Swiss America Blog Archive

Swiss America Blog Archive

3.24.23 - Banking 'turmoil' can't be contained

Gold last traded at $1,978 an ounce. Silver at $23.12 an ounce.

EDITOR'S NOTE: The Fed stepping in to bail out failing banks may have stopped a brush fire, but many still believe a forest fire is the on the way. The banks that have already stumbled were just the tip of the iceberg.

Moody's sees risk that U.S. banking 'turmoil' can't be contained- MarketWatch

bank Still, the agency's baseline view is that U.S. officials will "broadly succeed".

Despite quick action by regulators and policy makers, there's a rising risk that banking-system stress will spill over into other sectors and the U.S. economy, "unleashing greater financial and economic damage than we anticipated," said Moody's Investors Service, one of the Big Three credit-ratings firms.Simply put, the risk is that officials "will be unable to curtail the current turmoil without longer-lasting and potentially severe repercussions within and beyond the banking sector," Atsi Sheth, Moody's managing director of credit strategy, and others wrote in a note distributed on Thursday. Still, the agency's baseline view is that U.S. officials will "broadly succeed." Moody's warning came as Treasury Secretary Janet Yellen indicated that the U.S. could take additional actions if needed to stabilize the banking system, and after Federal Reserve Chairman Jerome Powell assured Americans on Wednesday that the central bank would use its tools to protect depositors. Read: Regional banks get the attention, but worries are more widespread, says ex-FDIC chief Bair and Debate over expanding deposit insurance weighs on bank stocks. Here's what to know. READ MORE

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3.23.23- Dollar Struggles, Gold Shines

Gold last traded at $1,999 an ounce. Silver at $23.19 an ounce.

EDITOR'S NOTE: Gold is perfectly demonstrating its value right now and why it should have a place in every investment portfolio. Its recent price movement to the upside is a typical reaction to times of uncertainty and, with all the sensitivity in our markets right now, being without it could cost you.

Gold shines as bets on Fed pause gain momentum - Reuters

By Seher Dareen

gold (Reuters) - Gold prices extended gains to a second straight session on Thursday, boosted by a slide in the U.S. dollar and Treasury yields after the Federal Reserve signalled an end to its monetary tightening cycle might be on the cards.

Spot gold rose 0.7% to $1,982.89 per ounce by 10:25 a.m. ET (1425 GMT) while U.S. gold futures gained 1.7% to $1,981.70.

The Fed raised rates by a quarter of a percentage point on Wednesday but highlighted that it was on the verge of pausing.

“If they truly do pause that clearly has been a green light for the gold market, being a quintessential hedge against inflation. It’s likely that inflation would remain elevated if they’re unable to raise rates any further,” said David Meger, director of metals trading at High Ridge Futures.

Gold on Monday hit a one-year high, breaching the key $2,000 level on safe-haven demand, though later ceded some ground as banking sector jitters subsided following the rescue of Credit Suisse. But the outlook remains positive if the Fed pauses or the banking crisis carries on, analysts say. READ MORE

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3.22.23 - Fed could put US economy in 'very dire situation'

Gold last traded at $1,967 an ounce. Silver at $22.93 an ounce.

Gold prices could notch an all-time high soon — and stay there -CNBC

As the markets seek stable ground in these uncertain times, many analysts suggest all roads will lead to aggressive increases in gold prices. We've already seen a jump recently but according to CNBC, that's just the beginning.

by Lee Ying Shan

Gold prices have more room to run as global banks struggle and the U.S. Federal Reserve renders another interest rate decision, potentially breaking all-time highs — and staying there.

“A sooner Fed pivot on rate hikes will likely cause another gold price surge due to a potential further decline in the U.S. dollar and bond yields,” said Tina Teng from financial services company CMC Markets. She expects gold will trade between $2,500 to $2,600 an ounce.

Investors have been flocking to gold and Treasurys as bank stocks have been whacked by the shuttering of Silicon Valley Bank and Credit Suisse’s implosion.

Gold is trading at $1,940.68 per ounce. On Monday, it breached $2,000 to strike its highest since March 2022. Gold has risen around 10% since early March when SVB was hit by a bank run. READ MORE

SVB’s Loans to Insiders Tripled to $219 Million Before It Failed -Yahoo!Finance

It's not much of a surprise to hear there may have been some insider mischief taking place in the recent failure of Simi Valley Bank. This has unfortunately become far too common in these situations. $100s of millions' worth of loans to insiders, months prior to the depositors learning about the financial shortfalls.

by Silla Brush, Noah Buhayar and Allyson Versprille

SVP (Bloomberg) -- As Silicon Valley Bank deteriorated late last year and regulators began internally flagging flaws in its risk management, the lender opened up the credit spigot to one group: insiders.

Loans to officers, directors and principal shareholders, and their related interests, more than tripled from the third quarter last year to $219 million in the final three months of 2022, according to government data.

That’s a record dollar amount of loans issued to insiders, going back at least two decades.

The surge in loans to high-up figures may draw scrutiny as the Federal Reserve and Congress investigate the breakdown of Silicon Valley Bank, the biggest US bank collapse in more than a decade. The firm — one of three US lenders to fall this month — collapsed after investors and depositors tried to pull $42 billion in a single day and it failed to raise capital to shore up its finances.

The government reports don’t disclose loan recipients or their purpose, and there have been no allegations of wrongdoing connected to the insider loans. READ MORE

Fed could put US economy in 'very dire situation' with rate hike decision, expert warns -Yahoo!Finance

Rising interest rates- a phrase we are all tired of hearing. Some suggest rates need to go down to right the markets, while others believe we need another hike. Ultimately there are compelling reasons on both sides of the discussion, which I believe reflects the precarious condition of our current situation.

by Kristen Altus

While some of America’s top banking CEOs discuss a new rescue plan and the Federal Reserve kicks off its two-day meeting, one market expert has warned of a "very dire situation" dependent on fiscal policy.

"If the Fed can't keep rates high, if they can't keep raising as they need be, and we have persistently high inflation, we are in a very, very, very, very dire situation," Michael Lee Strategy founder Mike Lee said on "Mornings with Maria" Tuesday.

"So I think the Fed goes 25 basis points. I think how the market reacts depends 100% on what Powell says and reacts to the questions and how the market absorbs that," he continued. "But what I see is not so much as a contagion from banks or some sort of massive solvency crisis, it's what do we do if the Fed can't raise any more, can't keep tightening? It has to ease, so there's no systemic shocks from the banking system." READ MORE

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3.21.23 - How the Fed circumvented the debt ceiling

Gold last traded at $1,940 an ounce. Silver at $22.40 an ounce.

EDITOR'S NOTE: The government is taking on billions more in debt bailing out failing banks. The incestuous relationship of the government and our banking system is nothing short of frightening. Banks are supposed to keep our money safe, but it would seem the Fed is using the banks - and therefore our money - to continue funding their losses. This is another chapter in the government's secret war on our cash!

The Fed circumvented the debt ceiling to borrow billions for failed banks - The Hill

by Paul H. Kupiec, opinion contributor

money As a consequence of its COVID crisis asset purchase program and the subsequent increases in interest rates needed to fight inflation, the Fed is now losing billions of dollars a week.

The Fed’s most recent H.4.1 statement shows that the Fed has borrowed $41 billion to pay its cash losses, but these borrowings do not count as U.S. Treasury debt and are not counted against the congressional Treasury debt ceiling limit.

In the past week, the Fed’s financial statement shows it borrowed an additional $143 billion to fund the FDIC’s bailout of Silicon Valley Bank (SVB) and Signature Bank, even though the FDIC is supposed to fund bank bailouts using the deposit insurance fund and, if need be, by borrowing from the U.S. Treasury. Instead, the Fed borrowed these funds and lent them to the FDIC to keep these bank failures from reducing the Treasury’s cash balances. You may recall that the Treasury is already precluded from any additional borrowing under the current congressional debt limit.

