Gerardo Del Real
May 10, 2022
We just witnessed the steepest year-over-year decline in U.S. treasuries in 50 years.
That’s a long time.
The 30-year mortgage now has the highest rate since 2009 — now over 5.25%.
This coincides with the U.S. increasing the debt limit by $2.5 trillion and blowing through $1.5 trillion of it in just four months.
Midterm elections are on the way here in the US. Across the world, people are rioting in the streets, angry at rising prices for basic necessities like food and gas. And the assault against the Ukrainian people continues with no end in sight.
Despite the data, the Fed seems to pretend to be serious about hiking rates to the tune of 200 basis points between now and September. That would require a 50-basis-point hike in each of the next four Fed meetings. Good luck with that.
In Canada, food prices just rose 7.7% year-over-year in March. Gas prices rose nearly 40% year-over-year. And the price to have a roof over your head rose 6.8% year-over-year. Nearly a third of Canadians surveyed by MNP say they don’t earn enough to pay their bills.
The German Producer Price Index (PPI) just posted 31% print. That’s the worst ever in history.
Europe’s corporate bond market just went through its worst sell-off in history. That’s a long time.
High-grade debt is down 8.6% since a recent high in August. That’s the good stuff.
I’m sure it'll all end well.
Meanwhile — surprise, surprise — the dollar index is firmly over 100 while gold continues to hold up well.
Gold is still up for the year and delivering alpha relative to a sinking stock market.
We’ll need to see that $2,000 level again before traders, speculators, and investors allocate serious capital back into the gold juniors. I think that happens sooner than later.
Which means a lot of our gold juniors will continue to be on sale, especially with the summer doldrums right around the corner.
That’s why I’m content to add to quality gold positions, especially those like this one that also pays you cash.
Gerardo Del Real
Editor, Resource Stock Digest