Despite back-to-back contractions in GDP, President Joe Biden, Fed Chair Jerome Powell, Treasury Secretary Janet Yellen and all of their supporters in the corporate media insist the US economy isn’t in a recession. But the only data they ever point to in order to back up their assertion is the “strong” labor market.
The problem with this spin is the labor market is a lagging indicator and it’s starting to show cracks.
Personal income from all sources adjusted for inflation — real income — fell for the second straight month in June and was down 1% on the year. But American consumers continue to spend. How can this be?
They’re running up debt at a dizzying pace.
This undercuts the narrative claiming the American consumer is “healthy.”
Yesterday, an Israeli law went into effect banning the use of cash in business transactions over 6,000 NIS ($1,700). Private cash transactions can’t exceed 15,000 NIS ($4,360). This is yet another escalation in the “war on cash.”
GDP fell 0.9% in the second quarter. This followed on the heels of a -1.6 GDP print in Q1. Back-to-back contractions in GDP have historically been defined as a recession, but the Biden administration and their apologists insist we aren’t in a recession. Peter Schiff appeared on the Megyn Kelly show to talk about the White House recession spin. He said this recession is just getting started.
Please note: the COT report was published 7/29/2022 for the period ending 7/26/2022. “Managed Money” and “Hedge Funds” are used interchangeably.
As discussed last month, overall net positioning is the smallest it has been since May 2019. Then, on July 12, Managed Money went short gold for the first time since April 2019.
Are those shorts about to get squeezed?
Gold demand through the first half of 2022 came in at 2,189 tons, up 12% over the first half of last year, according to the World Gold Council Gold Demand Trends Q2 report.
Congress passed a bill to prop up the US semiconductor industry last week and is now considering a new spending plan dubbed the “Inflation Reduction Act.” On his podcast, Peter Schiff talked about the Democrats’ legislative agenda and concluded that the “Inflation Reduction Act” will do the exact opposite.
Delivery volume in the July gold contract got off to the weakest start in years, but then had a major mid-month rally, turning it into one of the strongest minor months in recent history. Over the last 15 months, it only trailed the blow-out month of March. Momentum has continued in the August contract.
This week, the Federal Reserve raised interest rates another 75 basis points despite a second straight quarter of negative GDP growth. Meanwhile, Congress is debating a big government spending bill to “reduce inflation.” In this week’s Friday Gold Wrap podcast, host Mike Maharrey tries to unspin all of the spin and government propaganda to make some sense of what’s going on.
Another month in and the Fed is still struggling to implement Quantitative Tightening (QT). According to the plan the Fed outlined last May, the central bank should be shrinking the balance sheet by at least $47.5B a month, spread between $30B in Treasuries and $17.5B in MBS.
That’s not happening.
