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Where do you rate current US economic conditions?

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  • blitzdudeblitzdude Posts: 5,913 ✭✭✭✭✭
    DEFCON 5 - FED has solved all the problems

    We are nowhere near the disaster of 2008. > @derryb said:

    @RobM said:
    Only options now are to screw the masses with inflation, or claw back much of the paper gains and accept a recession. Debatable as to how severe it will be, but it is coming (if not already here)

    Either way masses are already screwed by real inflation as well as the unemployment that is coming due to higher rates. Recession (by definition) is here. Those that don't agree will soon sing a different tune.

    What happens when FED runs out of bullets?

    It must be groundhog day. Welcome to the gutter.

    The whole worlds off its rocker, buy Gold™.

  • derrybderryb Posts: 36,847 ✭✭✭✭✭
    edited September 24, 2022 5:58AM
    DEFCON 3 - Looking to dump my dollars

    Why a FED pivot is soon in the cards.

    FED jawboning says not, but it won't be the first time they lied.

    Natural forces of supply and demand are the best regulators on earth.

  • cohodkcohodk Posts: 19,160 ✭✭✭✭✭

    @derryb said:
    Why a FED pivot is soon in the cards.

    FED jawboning says not, but it won't be the first time they lied.

    Would a Fed pivot alter your view of much further declines in stock market?

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,847 ✭✭✭✭✭
    edited September 24, 2022 7:02AM
    DEFCON 3 - Looking to dump my dollars

    FED pivot would tell the stock market "while we had to take a break, we still have your back, start bidding."

    And if a reversal alone did not revive an interest rate tattered economy, they would turn on the christmas money tree.

    Natural forces of supply and demand are the best regulators on earth.

  • tincuptincup Posts: 5,159 ✭✭✭✭✭

    Wonder how the stock market will do this week.... October is a month where both the stock market and the precious metals markets have taken pretty good hits in some past years.

    ----- kj
  • RobMRobM Posts: 556 ✭✭✭

    @tincup said:
    Wonder how the stock market will do this week.... October is a month where both the stock market and the precious metals markets have taken pretty good hits in some past years.

    Hard to predict, but if today (Monday) mid day is any indication... DOWN. I am somewhat shocked that the Fed hasn't already pivoted. But they waited far too long to start raising rates, and accumulated an obscene balance sheet level in the process. Stonks are going down until the Fed stops QT and reverses rate hikes. Fiscal policy needs to both cut spending AND raise taxes. Sadly, yes, raise taxes. Most people aren't aware that this year's "deficit reduction" has little to do with responsible fiscal policy, but everything to do with hundreds of billions of leftover pandemic stimulus that needs to be made up somehow going forward.

  • rte592rte592 Posts: 1,682 ✭✭✭✭✭

    @tincup said:

    Stonks are going down until the Fed stops QT and reverses rate hikes. Fiscal policy needs to both cut spending AND raise taxes. Sadly, yes, raise taxes. Most people aren't aware that this year's "deficit reduction" has little to do with responsible fiscal policy, but everything to do with hundreds of billions of leftover pandemic stimulus that needs to be made up somehow going forward.

    Let the dolts that dreamed up those hundreds of billions in leftovers dig deep in their personal pockets.
    Those are the ones that made the money from this crysis.

  • derrybderryb Posts: 36,847 ✭✭✭✭✭
    edited September 27, 2022 1:24PM
    DEFCON 3 - Looking to dump my dollars

    Credit Default Swaps (CDSs) on Credit Suisse now at the peak reached during GFC 2008. This is the insurance cost against default on their bonds. Remember, since 2008 the rules were changed to put depositors on the hook for bank losses. How safe is your money at your bank?

    Natural forces of supply and demand are the best regulators on earth.

  • blitzdudeblitzdude Posts: 5,913 ✭✭✭✭✭
    DEFCON 5 - FED has solved all the problems

    @derryb said:

    How safe is your money at your bank?

    VERY. Hell it's hitting multiple decade highs. RGDS!

    The whole worlds off its rocker, buy Gold™.

