International Forecaster Weekly

A newsletter for economic news, global trends, politics, money, and investment. Published on Wednesdays and Saturdays for subscribers. Get a free sample of our full issue, or Subscribe today.

NEW STUDY CHARTS POST-GREAT RECESSION ECONOMY (Lack of) Employment Remains a Major Problem

Guest Writer, February 2 2022

The nonpartisan Center on Budget and Policy Priorities (CBPP) is out with the “Chart Book: Tracking the Post-Great Recession Economy.”

This ongoing study is a comprehensive, insightful look at how our economy has fared since the financial crisis that began in late 2007.

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2021 GOLD DEMAND UP 10% - The Stage Is Set for a Fine 2022

Guest Writer, January 29 2022

Global demand for gold skyrocketed to a two and a half year high in the 2021’s 4th quarter, resulting in a 10% full-year increase over 2020.

According to the World Gold Council’s latest report, total 2021 demand for gold (excluding Over the Counter) increased to 4,021 tons (502,625 oz.).

Thanks for that goes largely to 4th quarter demand jumping nearly 50%, and the result was the recovery of much of the pandemic-related losses of 2020. 

The WGC noted that demand for gold in the consumer-driven jewelry and technology sectors recovered throughout the year — in line with economic growth and sentiment.

Global central bank buying also was far ahead of 2020’s pace. Investment demand was mixed because of high inflation competing with rising yields for investor attention. 

The year ended similar to how it began, with interest rates and inflation jockeying for attention as the key driver of gold. 

But unlike the 1st quarter, inflation was a more dominant factor than interest rates as 2021 came to a close. “This helped gold make up some of the ground it had lost in the early part of the year," the report said.

Neils Christensen added, “The gold market has once again proven itself that it is a global market that is more robust than just investment demand.”

Here are some of the report’s highlights:

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WITH INFLATION AND VOLATILITY STAYING HIGH, SOME EXPECT GOLD TO HIT $2,000 VERY FAST

Guest Writer, January 26 2022

After a trading day that saw the steepest drop in the S&P 500 since 2008, briefly dropping into correction territory with a big sell-off — and then saw it actually close UP 0.3% — the word that comes to mind, besides Whew, is Volatility.

A lot of it.

Since the beginning of the year, the CBOE VIX Volatility Index is up about 74% — having risen from a more modest 17.60 to 29.90 at the close today.

In fact, over the past two years, market volatility has more than doubled, and that is something precious metal investors should be paying attention to.

Without getting too technical, the VIX signals the level of fear or stress in the stock market — using the S&P 500 index as a proxy for the broad market — and thus is widely known as a “Fear Index.” 

The higher the VIX, the greater the level of fear and uncertainty in the market; levels above 30 indicate a lot of investor fear and enormous uncertainty.

Five years ago, Meera Shawn wrote in Market Realist, “Notably, we often see that an increase in volatility can lead to a rise in gold.” 

Other studies also confirm a positive correlation between the VIX and gold prices but are too detailed to summarize in this article (e.g., Gorbel & Jeribi 2021, Klein et al 2018, Bauer & Lucey 2010).

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THE RICHEST KEEP GETTING RICHER…The World’s 10 Richest Have More Than Doubled Their Wealth During the Pandemic

Guest Writer, January 22 2022

As the persistent pandemic has raged on, the world’s richest have only got richer, while tens of millions of people, most of them living outside the U.S., have taken a dive into poverty.

In a new report released Sunday, called “Inequality Kills,” Oxfam details how the wealth of billionaires increased more than ever before over the past two years

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IMMIGRATION HIATUS & RETIREMENTS DRIVE U.S. LABOR SHORTAGES

Guest Writer, January 19 2022

The nation’s worker shortage “has become a flywheel of doom, messing up our lives and society writ large,” according to Emily Peck. 

“And many of the underlying problems that led to this breakdown are bigger than the pandemic.”

Because of increased restrictions on immigration and travel that began with the pandemic in early 2020, the net inflow of immigrants into the U.S. has for all intents and purposes been in a 2-year hiatus. 

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WORLD GOLD COUNCIL SEES 2022 BEING GOOD FOR GOLD

Guest Writer, January 15 2022

There are a number of interesting and useful findings and projections in the World Gold Council’s “Gold Outlook 2022” released yesterday, particularly for precious metal investors.

Here are some highlights excerpted from the report:

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THE TORTOISE VS. THE HARE - Is the Fed Still Relevant?

Guest Writer, January 12 2022

The Fed is playing catchup, thanks to the ever-changing economy and pandemic.

