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A Historical Shift In The Global Economy A World Polarized By Sanctions Where Are We Heading?

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A Historical Shift In The Global Economy. A World Polarized By Sanctions. Where Are We Heading? 

Crypto And Gold Are Critical In These Erratic Times

I recently came across a research paper by a Ph.D. candidate in economics at Harvard University. The report headlined “Hedging Sanctions Risk: Cryptocurrency in Central Bank Reserves” argues that central banks, particularly in sanctioned countries, should start buying Bitcoin to protect themselves from sanctions. It seems viable when you consider Russia has announced its intentions to adopt crypto, and others, such as Iran, are reportedly already using it.    

Matthew Ferranti, the author of the highly detailed composition, discusses empirical and historical data on sanctions countries, devises complex economic model simulations, and projections of how sanctions could lead to the accumulation of BTC by central banks. He notes that it's the first research paper that analyzes the change in central bank reserves in response to sanctions. He also states he is not a Bitcoin maximalist, nor does he hold any BTC. 

Sanctions More Common But Less Effective

Matthew begins by giving examples of countries accumulating or using BTC. The list includes El Salvador and the Central African Republic, both of which made Bitcoin legal tender, and Ukraine received BTC donations following the inception of the Russia-Ukraine proxy war. He recounts how half of the Russian central bank's international reserves were frozen due to sanctions by certain western countries. 

He points out that this sent a warning to central banks worldwide that fiat currencies and cash equivalents like sovereign debt are not safe assets. He explains that sanctions have become more common as the financial system is more centralized. This centralization is due to digitization, which will only increase as central bank digital currencies  (CBDCs) are rolled out.

The details of US sanctions, specifically those from the US Treasury Department's Office of Foreign Assets Control (OFAC), basically ban all US individuals and institutions from interacting directly or indirectly with any sanctioned entity. The paper reveals that the US has sanctioned almost 9,000 entities. To put things into perspective, the European Union has sanctioned around 2,000 entities, and the United Nations has sanctioned about 1,000. These figures indicate how money is used as a weapon and point to how trigger-happy the US has been. 

Not surprisingly, research suggests that sanctions have become significantly less effective over the last 30 years, with only 30% of sanctions policy objectives being achieved. These policy objectives typically involve human rights and democracy, a term synonymous with US imperialism to many. 

Regarding sanctions against central banks, Matthew notes that there are seven that are or have been sanctioned by the United States. These are the central banks of Russia, Iran, Syria, North Korea, Venezuela, Afghanistan, and Iraq, with no expiration date for sanctions. Because the sanctions against these central banks were introduced for various reasons, no central bank can be sure it won't suddenly find itself on the wrong end of US sanctions. This calls for accumulating truly safe haven assets to hedge against this risk. 


 

Gold And Cryptocurrency

Gold is one of the most popular non-currency assets on central bank balance sheets, and it's impossible for the US or its allies to seize physical gold being held at the central bank of a sanctioned country. Matthew speculates that is the primary reason why central banks continue to hold gold. He also suggests that another reason has to do with concerns with the financial system because central bank gold reserves have risen since the 2008 financial crisis, reaching 14.4% in 2020.

The paper accurately states that so long as a centralized entity doesn't control a cryptocurrency’s blockchain, there will always be a way to evade sanctions using its coin or token. The only way to censor transactions on proof-of-work Blockchains is to acquire and sustain 51% of the computing power, AKA hash rate. 

It’s noted that the only time a Bitcoin mining pool achieved more than 50% of Bitcoin’s hash rate was in 2014, which has not happened since. Matthew implies that executing a 51% attack on Bitcoin today is practically impossible due to how large the network has grown. However, he does note that there have been cases of individual Bitcoin miners complying with US sanctions in the past and gives Marathon Digital as an example. 

Marathon Digital temporarily stopped including transactions from sanctioned Bitcoin wallet addresses in May last year. The Bitcoin miner went back to business as usual one month later after all the backlash from the crypto Community. He also explains why stablecoins are not suitable for sanctions evasion. Essentially, it’s because they're centrally controlled, and their issuers have previously frozen token holdings. Notably, centralized stablecoins also back many decentralized stablecoins. 

Matthew also claims that Bitcoin mining is terrible for the environment because it uses 0.05% of the world’s total energy, which in my mind, is more proof that he’s not a Bitcoin maxi. According to Cambridge University, he says environmental and energy issues won't be of concern to countries evading sanctions. Anyone who knows the facts about BTC and energy usage knows it’s not a concern to anyone. 

Further into the paper, Matthew discusses how he calculates BTC’s future price. He makes mention of BTC's insane price action since its inception and correctly points out that BTC will provide diminishing returns in percentage terms as it becomes more mainstream. In other words, Bitcoin's halving event every four years induces less supply with a deflationary outcome. Increased adoption causes a rise in demand which in turn increases the price. 


Image source: Crypto Valley Journal 

This is the purpose of the Bitcoin economic model and has earned the title of “the flagship cryptocurrency.” Bitcoin is crypto’s store of value or digital gold, making it a stable asset class for institutional investors and fueling its long-term rise.

Matthew also accounts for the BTC in circulation, new BTC being created with each new Bitcoin block, BTC trading volume, economic growth, stock market growth, and even estimated yields on government debt in his BTC price model. To be honest, most of this analysis went entirely over my head, but you’re welcome to tackle his 64-page digest. 

The Economics Of Sanctioned Countries. 

Michael then makes a series of economic assumptions related to sanctions. These include assertions that sanctions don't affect a central bank's gold or cryptocurrency reserves and that the stocks of companies in a sanctioned country will fall significantly in response to sanctions. 

He starts by estimating how much BTC central banks will begin to hold in the future without any sanctions. His extraordinary complex modeling suggests 2-3% of Central Bank portfolios will be in BTC. Interestingly, his model suggests that central banks will reduce their gold holdings simultaneously. 

The second model suggests that central banks facing sanctions risks will hold at least 5% of their portfolios in BTC and apparently up to 50% in gold. He concedes that such a large gold allocation will be unrealistic for most central banks due to the difficulty of acquiring and securing large amounts of gold. 

As such, Michael presents a third model where sanctioned central banks prefer BTC over gold for these reasons. In this third model, BTC holdings of central banks could be as high as 40% of their portfolios when facing a very high risk of sanctions.

According to the International Monetary Fund (IMF), most central banks have already been moving away from the USD and other US dollar assets for years and loading up on alternatives which set the stage for some significant BTC adoption.

