Here are the latest news items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. Most of these items are from the “tangibles heavy” contrarian perspective of SurvivalBlog’s Founder and Senior Editor, JWR. Today, we look at Joe Biden’s “Sugar High” Economy. (See the Economy & Finance section.)
Precious Metals:
World’s Biggest Platinum Miner Makes Another Bold Call on Prices.
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Golds gains over $100 this month.
Economy & Finance:
At Zero Hedge: Biden Unveils $6 Trillion Budget That Will Raise Federal Spending To Highest Post-WW2 Level.
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Joe Biden’s sugar-high economy should raise alarm. This piece begins:
“President Biden is betting big government can boost long-term growth and vanquish inequality and racism.
His infrastructure and social spending proposals would increase the federal deficit well above last year’s crisis-driven $3.1 trillion. A pandemic bounce will yield 6.5 percent GDP growth this year but longer term, Mr. Biden’s policies will bequeath higher interest rates, inflation, fleeing private investment and many fewer good paying jobs.
Fed Chairman Jerome Powell says the likes of Kimberly-Clark hiking prices on Huggies is a temporary phenomenon, but he is already tightening monetary policy. The 10-year Treasury rate, which provides the benchmark for everything from credit cards to mortgages, has jumped precipitously.
The dismal science and the financial press say higher interest rates reflect expectations for some combination of higher growth and inflation but whatever happened to supply and demand?
In 2020, the Fed purchased Treasuries and other securities approximately equaling the massive federal deficit, but this year its stated policy is to purchase half as many.
Without the Fed mopping up all the bonds the Treasury is spilling, demand is tanking. Longer-term interest rates must rise, and new home construction, auto purchases and shaky businesses propped up by junk bonds will eventually falter.
Raising corporate and capital gains taxes to some of the highest in the world are a biblical imperative for progressives with their disdain for thrift, enterprise, hard work and success.
Along with more government spending, higher interest rates and taxes will crowd out private investment and discourage risk taking on new products — the mother’s milk of productivity growth, higher living standards and international competitiveness.”
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At Wolf Street: Fed Drains $485 Billion in Liquidity from Market via Reverse Repos, Undoing 4 Months of QE, Even as QE Continues, Total Assets Near $8 Trillion
Commodities:
Lithium prices continue to soar – up 88% in 2021.
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Commodity Prices on an Unstoppable Rally: ETFs to Benefit
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Tesla Is “Paying In Advance” For Semiconductors And “Actively Considering” Buying Their Own Foundry
Derivatives:
From behind their paywall, Bloomberg reports: Justice Department Opens Probe Into Archegos Blowup.
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Analysis-New York Could Profit From Brexit Tussle Over Euro Derivatives
Forex & Cryptos:
Over at Larry Greenberg’s Currency Thoughts blog: Markets Looking for Clues to How Central Banks React to Spike in Inflation.
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This was published back in January, but is still instructive: The Most Traded Currency Pairs in Forex (2021 Edition)
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Mark Nestman: Is the Crypto Party Over?
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SEC begins formal review of Fidelity, SkyBridge Bitcoin ETF applications.
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Billionaire Carl Icahn Explores Crypto Investment of Up to $1.5 Billion. JWR’s Comment: If I was a billionaire and about to invest $1.5 billion in a highly-volatile market, then I certainly wouldn’t announce it. I’d wait until post facto. Why pay more for an asset?
Tangibles Investing:
USA Faces Shortages of Lumber, Other Materials.
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Provisos:
SurvivalBlog and its Editors are not paid investment counselors or advisers. Please see our Provisos page for our detailed disclaimers.
News Tips:
Please send your economics and investing news tips to JWR. (Either via e-mail or via our Contact form.) These are often especially relevant because they come from folks who closely watch specific markets. If you spot any news that would be of interest to SurvivalBlog readers, then please send it in. News items from local news outlets that are missed by the news wire services are especially appreciated. And it need not be only about commodities and precious metals. Thanks!