Swiss America Blog Archive

Swiss America Blog Archive

9.21.23 - 'Demons on the horizon' for stocks

Gold last traded at $1,919 an ounce. Silver at $23.44 an ounce.

EDITOR'S NOTE: Another billionaire sounds the alarm; this time it's Jeffrey Gundlach of DoubleLine Capital. Mr. Gundlach sees trouble ahead on a number of fronts, especially for the dollar. Read on to see his common sense reasoning why a recession is all but guaranteed in the months ahead.

'Bond King' Jeffrey Gundlach warns of 'demons on the horizon' for stocks - and predicts a dollar disaster and recession next year -Yahoo! Finance

by Theron Mohamed

short position Jeffrey Gundlach issued a slew of warnings about the stock market, the US dollar, and an upcoming recession during the Future Proof conference last week.

The S&P 500 and Nasdaq Composite have surged 16% and 31% respectively this year, as investors price in the potential boost to companies from artificial intelligence and future cuts to interest rates. However, they're overlooking "demons on the horizon," Gundlach cautioned.

The billionaire CEO of DoubleLine Capital highlighted signs of a faltering US economy as a key concern. He pointed to a recent wave of corporate layoffs, and consumers feeling the squeeze from record amounts of credit-card debt as red flags. He also noted the chilling effect of higher mortgage rates on the housing market, and the challenge for small businesses of having to refinance their debts at much higher interest rates.

"The economy is definitely weakening," Gundlach said. "I look for one next year, and I think the indicators are getting really convincing in that regard," he said about the prospect of a recession.

The fund manager — whose nickname is the "Bond King" — also argued that economic growth has been shored up this year by a dangerous and unsustainable amount of government spending.

"The economy is only growing because we have a budget deficit that is 8% of GDP," he said. "It's about the same today as the depths of the global financial crisis."

Gundlach underscored that the federal government financed most of its spending at rock-bottom rates. However, the Federal Reserve's war on inflation has seen it hike rates from nearly zero to over 5% since last spring, meaning the government's interest charges on trillions of dollars of debt are poised to balloon. READ MORE

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9.20.23 - Even the Fed is Losing Money

Gold last traded at $1,931 an ounce. Silver at $23.20 an ounce.

Take the Fed forecast with a grain of salt. It has a terrible track record -CNBC

Forecasters are often wrong for a variety of reasons but if anyone should get it right, it should be the Fed. Alas, even with a full-time research team and access to all the data available, they still miss the mark quite often. This is a good reminder to keep your portfolio diversified, no matter what the Fed - or the talking heads - are predicting.

by Bob Pisani

On Wednesday, the Federal Reserve will publish its latest economic forecasts. There will be an intense focus on the Summary of Economic Projections, which is the Fed’s own estimates for GDP growth, the unemployment rate, inflation and the appropriate policy interest rate.

The summary will be released as an addendum to the statement following Wednesday’s Federal Open Market Committee meeting.

Investors will carefully study these projections, and they will likely move the market.

But should you change your investment portfolio based on the Fed’s projections? You probably should not.

The Fed’s poor forecasting record: One example

Larry Swedroe, head of financial and economic research at Buckingham Strategic Wealth, for decades has studied economic forecasts of everyone from stock-picking gurus to the Federal Reserve.

He has this piece of advice: Don’t base your investment decisions on what the Fed says. Or anyone else, for that matter.

Swedroe recently wrote an article where he looked at one simple metric: the Fed’s effort to project its interest rate increases for 2022. READ MORE

Even the Fed’s Losing Money! -Daily Reckoning

Yes, you read that right, the Fed is losing money too. Add that to the looming commercial and residential real estate crash, the ongoing banking crisis, massive consumer credit card debt and a weakening dollar; and we can kiss a soft landing goodbye.

by James Rickards

money The financial system is in a slow-motion meltdown. There are many indications that the economy’s in trouble, despite what you’ll hear from the cheerleaders in the mainstream media.

Commercial real estate values are crashing, and the associated loans are going into default. Credit cards are maxed out and borrowers are being punished with 20% or even 30% interest rates (that will double the outstanding balance in three years if you don’t pay it off).

There’s a global dollar shortage, which explains why China is dumping U.S. Treasury securities (to get cash) and why the euro, yen, yuan and sterling are all going down against the dollar.

Meanwhile, investors are bracing for Stage Two of the banking crisis (Stage One consisted of the failures of Silvergate, Silicon Valley, Signature, Credit Suisse and First Republic from March 9 to May 1, 2023).

In fact, I believe the situation is so urgent that I held an emergency event last week to alert my readers about it.

There are plenty of other indicators out there that show expectations of a sharp recession and global financial crisis. Some are very technical in nature, so I won’t get into them here.

So can things get any worse? Actually, yes, they can. READ MORE

The US housing market is headed for the largest sales slowdown since 2011, Fannie Mae says -Yahoo! Finance

Fannie May sees a recession looming as the higher costs of borrowing and soaring inflation send home sales plummeting. Even if the Fed eases rate hikes, the weak labor market and credit crisis will likely keep the housing market soft for quite some time.

by Jennifer Sor

US home sales are headed for the biggest slowdown since 2011, according to Fannie Mae.

The government-sponsored mortgage finance company forecasted total home sales to slump to just 4.8 million this year, marking the slowest sales environment since 2011. That figure will only improve slightly in 2024, with total home sales expected to hit 4.9 million, Fannie Mae economists said.

The slump in sales is partly being influenced by high mortgage rates,with the average rate on the 30-year fixed mortgage rising to 7.18% over the last week, according to Freddie Mac data. That means prospective home buyers are facing the highest cost of borrowing since 2001, which has heavily hindered demand over the past year.

Those dynamics are also taking shape in the backdrop of a weakening US economy, which is poised to enter a slowdown within the first half of next year, Fannie Mae economists predicted. The Fed has aggressively hiked interest rates over the past year to lower inflation, a move experts have warned could drive the economy into a recession. READ MORE

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9.19.23 - Another FDIC-Insured Bank Is Teetering

Gold last traded at $1,931 an ounce. Silver at $23.20 an ounce.

EDITOR'S NOTE: Another bank is on the brink of collapse, a headline that's become all too common this year. Chances are good, more failures await; but why? Uninsured deposits and unrealized losses. Sound familiar?

Another FDIC-Insured Bank Is Teetering, Closing at 27-1/2 Cents Yesterday, Down 96 Percent in a Year -Wall Street on Parade

by Pam Martens and Russ Martens

bank There may be a lesson here: don’t put the word “Republic” in the name of your bank; don’t hold a lot of uninsured deposits; and don’t have wads of unrealized losses on your investment securities.

If those lessons sound familiar, it’s because they played out in stunning fashion earlier this year when the second, third and fourth largest bank failures in U.S. history occurred.

One of those banks that blew up was First Republic Bank, which was put into FDIC receivership on May 1 and later sold, under much controversy, to the already behemoth JPMorgan Chase, the largest bank in the U.S. (JPMorgan Chase can’t seem to stay away from criminal charges. It thus far has notched five felony counts in its belt and is currently being sued by the U.S. Virgin Islands for “actively participating” in Jeffrey Epstein’s sex-trafficking of minors by providing him with more than $5 million in hard cash over a decade.)

Now, another bank with the word “Republic” in its name is in deep distress. The holding company of the current problem bank is Republic First Bancorp (trading ticker FRBK), whose federally-insured banking unit is Republic Bank.

As of June 30, according to regulatory filings, Republic Bank held $6 billion in assets and had 35 branches in Pennsylvania and New Jersey. More than half of its deposits were uninsured. Its SEC filings are not up-to-date but in its 10-Q (quarterly report) for the period ending September 30, 2022, it had this to say about those uninsured deposits: READ MORE

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9.18.23 - Dalio: Bonds are not a good investment

Gold last traded at $1,933 an ounce. Silver at $23.26 an ounce.

EDITOR'S NOTE: Another billionaire investor, Ray Dalio, is weighing in on the future of our markets; specifically the bond market. He feels bonds are not a good investment today; which is interesting given bonds have long been considered a stable and secure investment vehicle. In his opinion, now is not the time to own debt.

Billionaire investor Ray Dalio sounds the alarm on US debt and says bonds aren't a good long-term investment -Yahoo! Finance

by Filip De Mott

bonds A global bond market that's already overloaded with US debt may see selling pressure that sends rates higher, Bridgewater Associates founder Ray Dalio said.

Speaking at the 10th Milken Institute Asia Summit in Singapore on Thursday, the billionaire investor noted that the US Treasury must sell huge amounts of bonds as federal deficits balloon, adding that the situation is also a world problem.

But if investors aren't receiving a high enough real interest rate, they will sell those bonds, he warned.

"The supply-demand [imbalance] isn't just the amount of new bonds. It's the issue of 'do you choose to sell the bonds?' I personally believe that the bonds longer term are not a good investment," Dalio said.

If selling happens, it forces interest rates to go further up, as the market needs to attract bond buyers. That means monetary authorities would face the difficult task.

"When the interest rates go up, the central bank then has to make a choice: Do they let them go up and have the consequences of that, or do they then print money and buy those bonds? And that has inflationary consequences," Dalio said. "So, we're seeing that dynamic happen now." READ MORE

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9.15.23 - Why Unions Are Rising Up Again

Gold last traded at $1,923 an ounce. Silver at $23.01 an ounce.

