Commodity Trade Mantra

Posts Tagged ‘Recession’

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.

Finally The Fed Admits It Has No Clue on Inflation & Investment Spending

The most interesting comment by Fed Chair Janet Yellen was her admission that she and her prestigious voting members don’t have a clue why inflation and capital investment spending have not returned to loftier levels. Then how do they yet expect a significant 250 basis point credit tightening over the next couple of years in an economy muddling along just above “stall” speed?

Gold Sparkles Most when Dark Clouds Loom over the Economy

After disappointing US economic growth data was released, gold jumped 1.2%. Weak data is good for gold because it decreases the chances of a rate hike soon. If US economy continues to struggle, the Fed could delay its next rate hike. If the dollar index breaks below 93, it could be a strong indication that a new downtrend in the dollar has started. And this could give a big boost to gold prices.

Helicopter Money Tested And Failed Spectacularly, Surprising Only Economists

Imagine waking one morning to find extra cash in your account, a gift from your country’s central bank. That might sound outlandish. But the concept of so-called helicopter money is being seriously debated by economists. Helicopter money handed directly to consumers, the theory goes, would send us scurrying to the shops to spend our windfalls, boosting confidence in the economy.

Greenspan Warns Of Imminent Crisis, Urges A Return To Gold Standard

“If we went back on the gold standard & adhered to the structure of the gold standard as it exited prior to 1913, we’d be fine. Remember that the period 1870 – 1913 was one of the most aggressive periods economically that we’ve had in the U.S. & that was a golden period of the gold standard. I’m known as a gold bug & everyone laughs at me, but why do central banks own gold now?” – Alan Greenspan

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.

This Always Happens Right Before The Official Start Of A Recession

The exact same patterns that we witnessed just prior to the last major economic crisis are playing out once again right in front of our eyes. If you are waiting for some type of big announcement from the government that a recession has started, you are likely going to be waiting for quite a while. Those that are wise have already been getting prepared for a new recession.

Gold and Silver Moving Sideways and Consolidating Indicate Another Move Up

Silver never moves lock step with gold. When uncertainty prompts investors to seek out safe havens, they look to gold long before silver, as gold is a more straightforward safe haven. When gold is consolidating its first big move & preparing to take out its next resistance, that is when the safe haven status in silver catches up. Silver’s recent move only confirms the new higher price range for gold.

Gold, A Natural Hedge Against Both - Inflation & Negative Interest Rates

The main reason people buy gold is as a hedge against inflation. But uncertainty & fear contributed undoubtedly to gold’s stellar first quarter rise. Analysts remain focused almost exclusively upon the major historical influence of inflation & possible rate hikes. Negative rates are now looming so large that precious metals could become an alternative form of cost-free cash.

Why Gold Is Winning The Money Competition

We’re now getting into negative interest rates on bank accounts / deposits. These are breaking out around the world & Yellen has talked about the possibility of having them in the US. If gold has zero yield & bank deposits have a negative yield, gold is the high yield asset, zero is greater than negative 40 basis points. So gold is the high yield asset; zero is more than negative.

A Stock Market Correction Has Only Been Postponed, Not Avoided

Markets are relieved that the Fed won’t hike rates in March. But, the markets are never satisfied. Getting stock market expectations aligned with the intended FOMC policy path will not be pretty. Expect higher volatility and stock market drawdowns in April and May as markets reprice. A further stock market correction has been postponed, but not avoided.

Ugly-Stepchild To Beauty Queen - Gold ETF Holdings Surge To 18-Month Highs

Gold has “seen some exceptional flows after quite a few years of being the ugly redheaded stepchild, but it’s not moved into sort of beauty-queen territory,” notes one commodity strategist as hedge fund net-long positions are the highest since Feb 2015 and gold holdings in ETPs has soared to 18 month highs. Gold is now heading for a third straight monthly gain.

Will a March Fed Rate Hike lead to Crashing Market Expectations?

Will a Fed rate hike in March lead to a train wreck by crashing into market expectations? It depends on whether Janet Yellen can signal the markets that her Cannonball Express is not stopping. Casey Jones died frantically pulling the train’s whistle. Janet Yellen needs to start blowing the Fed’s whistle and warning markets now — before it’s too late.

Inflation - The Fed's Nightmare Scenario Is Becoming Reality

Higher inflation is not a dream come true. It is the Fed’s worst possible nightmare. It will expose the error of their 8-year stimulus experiment & the Fed’s impotence in restoring health to an economy that it has turned into a walking zombie addicted to cheap money. If inflation catches fire now, with growth close to zero, the Fed will be completely incapable of controlling it.

Helicopter Money - The Recipe For Inflation Gathers Momentum

Where will inflation come from? With helicopter money, Congress spends the money. It covers its deficit with more borrowing & the Fed prints the money to cover the borrowing. It’s essentially monetizing the debt. The difference is that in the case of QE, there’s no extra spending. In the case of helicopter money, there is because Congress spends all the money. – Your recipe for inflation.

WTI #CrudeOil now -0.5% from +4.5%

Whatever ultimately the case, this has never been about oil prices except that they are the most visible and straddling indication between finance and economy; the money supply attempting a rebalancing in reverse of leverage that once dominated everything but no longer can fix to even slightly stable fashion. It is the representation of the structure behind the seeming cyclical.

The Fed Blinked; Dollar Plunged; Gold Rallied

Gold has fallen for the last few years based on this false belief that everything is great and we’re going to have a return to normalcy, and the Fed’s going to shrink its balance sheet. Nothing could be further from the truth. This gold price today, is at the highest it has been since the Fed hike. And this collapse in the dollar today is just the beginning.

A Recession Occurred The Last 16 Times This Happened

Something has just happened that has signalled a recession every single time that it has occurred since World War I. 16 times since 1919 there have been at least 8 month-over-month declines in industrial production during the preceding 12 month period, and in each of those 16 instances the U.S. economy has plunged into recession.

The End of the Bubble Finance Era

During the expansion phase of central bank enabled bubble finance, optimism reigns and bulls and speculators insist that “this time is different.” Yet the laws of sound finance and market economics never change. It often just takes an extended time for all the excesses to work their way through the system and finally reach the blow-off stage.

Why "Supply & Demand" Doesn't Work For Oil Prices

The costs of producing oil continue to rise, as a result of diminishing returns, so this fall in oil prices is clearly a problem. Low oil prices make future production unprofitable; it also leads to an increasing number of debt defaults. It is also inevitable that the price of oil must stop rising at some point because of the adverse impact on spendable income of consumers.

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