Here are the latest items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. And it bears mention that most of these items are from the “tangibles heavy” contrarian perspective of JWR. (SurvivalBlog’s Founder and Senior Editor.) Today’s focus is on the future of the Euro as a currency unit.
Precious Metals:
Peter Hug: Gold Reacts To A Perceived Hawkish Fed
o o o
Gold Has “Room To Move” – Osisko CEO
Stocks:
Earlier this week, we saw: Dow falls 299 points after Powell signals Fed will keep raising rates to contain inflation. Yes, The Federal Reserve banking cartel is now worried about inflation and higher wages, so they will keep raising interest rates. This will slow the economy, put a damper on the current irrational exuberance of the stock market.
In essence, when The Federal raises the Federal Funds Rate, banks raise their prime rates, to match. That in turn raises business loan rates, mortgage rates, and car loan rates. So if The Fed keeps this up, look for a slowing home building industry, and a slowing car-making industry. The secondary effects are higher bond yields, higher credit card rates, less consumer spending, lower business profits, and less borrowing, in general. Rates have been held artificially low for so long that any substantial rise in interest rates will have magnified effects, compared to what had previously been seen in the normal business cycle. I see a stock slump and recession on the horizon, folks!
Forex (Future of the Euro):
The Euro has been around as an electronic currency unit since 1999 and subsequently as a printed/minted currency since 2002. It has been fairly stable on the foreign exchange (Forex) market for most of its life. But cracks began to appear when chronic over-spending led to a sovereign debt crisis in Europe’s Southern Tier countries. Then, citing oppressive trade regulation from the European Union (EU), British voters wisely opted to leave the EU. (Commonly called Brexit). Most recently, a few other EU countries have been making similar “exit” noises. (Most notably some in Poland there is now hope for “Polexit”.) In all, the future of both the EU as an organization and the Euro as a currency unit are far from certain.
Even with the Trump Administration’s quite clear Weak Dollar policy, I have avoided buying Euros (EUR). I instead hedge by buying Swiss Francs (CHF). That currency is the better bet, in my humble opinion. I’ve done my best to buy CHF during dips in the market. For any SurvivalBlog readers who already have their survival preps squared away, and who already have some barter silver coins, I recommend that you do likewise.
I’ll post some details on how and where to buy Swiss Francs in this column on March 9th.
Commodities:
The Wall Street Journal reports: Forecasts for Oil Prices Rise for Fifth-Straight Month
The New Space Race:
Musk Dream of Space-Based Internet Sent Others Crashing to Earth. Here is a key quote: “Boeing is seeking approval for 60 satellites, and the FCC last year granted OneWeb permission to serve the U.S. market using 720 satellites authorized by the U.K.. SpaceX’s plan calls for 4,425 satellites but it has also applied for another 7,518. FCC Chairman Ajit Pai has given his backing to the proposal, making it likely to win the agency’s clearance to provide broadband via low-earth orbit The planned constellations would far exceed the current number of satellites being operated by all countries, which stood at 1,738 through August of last year, according to a tally kept by the Union of Concerned Scientists.”
Tangibles Investing:
After a short lull, fine art prices at auction are coming on strong. There is even talk that some very rare masterpieces will eventually have Billion Dollar pricetags. After all, the supply of original Monet, Van Gogh, DaVinci, and Rembrandt paintings is fixed, but the number of buyers is growing. Meanwhile all of the fiat currencies in the world are gradually and inexorably inflating. In the long run this means that the prices of fixed-quantity collectible tangibles is bound to rise.
Provisos:
SurvivalBlog and its Editors are not paid investment counselors or advisers. So 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 of via our Contact form.) These are often especially relevant, because they come from folks who particularly watch individual markets. And due to their diligence and focus, we benefit from fresh “on target” investing news. We often “get the scoop” on economic and investing news that is probably ignored (or reported late) by mainstream American news outlets. Thanks!
The New Space Race:
Holy Cow! It’s going to be crowded up there (LEO – Low Earth Orbit) soon. “Gravity” may go from being a scifi movie to a disaster fact.
How else are they going to achieve total control of us? Thousands of satellites will make the job simple.
“In essence, when The Federal raises the Federal Funds Rate (Inflation!), banks raise their prime rates, to match (Inflation!). That in turn raises business loan rates (Inflation!), mortgage rates (Inflation!), and car loan rates (Inflation!). So if The Fed keeps this up, look for a slowing home building industry (Inflation! fewer homes higher prices per home), and a slowing car-making industry (Inflation! fewer cars made, higher prices per car). The secondary effects are higher bond yields (Inflation!), higher credit card rates (Inflation!), less consumer spending (not gonna happen), lower business profits (marginally), and less borrowing, in general (not likely).”
Sounds like inflation to me. Fed’s efforts to control their imaginary inflation is to cause inflation. All the while ignoring the real inflation in the economy that effects all the citizens.
Fed needs to get out of the way and actually let the free market work, causing natural deflation, a function of the free market and real competition. (No, sadly, that’s just a fantasy.)
I might be wrong about the car manufacturers, they actually attempt to compete in the marketplace. Though there might be a new thinning of the auto manufacturing marketplace. Look for Ford, GM, and maybe Chrysler to fold unless they are again deemed too big to fail. In particular, Ford. They have debts that were not wiped out by the bailouts in 2008 since they did not take the bailout.