EDITOR'S NOTE: We're seeing a surge in our economy, but not a good one; a surge in union strikes. A tight labor market - coupled with inflationary pressures - is driving the demand for higher wages. An increase in costs is not something our already strained economy is in a position to absorb right now.

Actors, UPS, and Now the UAW: Why Unions Are Rising Up Again -Barron's

by Megan Leonhardt

UAW The “summer of strikes” is spilling over into autumn as the United Auto Workers announced targeted work stoppages against the Big Three Detroit automakers after failing to reach new labor contracts.

UAW President Shawn Fain announced Thursday night the UAW would go on strike, initially targeting three facilities: a Ford Motor (ticker: F) plant in Wayne, Mich., a Stellantis (STLA) plant in Toledo, Ohio and a General Motors (GM) plant in Wentzville, Mo. Fain previously said the strike could expand to include additional plants if automakers can’t come to a deal.

About 12,700 of the UAW’s roughly 150,000 auto workers initially took to the picket lines early Friday morning. That added to the roughly 11,500 screenwriters and the 16,000 members of the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) already on strike—not to mention the approximately 1,000 Blue Cross Blue Shield of Michigan employees also represented by the UAW who also opted to walk out this week.

Earlier, UPS narrowly avoided a strike with the International Brotherhood of Teamsters union that represents more than 300,000 full- and part-time workers in July. The parcel delivery giant agreed to a deal that included hefty wage increases for full- and part-time employees, as well as improved working conditions.

The tight labor landscape is playing a major role in spurring recent union actions. The labor market has significantly shifted since prepandemic, providing unions and workers with more leverage. In fact, there were 23 major work stoppages that began in 2022, according to the U.S. Bureau of Labor Statistics. That’s much higher than the average of 16 strikes per year seen over the last decade. READ MORE

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9.14.23 - Is silver an investment bargain right now?

Gold last traded at $1,909 an ounce. Silver at $22.59 an ounce.

EDITOR'S NOTE: The real estate market is facing a major downturn but Robert Kiyosaki says this is good news for investors. He also sees another bargain investment for those looking to park their declining dollars somewhere, and that's physical silver. Kiyosaki cautions against putting money in ETFs as they have counter-party risk; physical metals do not. Call us today to add some silver to your portfolio while prices are still low.

'Airbnb To Lead Real Estate Market Crash': Robert Kiyosaki Issues Dire Warning But Says Crash Is The 'Best Time To Get Rich.' Here's The Biggest Bargain He Sees Now -Yahoo! Finance

silver Airbnb Inc. is in the spotlight. On Sept. 5, New York City implemented what Airbnb calls a "de facto ban" on the short-term rental platform.

The number of short-term listings on Airbnb in New York City, one of the platform's top markets, has seen a significant decline. And according to "Rich Dad Poor Dad" author Robert Kiyosaki, a major shift in the real estate landscape is on the horizon.

"Airbnb to lead real estate market crash," he said in a recent post on X, formerly Twitter.

While a crash in real estate prices can be devastating for homeowners, Kiyosaki believes that it could be an opportunity for potential buyers.

"If you want a new home your happy days are around the corner. Same for rental property," he wrote. "The best time to get rich is in a crash."


In a separate post on X, Kiyosaki wrote, "BIB: Biggest Investment Bargain: Silver still 50% below all-time high, in demand by greenies solar EVs."

The famed author has long been a fan of precious metals like gold and silver, which have been a store of value for thousands of years.

Unlike fiat money, which can be produced in unlimited quantities by central banks, precious metals have an inherent scarcity, making them a valuable hedge against inflation. READ MORE

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9.13.23 - China’s Economy Echoing 2008 Financial Crisis

Gold last traded at $1,909 an ounce. Silver at $22.84 an ounce.

Jamie Dimon warns of risks to US economy: 'We've been spending like drunken sailors' -Fox Business

While many in the media like to rejoice in our 'soft landing', financial experts are saying, "not so fast"; Jamie Dimon is one of them. As any good economist realizes, we don't see the results of fiscal policy shifts right away. Dimon sees the chickens coming home to roost over the next year.

by Megan Henney

JPMorgan Chase CEO Jamie Dimon sounded the alarm over the state of the economy on Monday, warning that the "booming environment" cannot last forever.

Speaking at the Barclays Global Financial Services Conference in New York, Dimon warned of significant headwinds to the economy, including geopolitical tensions, government spending and monetary policy tightening by central banks across the world.

"We've been spending money like drunken sailors around the world, this war in Ukraine is still going on. Those are really big ‘buts,’" he said. "To say the consumer is strong today, meaning you are going to have a booming environment for years, is a huge mistake."

The steady decline in inflation and the surprisingly resilient labor market have raised the specter among many economists of a "soft landing." But Dimon — who last year warned of an "economic hurricane" — remains skeptical that the good times will keep coming.

He cited concerns over the Federal Reserve's quantitative tightening campaign, and an increasing reliance on fiscal deficits, as well as the downstream impact of the Inflation Reduction Act, global remilitarization and greenification of the economy.

Tighter monetary policy works on a lag, meaning that it's often unclear when higher interest rates actually begin to affect the economy. Dimon seemed to allude to that during the question-and-answer session, noting that business results could change drastically in a year. READ MORE

BRICS: China’s Economy Echoing 2008 Financial Crisis of the U.S.

Is China on the verge of a full scale financial collapse? It seems it very well may be. If China does experience a catastrophic failure, the global repercussions will not be mild.

by Vinod Dsouza

money BRICS member China’s economy could be in jeopardy as all factors indicate a financial decline. China’s economy has now reached high debt levels, and government interference in all sectors has strained both small and medium-scale enterprises. In addition, the aging population is worrisome as more citizens claim benefits from health insurance schemes. The Chinese government covers a portion of medical costs for current and retired workers in urban areas.

However, the Chinese boom might soon come to an end as its economy is echoing the 2008 financial crisis of the U.S. The Communist country might experience a full-blown financial crisis that could take years to recover from.

The Chair of Rockefeller International, Ruchir Sharma, told the Financial Times that China’s miracle path no longer exists. Sharma highlighted China’s high debt levels, government interference in all sectors, and the aging population that contributes to the economic decline.

“China is where the U.S. was in late summer of 2008,” he wrote. Sharma predicted that “the next big step for China is a full-blown financial crisis,” that lies ahead of it. He added that the Xi Jinping administration must get things under control to prevent an “even deeper recession.” READ MORE

Gold set to hit $2,500 as dollar thrust appears to fade

More metals experts are joining the chorus for a rise in gold as the dollar continues to falter. As always, gold does its best work when every other investment vehicle is crumbling around it. Its time to shine may be just around the corner.

by Issac John, Khaleej Times

UAE - A breakdown in the dollar, which continues to dominate the gold market, could eventually push gold prices above $2,500 an ounce, according to precious metal analysts.

Gold has outperformed most other major asset classes in the past 12 months as it continued to resist rising interest rates while maintaining its role as a safe bet against inflation, analysts pointed out, predicting a target of $2,500 by the end of next year — more than 26 per cent higher than current levels.

David Neuhauser, founder of Livermore Partners, set a target of $2,500 by the end of 2024. “Much of this has to do with the fact that recessionary forces may take hold beginning later this year and gain steam in 2024.” Neuhauser expects stagflation to persist in the global economy for the next few years as inflation falls to between 3.0 per cent and 5.0 per cent.

Gold tends to perform in periods of uncertainty such as recessions and stagflation due to its status as a reliable store of value, and is often used as a hedge against inflation.

“I’m pretty confident that within a couple of years, we will see $2,500 gold. Any type of recessionary move would be positive for gold,” said Randy Smallwood, CEO of Wheaton Precious Metals, adding that he’s seeing weakness in the Chinese and US economy. READ MORE

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9.12.23 - CPI Inflation Rate Is Heating Up Again

Gold last traded at $1,913 an ounce. Silver at $23.07 an ounce.

EDITOR'S NOTE: CPI inflation figures are moving higher, but it appears the Fed won't be doing anything about it. With ever-increasing debt, rising costs of most major resources and a highly troubled banking system; will anything be able to shift the current trend and make things affordable for US households again?

The CPI Inflation Rate Is Heating Up Again. Here's Why The Fed Will Stay Cool.

by Jed Graham

inflation The consumer price index for August, out Wednesday at 8:30 a.m. ET, is expected to show the headline inflation rate moving higher for the second straight month, fueled by higher gas prices. Yet economists expect a third straight month of tame core CPI inflation, which should keep the Federal Reserve content to forgo further rate hikes and increase the chances of a soft landing.

The S&P 500 fell modestly in Tuesday's stock market action, dipping just below a key technical level as investors awaited the last big economic data point before next week's Fed meeting. Markets see minimal chance of a rate hike, but the CPI data will influence the Fed's policy projections that will be updated next week.

Thursday's retail sales and producer price index reports, which will provide key updates on consumer spending and health care inflation, also could prove important. READ MORE

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9.11.23 - Banking industry faces 'significant downside risks'

Gold last traded at $1,922 an ounce. Silver at $23.08 an ounce.

EDITOR'S NOTE: When it comes to the banking industry, things are not looking up. And the threat is coming from two fronts: depositors continuing to pull funds and put them in safer, more profitable havens and the commercial real estate market continuing to deteriorate, leaving banks holding the note.