In the paper's final section, Michael reiterates that no central bank can be confident that the US, the EU, or some other entity won't sanction their country and seize its assets. He also stresses that, in truth, there is no safe asset when sanctions are indeed severe. Regardless, gold and cryptocurrency are the best assets for central banks to hold under such circumstances.

Michael admits that much more research is needed, especially in simulating how central bank portfolios will change over time with and without sanctions risks. He also believes some central banks may already hold BTC on their balance sheets but refuse to disclose them publicly. This could be because they want their Bitcoin wallet addresses to be private or fear public scrutiny.

Michael points to the opacity of some central banks about their fiat currency reserves as evidence of this. He also points out that central banks tend to underreport their gold holdings when the price of gold is falling as additional evidence.

Why Central Banks Are Likely To Accumulate BTC

What is the reason for central banks to start accumulating more BTC? In short, their fiat currencies are collapsing, and not all of them can develop their own CBDCs. Adopting cryptocurrency could very well be the only alternative for these central banks. 

For central banks capable of producing their own CBDCs, their interest in cryptocurrency might increase due to having to leverage similar technologies. Case in point, the Central Bank of Switzerland said earlier this year that it could hold BTC as part of its balance sheet in the future. 

As pointed out by the research paper, we've just been looking at the central banks that are most likely to accumulate BTC, and other cryptocurrencies are those in countries facing sanctions. The list of countries targeted by the US, EU, and other western powers is likely to grow as globalization breaks down and political poles emerge. 


Image source: Economist.com     

Although the analysis cited that the effectiveness of sanctions has been declining for decades, this begs the question of why the need to flee to safe-haven assets like BTC and gold. The answer may be because of economic cohesion. Consider a world where almost every central bank has its own CBDC; this digital centralization means that the risk of sanctions could be much higher, even if the effects are less severe due to financial fragmentation.

The standoff between central banks is probably in the context of international trade. They would constantly be skeptical of whether they can safely process payments using highly controlled foreign currencies. The bottom line is that central banks want an alternative currency they can trust. That would be the trustless decentralization of cryptocurrency. 

One of the most prominent asset managers in the world, Fidelity Investments, reports there is a very high-stakes game theory at play here. If bitcoin adoption increases, the countries that secure some bitcoin today will be better off competitively than their peers. They elaborate by saying, “Therefore, even if other countries do not believe in the investment thesis or adoption of bitcoin, they will be forced to acquire some as a form of insurance.”

Given central banks' opacity concerning their portfolios, a theoretical approach could mean a push for more privacy because central banks won't want to reveal their BTC holdings. Bitcoin’s recent Taproot upgrade could well be the solution. 

Bitcoin’s upgrade made all complex transactions look identical, increasing privacy for institutions or anyone using Bitcoin’s Lightning Network. Meanwhile, Litecoin has introduced a privacy-preserving side chain. Note that Litecoin has a history of introducing upgrades before bitcoin as its de facto test net. 

That concludes the overview of Matthew Ferranti’s research analysis; however, another situation is brewing.

BRICS Breaking Away From The US Global Reserve Currency

Are the BRICS countries the United States Nemesis? BRICS is a collective body composed of five countries; Brazil, Russia, India, China, and South Africa. It was initially an informal group of the leading emerging economies of the early 2000s. 

BRICS has since become more of an institution and is expanding in light of the geopolitical uncertainty polarized by sanctions as more countries have applied for membership. A historical event leading to a restructuring of global economic power may be on the rise. 

Recently, Egypt was accepted and officially part of the BRICS New Development Bank (NDB). Egypt initially joined the bank sector of BRICS and has now applied for full membership in the BRICS alliance. Turkey and Saudi Arabia are also expected to apply for full membership to move away from the US dollar as a reserve currency.

Part of the alliance is the Shanghai Cooperation Organization (SCO), an eight-member Eurasian security and economic bloc, including Russia, China, India, and Pakistan. The SCO was founded in 2001 by Russia, China, Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan. India and Pakistan became full members in 2017.

Moscow sees the increasing role of blocs like the SCO and BRICS as countermeasures against western sanctions imposed over the Ukraine conflict. Foreign Minister Sergey Lavrov said in July, 

“We are talking about countries that together account for 80% of the world’s population. Which is why it is clear to any unbiased person that there is no such thing as an isolation of Russia.” 

In November of this year, Lavrov confirmed that “more than a dozen” countries are eager to join BRICS, including Algeria, Argentina, and Iran.


Image source: rt.com

The five BRICS economies currently account for more than 40% of the world’s population and nearly a quarter of the world's GDP (31.5%), heading for 50% of global GDP by 2050. They are building their own reserve currency backed by gold and other commodities like uranium, graphite, and copper.

BRICS is also working on its own financial infrastructure, including a joint payment network. Some member states have already switched to trade in the local currency in order to reduce dependence on the US dollar and the Euro. 

The US dollar is also called the petrodollar. As its name suggests, the petrodollar is pegged to oil and was created through a deal between the US and Saudi Arabia in 1973. This was just two years after the Nixon Administration abandoned the gold standard resulting in the US dollar going into freefall as inflation soared. 

With oil standardized in terms of dollars, any country that purchased oil from Saudi Arabia would have to use dollars. This led many other oil-producing countries to standardize oil prices in US dollars – and the petrodollar system was born. 

The drawbacks of the petrodollar are the need for the US to run account deficits to maintain liquidity in a continuously expanding global economy. Stopping these deficits will slow down the global economy, but continuing the deficits may cause other countries to downgrade the dollar's value. This is already happening, along with the added dilemma of strained relationships with major oil producers like Russia, Iran, and China. 

The US dollar is built on debt and “the nothing.” What is “the nothing”? Just like the movie The Neverending Story,  it’s the “emptiness that’s left.” The nothing, in this case, is the failure of the western hegemony, which is built on a house of cards. It’s game on as these countries develop a separate currency backed by gold. 

Why is Saudi Arabia turning its back on the United States? It can be traced back to one single big event; the start of the war in Ukraine. The Organization of the Petroleum Exporting Countries (OPEC Plus) and Saudi Arabia specifically warned the United States not to impose sanctions on Russia. 

The US didn’t heed the warning, neither did Europe, and they pigheadedly did the opposite, thinking its relationship with Saudi Arabia would continue unabated. Well, that wasn’t the case and is considered a failure of the Biden Administration of the highest order and set to hurt America’s ability to secure low-cost oil. 

