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| Money Metals News Alert | July 29, 2024 – Gold and silver prices ended lower for a second week on Friday, with silver leading the way down. The white metal lost 4.6% for the week.
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The losses on gold were more manageable, with the price down roughly 0.5%.
Stock prices also fell, with the S&P 500 down about 1.7%. The Federal Reserve note dollar strengthened a bit on the DXY index, and 10-year Treasury yields dropped slightly to 4.2%.
The FOMC meets this week. Most expect the committee to hold interest rates steady.
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There is more speculation surrounding the next meeting in September. Most watchers expect the Fed to reduce rates then.
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 | Gold : Silver Ratio (as of Friday's closing prices) – 85.3 to 1 | | |
| Are Government Statistics Concealing the Truth About the Economy? | | | |
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Americans are questioning all sorts of government functions these days.
For example, majority of people, according to polls, have doubts as to whether U.S. elections are free and fair.
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Some believe the federal justice system has been weaponized and used against those in political opposition.
As of two weeks ago, a whole new group of people is wondering if the vaunted Secret Service can be trusted to protect the Republican candidate for president.
As long as people are questioning the credibility or motivations of government officials, they should remember to be skeptical of official economic data as well.
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The U.S. Bureau of Economic Analysis (BEA) published the latest quarterly report on GDP Friday. It was a surprise. U.S. economic growth was much stronger than expected. The data showed growth at a healthy 2.8%, better than the 1.9% rate expected by economists and double the 1.4% growth reported in the first quarter.
Combine that with a couple of key data points from the Bureau of Labor Statistics (BLS), and the picture being painted of the U.S. economy is rosy indeed.
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We're told roughly a quarter million new jobs were created each month over the past few years, and the unemployment rate has held steady near record lows. The Consumer Price Index shows inflation is back under control.
The challenge to accepting this state of economic bliss for Americans is the growing piles of both public and private sector data which conflicts with what bureaucrats have to say.
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Unfortunately, questioning the integrity of government statistics still appears taboo, at least at The Wall Street Journal and elsewhere in the corporate financial press.
The Journal recently published an article titled "American Borrowers Are on Shakier Ground." The first two paragraphs reinforce the official line, which is that the U.S. economy is strong, and fears of a recession are fading. Then the authors lay out a whole lot of data which shows an economy that is in serious trouble.
Households are increasingly reliant on credit card debt, where interest rates have soared.
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Average balances are much higher than two years ago, and credit card delinquencies are above 3% for the first time since 2011. The same is true for auto loans. Banks are writing them off at the highest rate since 2011.
Seventeen percent of Americans have a bill, whether it be a car payment, utility bill, or monthly rent/mortgage payment which went unpaid last month.
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About 40% of people with student loans missed their first required payment after the hiatus on payments ended last fall.
The recession bullet hasn't been dodged. The people making that claim all seem to work for the government, or in the unquestioning corporate press. | | |
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| Key Economic Data Scheduled for This Week | |
- Wednesday, July 31st – FOMC Meeting Announcement. Officials are expected to hold rates steady at this week's meeting. Most observers expect the Fed will cut the Funds rate at the next meeting in September.
- Thursday, August 1st – ISM Manufacturing Index. Manufacturers have been struggling and the consensus is for a decline in activity.
- Friday, August 2nd – Employment Report. Economists are expecting 190,000 new jobs and an unemployment rate at 4.1% in this week's report for July.
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| This week's Market Update was authored by Money Metals Director Clint Siegner. | | |
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