Banking industry faces 'significant downside risks': FDIC chair -Yahoo! Finance

by David Hollerith - Senior Reporter

deposits FDIC Chair Martin Gruenberg said Thursday that the US banking industry "continues to face significant downside risks" from inflation and high interest rates, which could cause profitability and credit quality to weaken.

The top regulator issued his warning as the FDIC released a comprehensive look at how thousands of institutions fared during the second quarter, one of the most tumultuous periods for banking since the 2008 financial crisis.

The quarter included the seizure of San Francisco lender First Republic, which was the second-largest bank failure in US history, and wild fluctuations in the stocks of other regional banks. Two other mid-sized lenders, Silicon Valley Bank and Signature Bank, went down during the first quarter.

What the report showed is that deposits declined for the fifth quarter in a row, largely due to the exit of uninsured account holders.

The decline of $98.6 billion, or 0.5%, "moderated substantially" from the $472 billion outflow during the first quarter, but it continued to place pressure on banks to raise their funding costs to keep account holders who are searching for higher yields. That, in turn, ate into a key measure of profitability. READ MORE

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9.8.23 - Will the US Economy 'hit a wall'?

Gold last traded at $1,919 an ounce. Silver at $22.91 an ounce.

EDITOR'S NOTE: Trouble is brewing in the economy and has been for some time. So much so that some believe we may avoid a recession altogether just because we have for so long; but not according to Jeffrey Gundlach. All of the "band-aids" put in place to stanch the bleeding are about to give away. Read on to see the "dangerous cocktail" of reasons why he feels the fat lady is about to sing.

US economy will 'hit a wall' by the spring – and inflation could spike again, warns 'bond king' Jeffrey Gundlach - Business Insider

By Theron Mohamed

franklin The US economy is barreling toward recession as consumers' finances crumble, and inflation could surge again, Jeffrey Gundlach has warned.

"I think the economy is going to hit a wall in the next six or eight months or so, and there's going to be a real shutdown in consumer activity due to all of these interest payments that have to be made," he told Fox Business Thursday.

The billionaire investor and DoubleLine Capital CEO noted that many Americans managed to put money away during the pandemic.

They took advantage of government-aid programs that included mailing stimulus checks to households, and offering emergency grants and loan forgiveness to businesses. All the extra cash boosted the economy and asset prices, stoking historic inflation last year.

However, consumers have virtually exhausted those savings , Gundlach said. They now face a "dangerous cocktail" of inflated living costs, steeper rents, larger interest payments on their credit cards, the resumption of student-loan repayments, and taxes coming due, he continued. READ MORE

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9.7.23 - Global de-dollarization is upon us

Gold last traded at $1,919 an ounce. Silver at $22.97 an ounce.

EDITOR'S NOTE: The de-dollarization push continues as BRICS accepts six new members - adding to the list of countries looking to conduct trade in currencies other than the dollar. What does this mean for you? As Mr. Rickards put it in this article, "For now, get your gold while you still can."

The Dream Is Dead - Daily Reckoning

by James Rickards

dollar The global desire to move away from the dollar as a medium of exchange for international trade in goods and services has gone from a discussion point to a novelty to a looming reality in a remarkably short period of time.

It’s impossible to check headlines without seeing a new story about major trading partners planning to substitute their local currencies (or in the BRICS case, a newly formed currency) for the U.S. dollar in payment channels supporting world trade.

This plan has recently been re-emphasized as the BRICS have agreed formally to admit six new members to the group, including Saudi Arabia.

The importance of the new members is obvious. By adding Saudi Arabia, the BRICS now have two of the three largest oil producers in the world (Russia and Saudi Arabia; the third member of the trio is the United States) inside their tent.

The inclusion of UAE and Iran alongside Saudi Arabia and Russia makes the BRICS a de facto OPEC+ when it comes to dictating oil output and prices.

The BRICS will now include the second, fifth-, 10th-, 11th-, 18th- and 23rd-largest economies in the world, along with five others. The total GDP of the expanded BRICS membership is approximately 30% of global GDP measured on a nominal basis and over 50% of global GDP when measured based on purchasing power parity.

Many Americans are inclined to lament declines in the dollar’s global role. But should they? READ MORE

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9.6.23 - Central bank gold buying remains hot

Gold last traded at $1,917 an ounce. Silver at $23.17 an ounce.

JPMorgan says the biggest risk of de-dollarization isn't a rival currency — it's that the US could lose a key tool it's used to fight past economic crises -Yahoo! Finance

The US dollar seems to be under constant threat from other currencies. JPMorgan provides an interesting perceptive: it is not the loss of the dollar's dominance but rather the loss of the ability to help manage the economy. This could create a serious crack in our economic foundation.

by Filip De Mott

The biggest risk of de-dollarization isn't a rival currency — it's that the US could lose a key tool it's used to fight past economic crises, according to JPMorgan.

According to a note on Tuesday, strategists led by Marko Kolanovic said de-dollarization risks are unlikely to mean emerging powers will suddenly stop using the dollar or replace it with another currency.

Instead, the key de-dollarization risk that Western economies face is mostly related to inflation and their debt burdens, they explained.

"Historically, imported deflation via trade with the global South and East, outsourcing less profitable segments of economy, recycling of trade surpluses into USD assets, and domestic energy independence (US shale growth), were key ingredients to the USD supremacy," JPMorgan said. "Imported deflation and debt demand has allowed Western central banks to successfully navigate every recent economic crisis with a combination of monetary and fiscal measures." READ MORE

Central bank gold buying remains hot in July

When it comes to buying gold, Central Banks continue to amass very large positions in the precious metal. It is no surprise that these banks are positioning their holdings in this centuries old, proven asset that has provided tremendous stability over millennia ... as the banking system continues to crumble.

by Krishan Gopaul

chart Having reported a return to net buying in June, the latest data shows global central banks continued to add to their gold reserves in July. Central banks reported healthy net purchases of 55t during the month.1 Despite the month-on-month slowdown – owing to the late reporting of a 30t purchase by the Central Bank of Libya in June – the latest data does seem to support our view that the longer-term buying trend remains in place.

Looking at the detailed activity during July, two things are notable: 1) relatively few banks altered their gold holdings in July, and 2) many that did buy/sell did so sizeably.

The People’s Bank of China (PBoC) was once again the largest buyer, adding 23t during the month and cementing its place as the largest buyer year-to-date (126t). Since it began regularly reporting gold buying in November, the PBoC has bought a net 188t, lifting its total gold reserves to 2,136t (4% of total reserves). The National Bank of Poland (NBP) was a close second, increasing its gold reserves by 22t during July, boosting its total gold holdings to 299t. This is the fourth consecutive month of net buying, with purchases over this period totalling 71t – just 29t shy of the NBP’s stated aim of increasing its gold reserves by 100t. READ MORE

U.S. Regional Banks are on the Verge of collapsing and it's all planned. -The Trading Chief

Bank closures has become an all too familiar tune these days. These closures have restricted depositors access to their own funds and, ultimately, will have cost taxpayers a pretty penny. A question often asked is, could this have been prevented? Well now it seems it may have all been planned!

The collapse of Silicon Valley Bank and the US regional banking crisis that followed earlier this year had major economic and regulatory repercussions for lenders across the globe, some of which may be felt for years to come. The collapse of Silicon Valley Bank and Signature Bank in March triggered massive deposit withdrawals and placed renewed focus on lenders' financial health. More recently, the sector was hit by ratings downgrades when S&P last month cut credit ratings and revised its outlook for multiple U.S. banks, following a similar move by Moody's.

In its report on August 8th, Moody's also highlighted implications for banks of factors that aren't a direct result of Fed moves, including last year's UK gilt market chaos that pushed long-dated US Treasurys higher and weighed on banks.

With a recession still in the cards, the macroeconomic outlook in general puts pressure on the US banking sector. Funding and profitability remain more difficult than years past, and their large holdings of fixed-rate assets isn't ideal. READ MORE

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9.5.23 - Why Nick Colas Is Bullish On Gold

Gold last traded at $1,926 an ounce. Silver at $23.54 an ounce.

EDITOR'S NOTE: As nations around the world turn their attention to gold, many investors - and investment advisors - are highlighting the yellow metal's importance in any well-balanced portfolio. Below, Nick Colas - former Credit Suisse analyst and SAC Capital portfolio manager - shares his thoughts, through his own family's history, on why gold is set to shine.

Why Nick Colas Is Bullish On Gold -Zero Hedge

Nick Colas is bullish on gold.

gold coin The former Credit Suisse analyst and SAC Capital portfolio manager who founded DataTrek Research in 2017 has started offering his thoughts via YouTube, where he's opined on topics such as his 3 cardinal rules of investing, how to use the VIX to trade smarter, and the best way to value Tesla.

On Tuesday, Colas discussed where he thinks gold is headed...

In 1960, Colas's family came to America just after the Cuban revolution with $200 in a suitcase. After scrambling to land on their feet, his father began buying gold coins on business trips to Europe when it was $35 to $37 an ounce.

"He viewed gold as a long-term store of value," Colas said of his father. Then, "in 1971 President Nixon took the U.S. dollar off the gold standard and prices began to rise."

"In the late 70s inflation really took over as a big investment theme and the price of gold was going up even further," he continues.

