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All posts under ‘Economy’

Inflation Is Much Higher Than Officially Announced - Do You Yet Want More?

On the one hand, government agencies are bending over backward to under-report inflation. On the other, the Federal Reserve is whining that inflation is too low and their efforts to push it higher have failed. More honest and accurate estimates of real-world inflation is around 7% or even as high as 10% in high-cost metro areas, not 2%. So why does the Fed yet want higher inflation?

The GOLD Investment Thesis rests on the Gross Over-Issuance of DEBT

Every measure of domestic & global debt is significantly worse today than at its financial-crisis peak. Our gold investment thesis rests on the gross over-issuance of paper claims (debt) against comparatively modest levels of productive output (GDP). The US dollar’s extended decline & gold’s breakout signal growing market skepticism that the era of central bank stimulus is coming to a close.

Inflation in 15 Minutes & Solution to Debt Crisis - Raise the Dollar Price of Gold

A massive inflation in 15 minutes: the time it takes to vote on the new policy. Don’t think this is possible? It’s happened in the U.S. twice in the past 80 years. Raising the dollar price of gold is the quickest way to cause inflation. If the markets don’t do it, the government can. It works every time. Gold can be used to work around a debt ceiling crisis if an agreement isn’t reached in the months ahead.

Alarming Rise in Global Debt Levels to wake up Gold from Slumber

The medium- to long-term investment case for gold, I believe, looks even brighter. Many unsettling risks loom on the horizon—not least of which is a record amount of global debt—that could potentially spell trouble for the investor who hasn’t adequately prepared with some allocation in a “safe haven. Paying down this debt will not be easy. Another crisis could be in the works.

Temporary Stimulus Policies turn Permanent; Credit & Debt Expansion is Here to Stay

Given the extraordinary failure of both Keynesian stimulus & private-sector credit growth to create a self-sustaining cycle of expansion whose benefits flow to the entire workforce rather than to the top few percent, what can we expect going forward? Can we just keep expanding the economy’s debt load every few years? What if household incomes continue declining? Are these trends sustainable?

Americans Pawn Gold To Go Further Into Debt: US Gold Scrap Market Drying Up

It is quite unfortunate that Americans have pawned off their best asset only to go further into debt. U.S. gold scrap supply in 2016 (58.7 metric tons) is nearly two and a half times less than it was in 2010 (143 metric tons). Americans pawned off a great deal more gold in 2010 when the price was lower at $1,225 compared to $1,267 in 2016. Which means, the U.S. gold scrap supply market is drying up.

Bankrupt America: Interest On Debt Alone Approaches A TRILLION Dollars

The Trump economic cabal of Wall Street asset strippers is proposing tax & economic programs that will blow an already unprecedented US debt situation into the stratosphere. Budget deficits (already over $19 trillion) under the Trump plan could easily surpass $2 trillion a year. As Federal debt goes beyond $20 trillion, with normal interest levels, interest on debt alone approaches $1 trillion.

How to Subvert Public Resistance Against Elimination of Cash - IMF Tells Governments

The IMF has published a Working Paper on “de-cashing”. It advises governments who want to abolish cash against the will of their citizenry. Move slowly, start with harmless seeming measures, is part of that advice. The de-cashing process could build on the initial & largely uncontested steps, such as the phasing out of large denomination bills, ceilings on cash transactions, etc.

The Next Subprime Crisis - The US Auto Industry Is Here

Auto loans made to consumers with subprime credit have been accounting for an increasingly larger percentage of the market. Eventually a lot of those loans are going to start to go bad, and that is precisely what is happening now. Auto sales have begun to fall & used car prices have started to crash. Here are 12 signs that a day of reckoning has arrived for the U.S. auto industry.

Trump & the Monumental Magnitude of the US Debt Trap

What lies directly ahead, therefore, is another bumbling attempt by the White House and Congressional Republicans to hammer out an FY 2018 budget resolution and what amounts to a 10-year fiscal plan. So there flat-out must be big-time deficit offsets or there will not be close to 218 votes for what would otherwise be upwards of $15 trillion in added public debt over the coming decade.

What Role May Trumps' Policies Play in Creating Inflation

Among the main drivers of higher inflation expectations, one is the idea that a larger fiscal deficit will inevitably lead to higher inflation. The Trump program calls for higher defense expenditures and increased infrastructure spending. The perception in the financial markets is that fiscal spending and tax cuts add up to higher deficits, which would almost certainly imply higher inflation.

Read America's Credit Card Statement (No Password Required)

You might not be aware of it, but America’s credit card–our national debt–comes with its own disclosure statement. You know those disclosures on your credit card statements? That it will take 27 years to pay off your balance if you only make the minimum payment each month, and so on? What will replace the current system after it self-destructs? That’s the question.

Why is the Gold Market Sanguine about Rising US Interest Rates?

Why is the gold market being sanguine about rising U.S. interest rates? Rising U.S. inflation and a peak in U.S. dollar strength may mean that the traditional impact of a U.S. monetary tightening cycle may be less than usual. What the gold market is currently signalling is that while U.S. interest rate rises are still a bit of a headwind, they may not be enough to offset some compelling tailwinds.

The Return of the US Government’s Statutory Debt Ceiling

The budgetary bottleneck arrives again next month, when the latest suspension of the limit expires on March 15. Back in October 2015, Congress decided to punt on the issue by suspending the debt ceiling—with a hard end date. The US Treasury Department has been actively working to keep the nation’s total public debt outstanding from rising any faster than possible since late Nov 2016.

A Mega Sell-Off in U.S. Government Debt is Underway... 1 more Reason to Buy Gold

Foreign creditors are selling U.S. government debt like never before. Last year, China alone sold $188 billion worth of U.S. Treasurys while Japan sold about $21 billion worth of U.S. debt in December. Japan & China are America’s biggest creditors. But they’re not the only ones pulling out either. Saudi Arabia, Belgium & Switzerland have recently become net sellers, too.

American Consumer Debt Over $4.1 Trillion - Last Debt Bubble Peak was at $2.5 Tn

Americans are now borrowing & spending at record levels. Consumer debt being over $4.1 trillion is troubling when student debt, auto loans & credit cards are leading the way forward. Apparently we like repeating history & people may like to forget that at the root of the Great Recession was a giant credit bubble. Even at the peak of the last debt bubble, consumer debt totaled roughly $2.5 trillion.

A Gold Standard would've Prevented U.S. from this Extreme Indebtedness

Even Greenspan admits this is the case with debt: “We would never have reached this position of extreme indebtedness were we on the gold standard, because the gold standard is a way of ensuring that fiscal policy never gets out of line.” Certainly, debt loads have taken off since Nixon closed the gold window in 1971, breaking the last link with gold.

The Safe Way to Play Emerging Market Stocks

There’s a lot to like about emerging market stocks. But like any investment, there are risks you have to consider. Today, we look at the biggest threat to emerging markets. But don’t worry. There’s a way to get around this risk. A strong dollar makes it hard for many emerging market companies to pay off their debts. Invest in countries with low levels of external debt like Russia, Brazil & India.

Why It’s High Time to Consider Emerging Market Stocks

According to the International Monetary Fund (IMF), emerging markets grew 4.1% last year. For perspective, the U.S. economy grew 1.6%. For 2018 the EMs will grow 4.8%, compared to 2% U.S. economy growth. Commodity prices have taken off. Higher commodity prices could be the catalyst that emerging market stocks have been waiting for.

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