The U.S. Economy Is In A Recession Now – Gold, Silver Set To Soar

MBA, Market Analyst & Author @ The Mining Stock Journal
May 22, 2022

“We’ve seen a downturn in the price as expressed in the paper derivatives precious metals’ price. There hasn’t been any large scale physical selling of gold or silver. Coin dealers sell gold and silver on a daily basis to retail buyers and the bullion banks broker bullion from major gold bullion producers into the countries that are buying – India, Russia, China, etc – but I have not heard of any entity that owns a large amount of gold say ‘we have to sell 100 tonnes gold, bid wanted in comp…”

The economic and corporate earnings data continue to reflect an economy that is heading into a recession – a bad one, I suspect. 85% of the S&P 500 companies have reported their first quarter. The S&P 500 GAAP earnings are down 14% versus Q4 2021 and up only 1% year-over-year. If earnings were adjusted by just the highly massaged YoY CPI inflation rate of 8.3%, real YoY SPX earnings are down 7.5%. The general economic data, which I scrutinize weekly for my Short Seller’s Journal newsletter, began showing economic weakness last summer, after the round two stimmies were largely spent. The one area that continued to show robust activity was the housing market. But both home sales (new and existing) and retail sales (nominal) have been in sharp downtrend since the beginning of 2022.

Elijah Johnson invited on to his Liberty and Finance podcast to discuss the economy and, of course, gold and silver:

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Dave Kranzler spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, he traded junk bonds for a large bank. He has an MBA from the University of Chicago, with a concentration in accounting and finance. He currently co-manages a precious metals and mining stock investment fund in Denver. My goal is to help people understand and analyze what is really going on in our financial system and economy. Dave publishes the The Mining Stock Journal a bi-weekly subscription newsletter that features junior mining ideas as well as relative value ideas in large cap mining stocks.

 


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