Consumers aren’t the only ones defaulting on their debts: Corporate bond defaults were up massively in 2023, especially for high-risk junk debt, and the trend is continuing this year at a pace not seen since the 2008 global financial crisis. Unsurprisingly, companies selling low-rated junk debt are being hit the worst.
In this episode, Peter reacts to a hotter-than-expected CPI report, big trades in Bitcoin, and the federal bill that would ban the popular social media app TikTok. He also notes silver’s historically low price, which is nearly 50% of its 2011 high.
JD and Joel discuss the new all-time highs in gold, Peter’s recent podcast, the Fed’s next move, and why silver has become an especially good deal.
The following analysis breaks down the Fed balance sheet in detail. It shows different parts of the balance sheet and how those amounts have changed. It also shows historical interest rate trends. The analysis concludes that the resulting lack of Treasury demand is likely another reason Yellen is betting $2T on lower interest rates… she has to focus on the short-term of the curve to make sure the market can absorb the debt!
JD and Joel discuss Peter’s take on the recent bitcoin craze driven by ETF demand. Is there a limit to Bitcoin’s upside? Plus, what’s driving higher gold prices this week?
This week Peter covers the highlights of a volatile trading week, paying special attention to Nvidia, Wall Street’s favorite AI stock, and Newmont Corporation, a heavy hitter in the gold mining industry. Both companies’ shares experienced dramatic price action this week, with NVDA gaining $260 billion in market cap and pulling the market up after an excellent earnings report. Newmont, on the other hand, saw shares fall 7% after a disappointing last quarter.
In this week’s Friday Gold Wrap Podcast, JD and Joel discuss why gold is down today, why the Fed could replay 2008, and other market and precious metals news.
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.
The president touted a manufacturing renaissance. However, economic indices show US manufacturing entering a Dark Age. Home sales are not looking bright, either.
Peter Schiff left a stark warning at the end of the year: “2024 could be a horrible year for the dollar.”
Here are 3 big reasons why Peter thinks inflation might rise even higher this year.