The Fed is now losing billions of dollars each month. The losses are a consequence of the Fed’s huge investment portfolio that yields around 2 percent but costs about 4.6 percent to finance. Measured using generally accepted accounting principles, the Fed is now approximately bankrupt. As operating losses mount in the months and years to come, its cumulative operating losses and the Fed’s GAAP equity capital deficit will grow.

The Fed pays for its cash operating losses in two ways. READ MORE

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3.20.23 - Gold Tops $2,000

Gold last traded at $1,979 an ounce. Silver at $22.54 an ounce.

EDITOR'S NOTE: Gold topped $2,000 an ounce Monday for the first time in years, before settling back just under that threshold. It comes as no surprise with bank health being assessed globally in the last week. The question remains, how many banks are teetering this close to the edge and how many are about to fail? Could one of them be your bank?

Gold Declines as Traders Assess Banking Crisis, Fed Rate Path -Yahoo!Finance

by Yvonne Yue Li and Eddie Spence

gold money (Bloomberg) -- Gold slipped after earlier rising above $2,000 an ounce for the first time in a year as a deal to buy Credit Suisse Group AG failed to fully ease fears over the global banking sector.

The haven earlier rose as much as 1% despite regulators worldwide rushing to shore up market confidence over the weekend. The ongoing banking woes are also spurring bets that central banks may embark on a slower pace of monetary tightening.

Bullion surged 6.5% last week in its biggest advance since early on in the pandemic after several regional American lenders collapsed and concerns grew over the Swiss bank’s health.

“The treatment of AT1 bonds has introduced a new source of uncertainty,” Marcus Garvey, head of metals strategy at Macquarie Group Ltd., wrote in a note. “The longer uncertainty rolls on, with neither market fears being wholly calmed nor a full-blown systematic crisis unfolding, the higher gold prices should be able to trade.” READ MORE

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3.17.23 - Yellen's Bailout Stammer

Gold last traded at $1,988 an ounce. Silver at $22.60 an ounce.

EDITOR'S NOTE: 'Tis the season for more bailouts. Yellen got a bit tripped up when confronted about the government's involvement in bailing out more failed financial institutions. The question, how much more strain can the economy handle before things finally crumble?

Watch: Yellen Stammers After Senator Corners Her On Bailouts, Protecting CCP-Linked Deposits -ZeroHedge

By Tyler Durden

tweet Treasury Secretary Janet Yellen was caught flat-footed on Thursday during testimony before the Senate Finance Committee, after Sen. James Lankford (R-OK) grilled her over whether all deposits at Oklahoma community banks would now be fully insured like those at Silicon Valley Bank and Signature Bank.

"Will they get the same treatment that SVB just got, or Signature Bank just got?" asked Lankford.

"I'm concerned you're...encouraging anyone who has a large deposit at a community bank to say, 'we're not going to make you whole, but if you go to one of our preferred banks, we will make you whole," Lankford said.

"That is certainty not something that we’re encouraging," Yellen replied.

"A bank only gets that treatment" under the systemic risk exception rule, Yellen continued, explaining that it takes a 'supermajority' vote to do so.

"I, in consultation with the president, determine that the failure to protect uninsured depositors would create systemic risk and significant economic and financial consequences," she said. READ MORE AND WATCH

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3.16.23 - The Fed Finally Broke Something

Gold last traded at $1,919 an ounce. Silver at $21.70 an ounce.

EDITOR'S NOTE: While the Fed is only partly to blame for the banking crisis we now find ourselves in, it sure seems like they didn't see this coming - which is essentially their one job. Now they have two options, raise rates and deepen this crisis or pause their aggressive actions and weaken the dollar beyond repair. Either way, it's going to be unpleasant. Gold is the canary in the coal mine in these instances. As Mr. Rickards advises, if you want to know what's happening with this shaky economy, keep your eyes on gold.

The Fed Finally Broke Something - Daily Reckoning

by James Rickards

Fed It’s often said that the Fed raises interest rates until something breaks. Well, something has broken.

The collapse of Silicon Valley Bank (SVB) has really thrown Jay Powell and the Fed for a loop.

Just last week, Powell issued some very hawkish testimony before Congress about the need to maintain an aggressive stance against inflation. Markets were even factoring in an 80% chance of a 0.50% rate hike at next week’s FOMC meeting.

But what a difference a week can make.

Today, the market is giving zero chance of a 0.50% rate hike. Literally zero odds. The odds of a modest 0.25% rate hike are now 70%.

I agree with that prediction, incidentally. I believe the Fed will raise rates by 0.25%.

Let’s not forget that the Fed itself is partly responsible for the SVB collapse (aside from terrible risk management by the bank itself). READ MORE

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3.15.23 - Was the Fed Lying or Blind?

Gold last traded at $1,917 an ounce. Silver at $21.78 an ounce.

Why Ray Dalio says SVB collapse is a 'canary in the coal mine'-MorningStar/MarketWatch

The financial markets were given a pretty strong jolt last week on the SVB crisis. This was no surprise to the likes of moneymind Ray Dalio, who believes this is the first in a series of dominoes we may soon see fall.

By William Watts

Bank's implosion was a 'very classic event' that's part of the short-term debt cycle, Dalio says

That's the recently retired Ray Dalio, weighing in via his popular LinkedIn page to offer his thoughts on the collapse of Silicon Valley Bank, or SVB, and the regulatory response.

SVB, whose client base was heavily concentrated among venture-capital startups, was closed by California's bank regulator on Friday, while New York's Signature Bank was shut down on Sunday -- they followed the earlier closure of Silvergate Capital. Federal regulators late Sunday announced that SVB depositors, including those with deposits above the Federal Deposit Insurance Corp. cap of $250,000, would be made whole. The Fed also announced measures to ensure deposits at other institutions remain safe.

Read:Silicon Valley Bank: Here's what happened to cause it to collapse READ MORE

Another Billionaire Bailout! - Daily Reckoning

As suspected the Fed has stepped in to "fix" the recent debacle of the SVB failure. And once again, more rewards for risky choices. In short, it is the American public who will pay the price for billionaires' bad behavior.

By James Rickards

tweet The financial world is today reeling from the failure of Silicon Valley Bank (SVB). SVB was an FDIC insured commercial bank regulated by the State of California and the Federal Reserve System.

On Friday, March 10, the FDIC abruptly closed the bank, moved some deposits to a newly created bank controlled by regulators, wiped out large deposits, and began a process of selling bank assets and gradually repaying creditors.

The big news came out yesterday that all SVB depositors will be made whole. They just tore up the rules and changed them on the fly.

Bank deposit insurance is $250,000 per deposit. If you want to deposit more than that amount of money in the bank, you should open an additional account or accounts, depending on the amount you’re depositing. Otherwise, any money over the $250,000 limit would be at risk if you just held it in one account.

Well, guess what? Over 90% of the deposits in SVB exceeded the insured amount. That means that companies with deposits of over $250,000 were reckless and failed to implement the necessary risk management by parking it all in one place. It’s not as if they weren’t aware of FDIC limit. But they did it anyway. READ MORE

A Bank Crisis Was Predictable. Was the Fed Lying or Blind?

Even though the Fed claims taxpayers will not be footing the bill for the recent SVB bailout, do we really believe that's true? People are being bailed out by the FDIC as directed by the Fed. Is there really a difference or is it merely a "shell game" as is being asserted in this article? You be the judge.

By Tho Bishop

Welcome to Whose Economy Is It, Anyway?, where the rules are made up and the dollars don’t matter. Or at least that seems to be the view of the Yellen regime.

As Doug French noted last week, Silicon Valley Bank (SVB) was the canary in the coal mine. Over the weekend, Signature Bank became the third-largest bank failure in modern history, just weeks after both firms were given a stamp of approval by KPMG, one of the Big Four auditing firms.

While some in the crypto community are suggesting that the closure of Signature Bank has more to do with a larger war on crypto, the regulatory action was enough to push coordinated action from the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and the Treasury to do what they do best, ignore clearly established rules to flood a financial crisis with liquidity.