In 1974, gold soared from its $35 valuation in the 1960s to $600 an ounce by 1980.

Gold vs. Equities: The Unspoken Truth

While the S&P 500 has grown roughly 13% per year over the last decade, when one looks outside US borders, gold's 5% annual compounded growth begins to look quite impressive. Colas notes that the MSCI All-Country Ex-U.S. index and Chinese equities have shown a mere 5% and 3% growth, respectively. So if your portfolio isn't U.S.-centric, gold not just holds its own but shines. READ MORE AND WATCH VIDEO

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9.1.23 - US Treasury Direct Freezing Customer Accounts

Gold last traded at $1,940 an ounce. Silver at $24.17 an ounce.

EDITOR'S NOTE: When it comes to freezing customers accounts, it seems some banks are taking a, "shoot first, aim second" approach. Another good reason to buy gold!

The US Treasury Direct is Now Freezing Customer

franklin The US Treasury Direct (TreasuryDirect) is now freezing customer accounts, leaving users without access to their funds from weeks to months.

Tammarra Johnson reported to FrankNez that TreasuryDirect has frozen her account ever since she made a deposit going all the way back to April.

Users can purchase securities directly from the US Treasury with TreasuryDirect.

However, big financial institutions have access to TreasuryDirect’s auction house which means they have priority over individual customers.

Finance Strategists reports that’s securities purchased through TreasuryDirect cannot be sold in the secondary market before they mature.

“This lack of liquidity could be a disadvantage for investors who may need to access their investment capital before the securities’ maturity.”

But Johnson’s issue is a little different – TreasuryDirect froze the account after a deposit from a settlement. READ MORE

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8.31.23 - Home Purchases Crash 45% ... Biggest Drop Since 2008

Gold last traded at $1,940 an ounce. Silver at $24.42 an ounce.

EDITOR'S NOTE: Commercial real estate was first domino to start falling and it appears residential real estate is right on its heels. Can an economy already on the verge of collapse take any more blows? Add this to the rapid strengthening of the BRICS nations and we have an unholy recipe for financial disaster in the West.

AirBnB Bubble Bursts: Investor Home Purchases Crash 45% In Biggest Drop Since 2008 -ZeroHedge

by Tyler Durden

chart Earlier this week, we wrote that the bursting of the AirBnB bubble will also pop the broader housing bubble, which has shown remarkable resilience in the face of the highest interest rates since Volcker, largely the result of a staggering divergence between effective mortgage rates (since almost everyone refinanced into a 30Y mortgage when rates were at record lows a few years back and is locked into a nice, low rate for a long, long time... or until they sell) and current 30Y mortgages, which at 7.5% nobody can afford.

So back to the coming AirBnB fiasco, today the real estate experts at RedFin wrote that investor home purchases fell 45% from a year earlier in the second quarter, outpacing the 31% drop in overall home sales. That’s the biggest decline since 2008 with the exception of the quarter before, when they dropped 48%.

The decline comes as this year’s relatively cool housing and rental markets makes investing in homes less attractive than it was during the pandemic-driven homebuying frenzy of 2021 and early 2022, when record numbers of AirBnB were purchased as hotel and lodging surrogates (Redfin defines an investor as any institution or business that purchases residential real estate).

The drop in purchases has brought the total number of homes bought by investors below pre-pandemic levels, which is a major concern for a market where investors remained the last remaining support pillar now that most average Americans seeking to buy their first home are simply unable to afford it and are stuck renting indefinitely.

Real estate investors bought roughly 50,000 U.S. homes in the second quarter, the fewest of any second quarter in seven years, with the exception of the start of the pandemic. READ MORE

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8.30.23 - Signs of Collapse

Gold last traded at $1,943 an ounce. Silver at $24.61 an ounce.

Why Cash Seizures Backfire On Oklahoma Police -RealClearWire

We are all familiar with the uniquely American adage of "innocent until proven guilty"; but this doesn't seem to apply if the government or law enforcement subjectively feels you are carrying too much cash. These scenarios are increasing in frequency with little explanation as to why.

By Dan Alban & Daryl James

Police recruits join the force to help others and fight crime. Research confirms it. But priorities changed when sheriff’s deputies detained Eh Wah in Muskogee County, Oklahoma, and found more than $53,000 in his car.

Law enforcement training kicked in, and the purpose of the traffic stop switched from public safety to raising revenue. The deputies seized the cash and spent the next six hours interrogating Eh Wah, looking for any excuse to justify civil forfeiture, a process that allows the government to take and keep cash, cars and other assets without a criminal conviction.

Oklahoma agencies normally keep quiet about civil forfeiture, which is why the state ranks among the worst in the nation for civil forfeiture transparency. Oklahoma publishes no statewide reports, conducts no regular audits, and tracks only limited metrics.

The silence is strategic. The more people learn about civil forfeiture, the less they like it. But Oklahoma police and prosecutors have voiced opposition in recent weeks to H.R. 1525, the Fifth Amendment Integrity Restoration Act (FAIR), a bill that would reform federal civil forfeiture. READ MORE

FedEx, UPS both see PLUMMETING shipping volume as economy nears COLLAPSE -Natural News

The latest blow to the domestic economy is a struggling cargo market. Is this significant decline in transit demand a sign of graver things to come? If consumption goes down, other areas are bound to follow suit.

by Ethan Huff

plane The cargo market is imploding as shipping giants UPS and FedEx report precipitously declining package transit demand.

We know that the number of package flights operated by both FedEx Express and UPS "significantly declined month over month in July," according to Yahoo! Finance.

Since the spring of 2022, the overall cargo market has been waning. And the shipping industry's response thus far has been to impose new efficiency initiatives to try to lower costs and accommodate smaller express volumes.

Compared to the month of June, FedEx flew 9 percent fewer domestic flights in July. Year-over-year flight activity at the company was down 14 percent, according to investment bank Morgan Stanley.

From June to July, year-over-year declines in package volumes at UPS accelerated to 13 percent, up from 10 percent in June, while flight activity in May and June, comparatively, remained relatively stable. READ MORE

'We are buyers of gold on weakness': Yellow metal appears resilient after surge in real rates, says Morgan Stanley -MarketWatch

As one might expect, Morgan Stanley has a watchful eye on the economy and when it comes to gold, they love what they see. They cite gold's recent resiliency amidst interest rate volatility as proof of its staying power and think it presents a great price point of entry for investors. ‘We are buyers of gold on weakness’: Yellow metal appears resilient after surge in real rates, says Morgan Stanley

by Christine Idzelis

Gold appears resilient amid the recent surge in real interest rates, presenting a buying opportunity over the intermediate term, according to Morgan Stanley’s wealth-management business.

“Like equities, which have continued to shrug off the negative implications of rising real rates, gold GC00, 0.99%, which moves inversely to real rates and in turn to the U.S. dollar DXY, has remained extremely resilient,” said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, in a note Monday.

“Regarding the intermediate outlook, we are buyers of gold on weakness or declines in rates,” she wrote.

Real rates, which adjust for inflation, have recently jumped. While that eroded equity valuations this month, the U.S. stock market remains solidly higher for the year to date.

“The surge in real rates has been a multifactor move likely to force investors to contemplate valuation risks of a ‘higher-for-longer’ rate regime,” said Shalett. “The 10-year real rate rose above 2.0% last week, its highest since the Great Financial Crisis.” READ MORE

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8.29.23 - Gold resilient after surge in real rates

Gold last traded at $1,937 an ounce. Silver at $24.73 an ounce.

EDITOR'S NOTE: As one might expect, Morgan Stanley has a watchful eye on the economy and when it comes to gold, they love what they see. They cite gold's recent resiliency amidst interest rate volatility as proof of its staying power and think it presents a great price point of entry for investors.

'We are buyers of gold on weakness': Yellow metal appears resilient after surge in real rates, says Morgan Stanley -MarketWatch

by Christine Idzelis

gold chart Gold appears resilient amid the recent surge in real interest rates, presenting a buying opportunity over the intermediate term, according to Morgan Stanley’s wealth-management business.

“Like equities, which have continued to shrug off the negative implications of rising real rates, gold GC00, 0.99%, which moves inversely to real rates and in turn to the U.S. dollar DXY, has remained extremely resilient,” said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, in a note Monday.

“Regarding the intermediate outlook, we are buyers of gold on weakness or declines in rates,” she wrote.

Real rates, which adjust for inflation, have recently jumped. While that eroded equity valuations this month, the U.S. stock market remains solidly higher for the year to date.

“The surge in real rates has been a multifactor move likely to force investors to contemplate valuation risks of a ‘higher-for-longer’ rate regime,” said Shalett. “The 10-year real rate rose above 2.0% last week, its highest since the Great Financial Crisis.” READ MORE

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8.28.23 - BBB Reports Wave of Complaints About Frozen Accounts

Gold last traded at $1,920 an ounce. Silver at $24.23 an ounce.

EDITOR'S NOTE: For years, Swiss America has been offering a report detailing what we feel is a secret war on your cash. There are many different ways in which this war is being waged. This article is an example of yet another tactic: US citizens - some of whom are retirees - are being denied access to their bank accounts, preventing them from being able to pay for basic necessities.

BBB Reports New Wave of Complaints About Frozen Bank Accounts -

by Frank Nez

dollar The Better Business Bureau (BBB) is now reporting a new wave of customer complaints about frozen accounts at a popular US bank.

