Inflation Increases Household Expenses by $433 Per Month

Nov. 25, 2022

According to Moody’s, average US household spending rose by $433 a month. 

Shopping mall

Although inflation fell slightly month-over-month in October, Americans struggle with high inflation.

Prices rose 7.7% MoM in October. Prices for food at work/school, eggs, butter, public transportation, health insurance, energy, poultry, bread, milk, and shelter grew to 95.2%, 43%, 33.6%, 28.1%, 20.6%, 17.6%, 14.9%, 14.9%, and 6.9%, respectively.

Items like women’s outerwear, wireless cellphone service, beef, TVs, and smartphones, fell 1.4%, 1.4%, 3.6%, 16.5%, and 22.9%, respectively.

Employee wages have lost buying power in today’s economy with hourly earnings dropping 2.8% against inflation.

Today, gold dipped 0.29% to $1,759.60 per ounce. Silver sank 0.72% to $21.58 per ounce. Platinum decreased by 1.11% to $998.10 per ounce, while Palladium fell by 4.41% to $1,855.50 per ounce. Bitcoin dropped 0.51% to $16,501.10.

How much more are you spending a month on household expenses?

Central Banks Expand Their Gold Holdings as Many Countries Shift Away From the West

Nov. 23, 2022

According to strategists from Nikkei Asia (the world’s largest financial newspaper), central banks all over the world have increased gold purchases in 2022 after sanctions confiscated overseas Russian assets.

gold bars

Around $300 billion of Russian overseas reserves have been frozen by the US and its allies as punishment for its incursion on Ukrainian territory. Moscow has repeatedly proclaimed the asset seizures as “theft”. 

In the 3rd quarter of 2022, gold purchases reached 399.3 tons. The total amount of gold purchased rose from 186 tons in 2021’s 3rd quarter.

The majority of gold is being bought by countries that are against Western policies and view the Russian sanctions as a threat to their financial sovereignty.

Turkey, Uzbekistan, and India previously announced that they purchased 31.2 tons, 26.1 tons, and 17.5 tons, respectively. It is still unknown which entity bought the rest of the estimated 300 tons of gold, but many industry insiders point to China as the recipient.

Itsuo Toshima, the former Japan director for the World Gold Council, explained that the People’s Bank of China most likely bought over 2,000 tons of gold from Russia

Many of the BRICS+ nations (Brazil, Russia, India, China, and South Africa) are working together on a new financial system that will rival the West’s current one. BRICS+ believes that the financial and political system is one-sided. 

They also believe that a multipolar world (in which more than two nation-states have nearly equal amounts of economic and geographic influence) is needed for a more fair distribution of power. To achieve this goal, all BRICS nations will have to become less reliant on US dollars and more so on gold.

Today, gold rose 0.18% to $1,751.90 per ounce. Silver jumped 1.04% to $21.56 per ounce. Platinum decreased by 0.40% to $1,007.20 per ounce, while Palladium grew by 1.12% to $1,922.50 per ounce. Bitcoin spiked 1.90% to $16,407.80.

What would a multipolar world look like in the future if the BRICS+ nations achieve their goal?

Traders Abandon Crypto Markets as Skepticism Mounts 

Nov. 22, 2022

Investors are fleeing the crypto market as digital currency values fall and exchanges like FTX go bankrupt.

bitcoin

FTX’s fall from grace has seriously hurt investor confidence in cryptocurrencies. Large exchanges that dabbled in arbitrage price gaps have pulled back significantly. 

Asset management companies like Fasanara Digital and Pythagoras Investments have dialed down their risk exposure.

The contagion effect spreading through the crypto market has pressured fund managers to avoid centralized platforms and opt for Wall Street-like firms.

The collapse of FTX and other cryptocurrency exchanges is exerting downward pressure on Bitcoin, Ethereum, and various other digital coins.

Today, Bitcoin jumped 2.51% to $16,156.20. Gold rose 0.20% to $1,765.80 per ounce. Silver grew 0.77% to $21.32 per ounce. Platinum increased by 1.02% to $1,002.40 per ounce, while Palladium fell by 0.22% to $2,015.00 per ounce.

How are you feeling about cryptocurrency and the current state of events transpiring with FTX?

