ECONOMIC UPDATE: What do Global Central Banks Know that We Don't?
Record amounts of gold is being purchased by countries -- once the U.S. dollar crashes, precious metal will skyrocket
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The true fear of an economic calamity on the near horizon was further clarified yesterday as gold once again illustrated its status as the world’s number one safe-haven asset.
According to Invesco, across the globe, central banks racked up a record amount of gold purchases last year… and are breaking another record in the first quarter of this year.
Concerned about the illegal sanctions imposed by the U.S. and the EU on Russia and their confiscation of Russian gold—some 50 percent of Moscow’s $640 billion of gold and forex reserves were frozen along with some $300 billion in cash by the West last year—more countries are bringing their bullion reserves back home, rather than keeping it in other nations.
First Republic and Signature Bank is just the beginning of a much worse that is yet to come.
“If it’s my gold then I want it in my country’ (has) been the mantra we have seen in the last year or so,” said Invesco’s Rod Ringrow. Indeed, Invesco reported that back in 2020 that 50 percent of central banks held part of their gold reserves domestically.
BIDEN: U.S. RUNNING OUT OF AMMO
This year, that number is up to 68 percent and is expected to hit 74 percent over the next five years. And rather than buying or selling gold via ETFs and gold swaps, their survey showed 96 percent said they were investing in gold because it was a top safe-haven asset.
TREND FORECAST: “By their deeds you shall know them.”
It is obvious that the central banksters in charge of the world’s money see, hear, and feel the troubling economic climate ahead… that is why they are investing heavily in gold. And as we have forecast, when the United States Federal Reserve begins to lower interest rates, the dollar will begin its long descent… and the lower the dollar falls, the higher gold prices will rise.
Banking Crisis Ahead
What we had forecast back in March of 2020—when a State of Emergency was declared by then-President Donald Trump to fight the COVID War—that a banking crisis would occur as people were prohibited to go to work at offices. The result would be a commercial office bust with building owners unable to pay off their mortgages. This is now, finally, becoming a mainstream reality.
Three years too late, this was a headline story in Business Insider last Friday:
Commercial real estate values are set to crater as much as 40% by 2025 in these 6 cities
Commercial real estate is in for hefty price declines across six top US cities, according to a recent report from Capital Economics…
San Francisco is expected to suffer the largest decline, with commercial property values in the city plummeting 40%-45% from 2023-2025.
Chicago and New York will see declines of 30%-35%, while LA and Washington will see 25%-30% drops. Boston is expected to see values slipping around 25%.
Other cities in its “Western metros” category will suffer comparable valuation declines, such as Seattle, Portland and Denver, while values in Southern cities like Miami, Dallas and Atlanta are set to fall 20% or less…
TREND FORECAST: There are also estimates from Morgan Stanley that commercial real estate prices will fall by 40 percent, and we have been reporting on those price declines in previous Trends Journals.
So here it is! A major “new news” article in Business Insider that is old news to Trends Journal subscribers… and what do they do in this article to forecast the future?
NOTHING!
Not a word from Business Insider of how this will hit banks that are holding these loans that will not be repaid and the economic crisis that will result as more banks fail.
Indeed, the banking crisis that began this year with the failure of Silicon Valley Bank, First Republic and Signature Bank is just the beginning of a much worse that is yet to come.
As witnessed with the failure of these three banks, the rapidly rising interest rates deepened their losses on securities which they bought when interest rates were at and/or near zero. Now, with interest rates having rapidly risen and banks paying next to nothing to depositors, they are pulling money out of their bank accounts and investing in safe-haven assets, such as money market accounts that give them a higher return and are insured by the FDIC.
Game Changer
A June 1-22 Gallup poll showed that only 26 percent of Americans have “a great deal” or “fair amount” of confidence in the banks. In 2021, at the height of the COVID War, the confidence level was at 33 percent. And in 1979, despite a decade of high inflation and growing economic discontent—before banks were permitted to go interstate and were just intra-state and the public had faith in their local banks – the Gallup poll showed 60 percent of Americans had confidence in the banks.