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Gold Hits $2200 Again

Posted on Saturday, March 30, 2024
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by Mike Fuljenz
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6 Comments
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Gold

After the Federal Reserves Open Market Committee (FOMC) meeting on Feb. 20, 2024, gold shot up $50 per ounce in a matter of minutes, rising from $2,160 to $2,210 on the futures market. In the same few minutes, silver shot up from $25.10 to $25.70. Both settled down by the opening the next morning, but that was a new closing high for gold and a 10-month high for silver.

Gold, silver (and the stock market) rose because the Fed Chairman, Jerome Powell, did not seem dismayed by the series of higher-than-expected inflation reports for January and February 2024. He and his Fed board members were still intent on cutting interest rates three times this year, most likely starting in June, according to their published voting intentions in a “dot plot.”   Also, many other major central banks seem ready to cut key interest rates in June, or before. This past Thursday, the Swiss National Bank reduced its key interest rate to 1.5%, while the Bank of England, European Central Bank (ECB) and our own Fed have signaled intentions to cut rates in June. For instance, the European bank president Christine Lagarde said the ECB will lower rates in June if their inflation figures and wage data remain within guidelines before then.

Even though inflation has ticked up lately, the Consumer Price Index (CPI) may severely under-report the real inflationary impact of Bidenomics. A paper released last month by a leading Democratic Party economist (Lawrence Summers) calculated the impact of rising debt service, not included in the CPI, and found the CPI peaked at 18% (not 9%, as advertised) and its actual level at the end of 2023 was 7% (not 3%, as reported). The paper, published in February 2024 by the National Bureau of Economic Research (NBER) was titled “The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment Anomaly.”

The authors pointed out that from 2022 to 2023, we saw the most rapid rise in interest rates in history (over 5% in 15 months), resulting in huge debt increases and rising loan service costs. This study calculated that this rise in rates pushed mortgage rates over 140% higher and car loans about 80% higher, while credit card rates rose from an average 15% APR to 23% APR. This pushed the “real” Consumer Price Index to a peak of 18% (annual rate) in April 2022 and a recent real reading of 7% (rather than 3%) as of the end of 2023. This rise in debt costs hurts the poor the most but it hits most Americans as well, and that’s a reason why the President’s poll numbers are so low.

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Alta Dibbert
Alta Dibbert
2 months ago

Your blog is a constant source of inspiration for me. Your passion for your subject matter shines through in every post, and it’s clear that you genuinely care about making a positive impact on your readers.

Katelynn Russel
Katelynn Russel
2 months ago

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Stella Mante
Stella Mante
2 months ago

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Jphn
Jphn
2 months ago

Gold is good only after a complete economic collapse but there are better asset’s that are worth far more. Water, food, medical supplies, seeds, chickens, goats.The thing about gold is that it is TAXED when you buy it, it’s TAXED when you convert it back to cash and don’t forget the fee’s charged for the transaction’s.

John
John
2 months ago

“Biden the Inept” is the reason his poll numbers numbers are so low.He us literally the most corrupt, incompetent president we have ever had and the voters can see it for themselves everyday.The Totalitarian Communist Democrat Party Comrade’s need to go!! Every single democrat needs to be voted out of office as they are all contributing to the demise of America.

Joe McHugh
Joe McHugh
2 months ago

Gold purchases are fear buys. Mike Fuljenz stated this fact previously, and I agree.
If the governments of the developed countries didn’t abuse their money systems, inflation would be less than 1%, perhaps zero percent. It has become the job of the various central banks to manipulate the money systems to keep inflation from going through the roof. Example: what keeps the inflation rate from becoming hyperinflation in the United States? The Federal Reserve board is trying to maintain a balancing act with the pressures that force inflation ever higher, while the politicians spend borrowed money like it was a cheap as water. It’s a true wonder that our rising national debt hasn’t pushed us into a situation akin to that of the Germany Weimer Government in November of 1923. The inflation rate increase was 29,525%. A truck load of German paper money was worth more in scrap value than its face value.
The advice that most financial advisors give is for the individual to purchase up to 10-percent of his total assets, including any real estate holdings. This is a hedge action, not an investment. Gold only helps to maintain the value of the original money used to purchase it. If one wants to actually make money, one should invest in stocks and bonds.
One hopes that his or her gold holdings will never be a financial life raft if worse comes to worst in our economy. However, if the Democrats succeed in imposing socialism on the American people, our national economy will collapse according to the history of the countries that tried to use socialism as being a sound political theory.
The future price of one ounce of gold? It will increase step by step as inflation increases. Our political leaders give us good reason to fear for our financial future. A one ounce gold coin was once worth $20.00. As the article noted, its value has exceeded $2,200.00. Keeping cash in a safe is problematic.

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