Out: FDIC insurance limits on bank deposits lower than $250,000, haircuts for the largest bank depositors, and Walter Bagehot’s golden rule to lenders of last resort, “Lend freely, at a high rate of interest, against good collateral.” In: emergency financing to secure all deposits, accepting collateral at face value (rather than its current diminished market value) with no fee. READ MORE

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3.14.23 - Bad banks need consequences

Gold last traded at $1,903 an ounce. Silver at $21.68 an ounce.

EDITOR'S NOTE: Should banks who make risky investment choices be bailed out? Or should they face the natural consequences of their choices as the rest of us must? One thing is for certain, either option involves the government stepping in - which means, once again, taxpayers will pay.

Why We Should Let Bad Banks Fail

Bad banks need consequences. Let them fail.

By Peter Jacobsen

tweet By now, you’ve likely heard about regulators closing down Silicon Valley Bank (SVB) and now Signature Bank as well....

Essentially, SVB received a large influx of deposits as the Federal Reserve flooded the market with dollars during COVID.

From there, SVB went out and bought government bonds to store that money. But then, the Federal Reserve started enacting policies which moved interest rates up. The problem? As interest rates rose, the bonds SVB purchased in the past declined in value.

Bond prices and the interest rate have an inverse relationship. If interest rates increase, you can earn a higher return on financial assets purchased today. When that happens, bonds issued at a previously lower rate must sell at a discount to compete.

So when rates rose, SVB’s assets (composed largely of old lower-rate government bonds) plummeted in value.

Let Losers Lose

The key question now is, what are we going to do about it?

I have a modest proposal—let them fail. READ MORE

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3.13.23 - Will More Banks Fail?

Gold last traded at $1,913 an ounce. Silver at $21.80 an ounce.

EDITOR'S NOTE: Hedge Fund Manager Bill Ackman believes depositors in Silicon Valley Bank will have access to half their funds today and the other half three to six months from now; but that's only for the people with less than $250,000.00 in holdings. The rest? Read on to see what they will face. But there is even greater concern that this failure is just the tip of the iceberg. Right now this is perhaps the single, most pressing reason to be diversified into physical metals: A tangible, non-debt encumbered asset with global liquidity. Call your Swiss America representative today to find out more.

SVB Collapse: Legendary Financier Bill Ackman Warns of Massive Bank Runs - The Street

The hedge fund manager says that it is likely that Silicon Valley depositors will have access to around 50% of their funds on Monday, but the remaining 50% will not be available for 3-6 months.

by Luc Olinga

The next few days are shaping up to be critical for Silicon Valley Bank (SVB) customers and its regulators.

The latter shut down the bank, which was the go-to lender for startups and many Silicon Valley businesses, including California wineries and farmers.

SVB’s failure, which was the second-largest of a bank in U.S. history, on March 10, has shaken many investors. It was the result of a bank run, caused by the bank’s announcement that it planned to raise $2.25 billion by issuing new common and convertible preferred shares to shore up its finances, after it sold bonds in its portfolio of investments at a $1.8 billion loss.

About $42 billion of deposits were withdrawn by the end of March 9, according to a regulatory filing. By the close of business that day, SVB had a negative cash balance of $958 million, according to the filing.

The Federal Deposit Insurance Corporation took control and is now the manager of $175 billion in customer deposits, including money from several startups and from some of the biggest names in the technology world. READ MORE

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3.10.23 - Are bigger banks next?

Gold last traded at $1,861 an ounce. Silver at $20.43 an ounce.

EDITOR'S NOTE: Bad fundamentals in financial markets are not discriminatory when it comes to their repercussions. The Fed's poor policy moves are now affecting banks in Silicon Valley - an area synonymous with wealth and abundance. Yet another example of an economy that seems to be one bad report away from disaster.

Why Silicon Valley Bank's crisis is rattling America's biggest banks -Yahoo! Finance

Rising rates and deposit withdrawals pinched SVB and Silvergate. Could the same happen to bigger banks?

by Dan Fitzpatrick - Editor

Image Courtesy of Yahoo
The problems of two small banks on the West Coast are rippling across markets and causing new investor concerns about some of the country’s largest financial institutions.

Why? Three words: rising interest rates.

The Federal Reserve’s aggressive campaign to bring down inflation helped set the stage for major problems at two California lending institutions — SVB Financial (SIVB) and Silvergate Capital (SI) — as an outflow of deposits forced both to sell assets at a loss. Those assets were bonds.

Banks are big investors in assets like Treasury bills because they need lots of safe places to park their cash. Many financial institutions piled into these investments during a period of historically-low interest rates that spanned the early years of the pandemic, as banks took in tons of new deposits and lending was somewhat restrained.

But now the Fed is hiking rates at a rapid clip, with Fed Chair Jay Powell warning earlier this week the central bank may have to speed up the pace of its rate increases to cool the economy further. The problem that creates for banks is simple: higher rates lower the value of their existing bonds. READ MORE

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3.9.23 - McDonald Prediction: 'Stock market will crash in 60 days'

Gold last traded at $1,830 an ounce. Silver at $20.09 an ounce.

EDITOR'S NOTE: I've always believed that no person has a crystal ball. However, there are some who may have a better idea than the rest of us of what lies ahead , based on their experience or expertise in a particular field. When someone like Larry MacDonald is suggesting a crash is 60 days out, it may be wise to heed his warning.

Stock market will crash in 60 days, best-selling author on Lehman collapse warns -Yahoo!Finance

by Kristen Altus

stocks After Federal Reserve Chair Jerome Powell indicated the bank isn’t finished raising rates, one market expert has warned a crash could come in a matter of days.

"They're playing catch up, and while they were doing quantitative easing in 2021, inflation started to rage and now they're trying to catch up," The Bear Traps Report founder Larry McDonald said Wednesday on "Mornings with Maria."

"Our 21 Lehman systemic risk indicators that look at equity and credit point to one of the highest probabilities of a crash in the stock market looking out 60 days," McDonald, who is also known for writing a best-selling book on the Lehman Brothers collapse, cautioned.

The withdrawal of capital from middle-class families has been "spectacular," McDonald argued, as the Fed continues its most aggressive rate hike campaign since the 1980s to crush decades-high inflation. Although the consumer price index has slowly fallen from a high of 9.1% notched last June, it remains about three times higher than the pre-pandemic average. READ MORE

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3.8.23 - Biden Pitches Tax Hike .. Again

Gold last traded at $1,813 an ounce. Silver at $20.02 an ounce.

Traders Are Betting the Fed Will Hike Rates by a Half-Point in March -Yahoo!Finance

As we all look for some form of financial reprieve, Wall Street traders are betting it is not coming soon. The Fed continues to move rates in hopes of balancing the economy, all the while they continue to put the squeeze on our budgets.

by Ye Xie and Benjamin Purvis

(Bloomberg) -- Bond traders boosted bets that the Federal Reserve may re-accelerate the pace of rate increases at the policy meeting later this month, after central bank head Jerome Powell said he’s ready for faster monetary tightening if economic data justifies it.

Interest-rate swaps Tuesday showed a shift in bets for the March 22 meeting, with a half-point hike seen as more likely than a quarter-point move. Traders are betting that the Fed will raise the key borrowing costs by 109 basis points to a peak of about 5.66% by September.

Shorter-maturity notes led the jump in yields, deepening the inversion of the yield curve and pushing the two-year Treasury rate above 5% for the first time since 2007.

An upside down-shaped curve suggests that traders anticipate a more restrictive policy that will slow down the economy significantly. The Bloomberg dollar index jumped to a level unseen since early January, while the S&P 500 Index tumbled around 1.7%. READ MORE

ADP Reports Wage Growth Slowing Despite Job Gains -ZeroHedge

The good news? The job market is growing. The bad news? Wage growth is slowing. Sometimes you have to take the good with the bad. In this case however - with the cost of living expenses steadily on the rise - this is bad news with a bite for US households.

by Tyler Durden

jobs After tumbling last month to its lowest in two years (blamed on weather), ADP's employment report was expected to show a rebound in Feb, adding 200k jobs. The actual print was even higher at +242k (with January's revised up to +119k).

Large companies dominated the beat...

Business Services and Construction sectors saw job losses...

DP's chief economist Nela Richardson said of the January weakness, "we saw the impact of weather-related disruptions on employment during our reference week."

