Precious metals continued their march higher, though slower than the post-election rally.
Let’s take a look at where prices stand as of December 13:
The price of gold was at $2,648 on Friday. Week over week, the price of gold was up 1.3% to around $2,718.
See the current gold price.
The price of silver was at $30.55 on Friday. Week over week, the price of silver was up 2% to $31.94.
See the current silver price.
A December to Remember?
November was the best month for the markets in 2024, with many indexes climbing to new record levels. The S&P 500 gained 5% and the NASDAQ rose 7.5% for the month, buoyed by a Trump win and the potential for tax cuts.
So naturally, markets have been anticipating a Santa Claus rally at the end of December, when stocks tend to have higher-than-usual rise in prices. But will Santa deliver this year? There are some signs that the Grinch may try to steal the Christmas goodies.
According to Morgan Lewis’ commentary on Hard Asset Insights, the S&P 500 advance/decline ratio — plotting the number of stock prices rising vs. stock prices falling — has been negative every day in December. It is the 11th time in history that it’s had such a long streak in negative territory, a warning sign of underlying instability in the outsized gains.
Bubble Bubble, Toil and Trouble
From Credit Bubble Weekly, Doug Noland takes a deeper dive into the debt carried by Americans. Looking at recent figures from the Federal Reserve, Non-Financial Debt (NFD) reached a seasonally adjusted and annualized rate (SAAR) of $3.642 trillion, up from a rate of $3.471 trillion in Q2 — the strongest expansion in a year. Compared to the real estate bubble of 2007, NFD expanded to $2.534 trillion, which is an annual record that held all the way to the historic rate of $6.797 trillion during the 2020 pandemic crisis.
The Dose Makes The Cure… Or The Poison
In just the last three months of 2023, the US government debt grew by about $2.26 trillion dollars, equal to about 7.7% of everything the country produces in a year.
At this rate, the US government will spend more money on interest payments on their debt than they will on military defense as well as non-defense discretionary spending. And it is estimated that in the fiscal years 2024 through 2027, the interest payments will exceed government spending on Medicare.
Where does the money come from? A lot of it is from your hard-earned money, which gets taxed every year. About 39 cents from every dollar that the US collects from taxpayers will go towards interest payments on the debt — and not even paying the actual debt down.
Clearly, this party can’t go on forever. At some point, the weight of all this debt can become too heavy. And when this happens:
- The government might have to cut spending or raise taxes
- Businesses and people might get worried and stop spending as much
- The economy could slow down or even shrink, causing a recession
It’s like a seesaw. A little debt can lift the economy up, but too much can suddenly tip everything the other way, causing a deep downturn.
The best way to protect your own personal economy is to add a layer of protection that will protect your purchasing power and guard against out-of-control spending. Gold and silver provide a simple, yet effective, way to protect your hard earned money.
Set Up Your VaultPlan Today
With Vaulted, you can put your gold and silver acquisitions on autopilot through VaultPlan. You set the desired amount, date and frequency (up to twice a month), and Vaulted handles the rest. All you need to do is log into your account, set up your plan, and sit back while VaultPlan grows your savings.
