The United Kingdom’s debt market and the fiat British Pound took further historic losses this past week as the pound spiked downwards to an all-time low versus the fiat US dollar and the Bank of England was forced to intervene and begin buying its own debt facing systemwide pension defaults if it had not done so. Kerrin Rosenberg, Cardano Investment chief executive, stated, “If there was no intervention today, gilt yields could have gone up to 7-8% from 4.5% this morning, and in that situation, around 90% of UK #PensionFunds would have run out of collateral. They would have been wiped out.” As the fiat Federal Reserve continues hiking rates faster than at any point in the last four decades, it seems like a weekly news item that something blows up somewhere in global financial markets. Since the 2008 Global Financial Crisis bailout era kicked off, the percentage of US companies that are effectively zombie companies, those whose debt servicing costs are higher than their ongoing profits, has zoomed to more than one in five. And so, ask yourself, how might these debt-laden companies do if rates continue to climb in the USA?
How many large company bankruptcies might we finally see in this recession? #Silver and #Gold spot prices climbed slightly this week in fiat Fed notes. The spot silver price closed just above $19 oz, while the spot gold price ended above $1660 oz this week. The gold-silver ratio stayed flat at 87. We again witnessed relative fiat Fed note or fiat US dollar strength in currency markets. It is worth a moment to see how gold is holding up in relative fiat currencies, losing recently on a relative basis versus the fiat US dollar. Here is a monthly chart of gold priced in fiat US dollars where this year’s selloff in nominal price is obvious of late. But if we look at the gold price in fiat British pounds, the story looks a bit different. Similarly, in fiat Japanese yen or even in fiat Euro notes, the nominal price of gold has been much stronger, relatively illustrating that gold remains a bedrock store of value during devaluing turbulent financial market durations. Physical price premiums over ongoing spot prices on important bullion products like 1 oz Gold Eagle coins and 90% Pre-1964 silver coinage are reaching high levels not seen since the 2008 Global Financial Crisis.
Bullion buyers intuitively know the hundreds of trillions of underlying fundamental factors likely to store value and drive bullion values higher in the years to come. The COMEX Registered deliverable pile of fractionally reserved silver 1000-ounce bars continues to shrink, now just over 42 million ounces or a mere $800 million fiat Fed notes would clear that exchange of its deliverable silver ounces. Those who can afford to also buy bullion at increasingly record-sized rates. Continue to take advantage while spot price weakness lasts.
