The Market News You Need to Know
Today’s key stories have to do with foreign nations aggressively adding to their gold holdings, while both the deficit and inflation are rising in the United States.
HUNGARY TRIPLES ITS GOLD RESERVES!
Hungary has added gold reserves at a record rate, tripling its central bank holdings in less than three years.
From the Magyar Nemzeti Bank’s (Hungarian Central Bank) official announcement:
“As it carries no credit or counterparty risks, gold facilitates reinforcing trust in a country in all economic environments, which still renders it one of the most crucial reserve assets worldwide…
“Taking into account the country’s long-term national and economic policy strategy objectives, the Magyar Nemzeti Bank decided to triple its gold reserves. Managing new risks arising from the coronavirus pandemic also played a key role in the decision. The appearance of global spikes in government debts or inflation concerns further increase the importance of gold in national strategy as a safe-haven asset and as a store of value.
“As a result of this decision, the country’s gold reserves have been raised from 31.5 tons to 94.5 tons….”
THIRD LARGEST MONTHLY US DEFICIT IN HISTORY!
March was another blow-off month for the US deficit. The Congressional Budget Office reports a $658 shortfall for the month.
It is the third largest monthly deficit in US history, coming in behind the record COVID shutdown deficits in April and June last year.
For the first six months (October 2020 – March 2021) of the current fiscal year, the government ran a $1.7 trillion river of red ink.
That is almost $1 trillion more than the same six months a year earlier.
INFLATION WATCH
We aren’t surprised by the big increase in producer prices in March. We have been reporting on Fed activities and warning that inflation is making a big comeback.
But establishment economists were apparently shocked when the producer price index for March came in twice as high as their forecasts.
The Bureau of Labor Statistics’ final demand index showed a 1.0 percent increase for the month of March. That compares to economists’ expectations as reported by Reuters of only 0.5 percent.
It was the biggest annual gain in 9 ½ years. For the 12 months through March the PPI was up 4.2 percent.
CHINA’S HIDDEN GOLD RESERVES!
Comments by noted gold researcher Alasdair Macleod:
“America has promoted her dollar basically by demoting gold. And yet we have the Chinese and Russians who have taken control of the physical markets, particularly China….
“They also have a lot of hidden reserves. Not only has China become the largest miner, not only has she become the largest refiner of her own gold, but I reckon (and I have had some confirmation on this from quasi-intelligence sources), that China has stored something like 20,000 tons of gold, physical gold in various accounts. They don’t appear in the central bank accounts, but we’re looking at the Communist Party accounts, the Army accounts, the young communist party’s accounts [the Communist Youth League]. It’s spread around.
And I suspect that Russia is in a similar situation.”