepherdson – agree the housing market is now experiencing a recession.

But unlike the 2008 housing crash that helped to fuel a broader global financial crisis, the current recession is unlikely to seep throughout the rest of the U.S. economy. That's because the market has fewer entrenched risks than compared to the mid-2000s housing bubble.

'The very low level of inventory means that a headlong collapse in prices is unlikely, but we still expect a total decline of up to 20% by the middle of next year,' Shepherdson said."

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