In a recent editorial, economist Peter St Onge explores the potential of a hidden economic recession, suggesting that official figures might not reveal the full extent of the decline. St Onge raises concerns about the accuracy of U.S. inflation data and its implications for measuring true economic growth. Peter St Onge, Official Figures May Understate […]
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US Senators Urge Federal Reserve to Cut Interest Rates — Warn Fed Policy Threatens Economy, Risks Recession
Three U.S. senators have urged Federal Reserve Chair Jerome Powell to cut interest rates, arguing that high rates stifle the economy and raise housing and auto insurance costs, which are key inflation drivers. They warn that prolonged high rates risk a recession and increased unemployment, calling for immediate rate cuts to stabilize the economy. Senators […]
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Peter Schiff Says ‘Big Surprise’ Awaits in 2024 — Warns of Crash, Recession, High Inflation Returning With Vengeance
Economist Peter Schiff has shared some predictions for 2024. “The big surprise in 2024 will not only be that the economy crashes into recession, but that high inflation returns with a vengeance,” he described. The technicals are breaking down for the U.S. Dollar Index, he added, emphasizing: “This couldn’t come at a worse time. The Fed is planning interest rate cuts, which will not only accelerate the decline, but put renewed upward pressure on inflation.”
Peter Schiff’s 2024 Economic Predictions
Gold bug and economist Peter Schiff shared his predictions for 2024 in a series of posts on social media platform X Wednesday.
“Investors are convinced the Fed has succeeded in restoring price stability without causing a recession, pulling off a miraculous soft landing,” Schiff described, warning:
The big surprise in 2024 will not only be that the economy crashes into recession, but that high inflation returns with a vengeance.
“The U.S. Dollar Index is below 101 for the first time since July, down over 12% from its 2022 high. The near 30% rise in the dollar off its 2021 low is the main reason headline CPI declined so much. All of those gains may be lost in 2024, sending annual inflation to new highs,” Schiff explained.
“As the year draws to a close, the Dollar Index continues to sink quietly toward 100 as gold continues to nudge its way toward ,100. Look for these moves to become increasingly more pronounced in 2024, as both the dollar’s fall and gold’s rise accelerate,” the gold bug advised.
While emphasizing that the U.S. Dollar Index closed at its lowest level since July, Schiff explained on Dec. 21: “More importantly, the technicals are breaking down. This couldn’t come at a worse time. The Fed is planning interest rate cuts, which will not only accelerate the decline, but put renewed upward pressure on inflation.”
Moreover, Schiff shared on X Thursday: “The Nov. trade deficit in goods was a larger than expected .3 billion, as the decline in exports exceeded the decline in imports.” He stressed:
This not only indicates a weak and dysfunctional economy, but portends a significant drop in the dollar and rise in imported goods prices in 2024.
In a follow-up post, Schiff stated that the “highly anticipated recession” is “still coming,” emphasizing that all the government spending, credited with preventing the recession by some, “merely delayed the onset, while ensuring the recession is much worse.”
Schiff has constantly cautioned about the U.S. economy and the USD. Last month, he warned of the U.S. dollar being near a “historic crash,” emphasizing that the U.S. economy will not see a soft landing. He said in October that owners of U.S. dollars will get destroyed. He also warned of a deep recession, an inflationary depression, an “unprecedented” financial crisis, and the biggest bond market crash.
What do you think about the predictions by economist Peter Schiff about the U.S. economy and the dollar? Let us know in the comments section below.
Economist Jim Rickards’ ‘Tumultuous’ and ‘Shocking’ Predictions: Global Recession and a New Banking Crisis to Ensue in 2024
Jim Rickards, a famous economist and investment lawyer, has predicted a year of turmoil for global economies in 2024. According to Rickards, the U.S. Federal Reserve will be unable to pull off a soft landing scenario, prompting a global recession. Also, according to Rickards, a new banking crisis involving medium-sized regional banks will develop.