  • derrybderryb Posts: 36,847 ✭✭✭✭✭
    DEFCON 3 - Looking to dump my dollars

    @blitzdude said:

    @derryb said:

    How safe is your money at your bank?

    VERY. Hell it's hitting multiple decade highs. RGDS!

    So is risk. LOL

    Natural forces of supply and demand are the best regulators on earth.

  • OPAOPA Posts: 17,123 ✭✭✭✭✭

    @derryb said:

    How safe is your money at your bank?

    A lot better than those holding PM's or crypto currency's ;)

    "Bongo drive 1984 Lincoln that looks like old coin dug from ground."
  • BLUEJAYWAYBLUEJAYWAY Posts: 9,219 ✭✭✭✭✭

    Always $ to be made in a diving market. Buy at the bottom, wait a few years until the policy influencers move the needle.

    Successful transactions:Tookybandit. "Everyone is equal, some are more equal than others".
  • meluaufeetmeluaufeet Posts: 764 ✭✭✭

    Global Macro setup for the next 3 qtrs is ugly. Really ugly.

  • jmski52jmski52 Posts: 22,869 ✭✭✭✭✭
    edited September 28, 2022 4:40AM
    DEFCON 5 - FED has solved all the problems

    How safe is your money at your bank?

    A lot better than those holding PM's or crypto currency's ;)

    Yeah, they'll probably only take about 10% out of bank accounts the first time around.............when they bail you in.

    Remembering that they changed the banking laws a few years ago so that your bank deposits are merely a loan to the bank and that the bank already owns your account. Nice, huh?

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • GoldenageGoldenage Posts: 3,278 ✭✭✭✭✭

    The more that things change the more they stay the same.

  • derrybderryb Posts: 36,847 ✭✭✭✭✭
    edited September 28, 2022 12:22PM
    DEFCON 3 - Looking to dump my dollars

    @derryb said:
    Why a FED pivot is soon in the cards.

    FED jawboning says not, but it won't be the first time they lied.

    And winter begins, Will the bond market be the US camel's straw?

    Natural forces of supply and demand are the best regulators on earth.

  • bidaskbidask Posts: 14,017 ✭✭✭✭✭
    DEFCON 2 - Time to barter my PMs

    I bought a two Treasury note 2 days ago locked 4.25% ......pretty happy with that ...and oh by the way it is exempt from state income taxes :)

    I manage money. I earn money. I save money .
    I give away money. I collect money.
    I don’t love money . I do love the Lord God.




  • derrybderryb Posts: 36,847 ✭✭✭✭✭
    edited October 2, 2022 8:28AM
    DEFCON 3 - Looking to dump my dollars

    @bidask said:
    I bought a two Treasury note 2 days ago locked 4.25% ......pretty happy with that ...and oh by the way it is exempt from state income taxes :)

    I bonds (treasurydirect.com) currently paying 9.62%. Limit of $10K purchase per person per year. All of the family have some. New six month interest rate will be set Nov. 1, likely to be higher, might want to wait until then to lock in.

    Natural forces of supply and demand are the best regulators on earth.

  • blitzdudeblitzdude Posts: 5,913 ✭✭✭✭✭
    DEFCON 5 - FED has solved all the problems

    @derryb said:

    @bidask said:
    I bought a two Treasury note 2 days ago locked 4.25% ......pretty happy with that ...and oh by the way it is exempt from state income taxes :)

    I bonds (treasurydirect.com) currently paying 9.62%. Limit of $10K purchase per person per year. All of the family have some. New six month interest rate will be set Nov. 1, likely to be higher, might want to wait until to lock in.

    Hope you are correct on the rate being higher, but I have read from several sources that it is likely to drop to around 6.5-6.75%. Still not bad but 9+ is obviously better. Not like I have much anyway. Me and momma each did the $10k when they went to 9.62. RGDS

    The whole worlds off its rocker, buy Gold™.

  • HigashiyamaHigashiyama Posts: 2,192 ✭✭✭✭✭

    One thing that I think is clear is that the US economy is in much better shape (and likely faces fewer downside risks) than virtually all other of the larger world economies.

    Where would you rather be doing business? Australia? Parts of Canada? Southeast Asia, perhaps? ZIRP was a collective mess, but the US is much better positioned to deal with the consequences than others.