For the second week in a row, a group of customers at the Walmart and TurboTax-linked Green Dot Bank have said they are completely unable to access their funds, reports NBC News.

The bank, which says it has 33 million customers, is being scrutinized by the Better Business Bureau over a “pattern and influx of complaints against Green Dot”.

Daily reports are coming in from Ohio, Arizona, D.C., Minnesota, Michigan, New York, Texas, California, Pennsylvania, Missouri, and many other states.

Some of these frozen accounts include retiree accounts, like Beth Williams, 78, who told FrankNez she has been unable to gain access to her WMC/Green account for 20 days now. READ MORE

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8.25.23 - Credit card delinquencies on the upswing

Gold last traded at $1,914 an ounce. Silver at $24.22 an ounce.

EDITOR'S NOTE: Just when we thought small and medium banks had seen the last of the crushing blows, rising credit card delinquencies start adding even more pressure. And with interest rates continuing to soar, this won't end well. Is this yet another portent of collapse?

Credit card delinquencies are on the upswing - Fox Business

By Megan Henney

cards A growing number of Americans are falling behind on their monthly credit card payments, a trend that may be a harbinger of economic troubles ahead, according to a new report from Wells Fargo.

Findings from the bank indicate that credit card delinquencies are surging among commercial banks – particularly at small lenders. In fact, late credit card payments at banks that are outside the top 100 in asset size recently surged to a record high.

Those delinquencies raise the pressure on small- and medium-sized banks, which are already grappling with tightening credit conditions in the wake of three major bank failures earlier this year.

"The economy still has a cash cushion, but many consumers are exhausting their credit, while income growth has slowed sharply," the Wells Fargo strategists wrote in the note. "Our outlook remains for a short, moderate recession and then recovery for most of 2024 and likely into 2025."

The dual increase in credit card usage and delinquency rates is particularly concerning because interest rates are astronomically high right now. The average credit card annual percentage rate, or APR, hit a new record of 20.63% last week, according to a Bankrate database that goes back to 1985. The previous record was 19% in July 1991. READ MORE

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8.24.23 - Money Managers Say They’ll Stick With Gold

Gold last traded at $1,894 an ounce. Silver at $23.33 an ounce.

EDITOR'S NOTE: Gold has long been a hedge against financial uncertainty and instability. With the current global economic situation, gold's upside potential is beginning to shine. Now is the time for all of us to make sure our investment portfolios are diversified with a position in gold. Contact your Swiss America representative today to find out how.

Investors Say They’ll Stick With Gold as Fed Cycle Nears End -Yahoo! Finance

by Sybilla Gross

gold (Bloomberg) -- Gold isn’t losing its allure, according to a dozen money managers who all told Bloomberg News they expect to maintain or raise their exposure to the precious metal in the coming 12 months.

Bullion has stumbled in recent weeks in the face of multiple headwinds from surging real yields to a stronger US dollar and the prospect of US rates staying higher for longer. The survey of investors — from sovereign wealth managers to hedge funds — offered some modest optimism for price prospects into 2024.

None of the respondents said they would cut their exposure to gold in the immediate 12 months, and five of them said they expected to boost their allocations. More than two thirds of them see prices rising, and five expect a clear all-time high. The poll was conducted between Aug. 10 and Aug. 22.

There’s still obvious uncertainty around when the Federal Reserve will end the bank’s tightening cycle, which would be an important positive for non-interest bearing gold. Global central banks continue to grapple with stubborn inflation, and the US labor market has remained surprisingly resilient in the face of aggressive monetary tightening. READ MORE

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8.23.23 - De-dollarization "Irreversible"

Gold last traded at $1,894 an ounce. Silver at $23.33 an ounce.

5 New Countries Expected To Join BRICS -Watcher.Guru

Five new countries are set to join BRICS with the list of applicants growing daily. The head of the New Development Bank confirms they are accepting members based on geopolitical location which sure sounds like something someone staging a takeover might say; that takeover being the dethroning of the dollar.

by Vinod Dsouza

The BRICS bank commonly called the ‘New Development Bank’ (NDB) confirmed that it has started reviewing applications from countries that have formally applied to join the alliance. The head of NDB, Dilma Rousseff, said that the bank is reviewing applications sent from 15 countries. However, she did not name the applicant countries but confirmed that BRICS’ priority is to diversify the geographical location.

Rousseff’s statements hint that the BRICS bloc is looking to induct countries from all corners of the world. NDB might not specifically stick to one location or continent and aims to be a diverse group after expansion. BRICS is an acronym for Brazil, Russia, India, China, and South Africa. READ MORE

De-dollarization "Irreversible" - Putin Tells BRICS Summit In Remote Address -ZeroHedge

Putin would love nothing more than to see the dollar dethroned; and he's becoming more vocal about it as he gains the necessary support of those who may help his dream come true.

by Tyler Durden

BRICS In their inaugural day 'family photo', BRICS leaders posed without Russia's President Putin, as FM Lavrov took his place given the ICC arrest warrant and Rome Statute would require the South African government to seek his arrest.

Putin addressed the summit remotely, and emphasized in the Russian-language speech that de-dollarization is "gaining momentum". He said the dollar's receding global centrality is an "objective and irreversible" process. As expected he struck an optimistic tone about the bloc's future, also at a moment China's XI is urging BRICS to become a geopolitical rival to the G7: READ MORE

Americans Are More Afraid Of Going Broke Than Dying — Reports Indicate Financial Insecurity Is Becoming A Harsh Reality -Yahoo! Finance

This headline says it all, a sad reality here in the US. Some American households are faced with financial strains they believe are more frightening than death!

by Jeannine Mancini

A recent survey conducted by life insurance company Allianz reveals a significant concern among Americans regarding financial stability in their later years. According to the survey results, 61% of respondents are more afraid of depleting their savings during retirement than dying.

Allianz conducted its study by collecting information from a group of 1,000 middle-class Americans ages 25 and older. The study defined the middle class as people with investable assets of $150,000 or more or annual incomes of $50,000 if they were single and $75,000 if they were married. The study's findings highlighted a significant observation: While death is an unavoidable aspect of life, the fear of depleting one's financial resources in old age strikes a chord with a substantial number of people.

The concern over outliving your financial means is a driving force behind the importance of Social Security, a program designed to provide an inflation-adjusted lifetime annuity that ensures financial stability in retirement. READ MORE

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8.22.23 - Will the US Be Forced To Embrace Gold?

Gold last traded at $1,894 an ounce. Silver at $23.33 an ounce.

EDITOR'S NOTE: Many nations around the world have been beefing up their gold reserves for years. BRICS plans to back their new currency with gold. Seemingly the only country late to this game is the United States. According to some, this could prove to be quite detrimental to our nation.

The US Will Be Forced To Embrace Gold... Or Become Isolated -ZeroHedge

Authored by Patrick Barron via The Mises Institute

gold Dollar Hegemony Is Ending Due to Geopolitical Changes

Since the Bretton Woods Agreement in 1944, the dollar has been the world’s preferred reserve currency - the major trading nations of the world were willing to hold dollars in vast amounts to satisfy their need for a readily accepted worldwide payment medium. Even when, in 1971, the United States violated its solemn promise to redeem its dollars for gold at thirty-five dollars per ounce, nations were still willing to hold dollars.

In the mid-2010s, I was certain that Germany would abandon the euro and reinstate the deutsche mark. It was clear, especially to some German central bankers, that Germany was being cheated by the European Central Bank. Germany’s TARGET2 surplus represented a vast excess of German exports to other European Union members, who were pledging near-worthless government and corporate bonds in exchange for newly printed euros from the European Central Bank. These bonds would never be redeemed for anything of real value; therefore, it would be simple rational self-interest for Germany to quit the charade.

I predicted that such an action would cause the eurozone to collapse, make Germany’s deutsche mark the preferred unit of trade in Europe, and possibly threaten the dollar for worldwide reserve dominance. Obviously, this never happened. Why? READ MORE

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8.21.23 - 2008 Revisited?

Gold last traded at $1,894 an ounce. Silver at $23.33 an ounce.

EDITOR'S NOTE: Are we about to see a repeat of 2008? Commercial real estate is eroding, residential real estate is right on its heels. As rates keep rising so do delinquencies and yet the Fed keeps on moving the mark ever upward. Buckle up, it's going to be a bumpy ride.

Brace Yourselves, Because What They Have Planned Is Going To Absolutely Devastate The US Economy -ZeroHedge

Authored by Michael Snyder via The Economic Collapse blog

2008 Do you remember what happened in 2008? Many people believe that another historic financial disaster is coming and that it will absolutely devastate the U.S. economy. Earlier this week, I wrote about an investor named Michael Burry that has actually bet 1.6 billion dollars that the stock market is going to crash. He made all the right moves in 2008, and he fully intends to be proven right once again in 2023. Of course current conditions definitely resemble 2008 in so many ways. The residential housing market is so dead right now, and commercial real estate prices are plummeting at a very frightening pace. Unfortunately, officials at the Federal Reserve are making it quite clear that they are not done strangling the economy.

This week, mortgage rates jumped above the 7 percent mark to the highest level that we have seen in more than 20 years…

Mortgage rates surpassed 7% this week, hitting the highest level in more than two decades.

