Despite hitting the debt ceiling, the US Treasury managed to add $35 billion in new debt during January.
The Treasury has employed extraordinary measures, including exchanging Non-Marketable (e.g., Government employee retirement funds) and other forms of debt for short-term Bills. The balance on Bills grew by $241 billion which was the largest single-month growth since at least January 2021.
The December Trade Deficit increased after a major drop in November. The total came in at $67B which was 10% greater than November’s $61B, but still well below the 6-month high from October of $77B. It is also below the $79B Trade Deficit from December 2021.
By all measures, the latest job report absolutely blasted past expectations with one of the biggest upside surprises in recent memory. The current month came in at 517,000 jobs created. But even that massive figure was beaten by the latest Household Survey which showed 894k jobs created in January.
Strange activity continues at the Comex!
Delivery volume for February was a little less than half the contracts open at first notice. 6,005 contracts were delivered with 7,370 remaining in open interest. This was a much larger relative delivery than December which saw less than a third of contracts delivered on the first day. Things seemed suspicious back in December, but this month had a potentially bigger red flag.
The Fed has a targeted balance sheet reduction of $95B a month. The Fed has failed to meet its target in 7 of the last 8 months with only an $81B reduction in January.
The Fed fell woefully short of meeting their $35B MBS target, seeing only $16.7B (less than 50% of the target). The Treasury target was met.
The price analysis last month titled Gold and Silver are Setting up for a Strong Advance in 2023 highlighted that both metals had shaken off the weakness and looked to be headed higher. It concluded by saying…
For the first time ever, the money supply contracted on an annual basis in 2022.
The seasonally adjusted Money Supply in December was negative for a fifth consecutive month, coming in at -$147B. This was the largest monthly contraction in M2 going back to 1959. This type of contraction typically does not happen!
Gold deliveries in January have reached 6,327 contracts with only 178 remaining in open interest. While this fell shy of the last five minor months, there are a few signs that are noteworthy.
First, the delivery volume was greater than last January. This is important because January is typically a slow month after the major December contract.
The flow of gold and silver out of Comex vaults has slowed in recent weeks, but there is no question that metal continues to move out.
This analysis focuses on gold and silver within the Comex/CME futures exchange. See the article What is the Comex? for more detail. The charts and tables below specifically analyze the physical stock/inventory data at the Comex to show the physical movement of metal into and out of Comex vaults.
The Federal Government ran a deficit of -$85B in December. While this was much smaller than the deficit posted in November, it marks one of the largest December deficits ever.
That pushed then 2022 calendar year deficit to over $1.4 trillion.
