The US Treasury realized a monthly surplus of $118.7 billion in January. It was the first budget surplus since September 2019 and the largest since it realized a $160 billion surplus in April of 2019.
The surplus was driven by high revenue from a continued surge in Individual Taxes. This was combined with shrinking expenditures due to the expiration of the child tax credits that ended on December 31. The surplus for the month also was helped by $70 billion in proceeds from a wireless spectrum auction.
The Federal Reserve still seems to be hoping that inflation will just go away on its own or that it can jawbone it down by projecting a few little rate hikes. But the Consumer Price Index data keeps dashing its hopes. In this episode of the Friday Gold Wrap, host Mike Maharrey talks about the January CPI and the Fed’s proposed “fight” against inflation. He also discusses the demand forecast for silver this year.
The latest seasonally adjusted inflation rate for January was 0.65% month over month, with a non-seasonally adjusted annual rate of 7.48%. Both of these numbers came in above expectations.
As hypothesized last month, it was very possible that Omicron temporarily restrained inflation in December and a rebound should be expected. It did not take long for the rebound to occur!
After a strong 2021, demand for silver is expected to hit a record high in 2022, according to the Silver Institute’s Global Demand Forecast.
The Silver Institute projects silver demand will hit a record 1.112 billion ounces this year with growth in most key areas. That would represent an 8% year-on-year increase.
Atlanta Fed President Raphael Bostic made an important admission during a CNBC interview. He confessed the Fed wasn’t really going all-in on the inflation fight. That raises a question: how is it going to tame the inflation monster? Peter Schiff talked about this admission during his podcast, along with a head-scratching article about the trade deficit in the Wall Street Journal.
Central banks globally added a net 14.2 tons of gold to their reserves in December, according to the latest data from the World Gold Council. Central bank gold buying was up 82% year-on-year.
Turkey was the biggest buyer in December, adding 10.1 tons of gold to its reserves. That boosted the country’s total gold holdings to 10.1 tons. Turkey was a big seller in the third quarter of last year, but appears to be replenishing its reserves.
American consumers ran up more debt in December, wrapping up a year in which consumer debt increase at the fastest pace in five years.
This could prove problematic for the Federal Reserve as it contemplates raising interest rates.
In December 2021, the US ran up a total trade deficit of -$80.7 billion, just a tick shy of the record -$80.8 billion set in September. The Goods Deficit increased by 3.2% to come in at -$101.4B, eclipsing the -$100B mark for the first time ever.
This capped off a year in which the trade deficit shattered the record set back in 2006.
Global ETF gold holdings started off 2022 with a healthy increase.
Global gold ETFs recorded net inflows of 46.3 tons last month as gold investment demand returned with decades-high inflation and heightened market volatility. Total ETF gold holdings globally ended January at 3,615.6 tons, according to the latest data from the World Gold Council.
The January jobs report came in much stronger than expected. According to the labor department, the US economy added 467,000 jobs last month. This was significantly better than the 150,000 job projection. But there was some bad inflation news buried in the Labor Department data.
