Precious Metals News
They might think markets can't go much higher
Schmelzing stressed that a year isn't long enough to know if a crisis has been averted. He said that "systemic crises tend to be drawn-out affairs" with "long tails." Schmelzing said that a helpful guidepost is the timeline of the 2007-09 financial crisis.
The huge deficit seen last year has caused concern as it comes after a rise in interest rates and when the economy is growing. US government debt held by the public topped $26 trillion in 2023, or 97% of GDP.
"The most likely wildcard path to $3,000/oz gold is a rapid acceleration of an existing but slow-moving trend: de-dollarization across Emerging Markets central banks that in turn leads to a crisis of confidence in the U.S. dollar."
US has an 85% chance of slipping into a downturn, the highest probability recorded since the 2008 Great Financial Crisis. Once the economy does slip into a recession, stocks will be vulnerable, she added, especially since investors appear so bullish about the market.
"The irony here is that in the next 12-18 months, many commercial properties are likely going to go into default..."
CNBC: 'A Slow Fiscal Death' Awaits Some Countries in This 'Decade of Debt,' Says Economist Arthur Laffer
As a share of the global gross domestic product, debt has risen to 336%. This compares to an average debt-to-GDP ratio of 110% in 2012 for advanced economies. It was 334% in the fourth quarter of 2022.
Biden's spending as a share of GDP goes from 21% of GDP to 24%. His borrowing goes from 48% of the economy to 116% of the economy and, even with all that government stimulus, the economy is projected to grow by barely 2% over the next ten years.
The data points don't lie: silver is a screaming buy, widely undervalued. There is a silver supply shortage, historical undervaluation of silver compared to gold. We see two bullish targets: $34.70 and $50.00.
In October, you have the BRICS meeting, where they're going to announce which countries have been admitted, and maybe even a commonly backed currency. And I would say to you the likelihood of having something happen with gold grows by the day.