Gold Standard News Daily

5.9.24 - Are weekly bank closures a possibility?

Gold last traded at $2,345 an ounce. Silver at $28.32 an ounce.

EDITOR'S NOTE: While the Fed may act like bank failures were a 2023 problem that is behind us, Billionaire Barry Sternlicht sees a different future and he has been warning about it for quite some time. All banks will continue to struggle with rising loan losses, small and regional banks will be hard pressed to absorb them.

Billionaire Barry Sternlicht predicts weekly bank closures as the real estate sector battles high interest rates and inflation - Business Insider

by Erin Snodgrass

Billionaire Barry Sternlicht offered an ominous prediction about America's regional banks amid a coming commercial real estate reckoning.

The Starwood Capital Group CEO told CNBC on Tuesday that he thinks real estate's primary lenders — regional and community banks — could soon be bearing the brunt of high interest rates and inflation.

"You're going to see a regional bank fail every day, or not — every week, maybe two a week," Sternlicht said.

There are more than 4,000 regional and community banks throughout the US, many of which may not have the cash flow to handle major loan losses on real estate debt.

Problems have been pummeling the entirety of the real estate sector, but commercial real estate, in particular, has been struggling due to the rise of remote and hybrid work, leading to more and more vacancies.

Sternlicht has been ringing the warning bells for more than two years, calling the situation an "existential crisis" in a January Bloomberg interview. Earlier this year, he predicted $1 trillion of losses on office properties alone. In the Tuesday interview, Sternlicht said Fed Chair Jerome Powell's ongoing rate hikes will continue to have consequences in the real estate sector for the foreseeable future.

"He's got a hard task with a blunt tool, and the consequence is the real estate markets are taking it on the chin because rates rose so fast. We could have handled this, but we couldn't handle it this fast," Sternlicht said. "The 1.9 trillion of real estate loans, that's a fragile animal right now." READ MORE

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5.8.24 - BRICS Stockpiling Gold in Massive Numbers

Gold last traded at $2,308 an ounce. Silver at $27.32 an ounce.

Stocks are primed to tumble into a bear market as bullish investors have driven equities to 1929 extremes, famed fund manager says -Yahoo! Finance

At the risk of sounding like a broken record, another investor, John Hussman, sees trouble ahead and is again comparing the extremes we are witnessing now to the ones that came before the 1929 crash. Hussman believes we could see a 65% loss in value.

by Jennifer Sor

The stock market's extreme bull run is about to come to an end, as overly optimistic investors have driven equities to the most extreme valuations in nearly a century, according to legendary investor John Hussman.

The Hussman Investment Trust president sounded another bearish warning on stocks this week, pushing back against the strength in equities so far in 2024. The S&P 500 has broken a series of record highs this year, and has regained momentum in recent days after a lackluster month in April.

But the rally has largely been driven by a "certain impatience and fear of missing out" among investors — and market internals are looking "unfavorable,", Hussman said in a note.

His firm's most trusted valuation measure for stocks, which is the ratio of nonfinancial market capitalization to corporate gross value-added, is showing that the S&P 500 is priced at its most extreme levels since 1929, right before the market collapsed 89% peak-to-trough.

Hussman's firm is expecting the S&P 500 to underperform Treasury bonds by 9.3% a year for the next 12 years, based on his firm's internal metrics. That's the worst 12-year performance the metric ever predicted — even worse than in 1929 when market internals suggested that the S&P 500 would underperform Treasury bonds by 6% annually over the following 12 years.

"Statistically, the current set of market conditions looks more 'like' a major bull market peak than any other point in the past century, with the possible exception of the 1929 peak," Hussman said. "That's no assurance that the market will plunge, nor that it can't advance further. Still, given the combination of extreme valuations, unfavorable market internals, and dozens of other factors that cluster among the most 'top-like' in history, we're just fine with a risk-averse, even bearish outlook." READ MORE

BRICS Continues Stockpiling Gold in Massive Numbers -Watcher.Guru

The BRICS' voracious appetite for gold is great for the price of the yellow metal, but it's terrible news for the future of the dollar. This is just another part of their strategy to de-dollarize the globe. These nations see more trouble ahead for the US economy and are shoring up their holdings with gold to protect themselves against it.

by Joshua Ramos

The BRICS economic alliance has continued its ongoing strategy of stockpiling gold in increasing quantities. Indeed, the collective has sought to increase its gold holdings, with China currently on a 17-month purchasing streak.