The world is currently in a state of change as it shifts into a golden age eliminating the evil surrounding us. Ecosystems are being built; They are sanctuaries for all people who see the horrific deceit and are hurt by the powers that be and their egomaniacal decisions that have wrecked the global economy and societal culture.     

It’s good news regarding Bitcoin and all cryptocurrency adoption. Bitcoin is the store of value (like gold was) and is on its trajectory to becoming a crypto asset class with less risk for people and institutions with a long-term investment strategy. Utility-driven altcoins and platform tokens will benefit and thrive as the market begins to appreciate the value of blockchain ecosystems and services. 

All is as it should be, and God is watching over us as this all plays out. 

 

 

Editor and Chief Markethive: Deb Williams. (Australia) I thrive on progress and champion freedom of speech. I embrace "Change" with a passion, and my purpose in life is to enlighten people to accept and move forward with enthusiasm. Find me at my Markethive Profile Page | My Twitter Account | and my LinkedIn Profile.

 

 

 

 

 

Also published @ BeforeIt’sNews.com; Substack; Steemit.com

 

 

Tim Moseley

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Life is Short Seize the Day

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Life is Short… Seize the Day!

Don’t be alarmed, but right now I want to shake you by the shoulders and slap you silly… Because I suspect you’re fast asleep at the wheel of life.

 

Life is Short... Seize the Day!

Well I have news for you, and I’m sure you’ve heard it before but maybe, just maybe this is the time when you finally sit up and take notice and start making some real changes in your life, because…

Life Is Too @#$Z&% Short!

Remember when you were a child and you believed life just goes on and on and on?

And now here it is, barely a few minutes later (or so it seems) and you discover that a major chunk of your life is now forever gone.

What the heck happened to it??? Did you blow it like someone blowing money on the horses? Or did you make the most of every moment?

There are millions of people who struggle just to make it through the day. They’re in jobs they hate, lives they don’t like doing things that hold no interest for them. And yet the clock ticks for them as it does for the rare person who is completely happy and content doing what they love to do.

Doberman Dan wrote something that fascinated me. I don’t know where he got these numbers, but they’re enough to shake awake anyone slumbering through life:

You’ve got 78 years on this earth, statistically speaking.

You spend 1/3 of that time sleeping so that leaves you with 49 and 11 months of “awake” years.

Subtract hours in school and that leaves you with 46 years and 4 months of your life remaining.

Subtract 91,000 hours on a job and you’ve got 35 years and 11 months remaining.

Subtract time driving, running errands, brushing your teeth, etc., and you’re now down to 32 years and two months.

Subtract eating, drinking, shopping, etc., and you’ve got 25 years and 10 months left.

Subtract chores and you’re down to 20 years and 1 month.

Subtract taking care of children and family, along with watching TV, playing video games and wasting time on the Internet and you’re now down to 9 years and 6 months of your life remaining.

78 years on this planet (if you’re lucky) and only 9 of them are yours.

See what I mean? Life is too @#$Z&% short.

Life is too short to let fear rule. Open your mind, arms and heart to new things and people. Take a chance, push through fear, let go of guilt, break down your goals to achievable steps and get moving TODAY.

Life is too short to be unhealthy. Get moving and get active and stop eating crap food, especially if you want to make it to 78+ and enjoy the journey.

Life is too short to be full of regrets, just as it’s too short to dream about your ‘glory days.’ You can’t start the next chapter of your life if you keep re-reading the last one.

Life is too short to be a slob. If you’re disorganized then you’re wasting time looking for things and wasting more time not doing the things you want to be doing.

Life is too short to be negative. Yes, occasionally negativity seeps in. But when negativity rears its ugly head you’ve got to beat it back with everything you’ve got, and never under any circumstance do you invite it in or ask it to make itself at home.

Life is too short to deal with or even think about rotten people. Are you worried about what that nasty person said about you? Why????? Life is too short to stress yourself with people who don’t even deserve to be an issue in your life.

Life is too short to keep up with the neighbors. Do you care how many new cars or televisions they have? I can’t think of anything more irrelevant than what the neighbor blew money on today.

Life is too short to be in a job you hate. If you’ve never had a job you hated, all the words in the world couldn’t explain this to you. But for the other 95% of people who know what I’m talking about, no explanation is necessary.

Life is too short to be poor. Yes, you might start out poor and that certainly isn’t your fault. But there comes a time when your finances are exactly what you make of them. There is nothing noble about being poor – it’s like having a ball and chain around your throat that stops you from living the life you want and instead wraps you in layers of stress and anxiety. If you don’t have the money you want, then get busy and make it. And yes, I do believe Internet Marketing is still hands down and bar none the best way a person can go from poverty to wealth in a relatively short amount of time (2 to 10 years.)

You and I and every single person we love is terminal – it’s just a matter of time. And every day we have a little bit less of that.

I’ll let the quote master Mark Twain have the last words…

“Life is short, Break the rules.
Forgive quickly, Kiss SLOWLY.
Love truly. Laugh uncontrollably.
And never regret ANYTHING
That makes you smile.”
– Mark Twain

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Tim Moseley

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The Reality of Life – What Is Truth What Is Fake

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The Reality of Life – What Is Truth What Is Fake

By Maxine Whitfield 

The Reality of Life… What Is Truth What is Fake

Have you ever asked yourself, "What the heck is going on?". Well I decided to share the truth with you versus the illusion. We currently live in the matrix… hence: the illusion. It's an illusion because first and foremost earth is not your home. Every single thing you learned in life are total lies. Society rules, religion, schools, teachings, diet, exercise, dating, romance, relationships, death, God, and the list goes on. You might be asking yourself how is this so? How is this an illusion?

First earth is not your home! We are not humans but spirits, energy, and light who came from a beautiful place of beauty and love. We are spirits trying to be human. Earth is the only planet that has human bodies and it's a place to learn from your past incarnations; To grow, to evolve, and raise your frequency. Everything here are frequency. We also came here this time for ascension and to learn unconditional love. No one was taught the true meaning of love. Love is not searching outside of self to find your person. We don't need someone to complete us because we are already complete.

What happened was because of free will some evil reptilians took over earth and spread lies to all only for power, money, and control. There are universal laws that govern this planet yet no one told you about them. The plan was to keep you in fear, control your every move, poison your water, food supply and create poisonous pharmaceuticals. They created all your diseases including this virus, aids and cancer too. They never allow anyone to heal because their plan is to kill as many people as possible. They stole all elections, they run big businesses; Hollywood, the NFL, the media, politicians and all countries. They made the legal system to work for their crimes. This is why the legal system is a real joke. The rules are for them, not you. Now they are forcing people to get vaccinated for a virus they created and their vaccines were made to kill you. These vaccines are not real. They are gene therapy and all of you are their guinea pigs. This world is full of propaganda. The world is currently divided by those who know the truth and those that don't. They make you think that you will be free if you get vaccinated while knowing over 2 billion people will die from it.

