Commodity Trade Mantra

Posts Tagged ‘US Economy’

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.

Gold Prices may be Slow to Rise, but the Direction seems Completely Certain

Gold is challenging the $1300 level for the third time this year. If it breaks upwards out of this consolidation phase convincingly, it could be an important event, signalling a dollar that will continue to weaken. The factors driving the dollar lower are several & disparate. Here is a summary of these trends & explains why the consequence appear certain to drive gold, priced in dollars, much higher.

Don't Worry, Gold Prices Will Rise - These 7 Worrisome Signs Will Ensure It

Even if markets continue to rise in the interim, gold prices will rise. Since late 2015, gold has outperformed the S&P 500 by 30%. While the outlook for the US economy is more positive than it was 12 months ago, if we zoom out for a moment, the big picture ain’t so rosy. Gold has historically done well in times of uncertainty & panic & with these 7 worrisome signs, there could be plenty ahead.

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.

Yellen Succeeds in bringing Asset Price Inflation - Result of this Success to be Feared

Yellen, like notorious previous Fed chiefs including Strong, Martin & Greenspan, can now claim success in having prolonged & strengthened an asset price inflation which otherwise may well have been about to enter its severe end phase. If history is any guide, the result of that success is to be feared. Asset price inflation goes through a mid-late phase where speculative temperatures move sharply.

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.

Hyperinflation In The US — A Real Or Imagined Threat?

After seeing the latest string of events unfold right before our eyes, many are pondering whether we may see hyperinflation hit the US shores. When monetary supply goes unchecked, the price of basic goods goes up & the currency loses its value. Rather than ponder Trump’s latest executive orders or over the top pronouncements, let us first look at what hyperinflation is & how it works.

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.

2017 Creating Conditions for Gold to have it's Best Year in a Generation

Clearly, gold had a poor end to 2016 and fell by over 10% in the last two months of the year. However, it looks set to not only reverse this fall, but to also make high gains during the course of the year. The risks facing the world economy are significant and inflation looks set to rise, both of which create the conditions for gold to have its best year in a generation.

Trump’s Agenda will fuel Bigger Deficits, Debt & Inflation: Super-Bullish for Gold

No matter how awesome Trump’s pro-growth economic policies ultimately prove, these Fed-levitated stock markets near bubble valuations still face an overdue bear. And Trump’s big-spending agenda is going to fuel bigger deficits, bigger debt, and inflation for years to come. That’s super-bullish for gold since it tends to move counter to stocks.

Gold Investment a Safe Bet No Matter What the Fed Does

Yellen’s comments Friday about running a “high-pressure economy” make it clear that inflation moving a point or two above the 2% target will not trigger a rate hike. The Fed Chair also made it clear in remarks a month or two ago that she was not afraid to use negative rates. We are in a unique situation today in that any action from the Fed is likely to boost gold prices.

Silver Prices to Explode on Exponentially Increasing National Debt

The U.S. National Debt is a “train-wreck.” Silver and gold prices erratically increase along with debt. Given that silver prices are near the low end of their 20 year “megaphone” pattern, expect much higher silver prices. Further, the cost of production is increasing rapidly and the ore quality is declining. Expect prices to increase based on limited supply.

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.

With a Trump Win, Gold Prices Could Soar Sharply to $1750 or even $2000

Citigroup has advised investors to sell stocks & bonds – And buy gold – BEFORE the election, if Donald Trump starts rising in the polls. Their reasoning is that if Donald Trump begins to lead in the polls, gold prices could move up sharply before the election, since markets tend to price-in any expected outcome. ABN Amro Sees $1,850 Gold Prices Following a Trump Win.

Gold Remains a Mandatory Portfolio Asset

Can the US financial system endure normalization of interest rate structures? No. Gold will remain a productive portfolio-diversifying asset until the process of debt rationalization is allowed to proceed in the US. Given implications for declining intrinsic value of US financial assets, as well as ongoing Fed efforts to debase outstanding obligations, gold remains a mandatory portfolio asset.

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.

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.

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.

Could $1,900 Price of Gold Be a Reality in Wake of Brexit

The price of gold soared in the wake of the Brexit vote, going as high as $1,350 on Friday before settling back slightly. But there are indications that a lot more factors than just short-term, knee-jerk safe-haven buying are pushing the price of gold up. That means this may be more than a reactionary spike in the market. We’re going to see a whole lot more upside in the days ahead.

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.

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