Gold has crashed through another key resistance level and is on track for its fourth consecutive weekly gain. What is driving gold into the spotlight? Host Mike Maharrey talks about it in this week’s episode of the Friday Gold Wrap podcast. He also raises an important question – what is all this going to look like when the recession really takes hold?
During the 2019 Las Vegas MoneyShow, Peter Schiff participated in an investing panel with Alexis Christoforous, Keith Fitz Gerald, Mark Skousen. The four discussed “where to invest.”
When you boil it all down, it was Peter taking on the conventional wisdom.
There were some pretty lively exchanges with Peter driving home the point that the Federal Reserve has hopelessly distorted the economy and the next crash is on the horizon.
Last week we highlighted the rising level of auto loan delinquencies and the growing number of student loan borrowers who can’t make their payments. This week, we got some more bad news for lenders. Subprime credit card charge-offs remain at levels reminiscent of the Great Recession.
In the first quarter of this year, credit card charge-off rates at all but the largest 100 banks remained above 7% for the sixth quarter in a row. During the peak of the recession, the charge-off rate at these banks was above 7% for just four quarters, and not consecutively.
Consumer confidence was much stronger than expected in the latest report that came out Friday. Consumer sentiment jumped to 102.4, well above the 97.5 that was forecast. This was a 15-year high in this University of Michigan index.
In his podcast Friday, Peter Schiff said he thinks the reason consumers are so optimistic is the constant positive rhetoric they are bombarded with. They are constantly told that the economy is booming. But in reality, they are falling for a big con-job.
China sold off the highest level of US Treasurys in nearly 2-1/2 years in March. Meanwhile, there are renewed fears the Chinese could implement its “nuclear options” and sell off even more US debt in retaliation for US trade war tariffs.
China sold $10.45 billion in Treasuries in March. That was the biggest US debt dump by China since October 2016.
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 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.
While President Trump nags the Federal Reserve to reinstitute Obama-era monetary stimulus, China has already taken off down that path. And it actually has some people in the mainstream concerned.
According to a Reuters report, the Organisation for Economic Cooperation and Development (OECD) is warning that while Chinese government stimulus may boost the country’s economy in the short-run, it “may undermine the country’s drive to control debt and worsen structural distortions over the medium term.”
Last week we reported that the yield curve on US Treasurys had inverted after the yield on the 10-year fell below the yield on 3-year bonds for the first time since 2007 – the cusp of the Great Recession. This has historically been an early-warning sign signaling a recession.
Now we have some more bad news for bond markets – this time on a global scale. The amount of government debt with negative yields has vaulted back above the $10 trillion mark and now makes up a full one-fifth of the global bond market.