Jim Rickards Predicts a Year of Turmoil: Recession and Banking Crisis to Happen in 2024
Notable economist, investment banker, and best-selling author Jim Rickards has predicted 2024 will be a year of turmoil for the global economy, forecasting a global recession that will affect the U.S. and China, which will be unable to emerge unscathed from the significant headwinds they are facing. “My overall forecast is that 2024 will be more tumultuous and shocking than 2023,” Rickards notes.
According to Rickards, China, the U.S., and Japan will all fall into recession in the coming months, resulting in a global recession scenario in 2024. The Federal Reserve’s tightening policies won’t result in a soft landing, Rickards forecasts, stating that the U.S. might already be in a recession given reports regarding inverted yield curves, rising commercial real estate defaults, declining industrial production, declining job creation, and falling bank loans.
China, even with its stimulus reopening policies, will fail in its most recent relaunch attempt due to debts weighing heavily on its economy.
Rickards also believes the banking crisis that developed this year will continue in 2024, with not-too-big-to-fail regional banks having a starring role on this stage. Rickards explained:
Investors are relaxed because they believe the banking crisis is over. That’s a huge mistake. History shows that major financial crises unfold in stages and have a quiet period between the initial stage and the critical stage.
According to Rickards, this midsize banking meltdown could snowball into a global crisis directly affecting capital markets. Stocks will perform poorly, losing up to 50% if global geopolitical conflicts escalate, while gold and silver should “perform well” in a flight-to-quality scenario. “Put on your crash helmets for a wild ride in the coming year,” he warned.
What do you think about Jim Rickards’ dire predictions for 2024? Tell us in the comments section below.
Treasury Secretary Janet Yellen Discusses US Economy, Recession Risk, Soft Landing
U.S. Treasury Secretary Janet Yellen believes that inflation has come down meaningfully but there’s still further to go for the Federal Reserve to achieve its 2% inflation target. She noted that the central bank has two risks to manage. “One is that inflation doesn’t come down back to their target as they envisioned, and the other is that the economy becomes too weak,” she detailed.
Yellen Discusses U.S. Economy
U.S. Treasury Secretary Janet Yellen discussed the state of the U.S. economy in an interview with CNBC on Wednesday as the Federal Reserve left interest rates unchanged for the third consecutive time.
While stating that “Inflation has come down meaningfully,” Yellen cautioned: “There’s further to go for the Fed to achieve its 2 percent objective, but I think we’re on a path, and you can see a consistent pattern in inflation coming down over time.” The U.S. November Consumer Price Index rose 3.1% on an annual basis.
Regarding whether the U.S. economy will slide into a recession, Yellen said:
Well, I believe in any year, even if you knew nothing about the economy, there’s a recession risk that’s over 10%. So, there is always some recession risk. I don’t think it’s particularly high. Consumer spending, we have seen remain solid.
“Gradually over time, I think people will feel better about the economy,” Yellen emphasized while admitting that people have noticed that “the level of prices in some cases is higher than it was before the pandemic.” She mentioned: “They notice their bills, certain bills are higher. Rent would be a very good example. Apartment rentals, for example.”
Yellen also reiterated her view that the U.S. economy is heading for a soft landing, adding that she saw a reasonable chance that growth would continue in 2024. “I think there’s a reasonable chance we get it. I think that we’re on that path. My baseline is that we’ll achieve a soft landing,” the Treasury Secretary described.
Commenting on whether the Federal Reserve will cut interest rates next year, Yellen opined: “As inflation moves down, it’s in a way natural that interest rates should come down somewhat because real interest rates would otherwise increase, which can tend to tighten financial conditions.” She continued:
They have two risks to manage. One is that inflation doesn’t come down back to their target as they envisioned, and the other is that the economy becomes too weak … I’m going to leave that call to them.
What do you think about the statements by Treasury Secretary Janet Yellen? Let us know in the comments section below.
Vaneck Unveils 15 Crypto Predictions: Spot Bitcoin ETF Approvals, US Recession, BTC’s Historic Rally
Asset management firm Vaneck has unveiled its 15 crypto predictions for 2024. They include the U.S. recession’s arrival, the approvals of spot bitcoin exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC), and bitcoin’s historic rally, “potentially spurred by political events and regulatory shifts following a U.S. presidential election.”