No one dies. We are souls in a temporary body. When you are born in the physical you experienced a death in the spiritual. When you leave your physical body, you are reborn in the spiritual. We are eternal; never die. There is no heaven or hell. There is no judgment day. God is not a person who judges you or condemns you either. God is creator source energy who created all of us. Therefore we are our own Gods who create our own circumstances by our own thoughts. We are very powerful and very gifted yet we have been squashed of our powers, forgot who we were, and became slaves to the system.

Most don't even realize that all these fear based programs keep you slaves of this world.

You can break free from all of this by knowing the truth, seeing through these lies, and mostly following your heart. Whenever you read anything, hear anything and see anything ask yourself if this is truth. We are being tested to connect to our own heart for our own truths. What works for me might not work for you. What you read or see on the news in most instances is totally fake. Hollywood creates the scenes with the media. Remember, the media is not reality and does not share any truths whatsoever. This is the main reason so many are lost and confused. Take a moment and think about how we are all individual yet when it comes to diet, drugs, schools, etc. we are all treated the same!

The reality is earth is changing and will never be the same. This is good news. There are plans in the works for major change. There is so much going on behind the scenes which will be disclosed very soon. Everything comes in divine timing. There are the awakened ones, versus those that sleep. Many of us volunteered to come here only to raise the vibration, spread truths, and help this planet to ascend to a higher vibration. What is in our future is amazing. In the past, we have lived and "died" and then come back with the same soul into another body. This is why you recognize people you never met and feel like you have known them for years because you experienced another life together. You choose your family before you came all for karmic purposes. This is why families don't get along. Every soul on this planet and off this planet are your true family. Aliens are our family too. We are all connected as one; not separate as they made you believe. We age, get sick and die. This has been a false narrative. We only age and get sick because of our poisons we ingest. When we leave earth we become our true selves. Our true selves are only unconditional love of all. The plan is we are raising the frequency of earth which will move it to a higher place. We will, for the first time, be able to be in human form as our true self and live over 1,000 years in the same body and not ever age or get sick. Heaven is coming to high frequency earth. This articile is a perfect example of why you need to feel it in your heart for truth because so many of you will not believe or accept this because it goes against all teachings. Think about the stress everyone is under. Do you truly believe this is God's plan? Ask your heart how does this feel? If it feels true then I suggest you work on unconditional love of self and practice living in the present moment. Also turn off the news and search out truth news. Search out the universal laws and see for yourself the rules are totally opposite of what you believe. Do this for yourself. Do this for your own sanity.

Tim Moseley

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Silver price to beat gold in 2023? Precious metal plays catch-up on strong demand ETFs remain missing puzzle piece

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Silver price to beat gold in 2023? Precious metal plays catch-up on strong demand, ETFs remain missing puzzle piece

sIver is gearing up to outperform gold in 2023 after a mixed year, according to analysts, who point to a more positive macro environment, strong physical demand, and a good technical set-up.

Next year looks promising for both gold and silver, but many analysts expect silver to rally more than the yellow metal because of its volatility profile and the lack of attention it received in the prior two years.

Year-to-date, spot silver is up 0.21%, trading at $23.40 an ounce, and spot gold is down 1.8%, trading at $1,797.60 an ounce.

Silver saw most of its gains in the first quarter of this year, hitting $27 an ounce, which is similar to gold's trading pattern. Then it saw losses for six months, hitting a 2-year low of $17.50 in September. In the fourth quarter, prices started to pick up as investors began to anticipate a pivot by the Federal Reserve.

"I'm a little more positive on silver in that we're back to $23 an ounce. It's the high beta play," Wells Fargo head of real asset strategy John LaForge told Kitco News. "In a year where stocks are down, precious metals essentially follow stocks down. In that kind of environment, you'd expect silver not to be flat, which is better than gold's performance."

One major driver that held silver and other precious metals back this year was the Federal Reserve's aggressive tightening cycle with a total of 425 basis points for 2022.

"This increased cost of carry for pretty much everything. The U.S. dollar increased to 20-year highs, and inflation continued to rise this year. All of that created a perfect storm, and managed money has been moving away from non-yielding assets, which have been a drag on their portfolios in this high-interest rate environment," explained Mitsubishi Corporation head of business development Jonathan Butler.

LaForge noted that commodities have been in a supercycle since 2020, with silver looking to play a special role, especially considering how cheap it is relative to other commodities. "When you are in supercycle, you often find high-beta plays do better. Between 1999-2011, silver did much better than gold."

Silver has been neglected by investors, which is why it has a lot of potential at current price levels, Gainesville Coins precious metals expert Everett Millman told Kitco News. "Silver will outperform gold — that is the pattern that tends to play out during bull runs for precious metals. And its recent action is encouraging," Millman said.

Plus, the available supply for silver investment products is rather tight. "Silver sitting in vaults, which can be used for bullion products and investment products, has been getting tighter and tighter. A major issue for 2023," Millman explained.

Macro drivers are shifting, and it's good for the price

The macro environment is shifting from a negative to a positive one for the precious metals, and silver is already running ahead of gold.

"Silver gives signs that whatever weakness we see in gold is probably short-lived. Usually, when silver starts beating gold, we are closer to a bull market in precious metals versus the other way," LaForge said. "You can see it in the last couple of months, with all the talk of the Fed pivoting and things changing in 2023, precious metals perked up. I think next year they'll both do well."

The biggest macro driver supportive of higher prices is a Fed pivot. Even though an actual pause, a slowdown, or even cuts might be months away, precious metals are already anticipating that and are starting to move.

"Silver should benefit from the end of the Fed's interest rate hikes and the speculation on interest rate cuts that will start thereafter. The expected economic recovery following the end of the recession should additionally benefit silver as a precious metal with a high industrial use. With the easing of corona restrictions in China, silver demand should receive a further boost, as China is the largest consumer of silver," said Commerzbank analyst Carsten Fritsch.

 

Looking at fundamentals

According to Metals Focus, global silver demand is up 16% at 1.2 billion ounces as of mid-November.

And the silver market remains tight, with the Silver Institute and Metals Focus stating that the physical silver market, which excludes ETFs, is projected to show the most significant supply deficit in decades this year.