    Higashiyama
  • derrybderryb Posts: 36,847 ✭✭✭✭✭
    edited September 28, 2022 5:14PM
    DEFCON 3 - Looking to dump my dollars

    @Higashiyama said:
    One thing that I think is clear is that the US economy is in much better shape (and likely faces fewer downside risks) than virtually all other of the larger world economies.

    A result of US led sanctions? Worked well at keeping the dollar king.

    Where would you rather be doing business? Australia? Parts of Canada? Southeast Asia, perhaps? ZIRP was a collective mess, but the US is much better positioned to deal with the consequences than others.

    They all deal with consequences the same way, some just have to do it sooner or more often than others:

    Natural forces of supply and demand are the best regulators on earth.

  • cohodkcohodk Posts: 19,160 ✭✭✭✭✭

    Oh boy....all this bond buying talk. Jmski gonna ruffle a feather.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • dcarrdcarr Posts: 8,485 ✭✭✭✭✭

    @cohodk said:
    Oh boy....all this bond buying talk. Jmski gonna ruffle a feather.

    Another typical attempt to trivialize a rather serious situation.

  • OPAOPA Posts: 17,123 ✭✭✭✭✭

    @jmski52 said:
    How safe is your money at your bank?

    A lot better than those holding PM's or crypto currency's ;)

    Yeah, they'll probably only take about 10% out of bank accounts the first time around.............when they bail you in.

    Remembering that they changed the banking laws a few years ago so that your bank deposits are merely a loan to the bank and that the bank already owns your account. Nice, huh?

    Don't hold your breath waiting for that scenario. Of course if you are die heart doomsday subscriber, time to settle down in your bomb shelter and hope for the best, which I know you're not. A little bid of common sense would tell you ... not gonna happen. It didn't happen in 2008, "when the world was coming to an end," as so many self taught economics fortune tellers predicted and most likely not gonna happen this time around.

    "Bongo drive 1984 Lincoln that looks like old coin dug from ground."
  • derrybderryb Posts: 36,847 ✭✭✭✭✭
    DEFCON 3 - Looking to dump my dollars

    @OPA said:

    @jmski52 said:
    How safe is your money at your bank?

    A lot better than those holding PM's or crypto currency's ;)

    Yeah, they'll probably only take about 10% out of bank accounts the first time around.............when they bail you in.

    Remembering that they changed the banking laws a few years ago so that your bank deposits are merely a loan to the bank and that the bank already owns your account. Nice, huh?

    Don't hold your breath waiting for that scenario. Of course if you are die heart doomsday subscriber, time to settle down in your bomb shelter and hope for the best, which I know you're not. A little bid of common sense would tell you ... not gonna happen. It didn't happen in 2008, "when the world was coming to an end," as so many self taught economics fortune tellers predicted and most likely not gonna happen this time around.

    Bail-in didn't happen to account holders in 08 because the rules had not yet been changed to put them on the hook. All Americans are currently taking the 2008 hit (inflation) as a result of the trillion$ created to bail out the banks. So, yea, it did happen, and yes it is gonna happen again. One need not be in a bomb shelter to understand and see this.

    But, hey. . .

    Natural forces of supply and demand are the best regulators on earth.

  • blitzdudeblitzdude Posts: 5,913 ✭✭✭✭✭
    DEFCON 5 - FED has solved all the problems

    @derryb said:
    But, hey. . .

    AMEN brother. Looks like there might just be hope for you yet. RGDS!

    The whole worlds off its rocker, buy Gold™.

  • cohodkcohodk Posts: 19,160 ✭✭✭✭✭

    @dcarr said:

    @cohodk said:
    Oh boy....all this bond buying talk. Jmski gonna ruffle a feather.

    Another typical attempt to trivialize a rather serious situation.

    Buying a 2 yr treasury is a "rather serious situation"?

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • dcarrdcarr Posts: 8,485 ✭✭✭✭✭

    @cohodk said:

    @dcarr said:

    @cohodk said:
    Oh boy....all this bond buying talk. Jmski gonna ruffle a feather.

    Another typical attempt to trivialize a rather serious situation.

