The drastic increase in debt defaults show that rate hikes are starting to bite. The “free money” measures during COVID-19 seem to have delayed, not solved, the problem.
Assets and industries traditionally considered “safe havens” are rapidly losing their luster in our high interest rate environment. Precious metals could soon be the last bastion of safety.
The Fed is headed for an annual operating loss for the first time in 108 years. They will soon be forced to print the money to cover their expenses. A conundrum, indeed!
Rising interest rates reveal the consequences of exorbitant debt and leverage. When the free money disappears, what remains tends to flow into real assets.
The current pace of rate hikes has no modern precedent. With recessionary red flags popping up everywhere, what will it take for the Fed to reverse course?
The futures market is flashing a very clear, and very rare, signal. Gold’s jump from $1,680 to $1,800 could the be the beginning of a significant move higher. Right now, gold is still on the sale of the century.
As the Fed grapples declining GDP and the growing threat of recession, will they let the economy crumble and defeat inflation, or juice the markets again?