Boom in consumer purchases in durable goods. Surging imports and price increases. Container shortage. Triggered by stimulus money.

Tracking the Fed, still buying bonds. Short term rates are locked down, but they’re encouraging higher long term rates, they’ve tripled so far. They could go up to 2% for 10 year and then they’ll cap it. 3% would be a major problem. We’re getting over 2% inflation. Long term rates are okay up to the inflation rate for now. The Fed has spoken with a unified voice that they’re accepting higher rates for now. As has Treasury Sec Yellen. Rising growth and rising rates are okay as long as they don’t go up too fast and too high.

Wolf sees it as the Fed’s minor way of bringing order back to the markets. Look for a slightly depressed housing sector. Clamping down on exuberence, pulling the punch bowl away. It could go pretty far if inflation and expectations continue higher. Eventually they will step in to stop long term rates from increasing higher.

Precious metals have already benefited from this beginning inflationary cycle. They might very well have gone up in anticipation of the beginnings of the cycle. If it turns out to be bigger and badder, then there could be another run-up. A lot of interest in cryptos could have drained demand for precious metals. Cryptos can’t be compared to anything else, by design. Supply is unlimited. Copycats galore. If enough hedge funds and asset managers buy it, the sky is the limit. There’s more cryptos than stocks now.

Everything is inflated except bonds, excluding junk bonds. Hard to recommend buying anything at this point. Everything is overvalued. Hang on to what you have and buy productive assets, those that generate a cash flow.

Direct download: Wolf_Richter_10.Mar.21.mp3
Category:general -- posted at: 8:01am EDT

Andy has been working 20 hours a day. That’s how intense the demand is for precious metals. Last month every bullion deal shut down due to a major dump of metals contracts into the market. Physical metal is being drained from the SLV and the Comex. Same with the London Metals Exchange. Price is misdirecting the public as the powers that be use the opportunity to drain the metal out.

Spend, spend, spend. All the talking heads talk about is spending money. Debt issuance goes up and the Fed prints the difference. While rates have gone up, Andy believes they’re not going much higher. We’ll be paying more in interest than they receive in taxes. Hello inflation. The real rate will stay negative. The best environment for precious metals ever. What could really kill the gold price, 17-18% interest rates. We’re looking at YCC (yield curve control) in spades. There’s no way out. Pullbacks are an opportunity to continue to stack.

Inflation is running rampant. Tax receipts hardly cover the interest. Let’s get rid of taxes and let the Fed print the difference. It’s easy to become discouraged when we see so many precious metal smackdowns. It’s been going on for years now.

US mint has had a tough time meeting demand. They’ve been swamped by demand. Andy heard a rumor that there’s a high probability that the mint will shut down for two month hiatis to retool their equipment for new bullion coins. The Canadian mint has also had supply issues. Without the Perth Mint and UK Mint supply would really be at issue.

Direct download: Andy_Schectman_10.Mar.21.mp3
Category:general -- posted at: 8:00am EDT






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