Richardson's comments for February: READ MORE

Traders Are Betting the Fed Will Hike Rates by a Half-Point in March -Yahoo!Finance

As we all look for some form of financial reprieve, Wall Street traders are betting it is not coming soon. The Fed continues to move rates in hopes of balancing the economy, all the while they continue to put the squeeze on our budgets.

by Ye Xie and Benjamin Purvis

(Bloomberg) -- Bond traders boosted bets that the Federal Reserve may re-accelerate the pace of rate increases at the policy meeting later this month, after central bank head Jerome Powell said he’s ready for faster monetary tightening if economic data justifies it.

Interest-rate swaps Tuesday showed a shift in bets for the March 22 meeting, with a half-point hike seen as more likely than a quarter-point move. Traders are betting that the Fed will raise the key borrowing costs by 109 basis points to a peak of about 5.66% by September.

Shorter-maturity notes led the jump in yields, deepening the inversion of the yield curve and pushing the two-year Treasury rate above 5% for the first time since 2007.

An upside down-shaped curve suggests that traders anticipate a more restrictive policy that will slow down the economy significantly. The Bloomberg dollar index jumped to a level unseen since early January, while the S&P 500 Index tumbled around 1.7%. READ MORE

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3.7.23 - Low-Income Americans are Angry

Gold last traded at $1,813 an ounce. Silver at $20.07 an ounce.

EDITOR'S NOTE: In all the ups and downs of interest rates, waning markets and inflationary pressures Americans have faced, what seemingly always gets lost on the government is the toll it takes on US households. In these post-pandemic days as people are financially stranded once again, some are going as far as to say they feel the government is trying to kill them.

'The Government Is Trying To Kill Us Now': Low-Income Americans Fume In Mile-Long Food Lines After Pandemic Benefits End -ZeroHedge

cars Over the past year, 18 US states have officially ended pandemic-era states of emergency - including the covid food benefit, while a December mandate from Congress will end aid in March for the other 32 states, along with the District of Columbia, the US Virgin Islands and Guam.

The collective return to pre-pandemic policies includes enhanced unemployment benefits and child tax credits, as well as a rollback adjustment to Medicaid that boosted enrollment.

Now, people are waiting up to nine hours in mile-long lines for free food - some of whom say they can only afford to eat once per day, while others say they limit expensive food items such as meat for specific family members, such as growing teenage boys.

"I thought, ‘Wow, the government is trying to kill us now," said 63-year-old Danny Blair of Kentucky. Blair, who lives in a mobile home with his wife, survives on his Social Security disability check, the Washington Post reports.

"They are going to starve us out," Blair continued, apparently unaware that government assistance provided during the pandemic wasn't permanent.

Blair and his wife hop into their truck twice a month at 4 a.m. to ensure they get a few staples at the Hazel Green Food Project’s giveaway. On a recent Friday, they waited nine hours until local prisoners on work duty started loading bags of meat and vegetables, potato chips and cookies into vehicles in one of the nation’s most impoverished communities.

From the front to the back of the line, the sea of despair and hardship along this desolate Kentucky highway foreshadowed what may be in store for millions of Americans as the federal government ended the remaining pandemic increase in monthly food stamp benefits this week. -WaPo

As the Post frames it, the pullback of pandemic-related aid could pose a setback to the Biden administration's efforts to 'slash poverty' while building a 'healthier and more sustainable middle class' - none of which were the stated goals of the temporary aid. READ MORE

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3.6.23 - Government Will Track Every Dime You Spend

Gold last traded at $1,855 an ounce. Silver at $21.25 an ounce.

EDITOR'S NOTE: I'm sure it comes as no surprise that our government is watching us and our finances at every turn. Are they keeping our financial system safe; or are they infrigning upon our privacy? This is a major reason our clients - and myself for that matter - have positioned a portion of our investment dollars in a more private, non-debt encumbered form of wealth through precious metals.

Biden's Executive Order Nightmare: Government Will Track Every Dime You Spend -ZeroHedge

Authored by Lawrence Kadish via The Gatestone Institute

Posted by Tyler Durden

dollar When I was a sparring partner for professional boxers many, many years ago, I was taught to be wary of the jab. It is a tactic used to distract an opponent while setting him up for a devastating power punch that takes him down for the count.

Biden is throwing jabs.

In a 21st Century world where cryptocurrency and cybercrime are now embedded threats to our collective financial security, this Executive Order would seem to address these issues. That is the jab.

In fact, this order includes language that allows the Federal Reserve System to "explore" the possibility of introducing digital currency into the United States. This means that your cash becomes so much colored paper. That would not be the only catastrophic impact on our society and the nation's economy.

Under this new digital currency, any transfer of funds to family, friends, charities, or clients would be able to be tracked by the nation's central bank that issued this virtual money. Big Brother will be in your wallet every hour or every day.

You will not be able to buy a stick of gum without a Federal Reserve computer knowing where, when, and to whom you just put down a buck. READ MORE

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3.3.23 - The Carnage is Coming Fast and Furious

Gold last traded at $1,855 an ounce. Silver at $21.25 an ounce.

EDITOR'S NOTE: Wall Street's largest commercial real estate landlord has just defaulted to the tune of hundreds of millions of dollars. Yet another reflection of a fractured economy that seems eerily close to a full blown financial catastrophe. Don't get caught by surprise if and when the oft predicted market collapse occurs. Diversify into gold & silver today!

Blackstone Defaults On $562MM CMBS As It Keeps Blocking Investor Withdrawals From $71BN REIT -ZeroHedge

by Tyler Durden

buildings Now that soaring rates have burst the commercial real estate bubble, the carnage is coming fast and furious.

This morning Bloomberg reports that Wall Street's largest commercial real estate landlord, private equity giant Blackstone, has defaulted on a €531 million ($562 million) bond backed by a portfolio of offices and stores owned by Sponda Oy, a Finnish landlord it acquired in 2018.

While the PE firm had sought an extension from holders of the securitized notes to allow time to dispose of assets and repay the debt, the surge in market volatility triggered by the war in Ukraine and rising interest rates interrupted the sales process and bondholders voted against a further extension, the Bloomberg sources said.

And since the security has now matured and has not been repaid, loan servicer Mount Street has determined that an event of default has occurred, according to a statement Thursday. The loan will now be transferred to a special servicer.

“This debt relates to a small portion of the Sponda portfolio,” a Blackstone representative said in an emailed statement. “We are disappointed that the servicer has not advanced our proposal, which reflects our best efforts and we believe would deliver the best outcome for note holders. We continue to have full confidence in the core Sponda portfolio and its management team, whose priority remains delivering high-quality retail and office assets.” READ MORE

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3.2.23 - The US Has Entered The Inflation Death Spiral

Gold last traded at $1,835 an ounce. Silver at $20.90 an ounce.

EDITOR'S NOTE: Food, housing, medical, and tuition: Four costs that apply to the majority of households. The same four words are specifically mentioned in the context of the US entering into an "inflation death spiral". Another example of how today's economic mess will affect everyone. Gold and silver provide a great hedge for investments and retirement savings against this spiral.

The Top 3 Reasons The US Has Entered The Inflation Death Spiral -ZeroHedge

by Nick Giambruno

education Rapidly rising food, housing, medical, and tuition prices are squeezing Americans, and many do not understand the real cause of their falling living standards.

That confusion opens the door for opportunistic politicians who promise supposed freebies to ease the pain of inflation. Many, unfortunately, succumb to this siren’s call.

Perverse as it is, the policies offered to people suffering from inflation create even more inflation. In other words, inflation has a way of perpetuating itself, much like a heroin addiction.

We are already seeing cockamamie schemes in the US, like “inflation relief checks,” which attempt to solve the problems of inflation by creating more inflation.

The political-inflation cycle follows a clear pattern:

Step #1: In a fiat currency system, the government will inevitably print an ever-increasing amount of currency to finance itself.

Step #2: This makes prices and living costs rise faster than wages... READ MORE

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3.1.23 - US Bankruptcy Filings Surge

Gold last traded at $1,836 an ounce. Silver at $20.99 an ounce.

