Wednesday, March 22, 2023
HomeSurvivalToday, we look at some implications of rising interest rates.

Today, we look at some implications of rising interest rates.

Here are the latest news items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. Most of these items are from the “tangibles heavy” contrarian perspective of SurvivalBlog’s Founder and Senior Editor, JWR. Today, we look at some implications of rising interest rates. (See the Economy & Finance section and the Tangibles Investing section.)

Precious Metals:

A video interview: Fed Pause Will Be Crucial for Gold and Silver, Explained – Peter Boockvar.

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Stewart Thomson of Graceland Investment Management: Inflation: 18% And Sticky?

Economy & Finance:

The Federal Reserve’s interest rate announcement last Wednesday came as no surprise to Wall Street and to Forex traders, where they already had a 75 basis point jump in rates “baked into the cake.”  It appears that the Fed’s FOMC will keep raising rates until at least October, in an effort to put a damper on inflation. But that credit tightening may be a case of “too little, too late.”  Meanwhile, the Fed is still buying up billions in Mortgage-Backed Securities (MBSes), week after week. Thus, the policymakers seem schizophrenic, with simultaneous credit tightening and injections of liquidity.

Here, I must mention that I’m standing by my long-range projection that the Fed and U.S. Treasury will inflate their way out of the gargantuan Federal debt problem. In effect, currency inflation is a hidden form of taxation. The inflation rate may not go full Weimar/Zimbabwe, but the purchasing power of any saved Dollars will be sharply diminished. So… Hedge into tangibles. The time-proven fallbacks are gold, guns, and groceries. With the latter, I’m referring to long-shelf life storage foods.

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Trudeau fertilizer emissions plan sparks backlash from farmers and provinces. (A hat tip to H.L. for the link.)

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A new, brief video from Mike Maloney, going through some key charts on yield curve inversions: Decoding the Recession Double-Speak.

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At QTR: China Spied On The Fed & Detained, Threatened U.S. Economist For Policy Information.


At The Globe & Mail: Copper Tries To Stabilize. JWR’s Comment: A weak copper price clearly signals a global recession is unfolding.

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OilPrice News reports: High Oil Prices Spark A New Wave Of Exploration.

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Tim J. was the first of several readers who sent us this:  US dumped thousands of cows into Kansas landfill after mass heat wave deaths: report.

Inflation Watch:

The latest Bureau of Labor Statistics (BLS) report shows the Producer Price Index (PPI)  final demand goods at 18%, in June. JWR’s Comment: Note that this figure is often a precursor to general price inflation. Buckle up, folks, and hedge into tangibles!

Here is a quote from the BLS report:

“The index for final demand goods moved up 2.4 percent in June, the sixth consecutive
rise. Nearly 90 percent of the June increase can be traced to a 10.0-percent jump in prices for final demand
energy. The indexes for final demand goods less foods and energy and for final demand foods advanced 0.5
percent and 0.1 percent, respectively.

Product detail:
Over half of the June increase in the index for final demand goods is attributable to gasoline
prices, which jumped 18.5 percent. The indexes for diesel fuel, electric power, residential natural gas, motor
vehicles and equipment, and processed young chickens also moved higher. In contrast, prices for chicken
eggs dropped 30.2 percent. The indexes for iron and steel scrap and for jet fuel also decreased.”

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Inflation Is Hammering Rural America, Report Shows.
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Martin W. Armstrong: Worldwide Inflation in 2022.

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CNBC: Nearly half of all Americans are falling deeper in debt as inflation continues to boost costs.

Forex & Cryptos:

Over at Hedge Week: Tough Day for the Euro.

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On the Reuters wire: Analysis: ECB faces Italian debt test as politics intervenes.

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BRICS: The new name in reserve currencies.

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The Global Status of CBDCs in 2022.

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The case for a digital dollar is ‘picking up momentum’.

Tangibles Investing:

The U.S. residential real estate market had already topped out before July. But now, with the FOMC’s rate increase announcement, it appears that mortgage rate increases will trigger house and land price declines — although there will be some adjustments for the high rate of currency inflation, this year. At issue is the fact that each time mortgage interest rates rise, it cuts huge numbers of would-be buyers out of the market.  The “qualified buyers” become unqualified. We are likely to see a repeat of the late 1970s and early 1980s, when annual home mortgage rates exceeded 16%. The only folks who will benefit from this are cash house buyers, since it will become a Buyer’s Market, and there won’t be many competing bids from buyers who need to line up the requisite financing. Bottom line: There will be plenty of desire to buy houses, but a shortage of qualified buyers.

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Reader D.S.V. flagged this: A Flood Of Repossessed Vehicles Poised To Hit The Used-Car Market.

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Attention owners of Glock double-stack .45 ACP pistols (including Model 21, 30, and 41): I just noticed that GunMagWarehouse (one of our affiliate advertisers) is running a sale on KCI brand .45 ACP Glock 26-Round Polymer Magazines. Those KCI magazines have a good reputation for reliable feeding.  They are just $10.99 each!  At a price like that, you should stack them in quantity. In the event of a new Federal magazine ban with a grandfather clause, I predict that the upside potential on your investment on these is more than 10X.

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A reminder for home gun builders: The ATF rule requiring serialization and FFL paperwork for 80% complete lowers (ATF Final Ruling 2021R-05F) goes into effect in just 24 days. (August 24, 2022.)  I recommend that you stock up any 80% lowers/frames ASAP, to meet your lifetime anticipated needs. There are lots of great vendors out there that still have good supplies of them. Compare prices before you buy. I do recommend Brownells — one of our affiliate advertisers.


SurvivalBlog and its Editors are not paid investment counselors or advisers. Please see our Provisos page for our detailed disclaimers.

News Tips:

Please send your economics and investing news tips to JWR. (Either via e-mail or via our Contact form.) These are often especially relevant because they come from folks who closely watch specific markets. If you spot any news that would be of interest to SurvivalBlog readers, then please send it in. News items from local news outlets that are missed by the news wire services are especially appreciated. And it need not be only about commodities and precious metals. Thanks!

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