"This is expected to amount to 194 million ounces (6 thousand metric tons), meaning demand will outstrip supply by nearly 20%," Fritsch said. "The driving factor behind this is a 16% surge in silver demand to a record level."

Industrial demand for silver was at a record in 2022, reaching 539 million ounces, according to Metals Focus managing director Philip Newman. With so many countries focused on energy security, silver saw new demand come from solar panel installations, which hit new highs this year, Newman added during an LBMA webinar summarizing silver.

The automotive sector also contributed to additional demand, particularly the electrification of vehicles, added Butler. "The average silver content per vehicle is increasing," he said.

Physical demand for silver from retail investors has also been strong this year. Demand for jewelry and silverware is at record highs — jewelry is up 29% at 235 million ounces, and silverware is up 72% at 73 million ounces, according to Metals Focus. And India is responsible for at least half of each category.

Retail bar and coin investment demand are up 18% at 329 million ounces, also at a record peak, added Metals Focus.

The outlook for next year sees all these factors remaining in place. "Industrial demand should continue to benefit from electrification of the vehicle fleet, 5G technology, and the government-driven rollout of green infrastructure such as photovoltaics. Physical investment demand should be buoyed unabated by fears of high inflation," said Fritsch.

Analysts warned that there are several headwinds to monitor for 2023, including a recessionary slowdown impacting the industrial side of silver.

"China's regional lockdowns are a threat to some of the demand for next year and possibly beyond in terms of PV and conventional chemical application for silver," Butler explained. "There is an increased risk of 2023 being a recessionary year for Europe. That will impact some industrial sectors as well."

A recession could put a damper on industrial demand but not enough to make silver a recessionary casualty, said OANDA senior market analyst Edward Moya. "Silver is going to do well next year, just like gold, Moya told Kitco News.

The U.S. market remains a solid support factor, especially with additional funding coming from the Inflation Reduction Act, Butler pointed out. "We are seeing a great deal of investments into PV and electrification. That is ultimately good for silver. Meanwhile, the U.S. economy is bubbling along with some decent growth rates, which helps lift up conventional applications for silver in electronics and chemical applications."

 

The missing puzzle piece: investment demand

In contrast to robust physical demand is the lack of interest from institutional investors.

There were strong outflows from silver ETFs, amounting to more than 4,000 tons year-to-date in mid-November, Fritsch said, citing Bloomberg's data. "The year that is coming to an end is likely to show by far the strongest ETF outflows since the launch of this investment product 16 years ago," said Fritsch.

Global exchange stocks fell by around 400 million ounces year-to-date, touching 1.3 billion ounces, including London and COMEX markets, according to Metals Focus. "Quite staggering figures that you had depleted from these two locations alone," Newman said.

Disinterest from the professional side is one of the reasons why silver has not done better this year, according to StoneX's Head of Market Analysis for EMEA and Asia Regions Rhona O'Connell.

Other reasons included anemic gold price performance, LBMA silver vaults providing ample supply, and the physical market being much smaller than the professional market, O'Connell pointed out.

The price of silver does not always respond to higher physical demand. When there is more demand, the local premiums go up instead.

This is why this year, premiums skyrocketed in the silver market. For example, the retail premium on U.S. Eagles was $17 an ounce, noted Butler. "The end-consumer seems quite happy paying basically 100% markup for a silver Eagle," he said.

These high premiums for the physical metal across the globe also led to a shift in how the precious metal is getting delivered.

In 2022, 60% was delivered by air, which was unprecedented. "Silver usually travels by sea freight. [Freight by air is now] possible because of the high premium. Demand is so insatiable, they don't want to wait two or three months for a sea container to arrive," Newman pointed out.

In India, people are paying 25 cents an ounce to have silver flown in from London storage, which typically takes two days. In comparison, silver delivered by sea would cost 5 cents an ounce and take about four weeks or more, explained BullionVault's director of research Adrian Ash during an LBMA webinar on silver.

 

Price predictions

Many analysts are not ruling out silver hitting new record highs within this commodities supercycle or within this decade. But for next year, predictions vary, with the trading range remaining fairly wide.

"Silver could very well hit record highs in this supercycle. Average cycles last about 15-16 years. They are getting shorter. The new highs in silver could still be five years away. We are in year three of the supercycle. New highs are common in all supercycles. But it doesn't happen right away," LaForge said.

Millman's high-end target for next year is around $28-$30 an ounce. "Even though silver tends to outperform gold, it is also volatile. The trading range is wider than gold. Investors should also be cautious of major pullbacks where we get back to $20 or lower," he warned.

Fritsch sees silver at $25 an ounce by the end of the year.

Bank of America forecasts silver peaking at $25 an ounce next year. "While upside may be limited near-term, mine supply is constrained, so a rebound of commercial purchases is set to ultimately push prices higher," the bank said in its outlook. "[Supply] should also be supported by rising demand from solar panel and electric vehicle manufacturers, as the global community focuses on tackling climate change."

Participants of the LBMA's latest conference saw silver at $28.30 next year. "That's an awful lot of anticipation around silver," said Ash.

By Anna Golubova

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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Can gold price finish strong as markets enter the last full week of the year?

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Can gold price finish strong as markets enter the last full week of the year?

hawkish Federal Reserve has knocked gold back below $1,800 an ounce, but the precious metal is starting to retrace its gains heading into the weekend. Analysts warn of additional volatility during the last full week of the year.

The big news markets are still digesting is the aggressive Fed message, with rates peaking above 5% next year. The median forecast for next year shows that rates could go up to 5.1%, with Fed Chair Jerome Powell saying that rates will stay there "for some time."

Despite cooler inflation numbers from November, the Fed is staying on track with no pivot or pause signaled for the beginning of next year. Surprising many on the hawkish side, Powell said Wednesday that rates are not "restrictive enough" even after 425 basis points worth of hikes this year.

"It's now not so important how fast we go. It's far more important to think what is the ultimate level. And then, at a certain point, the question will become, how long do we remain restrictive? That will become the most important question," Powell said.

For the February Fed meeting, markets are looking for a 75% chance of a 25 bps hike and a 25% chance of a 50 bps increase, according to the CME FedWatch Tool.

"[Powell] played down the degree of cuts that are being forecast in the dot plot for 2024, suggesting they wouldn't ideally cut until they saw 2% inflation," said Pepperstone's head of research Chris Weston.

In response to a tighter monetary policy path ahead, gold tumbled from multi-month highs and dropped below $1,800 an ounce. At the end of the week, the precious metal retraced some of the lost gains, with February Comex gold futures last at $1,799.30, down 0.63% on the week.