That they’re in the role of the proverbial tortoise, in an existential race versus hare-raising inflation and stubbornly persistent unemployment, is a no-brainer. 

The only question is, will the world’s largest and most advanced central bank recover to overtake events of great consequence — or will those economic trials and tribulations force a reckoning, namely: 

Is the Federal Reserve still relevant?

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Gold Could Hit $2,100 This Year - Plus 10 Major Risks to 2022

Guest Writer, January 8 2022

Gold could test new highs of $2,100 an ounce this year, according to David Lennox at Fat Prophets.

The U.S. dollar’s weakness and rising inflation are some factors that are likely to boost prices, according to the fund management company’s analyst.

Lennox says, “We…think across the course of 2022, we will see the gold price testing at the all-time record highs…”

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FUNDAMENTALS FOR GOLD AND SILVER STILL STRONG AS NEW YEAR BEGINS

Guest Writer, January 5 2022

Gold and silver prices fell 3.5% and 11.5%, respectively, last year – and started the first official trading day of 2022 down another 2ish percent.

            Nevertheless, they’re still a solid – perhaps the best – place to have your savings, especially for the long run. 

            Why? Because the fundamentals of gold and silver remain strong as we embark on another year of work, play and investing for the future.

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AMERICANS ARE THREE TIMES MORE LIKELY TO MEASURE HOW ECONOMY IS DOING BASED ON INFLATION THAN UNEMPLOYMENT

Guest Writer, December 15 2021

A new poll is the latest sign that job numbers are pretty strong and the stock market may be at an all-time high. 

Yet, Americans are overwhelmingly grading the economy by the price they see on the shelves.

Prices paid haven't always been the top indicator of choice. When YouGov asked the question in August 2020, 44% picked the unemployment rate compared to 25% who chose inflation.

Bottom line, in the latest Economist/You Gov poll, a majority of Americans (53%) say the economy is getting worse — one point lower than the highest level of the Biden presidency, last month.

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WORLD INEQUALITY GROWS - Increase in Billionaires’ Share of Wealth Largest Ever

Guest Writer, December 11 2021

The share of global wealth held by the wealthiest people ballooned by nearly a full percentage point over the last year.

That increase in billionaires' share of wealth was the largest ever, according to the World Inequality Report 2022.

The top 0.01% of individuals now hold about 11% of the world's wealth, compared to just over 10% in 2020.

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BUSINESS LEADERS DON’T SEE INFLATION MELLOWING UNTIL END OF 2023

Guest Writer, December 8 2021

The next official government release on inflation comes Friday, as a nation of number watchers try to figure out the mixed signals sent by last week’s confusing jobs report.

Americans of all ilk — from the White House, members of Congress and Federal Reserve policymakers to mega corporations, small businesses and everyday households — are focused on persistent price gains and how they’re impacting families and the economy.

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FED TOLD TO SPEED UP TAPERING, IMPROVE COMMUNICATIONS AND RELEASE PAPER ON DIGITAL CURRENCY

Guest Writer, December 4 2021

Jerome Powell and his colleagues at the Fed are getting advice from a new generation of college students; maybe that’s a group they’ll listen to.

They’re telling them to speed up the tapering, enhance communications with the public and finish their study on digital currency.

For a few minutes every semester or two, the students act as Fed officials and compete to pitch staffers the best direction for the economy.

Never mind the Wall Streeters. Here’s a fresh look from the next generation policymakers.

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WILL THE FED RAISE RATES 6 TIMES IN 2 YEARS TO REIGN-IN INFLATION?

Guest Writer, December 1 2021

Market bull Phil Orlando believes the Fed will raise interest rates six times over the next two years to reign in significant ongoing consumer price increases.

Last week he said, “…we will see two quarter-point rate hikes…in the second half of [2022], and perhaps another four quarter-point rate hikes over the course of [2023].”

In other words, Orlando and his firm, Fidelity Hermes, see the Fed Funds rate rising from its current 0% to 0.25% range to 1.75% to 2.0% two years from now.

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TIGHTENING LABOR MARKET GETTING TIGHTER - It’s Especially Squeezing School Teachers

Guest Writer, November 20 2021

One measure of that is the latest JOLTS ratio, showing that for every job opening in September, there was significantly less than one person actually seeking a job.

The 0.7 job seekers available per job is an all-time low, with the exception of one month — April 2019 — when the stat hit 0.69. That’s according to the government’s Job Openings and Labor Turnover report, released last Friday.

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