As regular readers of Fun on Friday know, I’m not a big fan of masks. They are uncomfortable. They are inconvenient. And they are incredibly ugly.
But my opinion notwithstanding, it doesn’t look like masking is going away anytime soon, so we have to find ways to cope with it. A couple of weeks ago, I explained how I was having a little fun with the mask requirements here in Nassau County, Florida.
Well, in Turkey, they have actually found a way to address the ugly issue.
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.
The federal budget deficit for July was only $63 billion, according to the latest Monthly Treasury Statement issued by the Treasury Department.
Of course, $63 billion is a huge budget shortfall. I say “only $63 billion” simply because it pales in comparison to the $864.1 billion deficit in June. In reality, the July deficit continues the trend of unprecedented borrowing and spending we’ve seen throughout the year.
Gold and silver had an abysmal day on Tuesday (Aug. 11). The price of gold dropped more than 5%, falling far below the $2,000 level. It was the worst single-day rout in seven years. Things stabilized somewhat on Wednesday with apparent support above $1,900, but the big selloff fueled speculation that the gold bull run could be over.
Here are three questions you should ask yourself before declaring the gold bull dead.
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.
Gold and silver got pummeled on Tuesday. The price of gold dropped more than 5%, falling far below the $2,000 level. It was the worst single-day rout in seven years. Gold continued to fall in Asian trading Wednesday morning and briefly dropped below $1,900 before clawing back later in the session. Silver also had a precipitous fall, diving some 13%.
Peter Schiff talked about the sell-off during his podcast. He said we shouldn’t lose sight of the fundamentals and they’re still bullish for gold. The Fed isn’t about to stop printing money and inflation is going to win.
If you want to end unconstitutional, overreaching federal power – end the Fed. It’s the engine that drives the most powerful government in the history of the world.
But Congress will never abolish the central bank. It can’t even come up with the will to audit the Fed.
So what can we do?
There are actually actions that states can take.
Central banks added another net 18.1 tons of gold to their reserves in June, according to the latest data from the World Gold Council. The net total was pulled down by a significant sell-off by Columbia’s central bank.
ETFs globally added another 166 tons of gold in July. It was the eighth straight month of inflows of metal into gold-backed funds. That pushed total ETF gold holdings to another record high of 3,785 tons, according to the latest data from the World Gold Council.
With gold hitting an all-time record high at the end of the month, global assets under management stood at $239 billion at the close of July.