15 Crypto Predictions for 2024
Asset management firm Vaneck published its 15 crypto predictions for 2024 on Thursday. The first prediction concerns the U.S. economy slipping into a recession and the U.S. Securities and Exchange Commission (SEC) approving spot bitcoin exchange-traded funds (ETFs). Vaneck wrote on social media platform X:
The U.S. recession will finally arrive, but so will the first spot bitcoin ETFs. Over .4 billion may flow into these ETFs in Q1 2024 to support bitcoin’s price.
Vaneck is among the companies that have filed an application to launch a spot bitcoin ETF with the SEC. Other applicants include Blackrock, the world’s largest asset manager, Fidelity Investments, Ark Invest, and Bitwise.
The second prediction centers on the impending Bitcoin halving in April 2024, anticipating “minimal market disruption and a post-halving rise in bitcoin’s price, with significant gains for some low-cost miners.” The third prediction, which sees a dramatic surge in bitcoin’s price, states:
Bitcoin will make an all-time high in Q4 2024, potentially spurred by political events and regulatory shifts following a U.S. presidential election.
The next couple of predictions are about Ethereum. Vaneck predicts that ETH will outperform major tech stocks in 2024, although it won’t flip BTC. However, Ethereum’s market dominance will face challenges from other smart contract platforms. Moreover, the implementation of EIP-4844 (proto-danksharding) “will reduce transaction fees and improve scalability for layer 2 chains such as Polygon, Arbitrum, Optimism, and others,” Vaneck described.
The sixth prediction states that non-fungible token (NFT) activity “will rebound to an all-time high with Ethereum leading and Bitcoin gaining traction via the Ordinals protocol, shifting the ETH-to-BTC NFT issuance ratio to 3-1 by the end of 2024.” Expecting crypto exchange Binance to lose its number one position for spot trading, and competitors — such as Okx, Bybit, Coinbase, and Bitget — contending for leadership, Vaneck shared in its seventh prediction:
Coinbase’s futures market may exceed billion daily volume as regulated index inclusion becomes key.
The eighth prediction explains that the market capitalization of stablecoins should surpass its previous peak and reach a new high above 0 billion. This growth will be accompanied by a resurgence in USDC’s market share, signifying a transition towards increased institutional adoption, particularly within emerging Layer 2 chains. The ninth prediction details that decentralized exchanges (DEXs) “will hit all-time highs in spot trading market share, driven by fast blockchains like Solana and wallets enabling automated transactions, promoting on-chain trading and self-custody.” The 10th prediction states: “Remittances will boost blockchain use, with ‘Bitcoin Staking’ on the Lightning Network offering yield opportunities through new, user-friendly staking tools.”
Vaneck also anticipates the emergence of a smash-hit blockchain game exceeding 1 million daily players, propelling Immutable X’s market capitalization upwards “with key releases and the Immutable Passport, streamlining wallet usage and enabling wider adoption.”
The 12th prediction highlights that Solana (SOL) “is projected to become a top 3 blockchain by market cap, TVL, and users, potentially surpassing Chainlink’s TVS [Total Value Secured] with its Pyth oracle, as Defi [decentralized finance] TVL surges and ETF interest grows.”
Furthermore, the asset management firm predicts a surge in adoption for decentralized physical infrastructure (Depin) networks in its 13th prediction. “New accounting standards will boost corporate crypto holdings. Coinbase will report Layer 2 revenue as Base Protocol grows. By 2025, a major financial entity may launch a quasi-public blockchain with public chain connectivity,” the 14th prediction outlines.
The final prediction by Vaneck relates to know-your-customer (KYC) compliance. The asset management firm detailed:
KYC-compliant Defi apps, led by Uniswap, will likely surpass non-KYC ones, attracting institutional volume and enhancing protocol fees, which may boost Uniswap’s token value.
What do you think about Vaneck’s 15 crypto predictions? Let us know in the comments section below.
JPMorgan CEO Jamie Dimon Warns of Higher Interest Rates and Recession — ‘I’m Not Trying to Scare People’
JPMorgan Chase CEO Jamie Dimon has warned that something bad may happen in the U.S. economy. “I’m not trying to scare people. I’m more in the category that something could go wrong,” he stressed. “A lot of things out there are dangerous and inflationary. Be prepared … Interest rates may go up and that might lead to recession.”