The average rate on the popular 30-year fixed mortgage increased to 7.09% this week, up from 6.96% the week prior, according to Freddie Mac’s release on Thursday. That’s the highest point since the first week of April 2002 and marks just the third time rates have exceeded 7% since then. The last times were in October and November of last year, when the rate reached 7.08%.

Needless to say, high mortgage rates have been crippling the housing market in recent months.

At the midpoint of this year, existing home sales were down a whopping 18.9 percent from the same time in 2022…

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – receded 3.3% from May to a seasonally adjusted annual rate of 4.16 million in June. Year-over-year, sales fell 18.9% (down from 5.13 million in June 2022). READ MORE

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8.18.23 - The 'G7 of the East'

Gold last traded at $1,888 an ounce. Silver at $22.67 an ounce.

EDITOR'S NOTE: This article outlines the long, calculated move out of US dollars into gold by the East. These small but significant moves have been happening for years creating the proverbial frog in the pot: we don't realize the water is boiling yet, but it's only a matter of time until it does.

Gold and the ‘G7 of the East’ – Richard Mills -Ahead of the Herd

gold usa The dollar is the most important unit of account for international trade, the main medium of exchange for settling international transactions, and the store of value for central banks.

Lately though, “de-dollarization” is being pursued by countries with agendas at odds with the US, including Russia, China, Saudi Arabia and Iran.

As the target of US economic sanctions (for annexing Crimea, interfering in its election, and invading Ukraine), Russia sees diversification from the dollar and into gold and other currencies, as a way of skirting trade restrictions.

In 2021, China trimmed its holdings of US Treasuries for four straight months, in what analysts called a move to prevent potential adverse impact from escalating China-US tensions.

China actually started to move away from the dollar in 2014, agreeing with Brazil on a $29 billion currency swap to promote the Chinese yuan as a reserve currency. The Chinese and Russian central banks signed an agreement on yuan-rouble swaps to double trade between the two countries. The $150 billion deal is a way for Russia to move away from US dollar-dominated settlements.

A few years ago China came up with a new crude oil futures contract, priced in yuan and convertible into gold. The Shanghai-based contract allows oil exporters like Russia and Iran to dodge US sanctions against them by trading oil in yuan rather than US dollars. READ MORE

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8.17.23 - Is the dollar being dethroned?

Gold last traded at $1,888 an ounce. Silver at $22.67 an ounce.

EDITOR'S NOTE: Talk of the dollar being replaced is no longer just talk, it has become a reality. India just placed its first oil purchase in rupees rather than dollars. Read on to find out what this might mean for the US dollar.

Is the dollar being dethroned? India just bought 1M barrels of oil from the UAE using rupees instead of USD for the first time — why this could spell doom for the greenback -Yahoo! Finance

by Bethan Moorcraft

oil India and the United Arab Emirates (UAE) have officially started trading with each other in their local currencies.

The Indian government announced on Monday that the country’s leading petroleum refiner, Indian Oil Corp., used the local rupee to buy one million barrels of oil from the Abu Dhabi National Oil Company — not the U.S. dollar.

This monumental transaction follows the sale of 25kg of gold from a UAE gold exporter to a buyer in India for around 128.4 million rupees ($1.54 million), according to Reuters.

So, what could all this mean for the U.S. dollar on the world stage?

Last year, India’s central bank revealed a new framework for settling global trade in rupees — an idea that came into fruition last month, when India is the world’s third biggest oil importer and consumer signed two agreements with the UAE.

First, the two giants agreed to settle trade in their local currencies — in an effort to cut transaction costs and eliminate dollar conversions. They also agreed to set up a real-time payment link to simplify cross-border money transfers.

The agreements will enable “seamless cross-border transactions and payments, and foster greater economic cooperation,” the Reserve Bank of India explained in a weekend statement. READ MORE

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8.16.23 - American Households spending $709 More a Month

Gold last traded at $1,892 an ounce. Silver at $22.42 an ounce.

CNBC Daily Open: More trouble ahead for U.S. banks -CNBC

CNBC is calling for some tough days ahead for our if we haven't already been through enough. They cite several factors that will likely contribute to more banking difficulties and explain why.

by Yeo Boon Ping

Beset by worries
Major U.S. indexes tumbled, weighed down by losses in financial stocks and worries over China’s faltering economy. Asia-Pacific markets followed Wall Street and fell Wednesday. Most regional indexes lost at least 1%. A silver lining: Japanese business’ sentiment climbed in July, alongside the country’s stronger-than-expected economic growth.

Potential banking downgrade
Fitch Ratings warned it may downgrade the U.S. banking industry’s credit rating from AA- to A+. Since individual banks cannot be rated higher than the industry, major banks like JPMorgan Chase and Bank of America would be cut to an A+ rating — with a trickle-down effect for smaller banks — if the downgrades happens. Fitch’s warning comes as Moody’s downgraded 10 banks last week. READ MORE

Inflation Forces Typical American Household to Spend $709 More per Month Than 2 Years Ago -The Epoch Times

As the inflation battle rages on, the real devil is in the details; one of which is the actual financial toll it has taken on US families. A typical household is having to spend over $700 more a month than they did just two years ago.

by Tom Ozimek

money Moody's Analytics chief economist, Mark Zandi, has calculated that the typical American household is spending a whopping $709 more per month than it was two years ago because of high inflation.

Mr. Zandi's calculations came in a post on X, formerly known as Twitter, that was remarking on the latest government data on inflation, the Consumer Price Index (CPI).

Inflation, as measured by CPI, came in at 3.2 percent in year-over-year terms in July, up from 3 percent in June and the first increase in the annualized pace of inflation in about a year.

While that's down from the 9.1 percent peak in June 2022, many consumers continue to reel from the persistently elevated price pressures of the past few years.

"The high inflation of the past two-plus years has done lots of economic damage. Due to the high inflation, the typical household spent $202 more in a July than they did a year ago to buy the same goods and services. And they spent $709 more than they did two years ago," Mr. Zandi wrote in his post. READ MORE

BRICS Developing New Payment System To End Reliance on the U.S. Dollar -Watcher.Guru

The BRICS world is pulling no punches when it comes to what they foresee happening to the US dollar, and it's being done with intent. They are looking to end the world dominance of the US dollar. The number of nations jumping on board is growing by the day which spells nothing but trouble for the greenback.

by Vinod Dsouza

Russian diplomat Roman Babushkin confirmed that BRICS is developing a new payment system to end reliance on the U.S. dollar. The new payment mechanism will use local currencies for cross-border transactions and mutual settlements among BRICS members. The development aligns with the changing global dynamics and fosters the growth of the BRICS member’s respective local currencies.

Babushkin also refuted Brazilian President Lula de Silva’s comments about forming a new BRICS currency to challenge the U.S. dollar. The Russian diplomat admitted that creating a new currency comes with a lot of complexities, and the bloc is not prepared for the drastic development. The formation of the BRICS currency is challenging as it involves intricacies and is difficult to translate into reality.

“A BRICS payment instrument based on the currency basket would help to carry out mutual settlements without any reliance on the US dollar,” he said. However, he cautioned that creating a new currency needs more work and research, and the alliance is not prepared for it yet. “These ideas demonstrate new tendencies; however, it’s clear that a lot of aspects require in-depth study,” he said. READ MORE

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8.15.23 - The Hangover of our Drunken Sailors

Gold last traded at $1,902 an ounce. Silver at $22.52 an ounce.

EDITOR'S NOTE: Foreclosures, bankruptcies, delinquencies and collections! Oh my! Not a pretty forecast. Here's what we can expect ...

Consumer Foreclosures, Bankruptcies, Delinquencies, and Collections: Checking on the Hangover of our Drunken Sailors- Wolf Street

By Wolf Richter

foreclosures Our Drunken Sailors have been out there spending money, and some of it comes from their surging income that has been outrunning inflation finally this year, and they’re spending money from their investment gains and from surging interest income from CDs, money market funds, Treasury bills, and savings accounts. And some are spending money they’ve borrowed. And our Drunken Sailors have borrowed heavily in recent years to buy homes at fabulous prices. So now it’s time to check in on them, to see how their credit is holding up under these conditions.

The number of consumers with foreclosures edged up to 38,840 in Q2, according to data from the New York Fed’s Household Debt and Credit Report. But that was down by about 45% from the Good Times before the pandemic in 2017-2019, and down by 75% from the Good Times in 2003-2004 when the housing market was approaching the peak of the prior housing bubble.

The fiscal and monetary excesses during the pandemic, the forbearance programs, and outright foreclosure bans reduced foreclosures to near zero. And now there’s the slow return to the Good Times normal. This combination is creating a lot of these frying-pan charts: READ MORE

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8.14.23 - The US is facing a debt storm

Gold last traded at $1,907 an ounce. Silver at $22.57 an ounce.

EDITOR'S NOTE: A debt storm is coming; which spells more trouble for faltering banks. Check out these charts ...

The US is facing a debt storm. Here's 5 charts that show trouble is brewing. -Business Insider

by Jennifer Sor

A storm of public and private debt is brewing in the US – and the troubles are already beginning to show on the surface as loans pile up and borrower confidence falters.

debt chart

At a broad level, Fitch Ratings' downgrade of the US credit rating and Moody's downgrade of 10 US banks this summer points to issues for both US sovereign credit (political polarization hampering the US's ability to meet debt obligations) and debt originated out of the banking sector (structural pressures stemming from tighter credit conditions and Fed policy).