The increased holdings of the metal by the collective should only increase its value. Throughout the year so far, gold has been surging in price. It most recently reached an all-time high last month, when it reached $2,431. Those prices should only increase as central banks show no sign of slowing down their purchasing practices.

Throughout the last year, the BRICS economic alliance has driven a global shift. Specifically, this has been rooted in collective de-dollarization practices, which have manifested more so in its diversification efforts. Subsequently, many of those have been shared by other central banks.

Yet, that doesn’t appear to be slowing down any time soon, as the BRICS bloc continues to stockpile gold in record numbers. Additionally, the acquisition strategy of these countries may only increase amid these efforts.

China, in particular, has been leading gold demand, which has equated to increasing prices. Speaking to the New York Times, Metalsdaily.com chief executive Ross Norman discussed the nation as the catalyst for increasing gold prices this year. READ MORE

Federal Reserve is giving your money away and it could destroy more than your wallet -Fox Business

Billionaire Investor Stan Druckenmiller recently summed up his feelings on Bidenomics and the Fed rather succinctly, "If I was a professor, I'd give them an F." It's a sentiment many of us share. It's seems hard to believe that the President and the Fed truly have no idea what they are doing, but here we are.

by Paul Mueller

Federal Reserve Chair Jerome Powell spoke May 1, trying to project an image of calm optimism. But, very much like the Wizard of Oz, the Fed doesn't want you to pay attention to the real issue behind the curtain: Fed officials are enabling profligate government spending that is driving our economic woes – including the new, weaker-than-expected jobs report and uptick in unemployment.

To put it bluntly, the Federal Reserve has lost its way. Officials don’t know why inflation has jumped back up this year or what will happen in the coming months. They left their interest rate target unchanged because of this uncertainty. While Powell mentioned "uncertainty" in his remarks, it would be more honest if Fed officials admitted that they really don’t know what’s going on.

The Fed has enabled reckless government borrowing – which has shackled us and our children with a mountain of debt that becomes more costly every year. The Federal Reserve began increasing its balance sheet after the 2008 financial crisis, meaning they increased the money supply to make borrowing cheaper and easier. This enabled the government to spend like a drunken sailor and suffer no consequences. In that time, the federal debt grew to an unbelievable $23 trillion! READ MORE

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5.7.24 - One Final Rally?

Gold last traded at $2,313 an ounce. Silver at $27.26 an ounce.

EDITOR'S NOTE: Another economist is sounding the alarm on a monumental US market crash. Adding to this pressure, the BRICS nations are rapidly de-dollarizing and buying up gold as fast as they can to protect themselves from a potential US market crash. That strategy may prove beneficial for the BRICS but devastating for the US economy.

BRICS: Economist Predicts One Final Rally Before the Markets Crash 50% -watcher.guru

by Vinod Dsouza

Speculations of a recession have been looming large since 2022 as economists have been repeatedly warning about an upcoming market crash. According to economists, the crash could be more severe than the 2008 economic crisis and replicate the worst recession since 1929. If the market crashes, BRICS will benefit as the US economy will suffer the consequences of their own making. The uncontrolled debt of $34.4 trillion is spiraling leading to other developing countries ditching the US dollar for global trade.

On the heels of the BRICS alliance looking to dominate the world’s financial sector, a macroeconomist shared his views that the US markets could rally one last time before tanking 50% or more. This time around, not all countries will be affected if the US economy crashes as developing countries are increasingly accumulating gold in their reserves. BRICS countries have been the largest buyers of gold since 2022 and are safeguarding their economies from a potential US market crash.

