Some people have all the luck.
Not me. Well, not good luck. I tell people all the time I could never gamble because I would be broke within weeks. I’m the guy that can jinx the best sports team simply by cheering for them.
The markets have been up and down this week, riding the trade war roller coaster. And analysts can’t seem to decide if the data of the day is telling us that the economy is sound or slowing. But we do know one thing for sure – there is a lot of debt out there, and there are signs that it might be catching up with us. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey talks student loan and auto loan debt, and what it be telling us about the economy. He also covers some of the latest trade war news and the last batch of economic data.
Auto loan delinquencies have surged to the highest level since 2011 and are approaching levels seen at their peak during the Great Recession.
The percentage of outstanding auto loans in serious delinquency (90 days or more past due) jumped to 4.69% in the first quarter of 2019, according to the latest data from the New York Fed. At their peak during the recession, auto loan delinquencies hit 5.27%.
The following is a market update as it related to precious metals prepared by SchiffGold intern commodities analyst Jason Mezhibovsky.
Trade War
Although some pressures on US equities from the trade war have been eased, the S&P 500 is down about 3.8% since the end of April. Stocks rebounded Wednesday with the news that the US and China seem to to be making some progress with trade deal talks and that the US may delay some auto tariffs on the EU. The Dow was up 115 points and the S&P 500 picked up 16.55 points Wednesday. But stock markets still have not recouped all of their losses from the pressure faced these past two weeks.
The rate of delinquency on student loan debt pushed up to 9.5% in the first quarter of 2019, even as total student loan debt climbed to $1.49 trillion according to the latest debt data from the Federal Reserve Bank of New York.
Student loan debt ranks as the second-largest consumer debt category, trailing only mortgages.
Thanks to gold, you may see even sharper images on your smartphone, computer and television screens the future.
We’ve seen tremendous advances in high-resolution technology over the last decade or so. Modern smartphone displays pack millions of pixels in a few inches of space giving us crystal clear images. But researchers at Cambridge University have created even smaller pixels using gold nanoparticles.
This is another in a long list of technological innovations using gold that researchers have developed over the last several years.
We’ve seen growing support for a universal basic income or UBI. In a nutshell, the government would pay every citizen a set amount of money without any means testing or work requirement. Democratic Party presidential candidate Andrew Yang has made UBI a central issue in his campaign. Under his plan, every American over the age of 18 would get $1,000 per month, guaranteed. This sounds great, doesn’t it? Who doesn’t want free money? But the plan raises a few questions — like how would the government pay for it?
In this episode of It’s Your Dime, host Mike Maharrey talks with Antony Sammeroff, author of the book “Universal Basic Income: For and Against.” They discuss the pros and cons of UBI and delve into some of the economic ramifications.
Monday was another rough day on Wall Street as the ongoing trade war weighed on stocks. The Dow dropped 617 points and closed below Friday’s low. The NASDAQ was down 3.4% on the day. The Russell 2000 was also off by more than 3%.
In his podcast Monday evening, Peter Schiff said he thinks the bear market rally is over.
Long live the bear market. This bear market rally is dead. We are going a lot lower.”
Uber launched its IPO on Friday. It was less than ideal.
Meanwhile, the Federal Reserve is talking about how it wants to tweak its quantitative easing program when the next recession rolls around.
Peter Schiff talked about how these things relate — and the “writing on the wall” for the economy in his latest podcast.
Typically, a strong dollar is considered one of the greatest “enemies” of gold and precious metals prices. In fact, a relatively strong dollar has created headwinds for gold for months.
Another interesting commodity we can take a look at is oil. Historically, oil and the USD have a negatively correlated relationship, with oil being one of the most inflation-sensitive commodities out there. However, this wasn’t the case late in April. Oil surged to around $65/barrel (WTI). The price has eased a bit since, but it is still trading in the $62/barrell range.