But there are more granular problems mounting across debt markets as well, as both private and public sectors face a drastically different environment than they did in the previous decade when interest rates were at historic lows coming out of the 2008 crisis. If low rates spurred the sugar rush of heavy borrowing, rising interest rates may be setting the stage for the sugar crash.

This was on full display earlier this year as Silicon Valley Bank imploded, driven by mismanagement of its balance sheet which was weighed down by a bond portfolio that was rapidly depreciating as interest rates climbed. SVB, Signature Bank, and First Republic all fell in quick succession.

The fallout from that event was relatively contained, but that hasn't stopped market pundits and investing icons from sounding the alarm on high debt levels in the era of rising rates. Hedge fund legend Ray Dalio and top economist Nouriel Roubini are among those who have warned a full-blown debt crisis could be on the way. READ MORE

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8.11.23 - Gold prices to breach all-time highs?

Gold last traded at $1,913 an ounce. Silver at $22.65 an ounce.

EDITOR'S NOTE: Gold price at $2,500?! According to CNBC, there's a good chance we may see it. This is yet another reflection of our current financial and economic situation. The time to get your position in gold should be now!

Gold prices to breach all-time highs? Some expect bullion to hit $2,500 -CNBC

by Lee Ying Shan

gold coins Gold prices are on track to rally to all-time highs in 2024 on the back of tapering interest rates, and looming recessionary fears that elevate its role as a safe haven asset.

Spot gold prices hit a record intraday high of $2,072.5 on Aug. 7, 2020, according to data from Refinitiv. Analysts who spoke to CNBC say they could surpass that level and push beyond the record.

“I do see gold move above $2,100 in late 2023, early 2024 as a trading level,” said TD Securities’ managing director and global head of commodity strategy, Bart Melek, attributing his optimism to a potential pause in the U.S. Federal Reserve tightening cycle.

“I am positive on gold as I believe that the Fed will tilt policy away from its current restrictive mode. This I believe will happen before the 2% inflation target is reached,” Melek told CNBC in an email. READ MORE

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8.10.23 - Banks Hit with $549 Million in Penalties

Gold last traded at $1,920 an ounce. Silver at $22.83 an ounce.

EDITOR'S NOTE: Banks have once again been caught violating SEC regulations and fined accordingly. This time to the the tune of over $500 million. At this point, it's pretty clear that the banks are looking out for themselves first and their depositors last. These fines are just the cost of doing business these days. But with the entire system under tremendous strain, can they really afford to keep this up?

Banks Now Hit with Whopping $549 Million in Penalties -Frank Nez

franklin Banks have now been hit with a whopping $549 million in penalties by the SEC for failing to maintain electronic records of employee communications.

U.S. regulators on Tuesday announced a combined $549 million in penalties against Wells Fargo and 10 other smaller or non-U.S. firms.

The Securities and Exchange Commission disclosed charges and $289 million in fines against 11 firms for “widespread and longstanding failures” in record-keeping, while the Commodity Futures Trading Commission also said it fined four banks a total of $260 million for failing to maintain records required by the agency.

“It was regulators’ latest effort to stamp out the pervasive use of secure messaging apps like Signal, Meta’s WhatsApp or Apple’s iMessage by Wall Street employees and managers.

Starting in late 2021, the watchdogs secured settlements with bigger players including JPMorgan Chase, Goldman Sachs, Morgan Stanley and Citigroup.

Fines related to the issue total more than $2 billion, according to the SEC and CFTC,” reports CNBC. READ MORE

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8.9.23 - Cash Loses Another Battle

Gold last traded at $1,915 an ounce. Silver at $22.69 an ounce.

Cash Loses Another Battle -Daily Reckoning

The Secret War on your Cash rages on. These latest restrictions and infringements are bordering on Orwellian. The elimination of cash payments and transactions has incredibly far reaching consequences we would all be wise to consider.

by James Rickards

When I talk about the war on cash and a cashless society, some people think I’m exaggerating the threat or they don’t take it seriously.

But I’m not exaggerating the threat. It’s here, it’s growing and it’ll only get worse. Just look at a nation like Australia, a Western-style democracy similar in many ways to the U.S.

It provides a cautionary tale to Americans about where the war on cash is heading.

A few months ago, one of Australia’s four major banks announced that it was limiting cash withdrawals and deposits at several of its branches.

Over the past year, $1 billion in bank notes have been removed from circulation in Australia.

And according to a March bulletin from the Reserve Bank of Australia, the percentage of retail payments settled in cash fell from 70% in 2007 to 27% in 2019.

That number is even lower today, as COVID further eased the transition away from cash in 2020. Remember when they were telling us to avoid cash because it might be carrying the virus?

Well, as of last year, the percentage of Australian retail payments settled in cash fell to just 13%. How long will it be before cash payments are eliminated altogether? READ MORE

BRICS Reveals 23 Countries Have Applied to Join Economic Bloc – Power Shift to Dethrone U.S Dollar Soon- Crypto News Flash

The media has seemingly quieted down on the topic of BRICS but - make no mistake - its relevance is becoming greater by the day as more nations hop aboard.

by Bhushan Akolkar

BRICS South Africa, which is hosting the BRICS summit this year in 2023, has published a list of 23 countries willing to be part of this economic bloc. South Africa’s Minister of International Relations and Cooperation, Naledi Pandor, revealed about receiving new applications in a briefing on Monday, August 7.

The BRICS summit shall happen ahead of this month on August 22-24 in Johannesburg, South Africa. Pandor mentioned that during the summit, the BRICS nations’ leaders will receive a unique report about the principles for broadening the association and a list of countries interested in joining the economic group. these leaders would further discuss the expansion of the bloc. Pandor continued:

“It is the leaders who will make the final decision on this issue. We remember that South Africa was the first country to be admitted to the association after its creation. As the BRICS chairman, South Africa will negotiate at the summit on the expansion model and its principles and criteria. We are gradually moving towards a consensus on BRICS expansion and we hope that it will be reached at the summit.” READ MORE

Stock Market Crash Alert: The July Jobs Report Just Confirmed a Recession Is Coming - Investor Place

As the stock market continues to rally, experts believe the good times are going to end. I'm not sure anyone wants to see the market drop or even collapse, but the shaky fundamentals do more than suggest that one or the other may soon occur.

by Shrey Dua

Friday’s surprisingly cool jobs report has reignited fears of both a U.S. recession and a resulting stock market crash. Just how bad was the July jobs data?

Well, by most accounts, not too bad at all. Indeed, the U.S. economy added 187,000 jobs last month, below projections for 200,000. While this is a notable slowdown from June’s 200,000 added jobs, it still represents an unemployment rate of just 3.5%. That’s actually an improvement from June’s 3.6% recorded rate, which was also the estimated jobless level for July.

Average hourly earnings also managed to surpass expectations. Wages increased 0.4% from June to July, for 4.4% annual wage growth, once again ahead of consensus predictions.

“The labor market seems to be humming along rather well at this point in the business cycle. A 3.5% unemployment rate, you can’t complain about that,” said Satyam Panday, U.S. chief economist at S&P Global Ratings. “It’s a nice glide path down.”

Jobs were largely bolstered by hiring growth in the education and health sector, which added 100,000 jobs last month. This was followed by construction, which contributed 19,000 jobs to the mix. READ MORE

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8.8.23 - US Bank Shares Drop as Moody’s Cuts Ratings

Gold last traded at $1,924 an ounce. Silver at $22.76 an ounce.

EDITOR'S NOTE: More trouble for US banks as Moody's lowers ratings on several lenders and hints that more may be next. As with all movements within the financial markets, these downgrades don't just affect share prices. The Commercial Real Estate market - already on shaky ground due to delinquency rates - could see a steep plunge in values as more borrowers struggle to refinance their debts.

US Bank Shares Drop as Moody’s Cuts Ratings, Warns on Risks -Yahoo! Finance

by Hari Govind and Steve Dickson

franklin (Bloomberg) -- US bank stocks declined after Moody’s Investors Service lowered its ratings for 10 small and midsize lenders and said it may downgrade major firms including U.S. Bancorp, Bank of New York Mellon Corp., State Street Corp., and Truist Financial Corp.

Higher funding costs, potential regulatory capital weaknesses and rising risks tied to commercial real estate are among strains prompting the review, Moody’s said late Monday.

"Collectively, these three developments have lowered the credit profile of a number of US banks, though not all banks equally," the rating company said.

Shares declined for firms that had their ratings cut, including M&T Bank Corp., down 4.6%, and Webster Financial Corp., which lost 3.4%. Moody’s also adopted a "negative" outlook for 11 lenders, including PNC Financial Services Group, Capital One Financial Corp. and Citizens Financial Group Inc. Among those, PNC was down 4.6% and Capital One lost 3%.

Investors, rattled by the collapse of regional banks in California and New York this year, have been watching closely for signs of stress in the industry as rising interest rates force firms to pay more for deposits and bump up the cost of funding from alternative sources. At the same time, those higher rates are eroding the value of banks' assets and making it harder for commercial real estate borrowers to refinance their debts, potentially weakening lenders' balance sheets. READ MORE

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8.7.23 - Bank of America Insiders Sell $14M Of Stock

Gold last traded at $1,942 an ounce. Silver at $23.63 an ounce.