German Government Official Suggests Prepping ‘Several Crates’ of Canned Foods and Water

Nov. 21, 2022

Ralph Tiesler, the head of Germany’s Federal Office for Civil Protection and Disaster Relief (BBK), recommended German citizens prepare for power outages during the winter and to stock up on food and water.

Natural gas

Europe is facing an energy crisis due to various factors like the sabotage of the Nord Stream pipeline, as well as Russia’s counter-sanctions which minimized natural gas supplies to much of Europe.

Many German towns are preparing for widespread power outages this winter and are devising plans to cope with blackouts.

Unfortunately, many towns are not equipped to handle possible outages. A lack of supplies is possible, so officials believe that loading up on essential goods is the best course of action to mitigate supply chain issues

Today, gold dipped 0.98% to $1,743.90 per ounce. Silver sank 1.24% to $20.96 per ounce. Platinum decreased by 0.72% to $991.10 per ounce, while Palladium fell by 4.01% to $1,905.00 per ounce. Bitcoin dropped 1.90% to $15,943.90.

How are you preparing for possible blackouts in the US?

Home Sales Drop in October, as High Mortgage Rates Scare Off Buyers

Nov. 18, 2022

Home sales decreased for nine months straight as of October.

Real Estate

Would-be buyers are postponing the purchase of a new home due to higher interest and inflation rates.

Between the months of September and October, the sales of previously owned homes dipped by 5.9%. That’s the lowest pace recorded since 2011. 

The seasonally adjusted and annualized pace reading for October was 4.43 million units, with sales falling 28.4% lower YoY.

Prices are weakening in various locations around the country, but overall demand is still strong, especially amongst cash buyers. The median price sold in October was $379,100 for existing homes, which is an increase of 6.6% YoY. Prices are weakening in various locations around the country.

Today, gold dipped 0.28% to $1,765.80 per ounce. Silver rose 0.53% to $21.32 per ounce. Platinum decreased by 0.10% to $1,002.40 per ounce, while Palladium fell by 2.31% to $2,015.00 per ounce. Bitcoin dropped 0.01% to $16,679.80

How high do you expect mortgage rates to reach? Will it have a significant impact on housing prices?

American’s 401(k) Average Balances Fell 23% Year-Over-Year in 2022

Nov. 17, 2022

According to a Fidelity analysis, American retirement accounts dropped once again in the third quarter.

401(k) Accounts Drop

Due to market swings, retirement accounts have taken a heavy hit.

The average 401(k) balance dipped 23% year-over-year (YoY) to $97,200. For IRAs, the average balance fell 25% to $101,900 YoY.

Even though accounts are sinking, retirement savers are still contributing. The average contribution rate for a 401(k) is holding steady at 13.9%.

Some analysts believe that many retirement investors are clueless about how to avoid further losses. Many savvy retirement savers have preferred to roll over their retirement accounts into a precious metals IRA as a way to hedge against a recession.

Today, gold dipped 0.86% to $1,788.16 per ounce. Silver sank 3.08% to $21.88 per ounce. Platinum decreased by 2.39% to $1,044.08 per ounce, while Palladium fell by 4.53% to $2,124.50 per ounce. Bitcoin dropped 0.56% to $16,552.50.

Have you thought about reallocating your retirement account fund into a precious metal IRA? Why or why not?

US Household Debt Increased at Highest Rate in 15 Years

Nov. 16, 2022

According to the Federal Reserve, household debt in the US recently rose at the fastest pace in 15 years.

Credit Card

Americans are using more credit cards to make ends meet as they struggle with rising inflation and lagging salaries. 

Credit card balances grew to more than 15% year-over-year, which is the highest increase in more than 20 years.

The total amount of debt in American households reached $351 billion for the 3rd quarter, the largest jump in debt since 2007. The total amount of debt owed collectively in the US is a record $16.5 trillion.

The major contributors to debt originated from mortgage and credit card balances which rose to $11.7 trillion and $930 billion, respectively.

Today, gold jumped 0.02% to $1,788.16 per ounce. Silver grew 0.30% to $21.88 per ounce. Platinum decreased by 0.59% to $1,044.08 per ounce, while Palladium fell by 1.18% to $2,124.50 per ounce. Bitcoin dropped 2.55% to $16,451.00.

