Metals Market Report Archive
Metals Market Report 06-22-2023

The Mike Fuljenz Metals Market Report

June 2023 - Week 3 Edition

Gold Still Up Strongly Over Past Three Months

Gold is down this week on a series of misunderstandings but it is still up strongly in the past three months following the March banking crisis when three of the four largest U.S. bank failures happened – two in one weekend (March 10-12) and a third on May 1. Gold was at $1,813 just before March 10 and now it is $120 higher, even though it is down from a peak of over $2,040 in May. As gold is predicted to continue trending upwards, now is the time to contact one of our professional account representatives to find out how you can add physical gold to your investment portfolio.

Gold pulled back this week based on the continued bearish statements of Federal Reserve Chairman Jerome Powell, this time in testimony before Congress in which he indicated the likelihood of two (or maybe more) interest rate increases as the Fed continues the fight high inflation. As has so often happened during his five-year mistake-ridden tenure, he is looking back and failing to look forward.

Powell’s Federal Reserve is “Behind the Curve” Once Again –

Jerome Powell was appointed Chairman of the Federal Reserve by President Trump in November 2017 and took control of our central bank in February 2018. Powell’s first major mistake in December of that year was to raise interest rates one time too many, causing a huge stock market crash in the Christmas season for no good, or explainable reason. On the surface, he seemed to be declaring a “Declaration of Independence” from the confrontational “tweets” of President Trump, who kept urging Powell NOT to raise rates but Powell seemed to be saying, “I can, and I will!”

The S&P 500 fell almost 10% in December 2018 alone – the worst market December since 1931.

Mistake #2: After COVID struck in early 2020, the Fed and the Treasury overinflated the U.S. dollar, sending American families over $6 trillion in “helicopter money” (a term coined by economist Milton Friedman for overinflated newly printed fiat currency), sent to most American families, whether they needed it or not (most were still working). This fueled inflation in 2021.

Mistake #3: Most of the Fed Governors and new Secretary of the Treasury Janet Yellen said from April to November of 2021 that this new high inflation would be “transitory,” and that it would be over by the end of 2021. San Francisco Fed President Mary Daly said in an April 2021 Barron’s interview that the Fed needed even more money creation to get the inflation rate UP to 2%, reassuring readers that “we always have the tools to bring it back down if inflation goes higher.”

Mistake #4: After seeing inflation continue to rise, Chairman Powell finally retired the word “transitory” in November 2021, but he kept fueling inflation with higher “quantitative easing” (new money) and low (near-zero) interest rates until March 2022. This ensured inflation would be that much harder to bring under control once the Fed Board of Governors finally acted.

Mistake #5: In March 2022, the Federal Reserve acted in a “too much, too late” manner. The Fed proceeded to raise rates at the fastest rate in history – up 500 basis points (+5%) in 10 consecutive meetings of the Federal Open Market Committee (FOMC) from March 2022 to May 2023. This was done while also lowering the M2 Money Supply by $1 trillion through quantitative tightening (QT) and retiring up to $95 billion per month in Treasury bonds and U.S. mortgage-based securities.

Mistake #6: This one is taking place now: The Fed is looking backward, once again as history has shown. Fed leaders are waiting to see inflation rates reach 2% before stopping their radical deflationary policies, but by that time it will be too late to stop a new deflationary trend. The CPI is a lagging indicator, as is their favorite indicator, the GDP’s price deflator. They need to look forward – for a change – at the sharply declining commodity prices and at last year’s peak inflation months, coming up.

As America’s Gold Expert®, I predict gold prices will continue to trend higher over time as major investment groups try to offset these actions by the Fed. I strongly recommend buying gold coins to protect and grow your investments. Gold is life insurance for the rest of your portfolio, so call our professional account representatives today.

 

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