"Gold is sending out a lot of mixed signals. It seems to like uncertainty and the idea that Fed is struggling to strike the right balance with rate hikes. The idea that interest rates will remain higher for longer, is pretty negative for the gold price on balance," Gainesville Coins precious metals expert Everett Millman told Kitco News.

The Fed is also projecting GDP to grow just 0.5% and core PCE at 3.5% in 2023.

The context of the Fed's message is also very important to consider. And markets are entering the last full week of the year. "We are entering a period where it is the last full trading week of the year. Gold is trading fairly choppy," OANDA senior market analyst Edward Moya told Kitco News.

Short-term Moya is bearish on the gold price, but longer-term, the outlook is bullish. "We are going to see gold traders being cautious here. Because of lighter liquidity and it will still be more of a one-way trade and pressure gold," Moya said. "Right now, we need to price in more Fed tightening, more ECB tightening, and interest rates going up."

Next year, gold will become safe heaven, Moya added. "As you start to see more strains on crypto and more pressures with economic data deteriorating quickly, gold will start to see more safe-haven flows next year."

One signal to watch is the ETF buying, Moya pointed out. "You need to see that trade gain one momentum. The first half of next year — I am bullish gold."

Price levels

Going into next week, gold's support is at $1,750, and gains are likely to be capped at $1,840, Moya noted.

Millman added that the first resistance is at $1,800 an ounce, and that level will remain pretty stubborn. Meanwhile, the first support is at $1,775. But if that level fails, gold could fall to $1,715 an ounce, Millman warned.
 

Data to watch

Tuesday: U.S. building permits and housing starts

Wednesday: U.S. CB consumer confidence, existing home sales

Thursday: U.S. Q3 GDP, U.S. jobless claims,

Friday: U.S. PCE price index, U.S. durable goods, U.S. new home sales

By Anna Golubova

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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Hawkish central banks will test gold bulls’ resolve into year-end

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Hawkish central banks will test gold bulls' resolve into year-end

he gold market is holding its ground at around $1,800 an ounce despite growing hawkish rhetoric from central banks around the world; the bullish sentiment in the marketplace is pointing to a positive end for the precious metal for 2022.

The latest Kitco News shows that retail investors are still significantly bullish on gold heading into the final full trading week of the year. At the same time, Wall Street analysts are slightly more cautious, with many saying that lower gold prices represent a strategic buying opportunity.

Although the Federal Reserve has signaled that it is nowhere near ready to halt its tightening cycle, analysts note that the market is starting to discount the hawkish stance. Some analysts have said that investors are now shifting their focus to the growing recession fears and away from the inflation threat.

"The Fed is not pumping the breaks just yet, but it is taking its foot off the gas, and that should help gold consolidate around $1,800," said Frank Cholly, senior market strategist at RJO Futures.

Christopher Vecchio, head of futures and forex at Tastylive.com, said that weaker economic growth is helping to bring down real yields, which continues to support gold around $1,800 an ounce.

"I think gold right now is well positioned to start the new year on a strong note," he said.

This week, 20 Wall Street analysts participated in the Kitco News Gold Survey. Among the participants, nine analysts, or 45%, were bullish on gold in the near term. At the same time, five analysts, or 25%, were bearish for next week and six analysts, or 30%, saw prices trading sideways.

Meanwhile, 772 votes were cast in an online Main Street poll. Of these, 437 respondents, or 57%, looked for gold to rise next week. Another 202, or 26%, said it would be lower, while 133 voters, or 17%, were neutral in the near term.

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The gold market is looking to end the week in roughly neutral territory, with prices down 0.5% from last Friday. February gold futures last traded at $1,800 an ounce.

Adam Button, head of currency strategy at Forelive.com, said he expects to see lower prices next week as hawkish central bank comments could weigh on prices.

Not only is the Federal Reserve not done raising interest rates, but European Central Bank President Christine Lagarde warned investors that the ECB is expected to continue to raise interest rates by 50 basis points well into 2023.

However, Button added that any dip in the price could be a buying opportunity as this is seasonally a strong period for gold.

"Even holding steady for the remainder of the month would be a win and set up gold for a nice rally in January," he said.

While gold has remained resilient as central banks tighten monetary policies worldwide, some analysts have noted that bullish momentum is starting to weigh as resistance holds around $1,800 an ounce.

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Downside risks for gold and silver prices in 2023 – Natixis' Dahdah

"The momentum indicators have not recovered. I still think a bigger pullback may be coming, but so far [gold has been] more resilient than I thought," said Marc Chandler, managing director at Bannockburn Global Forex. "This seems to be corresponding to a U.S. dollar, which seems better offered into rallies than bought on dips."

Darin Newsom, senior market analyst at Barchart, said that he sees the U.S. dollar entering a short-term uptrend helping to push gold prices lower.

"Last week's call for a lower market is still working, unless Feb gold posts a strong rally to close out Friday. If it doesn't, then the contract will have completed a bearish spike reversal on its weekly chart, confirming the secondary (intermediate-term) trend has turned down," he said.

By Neils Christensen

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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The Fed’s made its move and now it’s gold’s turn