How will Americans afford to pay off this debt if unemployment and inflation continue to rise?

Producer Price Index Increased by 0.2% in October, Lower than Expected

Nov. 15, 2022

The Producer Price Index (PPI), which calculates the prices companies pay for finished goods, came in lower than the Dow Jones estimate of 0.4% month-over-month (MoM).

manufacturing

According to the Bureau of Labor Statistics, wholesale prices rose in October by 0.2% MoM and 8% year-over-year (YoY).

Excluding energy, food, and trade services, PPI grew 0.2 % MoM and 5.4% YoY.

The lower-than-expected PPI rate has caused many investors to perceive that inflation might have peaked. These numbers should encourage the Fed to pivot away from increasing rates even further. 

On the other hand, other investors believe that the inflation decrease was due to lower fuel prices achieved through the release of a large amount of oil from the country’s Strategic Petroleum Reserve (SPR). Since the SPR current levels are extremely low, it is believed that energy supplies will tighten even further and increase prices.

Today, gold dropped 0.08% to $1,778.50 per ounce. Silver fell 1.75% to $21.82 per ounce. Platinum decreased by 0.98% to $1,028.20 per ounce, while Palladium grew by 2.29% to $2,121.00 per ounce. Bitcoin rose 2.37% to $16,984.60.

What do you think will happen to oil prices over the winter?

NY Fed Survey Expects Higher Inflation Rates Due to Rising Gas Prices

Nov. 14, 2022

In the US, Americans are growing more concerned about higher prices.

The Fed

According to the New York Fed Survey of Consumer Expectations, inflation expectations for 2023 grew by 5.9%. That is more than the half a percent recorded in September.

The three-year and five-year expectations for inflation rose by 3.1% and 2.4%, respectively.

The concern for many Americans is rooted in the fear of rising gas prices at the pump. Respondents believe that gas prices will rise by 4.8% next year.

Today, gold jumped 0.05% to $1,780.20 per ounce. Silver grew 1.50% to $22.23 per ounce. Platinum decreased by 0.78% to $1,039.00 per ounce, while Palladium fell by 0.71% to $2,077.00 per ounce. Bitcoin rose 1.65% to $16,570.60.

Do you think inflation will continue to rise in 2023? Or will we face a deflationary period soon?

Inflation Rose Less Than Expected in October

Nov. 10, 2022

According to a Bureau of Labor Statistics release Thursday, the consumer price index (CPI) grew by 0.4% month-over-month (MoM) and 7.7% year-over-year (YoY) in October. That figure is lower than the Dow Jones estimated CPI increase of 0.4% MoM and 7.9% YoY.

CPI

Core CPI, which excludes energy and food costs, jumped 0.3% MoM and 7.9% YoY in October, lower than the respective Dow Jones estimates of 0.5% and 6.5%.

Major price declines were discovered in the used car market, apparel, and healthcare sectors, which were significant contributors to October’s slowing inflation. Prices fell 2.4%, 0.7%, and 0.6% MoM, respectively.

The cost of shelter, a metric that makes up one-third of CPI figures, grew by 0.8% MoM and 6.9% YoY. It is the steepest monthly increase since 1990 and the highest yearly level since 1982. 

The food price index also rose in October, hitting 0.6% MoM and 10.9% YoY.

Markets have reacted positively to the better-than-expected inflation figures, with the Dow Jones Industrial Average rising 820 points or 2.5%. The S&P 500 surged 4%, while the Nasdaq Composite spiked 5.5%.

Today, gold jumped 2.67% to $1,723.60 per ounce. Silver grew 3.38% to $21.55 per ounce. Platinum increased by 5.50% to $1,006.30 per ounce, while Palladium rose by 4.84% to $1,902.00 per ounce. Bitcoin surged 9.72% to $17,450.60.

With slowing MoM inflation, will the Fed pivot or will they continue with their “hawkish” agenda?

Gold Demand in Vietnam Tripled in Q3

Nov. 9, 2022

The demand for gold in Vietnam is growing. In the third quarter of 2022, gold demand rose to 12 tons compared to last year’s 3.3 tons of the precious metal.

gold

Bullion and jewelry sales increased to 8.5 tons from 2.4 tons and 3.5 tons from 3.3 tons respectively.

