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!
Should the Fed pay attention to the IMF’s warnings about global financial risks and deteriorating market conditions? Probably, but more red-hot inflation data means their hands are tied.
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 U.S. financial markets rest on how much investors trust the almighty Fed. Can they engineer a soft landing after so many egregious miscalculations and deteriorating credibility?