Car Debt Is Piling Up as More Americans Owe Thousands More Than Vehicles Are Worth -Yahoo! Finance

With rising interest rates and subsequent higher car loan costs, could the car market be another financial bubble waiting to burst? This factor - coupled with the sea of car loans that are upside down - could be a surefire recipe for disaster.

By Paige Smith and Michael Sasso

(Bloomberg) -- Chris Martin knew he needed a bigger car as the birth of his fourth child approached, but he and his wife were already $14,000 underwater on their two vehicles.

So the couple proposed an unusual two-for-one deal with an Atlanta-area auto dealer in 2020: trading in both of their vehicles so they could afford a three-row Ford Explorer. Their total loan after factoring in negative equity, a service contract, fees and other costs ballooned to $66,000 on the $49,000 Explorer.

Despite a lot of progress on the debt, he feels uneasy. “I don’t want to be paying interest on cars that I don’t even have anymore,” said Martin, a 36-year-old data engineer.

The build-up in negative equity — or the amount that debt exceeds a vehicle’s value — is rattling consumers and raising alarms within the industry. Though it’s not unusual for drivers to carry negative equity, some dealers say more people are arriving at their lots up to $10,000 underwater, or “upside down,” on their trade-ins. They’re buying at still-sky-high prices and rolling debt from one car to another and even onto a third. Loans are commonly stretching to seven years. READ MORE

US Bankruptcy Filings Surge At Fastest Pace Since 2009 -ZeroHedge

In the continuum of bad financial reports, household bankruptcies can be added to the list. This is just another example of the real life strain this Fed-driven economy is having on American families.

By Tyler Durden

bankruptcy For the past year, both the Biden White House and the Fed have been desperate to usher in a (mild) recession in the US to break the back of runaway inflation and the wage-price spiral with little success. But judging by the surge in bankruptcy filings, they are about to get their wish.

One month ago, when looking at the recent pace of large bankruptcy filings (those with more than $50MM in liabilities), we noted a troubling trend: in the first month of the year, the number of US bankruptcies topped 20, the highest in any other January dating back to 2010. Back then, 25 filings were seen as the economy was still reeling from the aftermath of the GFC.

The spike in defaults was not a fluke, and according to Bloomberg data, one month later - as of the end of February - no less than 39 large companies had filed for bankruptcy in the US so far this year, as February's pace matches that of January; the YTD total represents the fastest pace of companies filing for bankruptcy since the immediate aftermath of the global financial crisis in 2009. By comparison, US bankruptcy courts had seen 63 large filings at this point in 2009. READ MORE

Stock Market At ‘Critical’ Level And Braced For ‘High Risk’ Of Collapse In March—Here’s What Investors Should Know -Forbes

March is here and it's not looking like the rosiest of forecasts as we start the month. As the headline below reads, when it comes to the stock market we're hearing some of those nasty words again, like "critical" & "high risk". Certainly not how any of us would like our investment portfolio or retirement funds described.

By Jonathan Ponciano

After a slew of data showing the economy in a much more precarious position than previously believed, the stock market could be poised for another forceful plunge in March, according to Morgan Stanley’s investment chief, who notes that the last month of the quarter has been difficult for stocks over the year, as investors gear up for a fresh round of negative earnings reports.

Though high inflation and Federal Reserve interest rate hikes have fueled much of the fears driving the ongoing stock weakness, the depth and length of most bear markets are determined by the trend in earnings projections, the Morgan Stanley team led by Michael Wilson told clients in a Monday note.

Over the past year, stocks have rallied as corporate earnings come out, but then plunged in the month leading up to new reports, which have consistently shown companies cutting profit expectations.

After surging more than 16% since October and then abruptly falling 3% last week, the S&P 500 is at a “critical” level, cautions Wilson, saying there’s a “high risk” the bear market could induce a forceful stock plunge in March (the last month of the quarter)—particularly since earnings are expected to take another hit once reports start trickling in. READ MORE

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2.28.23 - Older Americans struggling to save for retirement

Gold last traded at $1,826 an ounce. Silver at $20.91 an ounce.

EDITOR'S NOTE: More and more Americans are now facing a vastly different retirement situation than the one they had planned. Even retiring in the most cost effective state, Kansas, would require a suggested $753,000. That's a real problem considering the current average holding in retirement accounts is $144,000.

Older Americans increasingly struggling to save for retirement -Yahoo! Finance

By Mark Strassmann

retirement For millions of Americans, saving enough for retirement is one of their biggest challenges, especially as recent Wall Street losses have led to shrinking 401(k) plans.

Senior planning executive Daniel Fitzpatrick's original goal was to retire at 60. He's now 64 and still working. Fitzpatrick currently has an income in the low six-figures.

"The benchmarks move as I get older," Fitzpatrick said. Now, his goal is to retire at 70 and then "look for something part-time afterward."

The national average for one person to live comfortably in retirement is around $967,000 in savings, according to the Federal Reserve. Every retirement scenario is different, but that's about $74,000 a year for the average American to live through retirement.

The most expensive state to retire in is Hawaii, with Americans needing to save around $1.7 million. The most affordable is Kansas, at $753,000 in savings needed.

But the typical retirement account balance in only $144,000, according to the federal reserve.

Rohan Ganduri, a finance professor at Emory University, warns that Social Security won't be enough for most people.

"The average Social Security benefits that people draw are about $20,000 a year," he said. "If you're relying on just Social Security, it will be very difficult to make ends meet." READ MORE

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2.27.23 - US economy headed for 'collision'

Gold last traded at $1,817 an ounce. Silver at $20.63 an ounce.

EDITOR'S NOTE: Yet another noted financial mind weighs in on the current condition of our economy; and he suggests we're heading toward a 'collision'. It's getting harder to deny that even tougher times are on the horizon.

Larry Summers warns US economy headed for 'collision' as Fed rate hikes aren't working -Fox Business

powell inflation Despite the Federal Reserve's best efforts, high inflation is sticking around and putting the U.S. economy on a "collision" course, according to former Treasury Secretary Larry Summers.

Summers – a Harvard University professor who served in both the Clinton and Obama administrations – said during an interview on Bloomberg News that recent evidence of strong underlying inflationary pressures in the economy suggests that the Fed's tighter monetary policy is having a limited impact.

"The Fed’s been trying to put the brakes on, and it doesn’t look like the brakes are getting much traction," he said.

In the span of just a year, the Fed has voted to raise its benchmark interest rate from zero to a range of 4.5% to 4.75%. At their last meeting, policymakers signaled that a "couple more" increases are on the table this year.

Despite the aggressive interest-rate hike campaign, inflation remains uncomfortably hot: The Labor Department reported last week that the consumer price index rose 0.5% in January, the most in three months. The annual inflation rate also surprised to the upside at 6.4%, underscoring the stickiness of high consumer prices that have broadened throughout the economy. READ MORE

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2.24.23 - Is The World Heading For A ‘Catastrophic’ Event?

Gold last traded at $1,811 an ounce. Silver at $20.77 an ounce.

EDITOR'S NOTE: Cyber Apocalypse: Yet another compelling reason to have a portion of your wealth in something tangible, like gold. According to some of the world's leading experts in the field, we are two years away from a serious cyber attack on our wealth system totaling $10 trillion! If that prediction is correct, the amount of cyber theft we will see will have tripled in just eight short years.

Cyber Apocalypse 2023: Is The World Heading For A ‘Catastrophic’ Event? -Forbes

By Bernard Marr

locks As the 2023 annual meeting of the World Economic Forum wrapped up in Davos, Switzerland, it ended with a disturbing prediction from one of the leading voices. Delivering a presentation on the 2023 Global Cybersecurity Outlook report, forum Managing Director Jeremy Jurgens revealed that 93 percent of those surveyed believe that a “catastrophic” cyber security event is likely in the next two years.

By 2025, it’s expected that cybercrime will cost the world economy around $10.5 trillion annually, increasing from $3 trillion in 2015 according to Cybersecurity Ventures. To put that in context, if it were a country, then cybercrime would have the third largest GDP behind the US and China. Key drivers of this growth are the ongoing digitization of society, behavioral changes due to the global Covid-19 pandemic, political instability such as the war in Ukraine, and the global economic downturn.