US macroeconomist Henrik Zeberg warned that the American markets could replicate the Great Depression of 1929 in 2024. He listed the observations pointed out by the Game of Trades, which shows similar chart patterns that led to previous market crashes. The BRICS alliance is hoping for the US market to crash to further strengthen its de-dollarization agenda. READ MORE

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5.6.24 - Fed Doesn’t Know Which Way To Go

Gold last traded at $2,325 an ounce. Silver at $27.44 an ounce.

EDITOR'S NOTE: There has been a lot of discussion recently about the US stock market heading for a correction; some are going as far to say we may be facing a total crash. Our fractured economy would suggest either is a possibility. This analyst believes we may looking at a crash worse than that of 1929.

Our Deer In The Headlights Moment: The “Worst Market Crash Since 1929” Is Rapidly Approaching And The Fed Doesn’t Know Which Way To Go -The Economic Collapse

The Federal Reserve is stuck between a rock and a hard place. If the Fed pushes rates higher, interest payments on our 34 trillion dollar national debt could spin wildly out of control and bank balance sheets will be in even worse condition than they are now. First Republic just bit the dust, and literally thousands of other small and mid-size banks and in serious jeopardy. So it would be suicidal to hike rates at this point. But if the Fed were to reduce rates, that would be like injecting jet fuel into a raging fire. Our ongoing inflation crisis is absolutely crushing working families, and the rising cost of living has risen to the top of the list of things that U.S. voters are concerned about. The Fed seems very hesitant to cut rates, because that would make inflation even worse. So at this point the Fed is essentially caught in a “deer in the headlights” moment because it doesn’t know which way to go.

But staying on the path that we are currently on is only going to end in disaster.

Mark Spitznagel, the chief investment officer of Universa Investments, recently warned that he believes that the “worst market crash since 1929” is ahead of us…

One of Wall Street’s most bearish skeptics told Business Insider last month that he thinks the “worst market crash since 1929” is coming.

For years, our leaders have been “kicking the can down the road”, but according to Spitznagel all of that intervention has set the stage for an absolutely epic collapse…

In an interview with New York Magazine’s Intelligencer last year, Spitznagel likened the Fed’s “constant monetary intervention” to forest fire suppression.

He went on to say “when you suppress it enough, it gets to a point where you can no longer afford to have any fires burn because they would be too big and too intense.” READ MORE

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5.3.24 - April Payrolls Unexpectedly Plunge

Gold last traded at $2,306 an ounce. Silver at $26.38 an ounce.

EDITOR'S NOTE: Despite the repeated efforts of our government to convince us we are living in a healthy job market, the numbers continue to tell a completely different story. The job market is just another casualty of our new economy. This leaves many people wondering how much longer the ship of our economy can take on water before it finally sinks?

April Payrolls Unexpectedly Plunge, Biggest Miss Since 2021 As Unemployment Rate Rises -ZeroHedge

by Tyler Durden

Ahead of today's payrolls report, in our preview we said that while we knew we would get a slowdown, the question was how big it would be (and before that we also asked if Yellen had leaked the weaker number to Japan ahead of their multiple interventions this week to prevent them from wasting tens of billions in intervention dry capital for nothing).

We got the answer moments ago when the BLS reported that in April the US added just 175K jobs, a nearly 50% drop from the upward revised 315K (was 303K), the lowest print since October 2023...

... and a two-sigma miss to estimates of 240K.

In fact, as shown below, this was the biggest miss since Dec 2021.

As usual, prior data was net revised lower, with the change in total nonfarm payroll employment for February revised down by 34,000, from +270,000 to +236,000, and the change for March was revised up by 12,000, from +303,000 to +315,000. With these revisions, employment in February and March combined is 22,000 lower than previously reported.

What was behind the unexpected payrolls plunge? Blame government, which added just 8,000 jobs in April the least since Dec 2021, almost as if the government itself was goalseeking the final result. VIEW CHARTS AND READ MORE

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5.2.24 - An Absolutely Enormous Economic Shift

Gold last traded at $2,322 an ounce. Silver at $26.72 an ounce.

