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 the recently-passed $1.2 Trillion infrastructure spending bill. (See the Economy & Finance section.)
Precious Metals:
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Growing solar power sector to drive silver demand for the next decade – Heraeus.
Economy & Finance:
Over at The New American: Congress Enacts $1.2 Trillion “Infrastructure” Bill With Radical Provisions. JWR’s Comments: The word inside the Beltway is that this $1.2 Trillion boondoggle (scaled back from Biden’s $3+ Trillion request) is about 90% pork-barrel spending, mainly benefitting Democrat-dominated coastal states. Take note of the names of the Republicans that signed on to this monstrosity of a spending bill. Also, consider this: It took 200 years for the Federal government to accumulate its first $1 trillion in National Debt. The congresscritters just more than matched that, in a day. It is hard to keep track, but the debt level is now around $29 Trillion. Face the facts, folks: Their only way to escape their mountain of debt is to inflate their way out. Invest, accordingly. Hedge, hedge, hedge!
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At Wolf Street: Further up the Producer Price Pipeline, Inflation Rages at over 20%, Heading for Consumers.
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The stock markets are getting farther and farther from reality. The ratio of corporate equities to GDP in the U.S. (200% at last measure) is the highest in history. Beware. I recommend reducing your exposure.
Commodities:
If you doubt long-term Dollar inflation, then take a look at this chart: Copper Prices – 45 Year Historical Chart. Copper was up 25% in 2020 and thusfar is up 24% in the first three quarters of 2021.
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OilPrice News reports: Oil Prices Soar On Surprise Crude Draw.
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Commodity supercycle set for new highs as inflation runs hot – What’s next? (Video)
Derivatives:
Derivatives Set for $15 Trillion Switch in Libor Test Run.
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Tradeweb Reports Record Trading Volume for October 2021. Record Total Volume of $25.6 Trillion and Record Average Daily Volume of $1.26 Trillion. JWR’s Comments: Note the volume of derivatives traded, particularly the 135% increase in rates derivatives. The report states:
“Swaps/swaptions≥ 1–year ADV [average daily volume] was up 68.3% YoY [Year over Year] to $202.9bn, and total rates derivatives ADV was up 135.8% YoY to $491.3bn.”
The counterparty risk when rates inevitably spike (and over-extended companies fail) will be substantial. Derivatives do a fine job of reducing risk in normal times, but when credit markets get frantic, the risk of disappearing counterparties could be dramatic, with far-reaching consequences!
Forex & Cryptos:
At Currency Thoughts: Global Stock Markets and Dollar Pause.
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Analyst Predicts Altcoin Market To Reach $7 Trillion During This Cycle.
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Bitcoin hits new all-time high, when will it reach full maturity? Farzam Kamalabadi.
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Global Finance reports: Iran To Pilot Central Bank Digital Currency.
Tangibles Investing:
Today’s mortgage refinance rates decline: November 9, 2021. JWR’s Comments: Be watchful for any jump in fixed-rate mortgages above 3.5%. I envision that will probably be the turning point that’ll turn the real estate bull into a bear.
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Growing Real Estate ‘iBuyer’ Companies Raise Concern.
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!