In a move “Bond King” Jeffrey Gundlach said could be a prelude to the next round of quantitative easing, the New York Fed conducted a repurchase operation involving about $53 billion in debt instruments on Tuesday. The move to designed to unplug the financial system’s “plumbing” with an injection of cash was the first such move since the financial crisis a decade ago.
The purchases involved about $40.8 billion of Treasurys, $11.7 billion in mortgage-backed securities and $600 million in agency debt, according to a CNBC report. The move was prompted by the recent surge in interest rates that drove the overnight repo rate Monday to as high as 8.5%.
The New York Fed was expected to repeat the operation on Wednesday.
Americans continue to drive the economy along spending money they don’t have. Consumer debt increased yet again in July, setting another record, according to the latest data released by the Federal Reserve.
Total consumer debt surged $23.4 billion in July, driven by a huge jump in credit card balances. The big rise in consumer indebtedness took analysts by surprise. Bloomberg said the increase “exceeded all estimates” in a survey of economists. Overall, consumer debt increased by an annual rate of 6.8% after a 4% increase the previous month.
The federal government continues to spend money at an insane rate and is running up budget deficits reminiscent of the Great Recession era.
With one month left to go, the federal budget deficit for fiscal year 2019 eclipsed $1 trillion in August, according to Treasury Department data released last Thursday.
Corporations are piling on the debt.
Last week, companies borrowed $74 billion in the US investment-grade bond market. It was the largest corporate debt increase for any comparable period since they started tracking such things in 1972.
The silver market in India has enjoyed massive growth over the last several years. Demand for the white metal has increased from around 3,000 to 6,000
tons over the last five years, according to Chirag Thakkar, CEO of the Indian bullion company Amrapali Gujarat.
The Silver Institute interviewed Thakkar for the latest edition of Silver News.
China added another 5.91 tons of gold to its reserves in August, bringing its total official gold purchases on the year to almost 100 tons, according to data released by the People’s Bank of China over the weekend.
It was the ninth straight month of gold purchases for China as it continues efforts to diversify reserves away from the US dollar.
Gold-backed ETFs added another 122 tons of gold globally in August and total holdings are nearing all-time highs.
Total ETF gold holdings have reached 2, 733 tons. That’s just 52 tons away from the all-time high reached in 2012 when the price of gold was 9% higher, according to the most recent data released by the World Gold Council.
Central banks continue to gobble up gold. Globally, the world’s central banks added another net 13.9 tons of gold to their reserves in July.
While this was the lowest net increase in global central bank reserves since August 2017, the number was skewed downward by a significant gold sell-off by Uzbekistan. Gross purchases by the world’s central banks came in at 36.4 tons, according to the latest data released by the World Gold Council.