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All posts under ‘US Economy’

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 Real US Economy - A Full-Fledged Credit Crisis Is Inevitable

Americans are filing bankruptcy at the fastest rate in years… A growing number of U.S. businesses are going bust… The value of U.S. auto loans topped $1 trillion for the first time ever. Outstanding credit card debt has also surged to record highs. The value of student loans has doubled since 2009. All this wouldn’t be such a big problem if the economy were doing well… But it’s not.

Is Trump Bad News for Gold? The Prospects for Gold under President Trump

Trump or not, the fundamental problems remain deep seeded in the US economy. “Draining the swamp” and “making America great again”, are easier said than done. This is why a serious investment into gold is for the long haul. Look beyond the short-term speculations & projections. Its clear that conditions will not be favorable either way & things appear increasingly dismal.

"Too Many Promises That Can't be Kept" - The Fed Can't Raise Rates: Paul Volcker

One can’t really blame the government for continuing its debt-funded spending spree – despite protests to the contrary – after all rates are so low, it would be irrational not to take advantage and add on more debt. However, it is here that the punchline from the Volcker op-ed kicks in, and explains why the Fed is stuck and will find it next to impossible to hike rates.

The Fed's Measure of Inflation is Furthest from American Reality

Ben Bernanke first set an official inflation target in January 2012, aiming at 2%. Has it been achieved? Well, it depends on how you measure inflation. There are many to choose from. The Fed has chosen the one that is most suppressed and furthest from the experience of most American households. So the Fed can pretend that inflation is “too low,” whatever that means.

Price of Gold Could Rise a Lot Higher - In Fact Double

There’s a difference between the narrative, which is what you’re being told, versus the reality of the economic data. It’s in no one’s interest ahead of the election to say the U.S. economy is a mess. If the flood of bad economic data continues, the Fed will almost certainly print more money or cut interest rates. And that could easily send the price of gold through the roof.

Global Gold and Silver Produced in 3 Years = Only the Interest on US Debt

The financial disaster taking place at the US costs one heck of a lot of gold and silver. In 2015, the US Federal Government paid $402 billion just to service the interest on its debt. The total value of global gold production in 2015 was $122 billion while that of silver was $14 billion. So the US could purchase 3 times the global gold and silver production in 2015, just by the interest on its debt.

Why The US Consumer Will Cause The Next Crisis

The market is materially mispricing the strength of the US consumer whose weakness will lead the US economy into a recession in Q117. The divergence is a result of the top 40% of earners who have accrued 84% of all new income and only 34% of new debt since 2013. This strength has driven headline sales figures and accounted for nearly all deleveraging since the financial crisis.

If the Fed does What it Wants to, the Result will be the Opposite of What it Wants

The US economy is slowing perceptively. What should the Fed be doing? They might want to cut interest rates. Problem. Another tool in the arsenal – cheapen the US dollar. Again there is a problem. Whether that works & what is a good idea are separate issues. Certainly a rate hike would take the stock market down 20%. It’s going to be just the opposite of what the Fed wants.

End of an Era: The Rise and Fall of the Petrodollar System

Similar to the paradigm shift – the transition to the petrodollar system that followed with the collapse of the Bretton Woods system, there is another major shift underway today. We will know its consequences in full, the day oil-producing countries demand gold for their oil, instead of dollars. The Gulf states are seeking measures to reduce their dependence & exposure to the US dollar.

Will Gold Prices Crash With The Dow And Again Soar On Inflation?

Are we headed for a crash in the stock market? Yes, and a more severe one than in 2008. As the crash unfolds, gold will be sold even though holders may be confident about gold, as the goal will be to cover immediate losses. Inflation will then ramp up dramatically as governments increase money supply, eventually causing collapses in currencies. Currency collapse will again push up gold prices.

Gold Warns of Impending Monetary System Collapse

The U.S. monetary system is the most debased it has ever been. Furthermore, the monetary system is at an all-time high stress-point & also at the worst possible time relative to other key conditions. The Dow is near all-time highs & is about to crash. This is the first time that point 4 on the Gold / Monetary Base chart will basically coincide with a Dow top/crash. This warning should not be ignored.

National Debt: US Economy Priced in Gold - Cause For Alarm

National debt has increased exponentially for the past 50 years. The 35-year graph shows on average the national debt has increased rapidly, even when priced in gold. Debt is increasing far too rapidly & gold is underpriced. The current national debt is equal to about 100 times the total value, at current gold prices, of the gold “officially” stored in Fort Knox. This should be cause for alarm.

America’s Hidden Jobless Rate is a Product of This Conspiracy

The jobless numbers are actually part of a much larger mainstream “conspiracy” that goes the heart of the way economies work in 21st century America. There are something like 100 million Americans not working, including older people and young people. That’s a fairly well accepted statistic. These people are not counted in the jobless figures though in fact they may want to work.

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