EDITOR'S NOTE: If you have found yourself looking at the world around you and wondering what is going on, you're not alone. In some ways it seems as though the world has been flipped over on its financial head. This article takes a closer look as to why we are feeling the way we are feeling.

An Absolutely Enormous Economic Shift Of Historic Proportions Is Now Taking Place Right In Front Of Our Eyes -The Economic Collapse

Can you feel it too? Over the past few weeks, I have heard from so many readers that are deeply troubled about economic conditions where they live. In some cases, sales are way down. In other cases, it seems almost impossible to find a decent job. It is almost as if a tremendous chill descended upon the U.S. economy as the second quarter of 2024 began. Yes, economic conditions have certainly not been good for a few years, but it appears that an absolutely enormous economic shift of historic proportions is now taking place right in front of our eyes. Other than the early stages of the pandemic, we haven’t seen anything like this since 2008 and 2009.

Let me give you an example that will illustrate what I am talking about. A reader that lives near Seattle recently wrote me about the horrible downturn that she is witnessing in the tech industry, and she said that I could share this information with all of you…

I live in the tech corridor outside of Seattle and practically no one can find a job in tech. Apparently the costs of AI processors and servers are so expensive that large tech companies are laying off workers to accommodate for the increased infrastructure costs. I would estimate that 50 percent of the people I know in tech are unemployed including myself and my spouse. In addition they are laying off both FTEs and contractors and not backfilling the positions. The problem is exacerbated if you’re over 40 because they don’t want to compensate for experience. In fact experience seems to be working against people. Not to mention AI taking over roles like technical writing and marketing communications. It’s getting really bad out there and the large companies play along with the media. I’ve met with several ex colleagues who have had their entire teams laid off and former FTEs who have had to take major pay cuts as contractors. I’ve also heard of more rounds of layoffs coming up. I went over to Microsoft the other morning to have coffee with an ex colleague and it’s a ghost town. No one in conference rooms or offices. Maybe people are working from home but it sure felt very different.

That email resonated with me so strongly, because she is right.

Vast hordes of tech workers have already been laid off, and more will be hitting the bricks soon.

But the tech industry is supposed to be one of our economic bright spots.

If things are this bad for the tech industry, what does this say about the economy as a whole? READ MORE

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5.1.24 - More Bank Failures to Come?

Gold last traded at $2,322 an ounce. Silver at $26.72 an ounce.

Billionaire investor David Einhorn shares an overlooked theory for why gold prices have spiked so much -Yahoo! Finance

Global central banks continue to gobble up gold. Billionaire investor David Einhorn believes this is why gold continues to shine even as hopes of a rate cut dwindle. But could there be a deeper reason? Other countries see the writing on the wall with the dismal future of our economy and it appears individual investors are starting to see it too. Gold, a long-trusted safe haven, is a harbor in this building tempest.

by Yuheng Zhan

Gold has had a record-setting year so far in 2024.

That being said, the commodity's sudden surge may come as a surprise. That's because the macro environment was supposed to create headwinds to gold's price appreciation, as the Federal Reserve's higher-for-longer interest rate stance typically makes other investments like bonds and saving accounts more appealing compared to the metal, as it's not a yield-bearing asset.

To explain the strong run for gold, billionaire investor David Einhorn offered a potential theory in his latest letter to investors published this week.

"While it's possible the advance was related to the market beginning to doubt the sustainability and wisdom of both monetary and fiscal policies, other indicia suggest that this was not the case," Einhorn said in the letter.

Instead, the Greenlight Capital founder said there's been a "secular trend" of the countries in the East buying gold from Western nations.

"Perhaps the West is running out of gold it is willing to sell, while Eastern demand has remained strong enough to force the price higher," he said in the statement.

Indeed, global central banks have been racing to buy gold, snapping up over 1,000 tonnes for the past two years straight, according to data from World Gold Council — and one of the biggest buyers is China. READ MORE

Republic First seizure signals more bank failures to come, expert warns -Fox Business

As the talking heads discuss news of each new bank failure, they seem to believe *this* will be the last one. And yet, another one bites the dust. But banking experts aren't wearing the same rose-colored glasses. Joseph Lynyak, a banking attorney, believes this is just the start of the next round of failures.

by Breck Dumas

Republic First Bank, a regional lender based out of Philadelphia, became the first bank failure of 2024 on Friday when it was shut down by Pennsylvania's bank regulator and the Federal Deposit Insurance Corp. (FDIC) seized control of the operation.

