The intricate dance between economic indicators unveils a sobering reality: as US government debt skyrockets, Gold emerges as a beacon of stability, outperforming Bonds in a landscape of uncertainty. With national gasoline prices surging past $3.70 per gallon amid persistent inflationary pressures, concerns deepen over the prospect of breaching the $4.00 mark for the first time in two years. Despite the Fed’s efforts to tighten monetary policy through rate hikes and balance sheet reduction, the market remains awash in liquidity, prompting speculation of further rate hikes should inflationary pressures escalate and expectations become unmoored. As the economic landscape teeters on the brink of uncertainty, our exposé delves into the hidden truths behind today’s economic crisis, offering unparalleled insights that demand attention.
Gold/TLT ratio has a close correlation with US government spending
As debt increases, Gold tends to outperform Bonds
If the US government continues to increase debt at this rate, it would be very bullish for Gold pic.twitter.com/WpUc8SbVQS
— Game of Trades (@GameofTrades_) April 25, 2024
"America Near an Inflation Tipping Point"
Our NEW exposé unveils the stark realities of today’s economic crisis. Dive deep with details beyond 📈prices & more that can’t be found anywhere else!
Grab your 🍺🍷 & 🍿 b/c you’re going to need it!
t.co/24sgEN9aLT pic.twitter.com/1BX3YMpMRi
— The Coastal Journal (@1CoastalJournal) April 10, 2024
US national gasoline prices have been rising in the last few months, breaching $3.70 per gallon.
It is just before the summer months when demand is higher.
Inflation has not gone away.
Will the prices at the pump reach $4.00 per gallon for the first time in 2 years? pic.twitter.com/04sXdo1gnG
— Global Markets Investor (@GlobalMktObserv) April 25, 2024
In my view, the Fed would be forced to consider additional rate hikes if the inflation data accelerate AND if inflation expectations become unanchored. Signs of the latter would come from the TIPS break-evens, which have so far remained quite stable. /END pic.twitter.com/rSrRrv4TUV
— Jurrien Timmer (@TimmerFidelity) April 25, 2024
Despite the Fed’s many rate hikes and $1.5 trillion in balance sheet reduction, the liquidity profile in the market remains robust. The forefront in that equation has been the drawdown in reverse repo program (RRP), which is down to a cycle low of $397 billion. /5 pic.twitter.com/kY9EsJhV5h
— Jurrien Timmer (@TimmerFidelity) April 25, 2024
The difference is wages kept up and we had a booming economy where every dollar spent in debt caused $4 in GDP.
Now? It's $.70 t.co/GUwyDxg2ZJ
— Darth Powell 🦈🇺🇲🇺🇦🇵🇱🇫🇮 (@GRomePow) April 25, 2024
Economic Slowdown and Rising Inflation Cast Doubt on Soft-Landing Prospects
The U.S. economy experienced its slowest growth in nearly two years last quarter, accompanied by a notable increase in inflation, which dampened hopes for a soft landing. The Bureau of Economic Analysis reported that the Gross Domestic Product (GDP) grew at an annualized rate of 1.6%, falling below all economists’ forecasts. The primary driver of economic growth, personal spending, increased at a modest 2.5% rate, which was less than expected. Additionally, a widening trade deficit contributed to the slowdown, marking the largest subtraction from growth since 2022. Inflation also showed signs of acceleration, with a key indicator rising at a 3.7% annualized rate. This was the first quarterly increase in a year, indicating that price pressures are resurfacing.