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 inflation and automatic cost-of-living escalator clauses. (See the Economy & Finance section.)
Precious Metals:
Higher interest rates — with a yield curve that has again gone inverted — and a surge in U.S. Dollar strength triggered a 4.15% drop in spot silver and 2.96% drop in spot gold, on Monday: Price declines in gold, silver as USDX, Treasury yields on the rise. But, predictably, the metals began to bounce back, on Wednesday: Spot silver was up .73% to $21.99, while gold was up 1.26% to $1,844.90 per Troy ounce.
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Gold price forecast for 2022 and beyond: Will the dollar keep it down?
Economy & Finance:
Retail Sales Fall, Fed Raises Interest Rate by Historic .75 Percentage Point. JWR’s Comment: Okay, absent a Chinese invasion of Taiwan and WW3, I’m now making eight predictions for in or before the Fourth Quarter of 2022:
- A Stagnant Economy + Continuing Inflation (“Stagflation.”)
- A lengthy Recession.
- At least six more 25+ basis point bumps in interest rates, by the FOMC.
- Real estate market declines, even amidst inflation.
- A nationwide average of $8.99 per gallon for gasoline, before leveling off.
- Equities market declines: Dow at 25,000, Nasdaq Composite at 8,500, and S&P 500 at 2,800.
- A retreat from the current Dollar Strength, on the Forex.
- A new bull market in precious metals, but with platinum lagging.
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Rand Paul warns of ‘double digit’ interest rates, recession, and joblessness.
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Over at Quoth The Raven: “Warning Flags Are Everywhere”: Kenny Polcari On The ECB, Inflation And U.S. Stocks
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Social Security benefits likely to climb by 8% next year, official says. JWR’s Comments: I’ve warned here before that legislated automatic cost-of-living escalator clauses will create continual ratcheting, as inflation continues to increase. This is will be a classic reinforcing feedback loop, with no easy exit. In essence, Inflation breeds inflation. And, of course, cost-of-living increases based on “official” inflation figures never keep up with real inflation rates. Standby for stagflation, folks.
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At The Burning Platform: Ticking retirement timebomb? Unfunded state pension liabilities grow to $8.28 trillion.
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Commodities:
Solar Microgrid Failure in India.
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Oh, and speaking of India: India Set to Reopen More Than 100 Coal Mines.
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Oklahoma: $100M rare earth metals manufacturing facility announced for Stillwater.
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A background piece, written in 2014: The Effects of Interest Rates on Commodity Prices.
Inflation Watch:
At CNBC: Inflation rose 8.6% in May, highest since 1981. You can watch Larry Kudlow break this down. JWR’s Comments: So, it is becoming clear that inflation is actually accelerating, rather than “peaking” as has been recently claimed by the Bidenistas. It is also obvious that inflation is being under-estimated, in the official reports. (See Shadowstats.com, for more realistic figures. Their latest derived number was a 16.8% annual inflation rate.)
Here is the cold, hard truth: Monetary authorities cannot rapidly balloon a nation’s money supply without some severe inflationary consequences. I believe that we are still in the early stages of a mass inflation cycle. So get out of Dollars and into tangibles, ASAP.
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Median monthly rent surpasses $2,000 in the U.S. for the first time, study finds.
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Forex & Cryptos:
Video: EUR/USD and GBP/USD Forecast June 13, 2022.
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H.L. sent us this: Credit Unions and Banking Groups Warn of “Devastating Consequences” of a U.S. Central Bank Digital Currency.
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Zimbabwe’s inflation soars to 131.7%.
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Reported on Monday: Bitcoin Drops To 18-Months Lows, Has The Market Seen The Worst Of It?
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Dogecoin Shed 91% Of Its Value Since 2021 High – A Musk Tweet To Pump DOGE?
Tangibles Investing:
A reminder to SurvivalBlog readers living in the once-great State of Washington: The Washington 11+ round magazine ban goes into effect on July 1, 2022. I strongly recommend that Washingtonians buy their lifetime supply of magazines, ASAP. They should even buy sets of magazines for guns that they don’t yet own, but might want to buy in few years. Just in case…
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This does not bode well for the real estate market: Mortgage rates are on the rise again. Note that this was reported before the Fed’s latest 75 basis points jump. Here is a pericope:
“The 30-year, fixed-rate mortgage averaged 5.23% in the week ending June 9, up from 5.09% the week before, according to Freddie Mac. The rate remains well above the 2.96% average from this time last year.”
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!