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The Fed's made its move and now it's gold's turn
The gold market appears to be taking the Federal Reserve’s hawkish stance in stride as the precious metal’s price continues to hold on to support around $1,800 an ounce.
This week the Federal Reserve signaled it will continue to raise interest rates in 2023 even if the pace of its rate hikes slows. Last week we warned that an adjustment to the Fed’s interest rate expectations presented a risk to gold. But the meeting has come and gone and gold investors are shrugging off the Fed’s new forecast that their key interest rate will peak above 5% in 2023. Heading into the weekend, February gold futures are down only 0.5% since last Friday.
According to market analysts, there could be a few reasons why gold has remained reasonably resilient following the Federal Reserve’s hawkish stance. One scenario is that investors are now becoming less concerned about inflation and more worried about a recession.
Economic data, from disappointing holiday retail sales to slowing activity in the manufacturing and service sectors, are highlighting a slowing U.S. economy. The concern is that the more hawkish the Fed is, the deeper the impending recession will be.
Many analysts have noted that a recession is a positive environment for gold as investors look for assets, which preserve their wealth. George Milling-Stanley, chief gold strategist at State Street Global Advisors, noted in an interview with Kitco News this week that in the last seven recessions, gold has seen an average return of roughly 20%. The deeper the recession, the better gold does, he said.
The second scenario that could be bolstering gold is that as hawkish as the Fed is, a lot of that is now already priced into the market. Some analysts believe that the U.S. dollar has peaked as the Fed starts to slow the pace of its rate hikes. At the same time, the European Central Bank has just started its hawkish long game, according to ECB President Christine Lagarde.
On Thursday, less than 24 hours after the Fed’s monetary policy announcement, Lagarde came out and said that the ECB will have to raise interest rates by 50 basis points for a prolonged period to bring inflation down. A narrowing of the monetary policy gap between the two major central banks should weigh on the U.S. dollar, which in turn should support gold prices.
 Hawkish central banks will test gold bulls' resolve into year-end
There is also a third theory floating around: that the market and investors just don’t believe the Fed. It’s easy to talk tough when the economy and the labor market are still relatively healthy, but what happens when the Fed’s monetary policy action really starts to bite?
Some market analysts have said that if the U.S. enters a deep recession, the Fed will quickly loosen its monetary policies, which will be good for gold.
If you want to find out what’s in store for gold, silver, cryptocurrencies, financial markets and the global economy in 2023, don’t forget to check out Kitco News’ annual outlook coverage. Investors will continue to navigate a world of extreme uncertainty, an ongoing energy crisis, the continuous inflation threat and the potential for a deep recession, and we’ll be looking at how all of these factors impact key markets.
This is also Kitco News’ final newsletter of 2022, so on behalf of the new team, we would like to wish everyone a wonderful holiday season and a prosperous and safe new year.
By Neils Christensen
For Kitco News
Time to Buy Gold and Silver

Tim Moseley

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Proven Ways to Kick Your Social Media Marketing Up a Notch

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Proven Ways to Kick Your Social Media Marketing Up a Notch

social media

Introduction

If you're reading this, chances are that you're a social media marketer. Whether you work for a small business or a large corporation, your role is to lead the way in getting people talking about your company and its products in their social media feeds. While it's true that these days every company needs a "social presence" (or at least thinks they do), social media marketing still requires more than just posting on Facebook or Twitter—though certainly those are two essential tools. Just as important is knowing how to use all the other social tools out there and putting together an effective strategy that makes sense for your organization's needs and goals.

ecosystem for entrepreneurs

Create a strategy.

When you're creating a social media marketing strategy, the first thing you should do is define who your target audience is. There are many factors that go into this, but one of the most important things to consider is what kind of content they like to consume. Once you've defined your target audience and know what kind of content they like, it makes it easier for you to create posts that speak directly to them.

Another important aspect of creating a social media marketing strategy is defining your goals for each channel. What do you want people to do after reading or seeing your post? Do they need more information about services offered? Are they interested in learning more about who works at the company? Once again, having clear goals makes it easier for everyone involved in creating the content because then everyone knows what needs to happen next (and how).

Next up on our list: channels! Defining which platforms we'll use helps us narrow down our focus and make sure that everything we create will be relevant to those particular audiences — especially when creating content across different mediums means having different approaches depending on which channel we're using (for example, videos might work well on Facebook while images might work better on Twitter). This step also helps us determine how often each platform should be updated with new posts since some platforms require more frequent updates than others (like Instagram!).

Take advantage of paid advertising.

There are many ways to market your business online, but one of the most effective ways is through paid advertising. This can be a great way to reach new customers and test new products or services before investing in them. Paid advertising helps you reach a specific audience with targeted messaging that is relevant to their interests and geographic location. It can also help you target specific demographics by age range, gender, or household income level.

It's important to note that paid marketing is not free—you'll pay for each click on your content—but this cost-per-click (CPC) model can be worth it if it leads users to buy something from you or sign up for an email newsletter subscription

Don't forget inbound marketing.

We've previously discussed why inbound marketing can be very effective in building your brand and establishing yourself as an authority, but it also has a number of other benefits. For example, when done right, it can help with lead generation and customer retention. It's also great for increasing brand awareness (which goes hand-in-hand with boosting your SEO).

The important thing to remember is that all of these methods are mutually beneficial: if you do them right, they will reinforce each other and work together to create a healthy growth cycle that strengthens your business over time.

Automate everthing you can.

  • Automate everything you can.

  • Automate everything you can.

  • Automate everything you can.

If there’s one thing that all marketers agree on, it’s this: automation is your best friend. With the right tools and a little finesse, automation can help you save time and money, get better results from your social media efforts (and less stress), and land more clients—all while sleeping in on Saturday mornings or taking an extra long lunch break during the work week!

Here are some specific ways to automate social media marketing tasks:

instant buyer traffic

Don't forget SEO and SEM.

Social media marketing can be a great way to reach your target audience, but it's important not to neglect SEO (search engine optimization) or SEM (search engine marketing). SEO is the process of getting your website to show up in search results. SEM is advertising on social media like Facebook, Twitter and Instagram.

Both are important because they allow you access to people who have already expressed interest in your product or service. If you're already spending time creating content for your website and blog, why not invest some more time into making sure that content pops up when someone searches for something related?

Use content curation to fill gaps in your content.

Content curation is the process of finding and sharing relevant information. In other words, it’s what you do when you see something cool online and share it with your audience.

A lot of social media marketers use content curation as a way to fill the gaps in their content strategies, especially when they don't have any time or budget for creating original content.

It's good to remember that there are two types of people on social media: those who create content and those who share it (and sometimes both). If you're part of the latter group—that is, if you mainly just want to share links—then this strategy is perfect for helping you find relevant content that your followers will love!

Use social media to do market research.

You can use social media to find out what your customers want, who they are and how they're marketing their products. You can also see what your competitors are doing, and even take a look at the company that's selling against you.

  • Learn more about your audience by looking at the social media accounts of people who have interacted with you on these platforms before. If they've left reviews or comments, read them to find out what kind of information is helpful or helpful enough for someone to provide feedback in this way.

  • Observe how other brands are using Twitter's live video feature as an effective tool for engaging consumers and building brand loyalty.

  • Keep tabs on how many followers each competitor has on Twitter as well as other social media platforms like Facebook (and Instagram). This will help shed light on which ones may be performing better than others when it comes time for marketing campaigns!

trafficmonsoon

Social media is an essential part of every B2B company's marketing arsenal

Social media is an essential part of every B2B company's marketing arsenal. While it may not be the most traditional marketing channel, social media can help you connect with potential customers, collect data about your target audience and engage with your customers.

Social Media as a Research Tool: Social media is a great way to conduct research on your target market before you create any content for them.

Social Media as a Customer Service Platform: Customers expect businesses to be active on social media channels—and in many cases it's the first place they go if they have questions about something you sell. It's important that you make yourself available to them by responding quickly and effectively if there are any issues.

