Valentine’s Day is here and you might find yourself buying (or wishing you had remembered to buy) a Valentine’s Day present. A classic romantic present involves gold, diamonds, and sometimes both. And both diamonds and gold seem at first blush to have a lot in common.
Citizens of Georgia, Kentucky, Wisconsin, and Kansas may soon enjoy lower taxes on precious metals if recently introduced pro-metal bills are made law in 2024.
A Major Trend Change
In 2023, the Treasury added $2.6T to the national debt. While that number alone should be enough to scare anyone, the details reveal something even more concerning. $2T of it, or 77%, was financed entirely with short-term Treasury Bills maturing in less than a year. The chart below shows the debt issuance trend over the last 20 years. As shown, the Treasury typically relies on medium-term debt (2-10 Year Notes) to fund the budget deficit. 2023 was a massive change in standard procedure as shown by the giant light blue bar on the right of the chart.
Proverbs 22:7, ‘The borrower is servant to the lender,’ has resonated in the background of my financial upbringing.
Akin to other proverbs and parables (Proverbs 1:6), there’s much more beneath the surface worth pondering.
As the conflict continues to accelerate in Gaza and beyond, 2024 is set for a somewhat terrifying boom in global uncertainty — and will take gold prices with it.
In the realm of institutional asset management, the copper/gold ratio (blue line) has served as a key indicator for some, providing insights into the potential trajectory of 10-year Treasury yields (red line).
In the last few decades, there has been a global shift towards a “cashless world,” a trend that continues to shape financial autonomy. Physical currency is becoming increasingly rare as the majority of the world’s money supply exists in electronic form. Governments and financial institutions are actively promoting a cashless society, raising concerns about individual financial freedom.
With consumer debt reaching record levels, the Federal Reserve contemplating rate cuts in 2024, and post-Covid inflation still yet to reach its peak, a storm is indeed brewing.
When a country starts to develop economically, a few things tend to happen: the death rate falls, workers become more productive, consumers consume more, and birth rates normally fall. During this period, countries experiencing such changes have a relatively small number of retirees and a small share of the population composed of children.
The first half of 2023 was a record-breaking moment for central bank gold buying, led by none other than China and Russia. Organizations like the World Gold Council reported a staggering increase compared to 2022:
