Monthly Archives: January 2023

MarketWatch/Steve Goldstein/1-5-2023

“Another similarity between now and then is the steep drop in the stock market. In the 1969 recession, the S&P 500 index slumped 34% from peak to trough, and by around 20% before the recession started. Already, the market is down about 20% in the past year from its peak before any recession has started.”

USAGOLD note: At about that same time, gold demand began to stir among investors, and European nation-states began converting their dollar holdings to gold at the U.S. Treasury’s gold window. Gold’s price history, thereafter, is well known.

Financial Times/John Plender/1-2-2023

“For the moment, a standard market view is that the central banks’ ‘tighter for longer’ mantra will keep bond yields rising and equities falling. But the big question is whether, in the event of a funding crisis, central banks will feel obliged once again to return to asset buying to prop up markets and financial institutions, thereby weakening their anti-inflationary stance.”

USAGOLD note: Some refreshingly clear thinking from Mr. Plender…… We have suggested for months that a change of course at the Fed is more likely to come the result of another credit crisis than a slowing economy.

The New York Sun/Editorial staff/1-2-2023

“So does ‘the flight of central banks to gold,’ as the FT puts it, signal that the world’s central banks see the error of abandoning sound money? The last time gold was bought at this pace, the FT says, it ‘marked a historical turning point for the global monetary system.’ Then, Europe’s central banks were buying ‘massive volumes of gold from the US,’ prompting ‘the collapse of the London Gold Pool of reserves.’”

USAGOLD note: Much food for thought in this New York Sun editorial……Of special note, the prospect of sovereign wealth funds in the Middle East buying gold sub rosa with oil revenues, and the Sun ending with the observation that in the context of a breakdown in the current monetary system it is “easy to understand the logic of buying gold.”

Bloomberg/Niall Ferguson/12-31-2022

“War is back. Could world war also make a comeback? If so, it will affect all of our lives. In the second interwar era (1991-2019), we lost sight of the role of war in the global economy.…[W]e forgot that war is history’s favorite driver of inflation, debt defaults — even famines. That is because large-scale war is simultaneously destructive of productive capacity, disruptive of trade, and destabilizing of fiscal and monetary policies.”

USAGOLD note: Ferguson examines how the current cold war could become a hot one. He starts wwith Kissinger’s current thinking, touches on the importance of algo-driven weaponry and other technological aspects of the current rivalry with Russia and China, and delves into what he calls America’s Achilles heel – the federal debt (of which China holds $970 billion) and interest payments on it. He worries that the conflict in Ukraine be the smaller war that ushers in a bigger one.

Project Syndicate/Nouriel Roubini/12-30-2022

“Inflation rose sharply throughout 2022 across both advanced economies and emerging markets. Structural trends suggest that the problem will be secular, rather than transitory. Specifically, many countries are now engaged in various “wars” – some real, some metaphorical – that will lead to even larger fiscal deficits, more debt monetization, and higher inflation in the future.”

USAGOLD note: Roubini argues the opposite of Wall Street’s favored inflation scenario – not peak, not transitory, but in the ascendancy.  He adds a new layer to his analysis in this essay – the disruptive effect of “globotics.” As more and more workers – white and blue collar – lose their jobs to globalization and automation, governments will be pressured “to help those left behind, whether through basic-income schemes, massive fiscal transfers, or vastly expanded public services.” He ends with a warning that “a great stagflationary debt crisis is upon us.” Though not always an advocate of gold ownership, Roubini has become one in recent years.

MarketsInsider/Jennifer Sor/1-5-2023

“The Federal Reserve wants a recession and is desperate to convince markets it’s serious about bringing inflation down, according to Bank of America’s chief economist Ethan Harris.”

USAGOLD note: What happened to “Don’t fight the Fed?” The markets, it appears, are in full defiance. The Powell Fed has become the Rodney Dangerfield Fed – looking for a little respect.

Bloomberg/Alison Schrager/1-5-2023

“Sure, everybody knows that with higher expected returns comes the bigger risk of loss. But time and time again investors put this most basic rule to the test in a kind of bull-market delirium. That explains the last blood-curdling year in investing, the last 15 years, and even the last thousand years.”

USAGOLD note: We pass this along simply because it includes the principles of sound money management that too many have forgotten or pushed aside over the last several years. The free money era is over. Everthing’s changed. Increasingly analysts are recommending investing in the old world economy of which gold is a charter member.

Financial Times/Madison Darbyshire and Nicholas Megaw/1-2-2023

“Growing numbers of retail investors are being drawn into commodity trading after two consecutive years of bumper returns, despite concerns that they could suffer huge losses or disrupt the complex and volatile markets.”

USAGOLD note: Commodities investors on the futures exchanges own leveraged positions, and as one analyst pointed out, “these are very sophisticated markets where you can lose . . . whatever you put up with your [broker] in a matter of minutes.” By owning physical gold and silver outright, you can participate in any future commodities rally without exposing yourself to the dangers of leverage. In fact, you can ride out any downside and live to potentially profit another day. The commodities’ futures markets are not for everyone – a lesson too many learn the hard way.

Financial Times/Gillian Tett/12/15/2022

“Indeed, when I talk to business leaders now, the words ‘disruption’ and ‘uncertainty’ repeatedly crop up. ‘As far as recent decades go, this sense of disorientation is new’ says Adam Tooze, a fellow FT columnist, who is also a history professor at Columbia University.”

USAGOLD note: Tett explores shifting sentiment at a time when the old economic structures are crumbling, and the new do not feel all that sturdy.

Bloomberg/Michael Sin/1-1-2023

“Scion Asset Management founder Michael Burry said while inflation has peaked, it is likely to pick up again in response to government stimulus.”

USAGOLD note: Burry obviously is not buying into Wall Street’s favored notion that the Fed has gotten the genie back in the bottle.

Financial Times/Henry Mance interview of Nouriel Roubini/12-28-2022

“I think that really the world is on a slow-motion train wreck. There are major new threats that did not exist before, and they’re building up and we’re doing very little about it.” – Nouriel Roubini,

USAGOLD note: Under these circumstances, says Roubini, “you go to short-term Treasuries, you go to inflation-indexed bonds, you go to gold.” The financial press likes to call him Dr. Doom but he sees himself as “Dr. Realist.”

Financial Times/Tommy Stubbington, Adam Samson, and Kate Duguid/12-31-2022

“Global stocks and bonds lost more than $30tn for 2022 after inflation, interest rate rises and the war in Ukraine triggered the heaviest losses in asset markets since the global financial crisis.…[S]aid Luca Paolini, chief strategist at Pictet Asset Management. ‘The lesson of this year is that at some point there’s a day of reckoning, and when it comes it’s brutal.’”

USAGOLD note: We posted this chart regularly in 2022 and here’s the final tally.

Stocks… down 19.95%
Treasuries… down 31.00%
Crypto… down 64.25%
Gold… up 1.19%
Silver… up 4.61%

Performances key asset groups 2022
(Stocks, bonds, crypto, gold and silver)

Chart courtesy of TradingView.com • • • Click to enlarge

Bloomberg/Niall Ferguson/12-18-2022

“Jay Powell may find, as Arthur Burns did, that tackling inflation is not a beautiful game.”

USAGOLD note: Ferguson walks us through the possibilities. He says the wrong call by the Fed – and it could be a matter of 25 basis points on interest rates – “can make the difference between a nasty recession and an inflationary spiral.” That might be cutting the margin of error a bit close. The real problem, in our view, is whether or not the Fed lucks out on the inflation rate and it continues to decline, or it bottoms and starts back up again. In Burns’ case it started back up again – repeatedly.