Great news on the inflation front!
At least if you believe the headlines.
For example, “Consumer Prices in April Rise at the Slowest Annual Rate in Two Years.”
But if you read about one inch below the headline, you’ll discover things aren’t so great. In fact, the actual data reveals price inflation is looking pretty sticky.
After pulling back slightly in February, Americans went back to borrowing on credit cards in March — despite record-high interest rates. This indicates that consumers continue to struggle to make ends meet in this deteriorating economy. It also reveals that the Fed’s monetary tightening is not cooling spending as promised.
After a record-setting 2022, central banks continued to buy gold in the first quarter of 2023, setting a new Q1 record.
Overall, global central bank gold reserves increased by 228 tons through the first three months of 2023. This was 38% higher than the previous first-quarter record set in 2013.
On May 2, a Texas House committee passed a bill to create 100% reserve gold and silver-backed transactional currencies. Enactment of this legislation would create an option for people to conduct business in sound money, set the stage to undermine the Federal Reserve’s monopoly on money, and possibly create a viable alternative to a central bank digital currency (CBDC).
Is the rate hike pause in play?
That question remains up for debate after the May Federal Reserve Open Market Committee meeting.
But when you break it all down, the underlying economic reality is far more important than the messaging coming from Powell and Company. And the underlying economic reality is that inflation isn’t beat and the economy is heading toward a cliff.
Treasury Secretary Janet Yellen keeps insisting that the banking system is “sound.” Is it though? Because it doesn’t look particularly sound.
In fact, we just witnessed the second-largest US bank failure ever.
The Conference Board Leading Economic Index (LEI) for the US fell by 1.2% in March. It was the 12th straight month of declines in the LEI.
Arkansas Gov. Sarah Huckabee Sanders has signed a bill into law making gold and silver legal tender in the state. The new law also effectively repeals the state capital gains tax on gold and silver. Enactment of this legislation will relieve some of the tax burden on investors, and take a step toward treating precious metal bullion as money instead of a commodity.
Today is tax day.
I’m not pleased.
I don’t know about you, but that means my bank account balance will be significantly smaller later this evening. I’m going to have to write a big check. But hey, this is the price I pay for a more civilized society.
After ending 2022 on an upward trend, China’s gold market continued to rebound during the first quarter of 2023.
Wholesale gold demand in China during Q1 hit the highest first-quarter level since 2019. Meanwhile, gold imports charted the strongest start to a year since 2015.