According to the WEF report, of particular concern is that the nature of cybercrime is becoming increasingly unpredictable. This is due to technology becoming more complex – in particular, breakthrough technologies such as artificial intelligence. This means that we are increasingly at risk of what has been termed a “catastrophic” cyberattack – one that will have severe and ongoing ramifications for society at large. READ MORE

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2.23.23 - Here comes the hard economic landing

Gold last traded at $1,822 an ounce. Silver at $21.32 an ounce.

EDITOR'S NOTE: Add Bond King Jeffrey Gundlach to the growing chorus of those who see a hard landing ahead. The economic factors contributing to these predictions are growing increasingly worse. Avoid the worst of this crash landing by diversfiying your assets now, before markets hit the ground.

Bond king Jeffrey Gundlach: Here comes the hard economic landing -Yahoo! Finance

By Brian Sozzi

funds The bond king is bracing for a hard economic landing.

"We have been preparing for a hard landing at DoubleLine," DoubleLine Capital founder and CEO Jeffrey Gundlach exclusively told Yahoo Finance Live.

Gundlach says his investment firm has been girding for such a scenario — a period of very weak economic growth fueled mostly by aggressive Fed interest rate hikes and stubbornly high inflation — for several quarters by increasing exposure to relatively safe Treasury securities.

Ultimately, Gundlach said he thinks it doesn't matter if there is a "soft" or "hard" landing. He said it's likely markets are on the cusp of having to digest a sharp economic slowdown — and they are ill prepared to do so.

"People are always asking me this question: how bad the recession is going to be. It doesn't matter as long as we're going into recession. You have to have certain degree of protection," Gundlach said.

He added: "In either case, you need an umbrella." READ MORE

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2.22.23 - S&P 500 Could Drop 26% in Months

Gold last traded at $1,825 an ounce. Silver at $21.52 an ounce.

1 in 6 retirees are mulling a return to work. What to consider before ‘unretiring’ -CNBC

For many of us retirement might be something we're looking forward to at the conclusion of our professional lives. Time to travel, spend time with family or just enjoy the quiet. As inflation - coupled with other negative factors - continues to take root in our economy; this goal may not only get further away but be out of the question for some altogether.

By Sarah O'Brien

For some retirees, heading back to work has emerged as an aspiration.

Roughly 1 in 6 retired Americans say they are mulling over whether to get a job, according to a recent study from Paychex. On average, those “unretiring” individuals have been out of the workforce for four years.

The top reasons cited by people surveyed for the report were “personal reasons” (57%), “needing more money” (53%) and “getting bored” (52%). “Feeling lonely” (45%) and “inflation” (45%) rounded out the top five reasons for considering employment.

Over time, the number of older adults in the workforce has been growing. Among adults ages 65 to 74, the workforce participation rate was 25.8% in 2021, according to the U.S. Bureau of Labor Statistics. That share is expected to grow to 30.7% by 2031. In the 75-and-older crowd, the portion in the workforce is expected to reach 11.1%, up from 8.6% in 2021.

If you find yourself among the retirees thinking about “unretirement,” there are some things to consider before you return to work. READ MORE

Morgan Stanley Says S&P 500 Could Drop 26% in Months -Yahoo! Finance

We have heard several warnings of a potential pullback in the stock market. It's not a difficult sell given the seemingly endless number of negative economic reports. Morgan Stanley has put an actual number of what kind of market drop we may expect.

By Farah Elbahrawy and Sagarika Jaisinghani

markets (Bloomberg) -- Expensive US equities are flashing a warning sign that could see the S&P 500 sliding as much as 26% in the first half of this year, according to Morgan Stanley strategists.

While recent data suggest the economy might be able to dodge a recession, they’ve also taken the possibility of a Federal Reserve pivot off the table, according to a team led by Michael Wilson. That doesn’t bode well for stocks as the sharp rally this year has left them the most expensive since 2007 by the measure of equity risk premium, which has entered a level known as the “death zone,” the strategist said.

The risk-reward for equities is now “very poor,” especially as the Fed is far from ending its monetary tightening, rates remain higher across the curve and earnings expectations are still 10% to 20% too high, Wilson wrote in a note.

“It’s time to head back to base camp before the next guide down in earnings,” said the strategist — ranked No. 1 in last year’s Institutional Investor survey when he correctly predicted the selloff in stocks. READ MORE

‘Goldilocks’ is dead, warns Morgan Stanley Wealth Management. The risk of an economic ‘hard landing’ is growing even if the ‘pain may be delayed’ -Yahoo! Finance

On the heels of Morgan Stanley suggesting the S&P 500 may experience a 26% drop, they are also suggesting the market will experience a harder landing than the gentle one being touted by the Fed.

By Will Daniel

Throughout January, the stock market soared as investors began to price in a “soft landing” for the economy—predicting the Federal Reserve would be able to tame inflation without sparking a recession. But Lisa Shalett, Morgan Stanley Wealth Management’s chief investment officer, warned Tuesday that “looking through the fog” to a new bull market is a bad idea.

After the U.S. economy added more than half a million jobs last month, pushing the unemployment rate to a 53-year low of 3.4%, and retail sales jumped 3%, surpassing economists’ expectations, Shalett fears the Fed will have to keep interest rates “higher for longer” to cool the economy and quash inflation.

“With consumption and inflation reheating, risks of a hard landing resembling a boom/bust are growing, even if the pain may be delayed a quarter or two,” she warned in a Tuesday note.

Recent strength in consumer spending and the labor market, along with better than expected corporate earnings, has led many investors to believe stocks are headed for a “Goldilocks scenario”—in which the economy is not too hot or too cold and where valuations remain high. But Shalett said that will only work if inflation continues to decline. And the latest consumer price index (CPI) and producer price index (PPI) data no longer show “speedily declining inflation,” according to the CIO. READ MORE

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2.21.23 - Unrelenting inflation continues its advance

Gold last traded at $1,834 an ounce. Silver at $21.84 an ounce.

EDITOR'S NOTE: We all saw this coming ... Americans are dipping deep into their savings just to make ends meet. Yet another example of the real impact of inflation. The most frightening part is, no end is in sight.

Savings getting tapped by Americans to make ends meet due to inflation -Fox Business

By Megan Henney

inflation Unrelenting inflation is continuing to take a toll on Americans.

About 27% of U.S. households reported taking money out of savings in order to make ends meet, according to new data published in the Country Financial Security Index. More than half of the respondents – about 54% – who tapped their savings said they did so in order to pay for basic expenses like groceries and rent.

"Inflation has shredded household budgets over the past two years, and not just when it comes to one-off discretionary expenses or special occasions, but for keeping up with day-to-day bills," said Greg McBride, chief financial analyst at

Millions of Americans stashed away extra cash during the pandemic as a result of multiple stimulus checks, boosted unemployment benefits and limited spending options, but those savings are quickly dwindling.

Americans have spent down about 35% of the extra money they accumulated during the pandemic as of mid-January, according to one estimate from Goldman Sachs. By the end of the year, the bank projected that households will have spent roughly 65% of that money.

The data comes as Americans continue to confront the hottest inflation since the 1980s. The Labor Department reported this week that the consumer price index rose 0.5% in January – faster than expected – and is up 6.4% over the past 12 months. While that is down from a peak of 9.1% recorded over the summer, it remains about three times higher than the pre-pandemic average. READ MORE

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2.17.23 - Hard Landing to Hit Stocks in Second Half

Gold last traded at $1,843 an ounce. Silver at $21.77 an ounce.

EDITOR'S NOTE: The Dow was off and running to start the year; finishing up 2.8% for the month of January. Even with this promising beginning, some strategists are predicting very difficult days ahead.

BofA Says Hard Landing to Hit Stocks in Second Half -Yahoo! Finance

by Farah Elbahrawy

(Bloomberg) -- The delayed arrival of a US recession will weigh on stocks in the second half of the year, according to Bank of America Corp. strategists, who say a resilient economy thus far means interest rates will stay higher for longer.

