- Fiscal Year 2019 is winding down and it’s one for the books. For the ten months of the year through July 30, the deficit is already higher than for the entire 12 months of the prior year. So far revenue has increased 3 percent over last year, while spending is up 8 percent. Not smart.
- Inflation turned higher in July. Both the Core Consumer Price Index – that’s the one that doesn’t count food and energy – and the broader CPI were up 0.3 percent for the month. Annualize that! The higher number, well above the Fed’s 2 percent annual inflation target, makes it hard to justify further interest rate cuts.
- Publisher Bill Bonner writes that gold has outperformed stocks for the entire 21st Century. “And not by just a little – but a lot. The Dow rose 145%. Gold rose 420%. Compare this to the 20th century. It was just the opposite.”
- The world is now awash in some $15 trillion in debt instruments (bonds) with negative yields. It’s quite an anomaly and one that screams danger. Jim Sinclair associate Bill Holter asks a question that should answer itself: “If you are offered a bond with negative rates from an issuer who is less than stellar…and your other option is gold or silver, which do you choose?”
- Speaking of debt, US mortgage debt has now surpassed the level of 2008 when the mortgage meltdown hit. In the third quarter of 2008 when it all went kablooey, mortgage debt totaled $9.294 trillion. It jumped $162 billion in the last quarter, reaching $9.406.
- And still speaking of debt, US bankruptcy filings, both personal and business, rose 5 percent in the month of July. Both student loan debt and auto loan debt just made new highs of $1.605 trillion and $1.174 trillion respectively.