    Buying a 2 yr treasury is a "rather serious situation"?

    No, Bank of England resuming "quantitative easing" is.

  • cohodkcohodk Posts: 19,160 ✭✭✭✭✭
    edited September 30, 2022 8:08AM

    @dcarr said:

    @cohodk said:

    @dcarr said:

    @cohodk said:
    Oh boy....all this bond buying talk. Jmski gonna ruffle a feather.

    Another typical attempt to trivialize a rather serious situation.

    Buying a 2 yr treasury is a "rather serious situation"?

    No, Bank of England resuming "quantitative easing" is.

    Oh ok. Same old same old doesnt worry me..

    Current conditions...folk have jobs and they're spending money.

    https://www.marketwatch.com/story/jobless-claims-drop-to-lowest-level-since-april-11664455275?mod=economic-report

    https://www.wsj.com/articles/inflation-consumer-spending-personal-income-august-2022-11664484435

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • WCCWCC Posts: 2,587 ✭✭✭✭✭

    @jmski52 said:
    How safe is your money at your bank?

    Remembering that they changed the banking laws a few years ago so that your bank deposits are merely a loan to the bank and that the bank already owns your account. Nice, huh?

    Not a few years ago. It's been a defacto loan as long as fractional reserve lending has existed. If the bank is paying you interest and or loaning your money out, it's a loan to the bank. Banks wouldn't pay interest or loan out real deposits. The first would bankrupt them and the second is (or at least should be) illegal.

    Banks do not have custody arrangements with depositors.

    Having said this, this makes bank "bail-ins" entirely appropriate. Why should anyone making an unsecured loan to anyone (yes, a bank "deposit") get bailed out by anyone else?

    It doesn't matter that they think the arrangement is different.

  • WCCWCC Posts: 2,587 ✭✭✭✭✭

    To answer the question in the OP, none of the above.

    I'd describe current conditions as poor for most of the population and getting worse. It's not the "usual" where a large number or above average percentage are unemployed, but they are still becoming poorer anyway.

  • ShadyDaveShadyDave Posts: 2,200 ✭✭✭✭✭

    Anyone else hearing that an emergency fed meeting is happening Monday morning due to Credit Suisse?

  • dcarrdcarr Posts: 8,485 ✭✭✭✭✭

    @ShadyDave said:
    Anyone else hearing that an emergency fed meeting is happening Monday morning due to Credit Suisse?

    No, but I will watch what develops (if anything) on Monday.

  • WCCWCC Posts: 2,587 ✭✭✭✭✭

    @ShadyDave said:
    Anyone else hearing that an emergency fed meeting is happening Monday morning due to Credit Suisse?

    Definitely a candidate for a future failure or bailout. In one sense, hard to believe that what used to be relatively conservatively run banks (this one and UBS) opted to play in the casino with Wall Street and the City of London. Credit Suisse's path to disaster started with their joint venture and subsequent buyout of US "bulge bracket" firm First Boston Corporation.

    Swiss Government and SNB should have allowed both Credit Suisse and UBS to fail in 2008, at most only bailing out their Swiss operations or somewhat more.

    I also suspect that the SNB's deranged monetary policy to suppress value of CHF in 2011 was influenced by these two banks. The Swiss public and all CHF holders will eventually pay the price for this mistake.

    I would have implemented FX controls to attempt to prevent speculators from buying the CHF. Non-Swiss residents don't have a right to own the currency.

  • tincuptincup Posts: 5,159 ✭✭✭✭✭

    Been seeing a couple of references to Credit Suisse potential issues... will just have to see what Monday brings.

    ----- kj
  • derrybderryb Posts: 36,847 ✭✭✭✭✭
    edited October 2, 2022 3:26PM
    DEFCON 3 - Looking to dump my dollars

    @ShadyDave said:
    Anyone else hearing that an emergency fed meeting is happening Monday morning due to Credit Suisse?

    "emergency" rate hike pause before the pivot? - good for stocks, bad for inflation, good for gold

    open dollar swap window for the EU and the UK? - good for stocks, bad for inflation, good for gold

    Natural forces of supply and demand are the best regulators on earth.