EDITOR'S NOTE: There has been no shortage of uncertainty when it comes to banks this year. This recent insider sell-off of Bank of America shares is certainly not helping to ease the concerns of investors. With a banking system that seems to be on the brink in new ways every day, should outside investors and depositors be looking to get out as well?

Bank of America Insiders Sell US$14m Of Stock, Possibly Signalling Caution -Yahoo! Finance

by Simply Wall St

bar chart In the last year, many Bank of America Corporation (NYSE:BAC) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Bank of America Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the President of Global Corporate & Investment Banking, Matthew Koder, for US$7.7m worth of shares, at about US$35.91 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$31.19. So it may not tell us anything about how insiders feel about the current share price.

In the last year Bank of America insiders didn't buy any company stock. READ MORE

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8.4.23 - Did the Fed Invent Inflation?

Gold last traded at $1,942 an ounce. Silver at $23.63 an ounce.

EDITOR'S NOTE: It's been said that the official inflation numbers are always manipulated to paint a rosier economic picture. Add a little of this, subtract a little of that and - Voila! - a number everyone can tolerate. But if you look at the inflation data over 100+ years, total inflation under the Fed is 3000%! Is it any wonder people don't believe the Fed is doing us any favors?

The Fed Hits 3,000 Percent Inflation - American Institute for Economic Research

by Thomas L Hogan

inflation The US economy was pushed to extremes during the pandemic recession and subsequent recovery. The unemployment rate peaked at 14.7 percent, the highest in the post-World War II period. Inflation reached its highest rate in 40 years, prompting the Fed to raise short-term interest rates to their highest levels since 2007.

As of June, the economy hit another dubious milestone: Inflation has now reached 3,000 percent under the Federal Reserve.

Inflation under the Fed

The Federal Reserve Act was passed by Congress in December of 1913, and the regional Federal Reserve banks opened for business in November of 1914. Comparing the price level at the end of 1914 to the level today tells us how much total price inflation the US economy has experienced under the Fed.

The consumer price index (CPI) is the most widely used and longest-running measure of the US price level, but there are disagreements about the accuracy of historical CPI. MeasuringWorth aggregates macroeconomic data such as interest rates, economic production, and the price-level from the most reliable historical sources.

Historical CPI data from MeasuringWorth show that the US price level rose by 2,920.2 percent from 1914 through 2022.

While the MeasuringWorth dataset provides only annual data, we can add monthly data for the current year from the official CPI data from the Bureau of Labor Statistics (BLS). According to BLS data, the CPI rose by 2.74 percent (not seasonally adjusted) in the first half of 2023.

That brings total inflation under the Fed to 3,000.2 percent. READ MORE

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8.3.23 - Inflation worries resurface

Gold last traded at $1,934 an ounce. Silver at $23.59 an ounce.

EDITOR'S NOTE: For weeks now, the media has touted that inflation is under control; if not a distant memory. Traders sure seem to think otherwise however, and they believe it won't be improving any time soon. The proof is in the bond yields.

Inflation worries resurface as long-term U.S. bond yields start to come unglued - MarketWatch

By Vivien Lou Chen

the end Inflation worries are back in some corners of the financial market, judging by soaring long-term Treasury yields that point to worries about higher-for-longer future price gains.

Yields on 10- BX:TMUBMUSD10Y and 30-year Treasury yields BX:TMUBMUSD30Y finished at fresh 2023 highs on Thursday, fueled by an aggressive selloff of long-term government debt. After factoring in the highest rates on 10- and 30-year Treasury inflation-protected securities in more than a decade on Thursday, traders continued to envision a scenario in which U.S. inflation remains above 2% for the long term.

A number of factors may be at play, chief of which is the continued strength of the U.S. economy and labor market.

Economists pointed to Wednesday’s better-than-expected private-sector employment report, which showed the U.S. added 324,000 jobs in July, and said expectations for Friday’s monthly jobs report were being revised upward even though the private-sector reading doesn’t always act as a reliable predictor. Before Wednesday’s data, economists polled by The Wall Street Journal expected July’s nonfarm payrolls report to show a gain of 200,000, little changed from the 209,000 increase seen in June.

The robust data comes at a time when the U.S. fiscal outlook is in focus following the Treasury’s plans to borrow $1 trillion in the third quarter and Fitch Ratings’ downgrade of the U.S. government’s debt rating. READ MORE

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8.2.23 - Banks Are Now Closing Thousands of Accounts Daily

Gold last traded at $1,935 an ounce. Silver at $23.71 an ounce.

Banking turmoil arrives in small-town USA with Heartland Tri-State failure -Yahoo! Finance

Another bank has been shuttered. The state banking commissioner claims this was an isolated incident and had nothing to do with the other bank failures from earlier this year. Even if this is true, why are US banks in such a precarious position that any little thing can result in their demise?

by David Hollerith - Senior Reporter

Bank turmoil arrived in small-town America on Friday night when a tiny four-branch bank in Kansas failed, becoming the fourth lender to be seized by regulators this year and the fifth to fold altogether.

According to the Kansas State Banking Commissioner David Herndon, the event "had nothing to do" with the year's earlier regional bank failures.

The Heartland Tri-State Bank, of Elkhart, Kan., is the smallest to go under in 2023 by far. It had $139 million in assets when it went down Friday, according to the Federal Deposit Insurance Corporation.

The other banks that failed thus far this year all had assets of more than $100 billion, including Silicon Valley Bank and Signature Bank.

The biggest was First Republic, which had $229 billion when it was seized by regulators in May, becoming the second-largest bank failure in US history.

The failures of Silicon Valley Bank and Signature Bank in March were the third- and fourth-biggest ever. Silvergate agreed in March to shut itself down voluntarily. READ MORE

Banks Are Now Closing Thousands of Accounts Daily -Frank Nez

There is definitely an uptick in suspicious behavior in banking; but it's coming from the banks, not the depositors. Now over a thousand accounts are being closed a day, often with zero explanation. Is this the beginning of the country's biggest banking powers determining who they deem socially worthy of having access to their own money?

by Frank Nez

BofA Banks are now closing thousands of customer accounts daily with reports only growing in the last year.

“The figures, obtained through a freedom of information (FoI) request made to City watchdog the Financial Conduct Authority and first reported in the Mail on Sunday, revealed that in 2016-17, just over 45,000 accounts were shut by banks.

The total has increased every year since, climbing to just over 343,000 accounts in 2021-22 – representing well over 1,000 for every business day of the week,” says The Guardian.

When people or organizations have their bank accounts closed, they often receive little or no explanation as to why this has happened, though the banks sometimes say it is due to concerns over financial crime such as money laundering and fraud, says The Guardian’s Betsy Reed. READ MORE

9 Reasons Why Gold Will Soon Replace Treasuries as the Ultimate Store-of-Value Asset - Doug Casey's International Man

US Treasuries have always been viewed as one of the safest investments and stores of value available. According to some, that may be about to change. Here are nine reasons why.

by Nick Giambruno

In the age of fiat currency, the distinct concepts of saving and investing have become conflated and confused.

Saving is producing more than you consume and then setting it the difference aside.

Investing is allocating capital to a productive business to create more wealth. Investing has more risk—and potential reward—than saving.

Today, however, what most people think of as saving is actually investing.

That’s because most people take the excess of their production over consumption and put it into the stock or bond market.

Most people understand that it’s not optimal to simply hold fiat currency, which the central banks continuously debase. So they put their money into other assets, primarily bonds and stocks.

In other words, fiat currency and inflation have ruined saving for most people. It has forced them further down the risk curve into stocks, bonds, and other investments in a struggle to maintain their purchasing power.

However, there is no guarantee those investments will even keep up with inflation. But suppose they do. They will then be subject to a capital gains tax, even if it’s only a nominal gain, not a real one. READ MORE

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8.1.23 - The $52 trillion case to buy gold

Gold last traded at $1,950 an ounce. Silver at $24.39 an ounce.

EDITOR'S NOTE: Despite all the rosy media reports, there is no avoiding the foundational cracks in the US and the global economy. Gold has been a stable hedge throughout history; offering diversification, growth and stability - and it will continue to do so as other asset classes falter.

The $52 trillion case to buy gold and SPDR Gold Trust ETF(GLD) - Invezz

By Crispus Nyaga

national debt Gold price has moved sideways in the past few days as investors assess the impact of last week’s Federal Reserve decision and the falling US consumer inflation. The precious metal was trading at $1,957 on Monday, ~6% below the highest level this year. Similarly, the SPDR Gold Trust ETF (GLD) is hovering below its all-time high.

Gold is the most precious metal in the world. It is held by many developed and emerging market central banks like the United States, UK, Turkey, and China. Unlike other metals like copper, iron ore, and lithium, gold does not have a major industrial purpose.

Instead, gold is seen as both a currency or an insurance against risks. It is also seen as an alternative to the US dollar and a hedge against inflation. And in this regard, gold has outperformed the dollar. While gold price has jumped by 60% in the past five years, the dollar index has risen by less than 10%.

The most bullish case for gold is the soaring US public debt. Data compiled by the Peterson Institute shows that America’s public debt stands at $32.6 trillion, which is equivalent to $97.6 per person.

Debt has been in a strong upward trend over the years. Data compiled by the Federal Reserve shows that the US had $5.5 trillion in 2000 and $3 trillion in 2000. Sadly, the debt has regained momentum recently and the situation will only get worse. READ MORE

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