Southeast Asian countries’ demand for gold is increasing significantly, but Vietnam’s year-over-year growth is incredible.

Vietnam’s increased gold purchases have been fueled by stronger economic recovery from the pandemic, such as full employment, higher salaries, and positive GDP growth. Also, many customers are flocking to gold as a way to hedge against inflation.

Today, gold jumped 0.08% to $1,723.60 per ounce. Silver fell 0.09% to $21.55 per ounce. Platinum decreased by 1.50% to $1,006.30 per ounce, while Palladium dropped by 3.40% to $1,902.00 per ounce. Bitcoin dipped 7.68% to $17,123.40.

Do you think that Southeast Asians growing gold demand will affect global prices?

Auto Loan Delinquencies Skyrocket as Owners Struggle with Inflation

Nov. 8, 2022

A growing rate of auto loan borrowers is struggling to make payments on their vehicles.

Auto loans

TransUnion announced Tuesday morning that 60-day delinquencies rose by 1.65% for the third quarter of 2022, making it the highest increase in over a decade. 

Satyan Merchant, vice president of TransUnion, said that “consumers still want to stay current as best that they can. It’s just this inflationary environment is making it challenging,” and “it leaves fewer dollars in their pocket to make the auto loan payment because they’ve got to pay more for eggs and milk and other things.”

The most economically impacted segment are subprime borrowers. They have lower incomes and credit scores which makes borrowing more expensive. Also, subprime borrowers are most affected by inflationary pressures.

Analysts believe that delinquencies might continue to rise as unemployment and inflation rates increase over the next couple of months.

Today, gold jumped 2.36% to $1,724.30 per ounce. Silver rose 3.34% to $21.75 per ounce. Platinum increased by 1.73% to $1,018.40 per ounce, while Palladium grew by 1.20% to $1,968.50 per ounce. Bitcoin dipped 2.97% to $20,152.80.

What do you think will happen to the automotive market in 2023?

Small Business Rent Delinquencies Rose in October

Nov. 7, 2022

The ongoing economic downturn is creating challenges for small businesses. Rent delinquencies in October jumped 7% in one month, making it the fastest increase this year.

Shutdown

Small businesses across the US are struggling to pay rent due to higher inflation rates and a drop in customer demand.

About 37% of small businesses cannot make rent payments on time and in full, leading many economists to speculate that the economy will slow down even further.

If inflation continues to grow, as hinted by the Fed last week, small business rent delinquencies can get worse. This will affect landlords who use their rent revenue to complete their mortgage payments. 

Today, gold fell 0.23% to $1,688.40 per ounce. Silver dropped 0.14% to $21.08 per ounce. Platinum increased by 1.46% to $991.60 per ounce, while Palladium grew by 0.61% to $1,919.50 per ounce. Bitcoin dipped 0.66% to $20,770.20.

Do you expect rent delinquencies to increase in the coming months? If so, by how much?

Payrolls Grew by 261,000, Exceeding Expectations

Nov. 4, 2022

Nonfarm payrolls rose by 261,000 in October, surpassing the 205,000 estimated figure. The job market still remains strong despite the Fed’s “aggressive” policy strategy.

Jobs market

The unemployment rate did tick up a little more than expected, hitting 3.7%. Although the current payroll figures are better than expected, it is still growing at the slowest pace since 2020.

Average hourly wages increased by 4.7% YoY and 0.4% MoM, but still lag behind inflation.

The industries that gained the most employment were led by health care (53,000 positions), followed by professional and technical services (43,000 positions), and manufacturing (32,000 positions). 

Leisure and hospitality jobs also grew, up by 35,000 jobs. Although this industry made gains of 78,000 a month in 2022, figures are dismal compared with the 196,000 from 2021.

The positive job growth is under threat by the Fed’s interest rate hikes and goal to slow the economy as a way to curb inflation. We can already see this trend within the tech industry. 

Amazon announced Thursday that it will halt the hiring of employees in its corporate sector. Also, Apple said it would pause hiring for its R&D division.

Lyft, Twitter, Stripe, Robinhood, and Coinbase have announced layoffs of their workforce.