  • derrybderryb Posts: 36,847 ✭✭✭✭✭
    edited October 3, 2022 4:05AM
    DEFCON 3 - Looking to dump my dollars

    @tincup said:
    Been seeing a couple of references to Credit Suisse potential issues... will just have to see what Monday brings.

    CS's recent problems began in April 2021 when it lost billions in Archegos hedge fund that was discussed in detail In the banks pull weekend all nighter thread.. Appears the warning there that the CS chickens would come home to roost advancing beyond conspiracy theory. LOL

    Natural forces of supply and demand are the best regulators on earth.

  • ctf_error_coinsctf_error_coins Posts: 15,433 ✭✭✭✭✭
    DEFCON 5 - FED has solved all the problems

  • jmski52jmski52 Posts: 22,869 ✭✭✭✭✭
    DEFCON 5 - FED has solved all the problems

    It's been a defacto loan as long as fractional reserve lending has existed. If the bank is paying you interest and or loaning your money out, it's a loan to the bank. Banks wouldn't pay interest or loan out real deposits. The first would bankrupt them and the second is (or at least should be) illegal.

    defacto, yeah and now it's been codified. Explain why a private institution should be allowed to lend out 10X the amount of my unsecured loan? Thats the part that is completely illicit, and yet nobody questions it. Well, almost nobody.

    Banks do not have custody arrangements with depositors.

    Having said this, this makes bank "bail-ins" entirely appropriate. Why should anyone making an unsecured loan to anyone (yes, a bank "deposit") get bailed out by anyone else?

    It doesn't matter that they think the arrangement is different.

    Yes, and why did the banks get bailed out in 2008? If bail-ins are appropriate, are not bank bail-outs inappropriate?

    You can't have it both ways, unless all of that moral hazard is just fine, which it is not. The system has been corrupt for a long time and it's only getting worse.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • derrybderryb Posts: 36,847 ✭✭✭✭✭
    edited October 3, 2022 4:23PM
    DEFCON 3 - Looking to dump my dollars

    Markets shake off (turn blind eye) to Credit Suisse threat to US bank derivative exposure. Remember, by the time they accepted the 2008 Lehman debacle for what it was, it was far too late.

    And FED;s Williams claims, “History may be less of a precedent for appropriate policy" hile the UN begs the FED to stop pushing the global economy into recession.

    So the FED believes that this time inflation is different? LOL

    Natural forces of supply and demand are the best regulators on earth.

  • WCCWCC Posts: 2,587 ✭✭✭✭✭
    edited October 3, 2022 4:02PM

    @jmski52 said:

    defacto, yeah and now it's been codified. Explain why a private institution should be allowed to lend out 10X the amount of my unsecured loan? Thats the part that is completely illicit, and yet nobody questions it. Well, almost nobody.

    Never said I agreed with this.

    Problem is customers in their ignorance don't know what they actually agreed to which should be:

    1) You loan your money to the bank at interest (not 0% as under ZIRP) and take full risk. No deposit insurance. It's a loan, not a deposit.

    2) You place your money on deposit with the bank under a custody agreement and they can't lend it out. You also pay for all bank services, including for their custody services for your deposit. No more "free" checking or anything else. No deposit insurance here either.

    @jmski52 said:

    Yes, and why did the banks get bailed out in 2008? If bail-ins are appropriate, are not bank bail-outs inappropriate?

    Never said I agreed with this either.

    @jmski52 said:

    You can't have it both ways, unless all of that moral hazard is just fine, which it is not. The system has been corrupt for a long time and it's only getting worse.

    Never said it should be.

  • derrybderryb Posts: 36,847 ✭✭✭✭✭
    DEFCON 3 - Looking to dump my dollars

    Anatomy of a Banking Crisis

    "Banking is a business of trust. If the trust in a bank or in the unlimited support of authorities for the bank, disappears, a bank run commences."

    Natural forces of supply and demand are the best regulators on earth.

