Despite a lackluster June, the price of gold rose 5.4% through the first six months of 2023 and was the second-best performing asset class behind only developed market stocks.
Most people believe members of the Federal Reserve are highly trained experts who are imminently qualified to run monetary policy. Guided by this perception, the mainstream treats Fed pronouncements as gospel. But if you compare Fed projections to actual outcomes, it looks like they’re just guessing. In fact, you would probably get more accurate results throwing darts at a dartboard.
A month ago, the fake debt ceiling fight ended and Congress suspended the federal government’s borrowing limit for two years. Since the debt ceiling deal, the US Treasury has added a staggering $851 billion to the national debt.
Today we celebrate insurrection.
No. I don’t mean the fake Jan. 6, 2021, “insurrection.” I’m talking about the bonafide insurrection staged by American colonists against the British government.
We call July 4 “Independence Day.” But the British called it an act of rebellion.
A note recently published by two Federal Reserve economists reveals a looming catastrophe.
The Fed’s interest rate hikes have already precipitated a financial crisis. The central bank managed to paper over that problem and get it out of the headlines with a bailout program. But it didn’t solve the problems. Banks continue to tap into the bailout loans as they struggle in this high-interest-rate environment.
And there are even bigger problems on the horizon.
A lot of the economic data this month looks strong. But when you dig a little deeper, you find that this “strength” is an illusion.
Following is a breakdown of several of these data points with some help from our friends at Passant Gardant.
Silver demand set a record in every category in 2022 and is expected to continue growing. Meanwhile, silver production flatlined. Record global silver demand and a lack of supply upside contributed to a 237.7 million ounce market deficit in 2022.
The trends indicate that this deficit will expand in the next several years as demand continues to surge as supply begins to shrink, and there are some concerning trends indicating supply may contract rapidly in the coming years.
Since the end of the fake debt ceiling fight on June 2, the Treasury has borrowed an additional $700 billion pushing the national debt over $32 trillion. Looking at the interest rates on this new debt, it becomes clear that the US government has a big problem.
There has been a steady migration of gold from West to East over the last three decades.
When the World Gold Council published its first Gold Demand Trends report 30 years ago, Asian demand made up 45% of the world’s total. Today, the Asian share of global gold demand is approaching 60%.
The national debt recently blew past $32 trillion.
As we approach America’s birthday on July 4, it might be a good time to consider what the founding fathers would have thought about this massive indebtedness.