The FDIC quickly made a deal for Fulton Bank to buy Republic First's assets, but one expert on financial regulatory reform and bank failures says the collapse could be a harbinger of things to come.

"This bank failure indicates that additional failures will occur and will range between smaller community banks and larger banks," said Joseph Lynyak, a banking attorney at Dorsey & Whitney, regarding the seizure of Republic First by U.S. regulators.

"The cause is twofold: higher-cost deposits exceeding the yield on low-yield treasury securities and similar investments held by banks, and the deteriorating commercial real estate market and commercial real estate loans," said Lynyak, who specializes in bank receiverships and failures.

Regional banks have been struggling to retain deposits as customers seek the safety of larger "too-big-to-fail" rivals, and higher interest rates have diminished the value of their loan books due to increased unrealized losses and lower commercial real estate values. READ MORE

Bye-Bye, Goldilocks -Daily Reckoning

The Fed has touted that there would be three rate cuts by the end of the year. Wall Street rallied on this news even though there was little indication it would actually happen. Here we are on May 1, with no cuts made. Does the Fed have time, in an election year, to still squeeze in three? Perhaps, it will only be two, or one, or none. Larry Summers has even warned the Fed may end up having to raise rates yet again.

Last Friday’s GDP number came in weaker-than-expected at 1.6% annualized, the weakest quarterly gain in almost two years.

I’ve written for months that there would be no interest rate cut by the Fed at their June meeting. Wall Street was putting the odds of a rate cut at around 70% and the stock market was rallying in anticipating the cut.

They were wrong, I was right. That’s not to brag, it’s just that I use a better set of analytic tools than they do.

Today, every top Wall Street analyst is proclaiming there will be no rate cut in June, and maybe not in July either. Thanks, guys and gals. You’re only about three months behind the curve.

That’s worthless forecasting, but it’s what Wall Street does best.

Now there’s a chance that we won’t get any rate cuts this year. So Wall Street has been wrong about rate cuts for almost two years, and they’re wrong now.

Recall, by the late summer of 2022, Wall Street was already talking about the “pivot.”

This was jargon for a rate cut. No one expected it that soon, but early 2023 was Wall Street’s target date for the pivot. That never happened. Wall Street extended the pivot date of mid-2023. Then late 2023. Then early 2024. Wrong, wrong and wrong.

Moving the pivot date from June 2024 to later this year is just the latest blunder. READ MORE

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4.30.24 - Gold Demand Hits Highest Level Since 2016

Gold last traded at $2,286 an ounce. Silver at $26.29 an ounce.

EDITOR'S NOTE: If you have wondered why gold prices have continued to rise so sharply for so long, here's one reason. Countries, institutions, banks and individuals have been buying gold at a record pace, causing rapid price appreciation. The better news? According to many, we're just getting started.

Gold Demand Hits Highest Level Since 2016, World Gold Council Says -Forbes

by Royston Wild

Demand for safe haven gold rose to its highest level in seven years in the first quarter of 2024, according to the World Gold Council.

Total bullion demand (including over-the-counter trades) rose 3% year on year between January and March, the body said, to 1,238 tonnes.

Excluding over-the-counter business, gold demand reversed 5% from the corresponding 2023 period, to 1,102 tonnes.

Average gold prices rose 10% year on year in quarter one, or 5% from the final three months of 2023, to an all-time quarterly high of $2,070 per ounce as macroeconomic and geopolitical drove demand for the flight-to-safety asset.

The WGC said that "healthy investment from the OTC market, persistent central bank buying, and higher demand from Asian buyers" all drove gold prices skywards last quarter.

The metal has continued to rise and struck fresh record highs of $2,364 per ounce in early April. It was last dealing at $2,314. READ MORE

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