Expectations that the Fed will continue and perhaps even quicken the pace of interest rates hikes have created headwinds for gold. But there another side to the rising interest rate phenomenon that a lot of people in the mainstream seem to be missing. According to a recent Bloomberg report, the prospect of a higher interest rate environment is feeding signs of financial stress among debt-laden consumers.
This doesn’t bode well for the US economy and could spur safe-haven demand for gold.
Americans are spending money, but it appears they are dipping into their savings to do it.
According to data released by the US Bureau of Economic Analysis, savings last month fell to a level not seen since 2007. The 3.1% rate in September was the lowest since it dipped to 3.0% in December 2007.
In his most recent podcast, Peter Schiff reminded us of what was going on in late 2007.