  • ctf_error_coinsctf_error_coins Posts: 15,433 ✭✭✭✭✭
    edited October 4, 2022 10:24AM
    DEFCON 5 - FED has solved all the problems

    Going to Home Depot to buy some lumber today :)

  • derrybderryb Posts: 36,847 ✭✭✭✭✭
    DEFCON 3 - Looking to dump my dollars

    We Blew It: Malinvestment and the Plundering of Productive Assets

    "Plunder is fun until everything has been plundered. Nothing is infinite except greed and credulity. Unfortunately, neither greed nor credulity can build a sustainable, productive economy."

    Natural forces of supply and demand are the best regulators on earth.

  • ShadyDaveShadyDave Posts: 2,200 ✭✭✭✭✭

    https://www.cnbc.com/2022/10/07/jobs-report-september-2022.html

    Jobs report this morning indicated payrolls increased 263,000 for the month, under the estimate for 275,000. The unemployment rate dropped from 3.7% to 3.5% and the markets reacted by going lower. Brace for another 75bps increase at the next fed meeting, things do not seem to be deteriorating in the economy quick enough to make the fed happy.

    Markets are expecting another 75bps at the fed meeting scheduled for 11.2.22, right before midterms.
    https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

  • derrybderryb Posts: 36,847 ✭✭✭✭✭
    edited October 7, 2022 7:28AM
    DEFCON 3 - Looking to dump my dollars

    @ShadyDave said:

    Markets are expecting another 75bps at the fed meeting scheduled for 11.2.22, right before midterms.
    https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

    The rate decision at that time will tell us if the FED is truly independent from the politicians. I suspect they are not simply because in reality they should have already raised rates much higher if they want to win the fight against price inflation. A deep recession is required to bring inflation to their target. Or, they can simply raise their "target" resulting in a much longer period of continued high prices.

    CNBC is reporting that a recession is worse for the economy than the current inflation crisis. Hogwash! As painful as an engineered recession (higher rates) can be, it is the quickest and correct way to win the inflation battle. A brave and independent Paul Volker proved this to the world 40 years ago.

    Natural forces of supply and demand are the best regulators on earth.

  • RobMRobM Posts: 556 ✭✭✭

    Keep in mind that before 11/2, more than half of US voters will have likely already voted. A rate hike on 11/2 will have only modest effect on who people are voting for. A candidate could have a stroke between now and 11/02 and get elected. Then again, a candidate could probably had a stroke before early voting even started and still get elected.

  • RobMRobM Posts: 556 ✭✭✭

    Here are some things to consider going into the next few quarters...
    1. Productivity losses. Quiet quitting is a real thing. If you work for a mid size or large company or government, you have likely witnessed it or are part of it. This will continue to dampen earnings going forward.
    2. Share repurchases falling. Companies with lots of cash may continue with buybacks, but it won't be feasible to borrow cash for buybacks at 6 or 7%.
    3. Corporate debt rollovers (which is pretty much what corporations do indefinitely) will reduce earnings due to higher interest expenses.
    Surprising that stocks can still be around 20% more expensive right now, without consideration to any of these headwinds, than historical norms would suggest.

  • WCCWCC Posts: 2,587 ✭✭✭✭✭
    edited October 12, 2022 10:15AM

    @derryb said:

    CNBC is reporting that a recession is worse for the economy than the current inflation crisis. Hogwash! As painful as an engineered recession (higher rates) can be, it is the quickest and correct way to win the inflation battle. A brave and independent Paul Volker proved this to the world 40 years ago.

    If the interest rate cycle turned in 2020 and the 39YR bond bull market ended as I believe it did, it's the end of the road for "kicking the can".

    You've probably seen it but for those who have not, go look at FRED data for "real" median household income and net worth. Both have essentially flatlined since the late 90's. That's an entire generation and certainly the worst performance since the Civil War, even as this period included "growth" around 95% of the time.

    All it took was a 5X increase in the national debt, a 14X increase in the FRB's balance sheet, the loosest aggregate credit standards and lowest credit quality in human history, and the biggest asset mania the world has ever seen to produce this pathetic performance.

    Inflation, recession or whatever, every "door" leads to future lower living standards for most Americans and many elsewhere.

  • Wolf359Wolf359 Posts: 7,657 ✭✭✭
    DEFCON 1 - I'm waiting in a bread line as I type

    System is ending. So...

    Best of luck everyone.

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