The Russian Finance Ministry has given the green light for the Russian National Wealth fund to diversify and invest in gold and other precious metals. According to a report by RT, this is part of a broader move to de-dollarize the wealth fund.
Jerome Powell and Janet Yellen testified jointly before the US Senate last week. Inflation was a big topic of conversation. The Fed chair continued to insist that the central bank can fight inflation if necessary, but that it really isn’t a problem we need to worry about right now. In his podcast, Peter Schiff said the truth is inflation is a problem. And when it comes to dealing with that problem, the Fed is in a box. It will never pick a fight that it can’t win.
I have to admit, I have some level of respect for gold smugglers. They are some creative people. And gutsy. And willing to endure a little pain. Not to mention the fact that a lot of them are just trying to avoid taxes. I can understand this desire.
Every time the economy gets into trouble, governments and central banks react the same way. They slash interest rates and loosen monetary policy. This gooses the economy — temporarily. But when the next crisis comes, it takes an even bigger dose of extraordinary monetary policy to revive the economy. The Fed has pushed things into the future several times, but as Friday Gold Wrap host Mike Maharrey explains, at some point you’ve got to pay the piper. In this episode, he also discusses the bond market and the latest Fed talk.
The bounceback in the Indian gold market continued last month.
Indian gold imports hit a 21-month high in February and there was robust retail demand.
This comes on the heels of a 72% year-on-year increase in gold imports in January.
Despite the “improving economy,” subprime mortgage delinquencies remain at record high levels. And the full extent of the problem is masked by forbearance programs.
The delinquency rate on FHA mortgages spiked to 17.5% in February. That was up from 17.0% in January and equals the all-time record set in September and November of 2020, according to AEI’s Housing Center.
Every time the economy gets into trouble, governments and central banks react the same way – they cut interest rates and loosen monetary policy to stimulate borrowing and spending. The idea is that the “stimulus” will increase demand and pull the economy out of trouble. But there is a dark side to this policy – debt. And debt is slowly poisoning the economy.
The latest Biden/Democrat stimulus bill is just the beginning. There is more government spending coming down the pike. That means more money printing. But Paul Krugman says not to worry. It didn’t cause a big jump in CPI last time and it won’t this time either. Peter Schiff talked about it in his podcast. He said when Krugman talks – nobody should listen.
On March 1, the national debt eclipsed $28 trillion. The mainstream media hardly gave it a mention. To put the speed of the borrowing into perspective, the US government added $5 trillion to the debt in less than 18 months.
The Federal Reserve was already intervening in the economy prior to the pandemic. Remember, the central bank cut rates three times in 2019 and relaunched quantitative easing that year as well, although it refused to call it QE. Loose monetary policy is the fuel that runs the US bubble economy.
Congress recently passed coronavirus stimulus 3.0, adding another $1.9 trillion in federal spending to the already massive fiscal 2021 budget deficit. That brings total spending related to COVID-19 to somewhere in the neighborhood of $5 trillion.
Meanwhile, the national debt has skyrocketed past $28 trillion. The US government has added $5 trillion to the debt in less than 18 months.
It might be tempting to blame all of this spending and the bloated government that comes with it on the coronavirus, but the trajectory of borrowing and spending was heading skyward even before the pandemic. In fact, the US government has been growing in size and scope for over 40 years, even as progressives bemoaned it as an era of government atrophy.
