Kitco News
(Kitco News) – The U.S. Securities and Exchange Commission (SEC) is adding 20 more positions to its Crypto Assets and Cyber Unit, nearly doubling in size.
The post SEC doubles the size of its crypto fraud unit appeared first on WorldSilverNews.
Kitco News
(Kitco News) – China’s Zijin Mining Group announced today that it has agreed to acquire an asset bundle consisting of four assets in Tibet, including a 70% interest in the Lakkor Tso Salt Lake lithium mine.
The post Chinese mining giant Zijin to acquire lithium mine in Tibet for $741 million appeared first on WorldSilverNews.
Kitco News
(Kitco News) – The Federal Reserve is on the cusp of embarking on its most aggressive tightening cycle in 28 years. The central bank is all but guaranteed to raise interest rates by 50 basis points on Wednesday.
The post The Fed is ready to raise rates by 50 bps, but what comes next? appeared first on WorldSilverNews.
Financial Times/Valentina Roma and Alan Smith/5-1-2022
“The prospect of stagflation’s return strikes fear into policymakers because there are few monetary tools to address it. Raising interest rates may help reduce inflation, but increased borrowing costs would further depress growth. Keeping monetary policies loose, meanwhile, risks pushing prices higher.”
USAGOLD note: How bad could it get? Only as bad as the 1970s in the final analysis, but not exactly like the 1970s, yet close enough for the word “stagflation” to still apply.
The post Today’s top gold news & opinion first appeared on Today’s top gold news and opinion.
The New York Sun/Editorial/4-28-2022
“The headline this morning atop the Drudge Report — ‘Dollar is King / Best Month in Decade‘ — certainly got our attention. It turns out to refer to a story in the Bloomberg in respect of how America’s fiat currency, which we call irredeemable electronic paper ticket money, compares to other fiat currencies like the yen, the euro, the won, the yuan, and other scrip. It is devoid of reference to the constitutional specie of gold or silver.”
USAGOLD note: The real measure of the dollar’s might is its long-term performance as a store of value. In that respect, its performance has been decidedly underwhelming. Says the Sun: “The dollar might well be king of today’s debased global currencies, but it wears a tin pot for a crown. We featured this editorial in yesterday’s DMR and repost it today for those who may have missed it.
The post Today’s top gold news & opinion first appeared on Today’s top gold news and opinion.
Last week’s release of first quarter GDP data was a disappointment, as GDP sank by 1.4%. Analyst expectations were calling for a rise of 1%.
The surprise decline may signal a recession ahead. Optimists, however, say the GDP number may not be as bad as it looks.
They point to issues including inventories as well as imports and exports. Someone needing to purchase a new stovetop for their kitchen, for example, may have to wait a year to get it due to supply chain constraints. That hurts sales, without a doubt. Imports are up while exports are down, which also affects GDP negatively.
Stocks largely ignored the poor GDP report. The gold market did not show much reaction, either.
Investors may now believe the Fed will continue posturing to fight inflation. Realizing they are so dramatically behind the curve, central bankers are unlikely to change direction in response to a single bad report on the economy, especially when some underlying components of the report were strong.
The Fed feels the economy is still strong enough to absorb higher interest rates. With inflation running completely out of control, the Fed may even act aggressively on raising rates in the next few months.
To that end, the central bank is expected to hike rates this week by 50 rather than 25-basis points – and this could be repeated in the following Fed meetings as well. Markets are expecting 250-basis points of rate hikes over the next 12 months.
The Fed may look to create a “shock and awe” effect and could even raise rates by 75-basis points if it deems necessary to reclaim some of its lost credibility.
But if the stock market suffers a severe breakdown, Fed officials will face pressure to prematurely end their rate-hiking campaign. While stocks have already undergone a correction, they are at risk of crashing if the Fed maintains an aggressive tone.
Once equities really begin to tank, the screaming from politicians and bankers may become too much for the Fed to bear. It’s theoretically possible rates could get as high 3% before the Fed loses its nerve and begins slashes them – as has occurred so many times before.
These scenarios keep gold in a position to run higher, likely to new all-time highs. A breakout above $2,050 in particular would signal a big move to the upside.
Regardless of upcoming Fed rate hikes, real interest rates are now – and will continue to be – way less than zero.
That makes precious metals attractive as alternative forms of cash.
And against the current economic and geopolitical backdrop, gold retains safe-haven appeal that vulnerable stock market indexes don’t.
