Talk is Cheap

Talk is cheap. But now when the rubber hits the economic road, let’s see how resolute the Fed is in fighting inflation. Evidence of the pain of just slightly increasing interest rates is seen in the Key Market Metrics displayed above left. The only safety net this week was U.S. Treasuries, as you can see from TLT. That ETF of the 20-to-30-year U.S. Treasuries gained 2.77%. Gold lost 1.31%. But look at Bitcoin once again. Art Cashin of UBS said on CNBC this Friday that he wants to watch Bitcoin closely, with the hope it can hold above 18,000. He fears there may be something “broken” in the crypto markets that could infect financial markets.

Crude was up 0.6% on the week, but Dr. Copper was whacked for the fourth week in a row. Its last 4 weekly losses have been 2.03%, 7.90%, 7.20%, and 3.34% this past week. There is a reason why copper has been assigned a PHD. With the Atlanta Fed now projecting a 2.1% negative GDP for Q2 on top of a 1.8% negative number for Q1, those big copper price declines over the past month were correctly predicting a recession which we are now in. The chart on your left shows the Atlanta Fed’s predictions for GDP estimates over time. While it is more bearish than the Blue-Chip consensus, the reason it is widely quoted is because of its reputation for accuracy.   

While the economy is slowing down in the U.S., I have to believe that things are going to be much tougher in Europe as gas stops flowing into key countries there. Already gas prices are up fivefold in the Netherlands and electricity prices are up sixfold in Germany! Let’s see how long the NATO Alliance can hold together for the benefit of Klaus Schwab, George Soros, the World Economic Forum, and America’s Military Industrial Complex when the wheels of industry grind to a halt and Europeans freeze to death. In the meantime, Russia is doing exceptionally well selling its oil to China, India, and no doubt some other counties that wish to remain unidentified.

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.