Here are the latest news items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. In this column, JWR also covers hedges, derivatives, and various obscura. Most of these items are from JWR’s “tangibles heavy” contrarian perspective. Today, we report on Janet Yellen speaking the “D” word: Default. (See the Economy & Finance section.)
Precious Metals:
Posted last Friday: With gold ending the week above $1,900, analysts turn their focus to $2,000.
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At Gold-Eagle.com: How Cheap are the Mining Shares? The Barron’s Gold Mining Index Tells All. A key quote: “…the broad stock market is nearing the edge of a big-bear market decline that will shock people. The gold miners have historically been counter-cyclical to the broad market in times of its distress.”
Economy & Finance:
Yellen warns of US default risk by early June, urges debt limit hike. JWR’s Comments: When national treasury or central bank officials use the dreaded “D” word, beware! The Treasury Department’s cost of servicing the national debt is getting away from them. Once interest rates spike, the dominies might begin to fall.
A side note: Some 33 years ago, when I wrote the first draft of what later became my novel Patriots, I included this, in the opening chapter:
“In Europe, international bankers began to vocally express their doubts that the U.S. government could continue to make its interest payments on the burgeoning debt. In mid-August, the chairman of the Deutsche Bundesbank made some “off the record” comments to a reporter from The Economist magazine. Within hours, his words flashed around the world via the Internet: “A full-scale default on U.S. Treasuries appears imminent.” He had spoken the dreaded “D” word. His choice of the word imminent in conjunction with the word default caused the value of the dollar to plummet on the international currency exchanges the next day.”
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I just found this web page, issuing a similar warning: Higher Interest Rates Will Raise Interest Costs on the National Debt.
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Forbes: Recession Fears 2023: What Lies Ahead?
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At Zero Hedge: How Crazy Will Economic Conditions Be in 2023?