Trouble Hiding in Plain Sight!

28 Aug

Trouble Hiding in Plain Sight!

“Unprecedented” deficits!; “Crisis-size deficits!”

Here’s the lead of an August 24 Bloomberg News story:

US Budget Deficits Are Exploding Like Never Before

The outlook for the federal budget right now is essentially unprecedented—crisis-size deficits as far as the eye can see, even though the economy appears to be in good health. That prospect is making investors uneasy, as demonstrated by yields on benchmark 10-year Treasuries climbing above 4.3% this week, their highest levels since 2007. Other borrowing costs are rising in tandem: The average rate on a 30-year fixed mortgage has surged above 7% for the first time in more than two decades.

Our thanks to Bill Bonner and his newsletter Bonner Private Research for calling Bloomberg’s story to our attention.  We certainly know what’s going on with the Biden deficit, but it saves us from having to write it.  And after all, we are a little overwhelmed with everything headed our way.  

  • China’s economy is beginning to swirl down into black hole of deflation.  Remember, it is as they say a global economy.  The popping of one bubble, especially one as big a China’s inevitably will mean the popping of others. 
  • US creditworthiness has been downgraded and is at risk and as is the solvency of a growing number of US banks. 
  • Freddie Mac says the latest weekly average 30-year mortgage rate, 7.23 percent, is the highest in two decades.  Meanwhile, at the Jackson Hole gathering, Federal Reserve Chairman Jerome Powell has signaled that the Fed isn’t finished raising rates.
  • Saudi Arabia and the United Arab Emirates have been admitted to the BRICS economic and trade consortium.  John Rubino points out that the world’s second and third largest oil producers, Saudi Arabia and Russia, “will be operating at least partially outside the dollar-centric financial system.”  Furthermore, Iran, Argentina, Egypt, and Ethiopia are now scheduled to join BRICS next year. 

As you can see, trouble for the US economy is hiding in plain sight.  Isn’t it time to review your investment portfolio to fortify your holdings of real money – gold and silver.  Call today and speak with a Republic Monetary Exchange precious metals professional!