Jamie Dimon Says ‘Be Prepared’
The CEO of JPMorgan Chase, Jamie Dimon, issued several warnings regarding the U.S. economy this week at the 2023 New York Times Dealbook Summit in New York and the Global Investment Summit organized by British Prime Minister Rishi Sunak in London.
Elaborating on his recent warning of “the most dangerous time the world has seen in decades,” Dimon said at the Dealbook Summit on Wednesday: “If you look at history and you open a newspaper of any month, any year, of course, there’s always tough stuff going on — wars, depressions, recessions….” He explained that the current situation, including the war in Ukraine, the huge humanitarian crisis, and the nuclear blackmail, is affecting all, including oil and gas, migration, food costs, as well as international military and economic relationships. “That’s pretty tough and that’s before the terrorist attack in Israel,” Dimon opined.
Noting that these events are “dangerous,” the JPMorgan executive emphasized: “If you look at the history of battles like this, they’re unpredictable. You don’t know the full effect.” He continued:
I look at a lot of things out there … both dangerous and inflationary. So I just say: be prepared. … The rates may go up — both the short rate and the 10-year rate, and be prepared that might lead to recession.
Commenting on the current state of the economy, Dimon described: “When people look at the current economy and things are going good … We’ve had a little bit of drugs injected directly into our system called ‘fiscal stimulation,’ the largest we’ve ever had in peacetime … But they are drugs running through the system, and they create this kind of sugar high, and we’re in a sugar high.”
The JPMorgan boss further shared: “Corporate profits are up because people are spending a lot of money. Where do they get the money? The government gave it to them. Well, of course, profits are up … So, I’m quite cautious about the economy.” Dimon further asserted that the world isn’t ready for a 7% interest rate.
Dimon Anticipates ‘Something Could Go Wrong’
At the Global Investment Summit organized by Prime Minister Sunak on Tuesday, Dimon warned that something economically bad may happen. Cautioning that the world is now facing a “dangerous cocktail” of risks that could prove “explosive” for the global economy, the JPMorgan CEO said:
You can’t sit here and say that something bad may not happen. I’m not trying to scare people. I’m more in the category that something could go wrong.
He cautioned that inflation is likely to persist at elevated levels for longer. “We’re on this sugar high and I’m not saying this ends in a depression [but] I think there’s more inflationary forces out there … There’s a higher chance that rates go higher, inflation doesn’t go away, and all these things cause more problems of some sort,” the executive detailed.
Earlier in the current month, Dimon expressed his view that the Federal Reserve might increase interest rates further, stating: “I suspect that they may not be done.” He added: “I think there’s a chance that inflation is just a little stickier than people think and their fiscal and monetary stimulus in the last several years is more than people think. Unemployment is very low.” Back in September, Dimon had cautioned that the Fed could potentially raise interest rates to 7%, which might lead the U.S. economy into stagflation. In October, he disclosed his observation of two “extraordinary” storm clouds impacting the U.S. economy. “One is the fiscal money being spent is so big, the largest in peacetime ever — America and kind of around the world — with very high deficits and QT we’ve never had,” the executive detailed, clarifying: “The biggest storm cloud is geopolitical.”
What do you think about the warnings by JPMorgan CEO Jamie Dimon about the economy? Let us know in the comments section below.
Adrian Day Warns of ‘Inevitable’ US Recession, Describes it as a ‘Freight Train Heading Towards Us’
In a recent interview, Adrian Day, CEO of Adrian Day Asset Management, shared his insights, positing a looming economic downturn in the U.S. Day critically analyzed the Federal Reserve’s actions, explaining their expected impacts on the nation’s economy.
Adrian Day: Recession Looms Like an Oncoming Train
On November 8, 2023, Adrian Day the founder and CEO of Adrian Day Asset Management spoke with Michelle Makori, the lead anchor and editor-in-chief at Kitco News at the New Orleans Investment Conference 2023. During the interview, Day voiced concerns about the U.S. economy’s trajectory towards recession, deeming it “inevitable” due to the delayed repercussions of monetary policy tightening.
