{"id":32572,"date":"2018-03-20T08:17:08","date_gmt":"2018-03-20T13:17:08","guid":{"rendered":"http:\/\/olduvai.ca\/?p=32572"},"modified":"2018-03-20T08:17:33","modified_gmt":"2018-03-20T13:17:33","slug":"four-charts-debt-defaults-and-bankruptcies-to-see-higher-gold","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=32572","title":{"rendered":"Four Charts: Debt, Defaults and Bankruptcies To See Higher Gold"},"content":{"rendered":"
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Four Charts: Debt, Defaults and Bankruptcies To See Higher Gold<\/a><\/h3>\n

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\u2013 $8.8B Sprott Inc. sees higher gold on massive consumer debt, defaults & bankruptcies\u00a0<\/strong>
\n\u2013\u00a0Rising and record U.S. debt load may cause\u00a0financial stress, weaken dollar and see gold go higher<\/strong>
\n\u2013 Massive government and consumer debt eroding benefits of wage growth (see chart)<\/strong><\/div>\n

by Bloomberg<\/a><\/strong><\/p>\n

Rising U.S. interest rates,\u00a0usually bad news for gold<\/a>, are instead feeding signs of financial stress among debt-laden consumers and helping drive demand for the metal as a haven.<\/p>\n

That\u2019s the argument of Sprott Inc., a precious-metals-focused fund manager that oversees $8.8 billion in assets. The following four charts lay out the case for why gold could be poised to rise even as the Federal Reserve tightens monetary policy.<\/p>\n

Gold futures have managed to hold on to gains this year, staying above $1,300 an ounce even as the Fed raised borrowing costs in December for a fifth time since 2015 and is expected to do so again next week.<\/p>\n

The increases followed years of rates near zero that began in 2008. Low rates coupled with the Fed\u2019s bond-buying spree contributed to the precious metal\u2019s advance to a record in 2011. Higher rates typically hurt the appeal of gold because it doesn\u2019t pay interest.<\/p>\n

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<\/div>\n<\/div>\n<\/figure>\n

Paper Losses<\/strong><\/p>\n

The U.S.\u00a0posted\u00a0a $215 billion budget deficit in February, the biggest in six years, as revenue declined, Treasury Department data show. That\u2019s boosting the government debt load, fueling forecasts for higher yields and raising the specter of paper\u00a0losses\u00a0for international investors who own $6.3 trillion of U.S. debt.<\/p>\n

Slowing demand for Treasuries from overseas buyers is contributing to dollar weakness against the currency\u2019s major peers, helping support gold prices, according to Trey Reik, a senior portfolio manager at Sprott\u2019s U.S. unit.<\/p>\n

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<\/div>\n<\/div>\n<\/figure>\n

Debt-Laden Shoppers<\/strong><\/p>\n

The yield on the 10-year U.S. Treasury, which has been in decline for more than three decades, has risen over 40 basis points this year as the Fed raised rates and U.S. debt ballooned to more than $20 trillion.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Four Charts: Debt, Defaults and Bankruptcies To See Higher Gold 20, March \u2013 $8.8B Sprott Inc. sees higher gold on massive consumer debt, defaults & bankruptcies\u00a0 \u2013\u00a0Rising and record U.S. debt load may cause\u00a0financial stress, weaken dollar and see gold go higher \u2013 Massive government and consumer debt eroding benefits of wage growth (see chart) […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1361,83,195,200,374,5613,647],"class_list":["post-32572","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bankruptcy","tag-bloomberg","tag-debt","tag-default","tag-gold","tag-goldcore","tag-precious-metals"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/32572","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=32572"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/32572\/revisions"}],"predecessor-version":[{"id":32573,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/32572\/revisions\/32573"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=32572"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=32572"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=32572"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}