A team led by Michael Hartnett is among those predicting a scenario known as “no landing” in the first half of the year, where economic growth will stay robust and central banks will likely remain hawkish for longer. That will probably be followed by a “hard landing” in the latter part of 2023, they wrote in a note dated Feb. 16.

Earlier this week, BofA’s global fund manager survey showed most investors aren’t convinced the equity rally of 2023 will last. Doubts have been fueled in recent days by hawkish commentary from Federal Reserve officials and US producer prices and inflation reports that pointed to continued upward pressure. US equities slumped and bond yields advanced on Thursday. READ MORE

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2.16.23 - The Collapse is Coming

Gold last traded at $1,836 an ounce. Silver at $21.59 an ounce.

EDITOR'S NOTE: More and more citizens - and financial experts - are seriously questioning the integrity of our banking system. In this video, it would seem the bankers are the ones who are most worried.

Banks admit the COLLAPSE is coming and they don't want YOU to know about it | Redacted News

Summary: Why are people around the world unable to withdraw money from their banks? Are we in for a "bail-in," meaning banks "borrow" from citizens to bail themselves out? It is not unprecedented. It has happened in more than 11 countries in recent years and very well could be coming in the U.S. and Europe.

(Redacted News has 1.7 million subscribers and this video has been viewed close too 500K times as of the time of this publishing) CLICK TO WATCH

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2.15.23 - 'Catastrophe' if debt limit not raised?

Gold last traded at $1,836 an ounce. Silver at $21.63 an ounce.

El-Erian, Rogoff Say It's Too Late to Fix Too-Low Inflation Target - Yahoo! Finance

As we all await a financial reprieve, some analysts explain why we might be holding onto false hope. The problem? The Fed's aim might be way off; which makes hitting the desired target of lower inflation impossible to hit.

By John McCorry, Tom Keene and Jonathan Ferro

(Bloomberg) -- Wall Street’s reaction to Tuesday’s consumer-price index shows investors are realizing inflation is likely to remain higher than the Federal Reserve’s goal for longer. Two heavyweight market voices say the 2% target is part of the problem.

“Back in the day, they should’ve said 3% instead of 2%,” Kenneth Rogoff, a professor at Harvard University and former Fed economist, told Bloomberg Television Tuesday. “If you change it, it means you might change it again. Inflation they’re going to allow to be elevated for longer but they’re going to say it’s going to get back to 2%, it’s just taking longer. That will be the rhetoric.”

Equities whipsawed Tuesday after data showed the CPI at 6.4% in January from a year earlier, still far above the Fed’s goal despite months of interest rate increases. Following the report, a raft of Fed officials said the central bank may need to keep tightening to ensure inflation continues to fall.

Mohamed El-Erian, the chairman of Gramercy Funds and a Bloomberg Opinion columnist, also sees the Fed stuck with an inflation target that will be challenging to reach. READ MORE

Fed's Harker Sees Interest Rates Moving to Some Level Above 5% - Yahoo! Finance

Interest rates and inflation continue to move higher. Yet another move in the wrong direction for American households and their budgets. There is also no indication as to when - if ever - this tide will turn.

By Steve Matthews

Harker (Bloomberg) -- Federal Reserve Bank of Philadelphia President Patrick Harker said he believes policymakers will need to raise interest rates to some level above 5% to counter inflation that is retreating only slowly.

“We’re going to have to let the data dictate that,” Harker said in answering questions from the audience after a speech Tuesday at La Salle University. “It’s going to be above 5% in the Fed funds rate. How much above 5? It’s going to depend a lot on what we’re seeing.”

Harker spoke after data showed consumer prices climbed a higher-than-expected 6.4% in January from a year earlier, far above the Fed’s 2% goal, which is based on a separate measure. He gave a slightly more upbeat take on the latest report than other officials speaking Tuesday, who said the figures may support a higher peak level for interest rates than previously expected.

“Today we had an inflation report, it was good and it was moving down, but not quickly,” Harker said, adding he was particularly concerned by high food inflation. READ MORE

Biden, Yellen warn of 'catastrophe' if debt limit not raised - Yahoo! Finance

Biden and Yellen are issuing dire warnings and using words like, "catastrophe". The debt ceiling "crisis" is a dog and pony show to all of us at this point. I believe a fair question is, what exactly do they mean by catastrophe at a time when the cost of living and inflationary pressures are already crippling us?


WASHINGTON (AP) — President Joe Biden and Treasury Secretary Janet Yellen warned Tuesday of a potential economic crisis if a deal isn't reached to increase the federal debt ceiling.

They raised the alarm during speeches to the National Association of Counties, which was holding a conference in Washington.

Biden said many local governments have recovered from the pandemic, but "some in Congress are putting that progress at risk by threatening to have America default on its debt, which would be catastrophic for counties and the country. Even coming close to default would raise borrowing costs, making it harder to finance key projects in your communities."

The concern over the debt ceiling is the result of a political showdown between House Republicans, who are demanding spending cuts, and the Democratic president, who insists on raising the limit without conditions. READ MORE

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2.14.23 - Paulson: Time to Buy Gold

Gold last traded at $1,854 an ounce. Silver at $21.86 an ounce.

EDITOR'S NOTE: Another prominent hedge fund manager sees a favorable move in gold prices this year. John Paulson sites numerous financial and economic factors as the catalyst. The factors are largely negative but the reality we seem to find ourselves in right now.

John Paulson: Now Is an Opportune Time to Buy Gold -Newsmax

by Lee Barney

Paulson The U.S. dollar’s devaluation, due to inflation and geopolitical tensions, will drive gold up considerably this year, says prominent hedge fund manager John A. Paulson.

Furthermore, gold is likely to continue to appreciate in value over the next three to five years, Paulson says in an interview with journalist Alain Elkann.

The dollar began its slow descent as world’s preeminent reserve after World War II, he says. While the U.S. dollar will remain a powerhouse, says Paulson — who shot to fame by shorting subprime mortgages ahead of the 2008 Great Recession — the U.S. dollar’s “share of world GDP has come down, and the emergence of Asia, particularly China, as an alternative economic power has risen.”

The U.S. government overshot its response to the COVID pandemic, further weakening the dollar, Paulson adds.

“The amount of money printing the U.S. central bank has done in order to simulate the economy has also caused doubt,” Paulson says.

Inflation is a direct result of this money printing, Paulson emphasizes. READ MORE

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2.13.23 - Ugliness Awaits Many Boomers

Gold last traded at $1,853 an ounce. Silver at $21.97 an ounce.

EDITOR'S NOTE: Nobody is immune from the ups and downs of the US economy recently however there is greater concern for retirees and those nearing retirement. These macro economic issues (inflation, debt, higher interest rates etc.) are and will continue to take a serious toll on those on the tailend of their working year.

Ugliness Awaits Many Boomers Nearing Retirement -Advancing Time blog

retirement Ugliness awaits most boomers nearing retirement, not only have they been lied to, but they also have to deal with rigged markets, corruption, and incompetent advisors. Boomers make up the second-largest generation in American history, it consists of over 72 million individuals. Those that haven't already retired are getting ready to. A big problem is most have little in the way of savings.

Adding to this problem is that the generations following the baby boomer generation are even worse off and America's economic picture is less than rosy. It does not help that Americans have been encouraged over the years to spend and incur debt rather than save. This encouragement comes from politicians hooked on the idea consumer spending creates a strong economy.

This results in many people retiring with little savings and dependent on a government already deep in debt to care for them in their older years. Those of us that have studied the numbers come to shaking our heads in horror, simply put, something has to give and most likely promises will be broken, When words like unsustainable and insolvent have been muttered they simply get brushed aside by daily life. READ MORE

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2.10.23 - No Matter What the Fed Chooses: Choose Gold

Gold last traded at $1,861 an ounce. Silver at $22.03 an ounce.

EDITOR'S NOTE: Today is good news Friday ... for gold owners. At a time when it's difficult to determine the best place to invest, several experts are saying gold will do well no matter what. Read more below.