He noted the historical sequence where recessions ensue rate hiking cycles, highlighting that the average delay from rate hikes’ commencement to recession onset spans approximately 22 months. This perspective indicates that the U.S. might not yet have fully grappled with the Federal Reserve’s measures, suggesting an impending recession.
“A recession is inevitable in my view,” Day said. “It’s all but inevitable, it’s built-in and a lot of people think, well you know the Fed’s done all is dramatic hiking and we haven’t had a recession yet, therefore we’ve escaped it — I think they’re living in fantasy land.
Day critiqued the Federal Reserve’s strategy, arguing missed opportunities in rate adjustments, potentially complicating future economic scenarios. He underscored the uncertainty shrouding forthcoming rate hikes, emphasizing that prolonged high rates would significantly affect households and corporations. Day’s stance implies a ‘tighter for longer’ approach by the Fed, likely leading to more severe economic consequences.
Addressing inflation, Day forecasted a resurgence, attributing it to base effects and escalating oil prices. He contended that, even if the Fed curbs inflation, the implemented measures might intensify a recession. Day’s commentary mirrors skepticism about the Federal Reserve’s capacity to ensure a smooth economic transition, suggesting that either persistent inflation or aggressive rate hikes could precipitate economic difficulties.
Regarding investment strategies amidst these uncertainties, Day recommended diversifying portfolios and focusing on assets like gold and gold stocks, which he perceives as undervalued. “The outlook for gold is strong,” Day told Makori. “So gold stocks are very undervalued, but I think we’re approaching a time when we’re going to start seeing gold stocks attract buyers if the stock market starts to falter, not crash, but falter we’re going to see a rotation into … sectors that are undervalued.”
He also advised allocating a substantial portion of assets into cash or short-term treasuries, citing their current appealing returns. This strategy, Day suggests, equips investors to capitalize on potential market shifts stemming from the evolving economic landscape. “I think a recession is coming, it’s a freight train heading towards us, it just hasn’t hit us yet … it’s inevitable because of the lagging effects of the tightening,” Day told Makori.
What do you think about Day’s projections about specific assets and the state of the U.S. economy? Do you think a recession is inevitable? Share your thoughts and opinions about this subject in the comments section below.
‘Bond King’ Bill Gross Predicts Q4 Recession: Loan Delinquencies and Regional Banks in the Crosshairs
Bill Gross, revered as Wall Street’s ‘Bond King,’ foresees a recession clouding the U.S. economy by the year’s final quarter. He pinpoints the burgeoning issue of overdue car payments and the financial strains beleaguering regional banks as catalysts for the impending economic slump.
Bill Gross Foresees Economic Clouds on the Horizon
On Tuesday, October 24, 2023, stock markets have risen, somewhat healing from the previous week’s bruises. Despite this uptick, market conditions remain tumultuous, with the 10-year U.S. Treasury bond yield hovering at 4.84%. Inflation has nudged slightly upward in the last two months, prompting anticipation of a 0.25% interest rate escalation in the forthcoming Federal Open Market Committee (FOMC) meeting.
On the social media network X (formally Twitter), the bond connoisseur Bill Gross publicly shared his projection of a deceleration in the U.S. economy’s momentum come the fourth quarter. “Regional bank carnage and recent rise in auto delinquencies to long-term historical highs indicate U.S. economy slowing significantly,” Gross said. “Recession in 4th quarter,” the investor added.
Auto loan tardiness has surged of late, with other financial slip-ups such as consumer loans and credit card lapses reaching peaks not seen in over ten years. Just last month, an alarming 6% of sub-prime car loan patrons lagged behind by a full 60 days. The unsettling trend of vehicle confiscations began to rise in January and hasn’t looked back since. Intriguingly, while auto loans and other consumer debts reveal escalating delinquency, single-family mortgage payment misses haven’t shown the same consistent uptrend in 2023, though they’ve inched upward.
