Last month we reported that mortgage delinquencies soared at a record pace in April. Well, things have gotten even worse since.
The overall delinquency rate for mortgages on one-to-four-unit residential properties spiked by nearly 4% in Q2, reaching 8.22% by June 30, according to the Mortgage Bankers Association’s National Delinquency Survey. The jump in the delinquency rate was the biggest quarterly rise in the history of the survey.
In yet another sign that the economy isn’t poised for a quick bounceback even if researchers produce an effective COVID-19 vaccine, many companies are considering permanently laying off furloughed workers and taking other steps to make cost-cutting measures permanent.
Gold rallied back above $2,000 on Tuesday (Aug. 18) driven in part by Warren Buffett’s sudden interest in the yellow metal.
Peter Schiff talked about gold’s rally and the weakness of the dollar on his podcast and focused on the lack of financial media coverage of Buffett’s purchase of Barrick Gold. Of course, they mentioned it, but they didn’t really delve into the significant questions raised by Berkshire Hathaway’s move into gold mining stocks. In effect, Buffett sold banks and bought Barrick Gold.
He basically reduced his bets on banks and made a brand new bet on gold, which is, in effect, a bet against the US, against the dollar, pro-gold.”
From time to time, you will hear people inexplicably say, “Gold is just a useless metal.” They claim that gold’s value is simply “a matter of faith.”
This is sheer nonsense. In fact, gold is one of the most useful metals on the planet and would probably have even more practical applications if it wasn’t so rare and expensive. The truth is gold did not become money because it wasn’t useful for anything else. Its role as money actually evolved because it is so valuable and has so many uses.
Here are 10 uses for gold beyond its function as money and a store of wealth.
What is inflation?
When analysts, politicians and pundits talk about inflation, they usually mean rising consumer prices as measured by the consumer price index (CPI). Peter Schiff and Jim Rickards debated this on Kitko news. Rickards also used this definition, insisting there is no inflation right now. Peter said, “Of course there is. The Fed is inflating like crazy.”
The ensuing debate led Peter to address the issue of inflation on his podcast. Peter called the modern mainstream definition of inflation a “false” definition.
Warren Buffet has bought into gold.
Gold mining to be specific. Peter Schiff talked about what Buffett is telling us in his podcast.
According to the latest 13F filing by Berkshire Hathaway, the company now has positions in Barrick Gold to the tune of over $500 million. This was as of the end of June. Peter said he suspects Berkshire Hathaway has a lot more shares now.
It was a tough week in the precious metals markets. On Tuesday, gold dropped well over 5% and silver plunged more than 13%. It was the worst single-day rout for gold in seven years. That led some to declare the gold bull dead. But SchiffGold Friday Gold Wrap podcast host Mike Maharrey doesn’t see it that way. In this episode, he breaks down the reasons for the selloff and explains why there is no need to panic if you’re keeping your eyes on the fundamentals.
The Federal Reserve responded to the economic havoc caused by government coronavirus shutdowns by launching QE infinity. It’s money printing to infinity and beyond. The mainstream almost universally believes that this is “necessary,” but we have argued that the “solution” is really the root of the problem.
Economist Bryce McBride provides a perfect analogy for what the Fed is doing and explained exactly why throwing printed money at the problem won’t make it go away.
Gold and silver sold off when Russia announced that it had an effective vaccine for coronavirus. This plays into the myth that a cure for COVID-19 will cure the economy. But there is plenty of evidence suggesting the damage to the economy is deep and will likely have long-lasting impacts even when the pandemic is in the rearview mirror.
We’ve reported on a number of these signs. Permanent business closures are rising. Americans owe billions in back rent. There is an increasing number of mortgage delinquencies. There is a rising number of over-leveraged zombie companies. And a tsunami of defaults and bankruptcies are on the horizon.
In fact, bankruptcies are already on track for a 10-year high.