The Coming Move to $50 Silver (and beyond)

By Ted Butler

Twice over the past 42 years, the price of silver has risen to $50; once back in 1980 and again 11 years ago, in 2011.  Obviously, no one would argue that something that occurred twice already is not capable of happening again. On both prior silver price peaks, prices then fell sharply and quickly. But the next coming move to $50 in silver is much more likely to not only exceed the past two highs, but also remain far higher for far longer than previously.

In 1980, the price of silver rose from $7 to $50 in little more than a year, driven, essentially, by the concerted buying, both in futures and physical metal by interests associated with the Hunt Brothers from Texas and then fell even more sharply as a result of exchange and regulatory actions to unwind the Hunt’s buying. But the epic price run up did show, conclusively, that speculative investment buying could drive silver prices sharply higher.

The Most Splendid Housing Bubbles in America: Biggest Price Drops since Housing Bust 1. Record Plunge in Seattle (-3.9%), Near-Record in San Francisco (-4.3%) & Denver. Drops Spread Across the US

By Wolf Richter for WOLF STREET.

This is the first month in this cycle that the S&P CoreLogic Case-Shiller Home Price Index, which lags reality on the ground by 4-6 months, is showing house price declines in all the metros in the index.

In Seattle, the month-to-month plunge was the steepest on record (-3.8%). In San Francisco, the month-to-month plunge (-4.3%) was the third-steepest on record, outdone only by the two worst months during Housing Bust 1 in 2008. In San Diego (-2.8%), Los Angeles (-2.3%), Phoenix (-2.1%), and other metros, the plunges were the worst since Housing Bust 1. And the declines are spreading across the country to other metros, including Dallas, Boston, Washington D.C., and Las Vegas.

These are serious declines for the Case-Shiller Home Price Index, where each month is a rolling three-month average which irons out the month-to-month variability.

China’s Superpower Slump

It’s a strategy that has massive economic consequences.

China has kept its zero-tolerance stance on COVID through 2022.

This means that any outbreaks of COVID are met with aggressive regional lockdowns to minimize spread.

Budget deficits have soared as local governments have tried to cover the tab for economic losses.

For a nation that prides itself on massive economic output and exports to the rest of the world, this has major consequences.

And has massive repercussions for the commodities market.

A Taxing Time…

China has 31 provinces; Shanghai is the only province to not be in deficit.

That means 97% of Chinese provinces are spending more than they are receiving back in tax revenue.

Why the Rally for Bank Stocks Is Just Beginning

By Scott Garliss

The Federal Reserve is on a mission. It's hiking rates at a breakneck pace with a single goal... getting inflation under control.

Unfortunately, it has to cool down the economy to do it. And that's putting stock and bond prices under pressure. Just about everything is falling due to the Fed's actions. But not every asset will end up a loser.

In fact, one corner of the market will earn big profits from these interest-rate hikes. And while this sector has taken a hit so far this year, a long-term rebound could be on the way.

Bitcoin Completes Second Full Week Below $20K as Aptos Finds Market Bottom

By Jocelyn Yang

Bitcoin notched its 14th consecutive day of trading below $20,000, but was holding remarkably steady despite ongoing turmoil in traditional markets.

Bitcoin (BTC), the largest cryptocurrency by market capitalization, was trading at around $19,100, little changed in the past 24 hours. The CoinDesk Market Index was up 0.5%. Ether (ETH) was up 1.4% to $1,310 as of press time.

The historically high-volatility crypto market remained unusually stable this week compared with traditional markets whipsawed by speculation over the Federal Reserve’s plans.

Fed Defending Dollar No Matter What Crashes – Catherine Austin Fitts

By Greg Hunter’s USAWatchdog.com

Catherine Austin Fitts (CAF), Publisher of The Solari Report and former Assistant Secretary of Housing (Bush 41 Admin.), says what is coming for the economy is pain–and lots of it. CAF explains, “We are either in a major correction or we are going to go into a bear (market), and a lot of it depends on many different politics. If you look at the money being pumped out . . . on climate change, on green energy, environment and all these different new sort of scams, it depends on how they inject money. It’s either a major correction or it could turn into a bear (market). There is no way to tell because it is purely political.”

Casino Banking: Wall Street Mega Banks Traded More in their Federally-Insured Bank than the Total for their Bank Holding Company

By Pam Martens and Russ Martens: October 13, 2022

When something happens for the first time in history at federally-insured banks, Congress and federal regulators need to pull their heads out of the sand and pay attention. We’re talking about the fact that in the second quarter of this year, trading revenues at federally-insured commercial banks eclipsed the trading revenues at bank holding companies – which typically include subsidiaries where traders actually have licenses to trade.

This latest data on what is happening inside the nation’s largest federally-insured banks comes from the Office of the Comptroller of the Currency (OCC), see pages 2 and 3 here. The federally-insured banks generated a total of $10.3 billion in trading revenue in the second quarter versus $10.2 billion for the bank holding companies, or 101 percent of the bank holding company revenues. That’s never happened before according to the data provided by the OCC.

The report provides the following historical perspective:

Gold Beating

This should be gold’s time to SHINE…

In a time of high global inflation caused in part by massive money printing and fiscal stimulus experiments, gold should be rocking.

But instead, gold hit a 2 year low this week.

For decades investors have linked gold and inflation together.

  • The Theory: As inflation rises, the purchasing power (or the quantity of goods) that $1 Dollar can buy, will go down.

Which in layman’s terms means the dollar bill in your pocket today will buy less stuff tomorrow, than it will today.

Gold and other real assets like art and real estate tend to hold their value much better and retain their purchasing power.

This means they should be a better asset class to invest in during inflationary periods.

The Test: Gold and Inflation

Below is a table that shows the performance of gold, dollars, oil, and equities during periods of US tightening cycles over the last 60 years.