A closer look at the data paints a mosaic of delinquency trends, oscillating based on the mortgage type and the specific timeframe in focus. The Mortgage Bankers Association (MBA) has pointed out a noticeable uptick in delinquencies for commercial real estate and multi-family sectors in 2023’s second quarter. Amidst this backdrop of rising defaults and a stubbornly high federal funds rate, 2023 has been particularly brutal for regional banks. The scenario grew direr after the abrupt downfall of Silicon Valley Bank (SVB) in March.
In Gross’s commentary on X, he emphatically noted, “I’m seriously considering regional banks again,” following up with the investment advice: “On bonds. Invest in the curve.” The year has seen regional banks not only underperforming but also plummeting even deeper than their lows during the SVB debacle. The financial institution Huntington Bank felt the pressure, shuttering dozens branches across the Midwest.
These regional financiers, are heavily tied to commercial real estate (CRE) and are grappling with the rising defaults. This, coupled with consecutive Federal rate boosts, has nudged their unrealized losses perilously close to the edge.
What do you think about Gross’s prediction? Do you expect a recession in the fourth quarter? Share your insights and opinions about this subject in the comments section below.
Economist Peter Schiff Warns of Deep Recession, Inflationary Depression, and Collapse of US Dollar Demand
Economist Peter Schiff has warned of an inflationary depression, noting that inflation will stay higher for longer, leading to a more severe and prolonged recession. He predicted that the rapidly increasing national debt and federal budget deficits should lead to a collapse in demand for U.S. dollars. “Once the dollar starts falling, Treasury yields will rise faster,” the economist said.
Peter Schiff on Inflation, Recession, Depression
Economist and gold bug Peter Schiff issued warnings about the U.S. economy and the U.S. dollar again this week in a series of posts on social media platform X.
“The financial and economic crisis that’s already begun is long overdue and its ultimate arrival has been obvious for years. Yet as it unfolds, the media, government, academia, and the Fed will claim it was impossible to foresee. There’ll be no shortage of private sector scapegoats,” Schiff wrote. “Remember the reason that interest rates will stay higher for longer is that inflation will also stay higher for longer,” he added, elaborating:
That means the coming recession will be deeper and last longer too. It’s not just stagflation, but an inflationary depression.
He also commented on the remarks by Federal Reserve Chair Jerome Powell regarding the economy on Thursday. “Powell blamed today’s inflation on the pandemic. The pandemic didn’t cause inflation, the Fed and the federal government did. Both made the inflation problem worse during the pandemic by running huge budget deficits and printing a sh*tload of money to finance stimulus checks,” Schiff argued.
“Powell actually said the Fed doesn’t consider fiscal policy when making decisions on monetary policy and that he doesn’t change monetary policy based on fiscal policy. That is likely the most reckless admission ever made by a Fed Chairman. It will define Powell’s failed legacy,” Schiff further opined.
The economist continued:
The primary use for U.S. dollars has been to buy Treasuries. But since the biggest buyers are now sellers, and the national debt and federal budget deficits are soaring, demand for dollars should collapse as well. Once the dollar starts falling, Treasury yields will rise faster.
“It’s clear that bond investors have lost confidence in the Fed’s ability to bring inflation back down to 2%. That’s why 30-year Treasuries are now yielding 5.1%. But 5.1% is not nearly high enough to offset 30 years of high inflation. So bond yields are headed much higher fast,” Schiff explained. “The Treasury yield curve will soon normalize at higher rates across the curve. Short-term yields will move from 5.5% to 6%. Long-term yields will move from 5% to 7%-8%. Given an abnormally large amount of debt, the U.S. economy can’t afford a normal yield curve. QE coming soon,” the gold bug predicted.
Schiff expects no further interest rate hikes. “We’ve got war in the Middle East, so the Fed can’t raise rates with all that uncertainty out there. And maybe they’ll have to cut rates,” he recently said. He has repeatedly warned about an impending biggest bond market crash and an unprecedented financial crisis. Furthermore, he has expressed concerns about a “tragic ending” and the collapse of the U.S. dollar, emphasizing that the day of reckoning is at hand.
What do you think about economist Peter Schiff’s warnings about the U.S. economy and the U.S. dollar? Let us know in the comments section below.