After the worst week since 2008, the stock market rallied on Monday on the hope of central bank stimulus. In his March 2 podcast, Peter Schiff said he doesn’t think the Fed’s easy money can keep the air in the stock market bubble. But the stimulus overdose will likely propel gold to new highs.
Subprime auto loan delinquencies have exploded, taking the overall delinquency rate to Financial Crisis levels. But the economy is supposedly great. What is causing this spike in delinquencies?
According to the latest data released by the New York Fed, serious delinquencies (90 days or more past due) surged by 15.5% in the fourth quarter of 2019 to a record high of $66 billion.
In the most recent Friday Gold Wrap podcast, Mike Maharrey talked about the fact that the Federal Reserve has increasingly engaged in more and more extraordinary monetary policy. As he put it, extreme has become the norm. Despite what pundits insist is a “great” economy, interest rates are extremely low by historical standards and the Fed is engaging in quantitative easing to the tune of $60 billion a month.
While stock markets continue to make record highs and the economy continues to grow, the question is how long can this last?
The Federal Reserve held its first Federal Open Market Committee meeting this week. As expected, the central bank held interest rates steady but the overall posture of the Fed came off as rather dovish. Quantitative easing will continue into the near future and Fed Chairman Jerome Powell left the door open for future rate cuts.
The Federal Reserve funds rate will stay locked in at 1.5 to 1.75% and the vote was unanimous. Powell said, “We’re comfortable with our current policy stance and we think it’s appropriate.”
Sometimes it’s a lot easier to sit down at the table than it is to fold your hand and leave.
Nearly four months after it started, the Federal Reserve continues to run overnight repo operations and it’s unclear when the central bank will actually end these “emergency” measures.
The Fed stepped into the repo markets last September to “unplug” the financial system’s “plumbing” with an injection of cash. It was the first such move since the financial crisis a decade ago. The move stabilized the markets, but months later, it doesn’t appear the Fed has a viable exit strategy.
Gold had a pretty good run in 2019. In fact, it was the best year for the yellow metal in nearly a decade. So what’s in the cards as we rush headlong into the 2020’s? In this episode of the Friday Gold Wrap podcast, host Mike Maharrey looks back at 2019 and highlights some of the things that drove precious metals markets. Then he pivots and looks ahead at 2020 and beyond. Where are we going and what will get us there?
Gold is finishing up 2019 with a bang, pushing back above the psychologically significant $1,500 per ounce this week. Although there are a few trading days left, gold appears set to end the year with a better than 17% gain. In the last Friday Gold Wrap podcast of 2019, host Mike Maharrey takes us through a quick overview of what he considers to be the five biggest stories of the year driving precious metals.
The Federal Reserve is worried about corporate debt, which is ironic given that Fed policies made the corporate debt problem possible.
The Fed’s latest Financial Stability Report issued in November laments the pileup of business debt.
Borrowing by businesses is historically high relative to gross domestic product (GDP), with the most rapid increases in debt concentrated among the riskiest firms amid weak credit standards.”
Former Federal Reserve Chairman Paul Volcker passed away last week. Volker was appointed by President Jimmy Carter, but served most of his term under President Ronald Reagan. Volker was best-known for fighting inflation with interest rate hikes. At the peak, Volker pushed rates all the way to 20%.
Peter talked about Volcker in a recent podcast, noting that he was credited with slaying the inflation monster that today’s Fed seems happy to resurrect.
Peter Schiff recently appeared on Kitco news with Daniela Cambone to talk politics, the economy and the Fed. He said that no matter what Jerome Powell is saying, the Fed central bank isn’t finished with rate cuts.