Conclusion

Social media is an essential part of every B2B company's marketing arsenal. It provides a way for businesses to engage with customers and prospects in a personalized way, as well as providing many other benefits that help you reach your audience effectively. We hope this post has given you some ideas on how to improve your social media marketing efforts, whether it be hiring an agency or simply adopting some new practices!

Tim Moseley

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Gold silver hit hard by hawkish Fed surge in greenback

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Gold, silver hit hard by hawkish Fed, surge in greenback

Gold and silver prices are sharply lower in midday U.S. trading Thursday. The precious metals bulls were running for cover today amid sharp gains in the U.S. dollar index and in the aftermath the FOMC meeting that sees the Federal Reserve still leaning hawkish on U.S. monetary policy. February gold was last down $32.00 at $1,786.00 and March silver was down $0.836 at $23.305.

A still-hawkish Federal Reserve had traders and investors in a "risk-off" stance Thursday. Two months of better-than-expected U.S. inflation data were not enough to convince the Fed to let its foot off the monetary-policy-tightening gas. "Higher for longer" is the marketplace takeaway from this week's FOMC meeting—meaning higher interest rates for a longer period of time—to ensure the Fed tamps down hard on inflation.

Global stock markets were lower overnight. U.S. stock indexes are lower at midday.

The European Central Bank and the Bank of England monetary policy meetings on Thursday saw both the BOE and ECB raise their main interest rate by 0.5%. That follows the U.S. Federal Reserve's half-point rate hike. The central banks of Switzerland and Norway also raised their interest rates Thursday but also in smaller increments of policy tightening.

China and its fight against Covid remains near the front burner of the marketplace. Broker SP Angel this morning said in an email dispatch there is increasing evidence that China is now "allowing Covid to rip through the population." There is relatively little vaccination and almost no effective vaccination against Omicron in China. "That means the virus will bypass most of the Covid controls left in place." The Wall Street Journal said today that "China's economy took a big hit in November" due to strict Covid lockdown policies.

 The ECB's aggressive monetary policy stance gives gold a lifeline as euro makes a move against U.S. dollar

The key outside markets today see the U.S. dollar index sharply higher. Nymex crude oil prices are weaker and trading around $76.75 a barrel. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently around 3.45%.

Technically, February gold futures bulls are fading late this week but still have the overall near-term technical advantage. However, a five-week-old uptrend on the daily bar chart is in jeopardy. Bulls' next upside price objective is to produce a close above solid resistance at this week's high of $1,836.90. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at $1,800.00 and then at today's high of $1,819.70. First support is seen at today's low of $1,782.00 and then at $1,778.10. Wyckoff's Market Rating: 6.0

March silver futures bulls have the firm overall near-term technical advantage. Prices are in a choppy 3.5-month-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $25.00. The next downside price objective for the bears is closing prices below solid support at $22.00. First resistance is seen at $24.00 and then at this week's high of $24.39. Next support is seen at today's low of $23.155 and then at $23.00. Wyckoff's Market Rating: 6.5.

March N.Y. copper closed down 1,125 points at 376.55 cents today. Prices closed nearer the session low today. The copper bulls have the slight overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 400.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 354.70 cents. First resistance is seen at today's high of 386.75 cents and then at this week's high of 392.90 cents. First support is seen at 370.00 cents and then at 360.00 cents. Wyckoff's Market Rating: 5.5.

By Jim Wyckoff

For Kitco News

Time to Buy Gold and Silver

Tim Moseley

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Tough talk by Chairman Powell signaling more rate hikes over a longer time span

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Tough talk by Chairman Powell signaling more rate hikes over a longer time span

As expected, the Fed announced its decision to raise its benchmark rate by 50-bps. This takes the central bank’s “Fed funds” rate to between 425 – 450 bps (4 ¼% – 4 ½%). However, it was Chairman Powell’s comments regarding his policy outlook during the press conference that garnered the most attention. Market participants and analysts were looking for insight into the forward guidance of the Federal Reserve as it pertains to their monetary policy, inflation, and future rate hikes. Which revealed that the Federal Reserve will continue its policy of monetary tightening by continuing to raise rates in 2023.

The Federal Reserve released a statement as well as its summary of economic projections for 2023 through 2025 after today’s FOMC meeting. One component of their economic projections was the most current “dot plot” which reveals assessments made by each Fed official. When the Fed is fully staffed the dot plot will contain 19 individual projections.

2023 – All of the 19 Federal Reserve members who added their “dot” to the Fed’s projections reflected higher interest rates in 2023. The majority of members (10 votes) anticipate rates to be at 5 ¼%, with four members anticipating rates to go to 5 ½%, two members anticipating rates at 5 ¾% and two members anticipating rates at 4 ¾%.

2024 -seven members anticipate that interest rates will remain elevated above the current rate of 4 ½%, with the remaining 12 members anticipating rate reductions from ¼% to 1 ½%.

2025 – all Federal Reserve members anticipate that fed funds rates will be 4 ½% to 3% by the end of 2025.

Chairman Powell delivered a strong message reinforcing the information contained in their economic outlook and the Fed’s policy outlook saying, “Fed policymaker projections are best assessment of where Fed policy rates will be.”

Chairman Powell’s press conference

Chairman Powell acknowledged that the last two CPI reports were promising but incomplete. “Data we have received so far on inflation for October and November do show a welcome reduction in price pressures; need substantially more evidence though to be confident inflation coming down.” He also said that “recent data gives us greater confidence in our forecast.”

His statements supported the Federal Reserve’s resolve and commitment to keep interest rates at their current level and higher until the Fed reaches its inflation target of 2%. Addressing the possibility of a recession he simply said “no one knows if we are going to have a recession or not.”

Today’s FOMC meeting statement, economic projections, and press conference resulted in declines in the dollar, US equities, and precious metals. As of 5:20 PM EST gold futures basis, the most active February 2023 contract is currently fixed at $1818.80 after factoring in today’s decline of $6.70 or 0.37%. Concurrently the dollar declined by 0.33% and is currently fixed at 103.595. Dollar weakness added $6.70 to the price of spot gold and normal trading indicated that traders moved gold pricing lower by $9.40, according to the Kitco gold index.

It was clear that Chairman Powell's statements today delivered a hard-hitting truth to Americans that inflation will remain persistent for longer than anticipated and interest rates will follow the same course.

By Gary Wagner

Time to Buy Gold and Silver

Tim Moseley

The Artist that came out of the Winter