After rising early in the week on the Fed’s promise of more inflation, gold and silver dipped a bit late in the week with some positive economic data bolstering hopes of a quick economic recovery. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey reiterates that what’s going on isn’t fundamentally about the coronavirus. He takes a deep dive into the Fed’s new inflation policy and makes the case that this was all in play long before the pandemic.
According to CBO projections, the federal budget deficit will come in at $3.3 trillion for fiscal 2020. That’s more than triple the budget shortfall last year and more than double the previous deficit record set at the onset of the Great Recession.
Researchers have developed a titanium bone implant incorporating silver nanoparticles that will help lower infection rates.
This is one of many new technological innovations and developments using silver reported in the most recent issue of the Silver Institute’s Silver News.
Last week, the Federal Reserve announced a change in the way it will target inflation going forward. In other words, the central bank moved the inflation goalposts. In effect, the new policy will allow the Fed to let inflation run hotter.
As Peter Schiff explained in his podcast, the move was expected and necessary.
Adrian Day did an interview with Kitco News and said gold will finish the year over $2,000 an ounce and investors shouldn’t worry about short-term profit-taking and consolidation. Why? Because the Federal Reserve is out of control.
Day is the CEO of Adrian Day Asset Management and also works with Peter Schiff as the portfolio manager of EuroPacific’s gold fund.
The S&P 500 charted its best August since 1986. Both the Nasdaq and the S&P 500 made new highs last month. Peter talked about the surging stock market in his podcast, saying that it is the biggest bubble ever. And despite what people seem to think, there will be consequences.
Peter Schiff has been warning about a dollar collapse for years. Now we’re starting to see some mainstream bearishness on the greenback.
The dollar hit a more than 2-year low on Monday and closed out August with its fourth straight monthly loss. It was the worst August in five years for the dollar and the longest run of monthly losses since the summer of 2017. The dollar is down about 11% from its 2020 peak.
Silver wrapped up a strong August pushing above the key resistance level of $28 an ounce on Monday.
While gold charted a slight dip of about 0.4% last month, silver was up just over 18%. On Tuesday morning (Sept. 1) the white metal was knocking on the door of $29 an ounce.
Which countries have the biggest gold reserves?
Central banks globally have been increasing gold holdings over the last few years. Central bank demand came in at 650.3 tons last year. That was the second-highest level of annual purchases for 50 years, just slightly below the 2018 net purchases of 656.2 tons. According to the World Gold Council, 2018 marked the highest level of annual net central bank gold purchases since the suspension of dollar convertibility into gold in 1971, and the second-highest annual total on record.
The Fed has moved the inflation goalposts.
The central bank will no longer focus on keeping a lid on inflation. In his podcast, Peter Schiff said this policy will simply speed up the destruction of the dollar and the economy.
Jerome Powell announced the new policy during his speech in Jackson Hole last Thursday. In the past, the central bank has targeted a 2% inflation rate as measured by CPI. Now it will shift to “average inflation targeting.” In effect, the Fed will allow the CPI to run “moderately” over 2% “for some time” to balance out periods where it runs under that level.