Gold - Poised to Benefit No Matter Which Path the Fed Chooses -Yahoo! Finance

gold All investment markets are predictive mechanisms — crystal balls, if you will, that discount future events by pricing assets today. But even though every market attempts to anticipate the future, none seem to do it as well as gold, asserts junior gold mining expert Brien Lundin, editor of Gold Newsletter.

With that said, gold is now looking ahead. And what it sees depends upon the success of the Fed’s battle against inflation. In fact, I believe it’s fair to say that the Fed is facing an historic turning point — a credibility crossroads from which it will be forced into one of two paths. And while both of these paths are bullish for gold, one is much more so.

The Crossroads

Fed Chairman Jerome Powell and his compadres at the central bank have been remarkably determined to put the inflation genie back in its bottle. They know the lesson taught by Paul Volcker in the 1970s: If you don’t kill it off completely, it will raise its ugly head again and again.

That said, they have yet to confront the three factors that I feel will prevent them from pursuing this tightening policy much longer:

1) The cost of servicing today’s massive federal debt.

2) The recession.

3) Something breaking.

One of these factors, and perhaps something I haven’t considered, will force the Fed to halt its rate-hike crusade. Accepting that, if we step back and consider the big picture, there are two possible scenarios ahead: READ MORE

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2.9.23 - Part-Time Work Growing Faster than Full-Time Work

Gold last traded at $1,861 an ounce. Silver at $21.98 an ounce.

EDITOR'S NOTE: President Biden is - yet again - out of touch with reality with his 'all is rosy' outlook. His own Fed Chair paints a much different future for the economy. When Powell starts treating a recession as an inevitability, it's hard to keep living in denial.

Another Recession Sign: Part-Time Work Is Growing Faster than Full-Time Work- Mises Institute

by Ryan McMaken

employment The Bureau of Labor Statistic (BLS) released new jobs data on Friday. According to the report, seasonally adjusted total nonfarm jobs rose 517,000 jobs, which was well above expectations. The words used by the media to describe the report included “stunner” and “wow.” President Joe Biden claimed the number proves his administration has delivered economic prosperity. The administration has also noted that in the official numbers, the unemployment rate is at a multidecade low. This, Biden and his supporters insist, proves the economy is remarkably strong.

There are at least a few things going on that are problematic for this narrative, however. For one, the Fed is actively taking steps to reduce the money supply in an effort to slow price inflation. A second problem is that the federal government’s own numbers show that total employment actually fell in January. A third issue is the fact that what job growth exists is in part-time employment. Taking these together—and considering what they tell us about where we are in the current economic cycle—it’s very difficult to buy into any narrative that attempts to paint the economic situation as strong, much less “wow.” READ MORE

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2.8.23 - Is the Dollar Done?

Gold last traded at $1,876 an ounce. Silver at $22.34 an ounce.

China's yuan will end US dollar dominance and create a bipolar currency system in the next decade, says 'Dr. Doom' Nouriel Roubini - Business Insider

China is once again at the forefront of what some experts are calling the end of US dollar dominance. The dollar has been bobbing and weaving for awhile now. The hope is it doesn't meet the dreaded knockout punch.

The US dollar is facing a threat from the Chinese yuan and the end of its dominance in the global financial system, according to Nouriel Roubini, chief economist at Atlas Capital Team.

In a Financial Times column on Sunday, Roubini said that as the world becomes ever more split between US and Chinese influence, "it is likely that a bipolar, rather than a multipolar, currency regime will eventually replace the unipolar one."

The so-called Dr. Doom economist, who is noted for his dire predictions, said that while skeptics typically caution that China's stiff currency controls should prevent the yuan from overtaking the dollar, the US has its own version that "reduce the appeal of dollar assets among foes and relative friends."

"These include financial sanctions against its rivals, restrictions to inward investment in many national security-sensitive sectors and firms, and even secondary sanctions against friends who violate the primary ones," Roubini wrote. READ MORE

Central banks are fighting the wrong war – the West’s money supply is already crashing - Yahoo!Finance

After years of Central Bank efforts to bolster the world's economy, some analysts are now saying they've got it all wrong. This is especially concerning in so much as our economy seems as vulnerable as a Chinese balloon over the coast of South Carolina.

Fed dollars Monetary tightening is like pulling a brick across a rough table with a piece of elastic. Central banks tug and tug: nothing happens. They tug again: the brick leaps off the surface into their faces.

Or as Nobel economist Paul Kugman puts it, the task is like trying to operate complex machinery in a dark room wearing thick mittens. Lag times, blunt tools, and bad data all make it nigh impossible to execute a beautiful soft-landing.

We know today that the US economy went into recession in November 2007, much earlier than originally supposed and almost a year before the collapse of Lehman Brothers. But the Federal Reserve did not know that at the time.

The initial snapshot data was wildly inaccurate, as it often is at inflexion points in the business cycle. The Fed’s “dynamic-factor markov-switching model” was showing an 8pc risk of recession. (Today it is under 5pc). It never catches recessions and is beyond useless. READ MORE

Welcome To The Global Recession, It Began In December Last Year - ZeroHedge

The recession is here...globally. As financial data from around the world is being considered, it would appear we've been in it for a bit. What does this mean for you and me - as well as the US economy? Here's what the experts are saying.

Authored by Mike Shedlock via

Consumer spending hit a brick wall in the US, EU, UK and Australia. Guess what that means. READ MORE

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2.7.23 - Is Hyperinflation Next?

Gold last traded at $1,870 an ounce. Silver at $22.14 an ounce.

EDITOR'S NOTE: As we roll into the second month of 2023 the "I" word (inflation) continues to capture the financial headlines. In this commentary, inflation is presented - or defined - as the destruction of our currency. A very compelling argument for sure.

Central Bank Digital Currencies Would Bring Hyperinflation

by Daniel Lacalle

hyperinflation There are many excuses often used to explain inflation. However, the fact is that there is no such thing as “cost push inflation” or “commodity inflation.” Inflation is not an increase in prices, it is the destruction of the purchasing power of the currency.

Cost-push inflation is more units of currency going to relatively scarce real assets. The same can be said about all other, from commodities to demand and my favourite, “supply chain disruption”. More units of currency going to the same goods and services.

The monster inflation we have endured these years first arrived through asset inflation and then through consumer prices. Now, governments and statistical bodies are tweaking the calculation of CPI to disguise the loss of purchasing power of the currency and central banks had to hike rates after the disaster created in 2020, when the massive increase in money supply went to finance bloated government spending and created the mess we live today.

Central banks know that inflation is a monetary phenomenon and that is why they are hiking rates and tightening as fast as governments allow them. However, central banks have lost a significant amount of an already low credibility by first ignoring the inflation risk and later using the base effect and transitory excuse, only to react late and slowly. READ MORE

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2.6.23 - Savings Starting to Run Dry

Gold last traded at $1,867 an ounce. Silver at $22.28 an ounce.

EDITOR'S NOTE: The soaring cost of living is gutting the already dwindling savings accounts of American households. And it doesn't look like prices will be coming down before those savings are completely gone. Having to go into debt to pay for groceries is a reality many may soon face. What does this sort of burden mean for the long term health of our economy?

Once Flush Savings Accounts Are Starting to Run Dry -Wall Street Journal

By Joe Pinsker

piggy bank The cushion of savings many built up during the pandemic is thinning out. In some households, it is already gone.

Americans have spent down about 35% of the extra savings they accumulated during the pandemic as of mid-January, according to an estimate from Goldman Sachs. By the end of the year, the company forecasts that they will have exhausted roughly 65% of that money.

In 2020 and into 2021, a combination of government pandemic stimulus and reduced spending, for example on restaurants and travel, fattened Americans’ wallets. Households amassed $2.7 trillion in extra savings by the end of 2021, according to Moody’s Analytics.

This cash helped Americans make it through a period of high inflation last year, but the forces that had acted to boost savings reversed direction as pandemic relief unwound and prices soared.

Today, some people are having to cut back on their spending or add to their credit-card balances. Many have had to tap their savings to stay afloat, say economists. READ MORE

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