Today, gold rose 2.71% to $1,685.80 per ounce. Silver jumped 5.76% to $20.85 per ounce. Platinum increased by 3.26% to $971.00 per ounce, while Palladium grew by 6.15% to $1,954.00 per ounce. Bitcoin climbed 4.73% to $21,163.20.

If unemployment continues on an upward trend, what repercussions will it have on the US economy?

Markets Have Fallen After Signs of Fed Pivot Disappear

Nov. 3, 2022

Stocks, precious metals, cryptocurrencies, and major leading FOREX currencies have fallen Thursday morning after the Federal Reserve raised interest rates by 75 bps.

Daily Market news

The value drop for these asset classes was compounded after Fed Chair Jerome Powell announced that rates need to continue to increase and a rate pause would be premature. 

Also, Powell noted that inflation is on track to increase over the next several months and the Fed has a lot of work to complete. The Fed’s inflation rate target is 2%, which is significantly lower than the last CPI reading of 8.2% year-over-year. 

The Fed has indicated that since unemployment is down and GDP slightly rose in the 3rd quarter, inflation will persist.

As a result, the Dow Jones Industrial Average dropped 100 points, the S&P 500 fell 15 points, and the Nasdaq dipped 55 points. 

Gold fell 0.36% to $1,637.50 per ounce. Silver rose 0.96% to $19.63 per ounce. Platinum decreased by 0.75% to $940.50 per ounce, while Palladium dropped by 2.81% to $1,854.00 per ounce.

Bitcoin tumbled 0.07% to $20,295.40. The US dollar gained significantly against the euro, pound sterling, and yen.

How much higher do you think interest rates will go in 2023?

Gold And Silver Hold Strong as Fed Prepares Rate Hike

Nov. 2, 2022

Gold and silver spot prices rose Wednesday as the value of the dollar dropped.

Gold and silver coins

The gold spot price grew 0.05% to $1,658.06. Silver jumped 0.23% to $19.90 per ounce. 

The Fed will announce the interest rate hike at 2 PM Wednesday, and it is expected to raise the rate by 75 bps. Many investors are betting against that rate increase, suggesting that the Fed will pivot its monetary policy to a more “dovish” stance.

The central bank’s comments later today will give investors a better understanding of the Fed’s next steps toward future rate hikes. A dovish tone will weaken the dollar and potentially strengthen precious metals, stocks, and cryptocurrencies. An aggressive policy will have the opposite effect.

Platinum increased by 1.94% to $948.80 per ounce, while Palladium grew by 2.92% to $1,877.00 per ounce. Bitcoin fell 0.41% to $20,407.10.

What type of stance do you expect the Fed will convey today during its rate hike announcement?

Manufacturing Drops; Economic Slowdown Impedes Production

Nov. 1, 2022

Recently, GDP data was released showing that the US economy improved in the third quarter. Unfortunately, the US manufacturing sector seems to be shrinking.

manufacturing

Today, the Manufacturing Purchasing Managers Index sunk to 50.2 in October, a decrease from September’s 50.9 reading. Manufacturing demand is expected to drop significantly as inflation continues to rise. 

In addition, manufacturers believe that the Fed will continue to raise interest rates. This in turn will make the cost of borrowing more expensive, dropping investment and further slowing economic growth. 

The Fed is set to increase interest rates tomorrow by 75 bps and once more in December before the year ends. Some market analysts are speculating that the Fed will pivot from its “hawkish” policy to a more “dovish” one. 

Many analysts oppose that view, suggesting that the Fed has not reached its established goals of lowering inflation, raising unemployment, and slowing the economy further. 

The Fed’s plan for the central bank to successfully lower inflation rates will be to lower the amount of capital circulating through the financial system. This will lower demand for goods and services, which in turn, will lower prices.

Today, gold rose 0.77% to $1,647.50 per ounce. Silver jumped 2.51% to $19.38 per ounce. Platinum increased by 1.94% to $948.80 per ounce, while Palladium grew by 2.92% to $1,877.00 per ounce. Bitcoin fell 0.41% to $20,407.10.

How do you feel about the Fed’s plan of raising the unemployment rate as a tool to control inflation?

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