➡ Trump has criticized Putin’s actions in Ukraine, suggesting a change in approach may be needed, possibly through banking or secondary sanctions. This shift in stance could impact financial markets. Meanwhile, the US economy is showing signs of slowing down, with a recession being considered the best-case scenario by some experts. Inflation remains a concern, with rates above the Federal Reserve’s target, and the impact of these economic factors is expected to be felt more in the coming months.

The week will be heard. Bullying will be stopped. And justice will not disappear from the world. All bullies are just paper tigers. The U.S. does not represent the entire world. Well, there you go. I guess the only thing we were missing on that one was Will Smith popping out at the end. Well, hello there, my friends. Chris Marcus here with you for RKD Economics on a Wednesday late morning. It’s about 10 45 Eastern Time, where there is plenty happening in the financial markets, as does seem to be the case lately. And also including a rather unusual, somewhat, well, I guess not really cryptic, but fascinating message sent out by the Chinese government yesterday about how they will not kneel down to Trump in the U.S.

I’m giggling. I mean, obviously some of these things are very non-ideal and will touch on some supply chain issues. Although if you can take a step back and hopefully you’re okay and not feeling the brunt of it, I mean, it’s quite movie-like and theatrical in its own right. So either case, as of just before 11 o’clock on a Wednesday, we see gold futures at $3,308, took quite a plummet below $3,300 briefly, then popped back up, sold back off. So it’s been a volatile ride. Here we are just where price was as of yesterday.

Goes up, comes down and hopefully just taking a step back, not getting too caught up in that. Obviously real quick, as we’ll look down here, we see the high was $3,509. So a little bit below that, although hopefully you’re smiling and happy out there. Come on now. So I want to hear any more of the long time suffering gold bugs. You know, be happy now and silver. Okay. It’s a little bit of a different story. Although quick story here, if I may, and we’ll pull up the chart here. It’s actually talking with David Morgan on Saturday or Sunday, sometime over the weekend, and was saying that now I, by all means I’ve been, I don’t know if guilty is the right word, but I’ve certainly looked back to the 1980 $50 high and obviously within a dollar of that in 2011.

So of course they’re significant. Although I wonder sometimes if looking at that $50 high in 1980, which it was there, I believe just for a couple of hours and then came back down. I mean, would that be like looking at nickel at the peak when it spiked a couple of years ago? I do think it’s relevant and I’m not trying to discount that just, I don’t know, always trying to think of, well, what is the most appropriate way to factor in all these different pieces of information? So, you know, if you take that out and then you take the spike out and as talked about before, actually silver has outperformed the CPI.

If you go back from when it was removed from the coinage and you can see things are sloping up and I wonder if, all right, maybe what you see there and there is what you get during times of panic or crisis when people don’t know really how these things are going to play out. So anyway, just some thoughts on silver below this year’s $35, I believe it got up to $35.49, but won’t take, there we go, $35.49. I guess I’m picking up years in life, still got the memory there a little bit.

So, $32.44, a little bit off, although certainly compared to, for those of you who were following silver from, I don’t know, about 2013 to 2019-ish, this price seems pretty good. So with that said, quick look at the dollar index, which back above 99 had broken below that level and now back above it, bond yields a little bit lower than in the over the past month as we will see here. I’m still above that 4% range and something to keep an eye on is that when you do get those spikes, such as there, what was that on April 9th, and we look at the move index, which is basically the VIX of the bond market and the founder of it mentions usually when you get over the 150 levels when something has not functioned properly.

I believe if you were looking at this intraday, this actually got quite a bit higher on this chart. You don’t see the full peaks on some of these, but let’s take a look back here just for perspective. Here we were, that’s banks failing back in the first quarter of 2023. And in either case, not in alarm territory today, but I would keep an eye if you see the bond yields start to spike again, you’ll see that move index spike again as well. And I think you can count on that happening. I won’t be as audacious as to give you a timeline on that.

Although let’s take a look at this one because I mentioned that there was a message out from China yesterday and we’ll get our sound enabled. I’ll play this one for you. I mean, it’s fascinating on a variety of levels, but I will stop commenting on it and actually just play it here so you can see for yourself what you think. Have you heard of the eye of the storm? It’s calm for a moment, but it’s actually a deadly trap that calm before an even fiercer storm. The US has stirred up a global tariff storm and deliberately targeted China, playing a 90 day pause game with other nations, forcing them to limit trade with China.

This is just like the deadly trap of the eye of the storm. Bowing to a bully is like drinking poison to quench thirst. It only deepens the crisis. The US once accused Japan of dumping semiconductors and crushed companies like Toshiba. Later, it forced Japan to sign the Plaza Accord, pushing the economy into decades of anemic growth. The US also used long arm jurisdiction as a weapon, breaking up France’s industrial giant Alstom, robbing the country of a national champion. History has proven compromise won’t earn you mercy. Kneeling only invites more bullying. China won’t kneel down because we know standing up for ourselves keeps the possibility of cooperation alive.

While compromise snuffs it out, China won’t back down. So the voices of the weak will be heard. Bullying will be stopped and justice will not disappear from the world. All bullies are just paper tigers. The US does not represent the entire world. This trade makes up less than a fist of the world’s total. When the rest of the world stands together in solidarity, the US is just a small, stranded boat. Imperialists are always arrogant. If they show a bit of reason, it’s only because they’re forced to do so. Making no mistake, the US will keep flip-flopping and playing hardball.

But China will stand firm, no matter how hard the wind blows, no matter how clouds rage. The darker the night, the brighter the stars shine. Someone has to step forward, torch in hand to shatter the fog and illuminate the path ahead. When every nation stands tall, the world will break through the walls of the beginning. For China, for the world, we must rise and fight on. Well, there you go. I guess the only thing we were missing on that one was Will Smith popping out at the end. Fascinating on a variety of levels.

A, seeing in today’s day and age using media. I think there was a clear message of appealing to the international community here. Take our side and here’s what the US is doing. So in a sense where war is now or sometimes, not always as we’ll get into in a moment, but sometimes information, media, financial, technology-based. Interesting to see what they did here. I did read an article from Bloomberg yesterday where it mentioned that at least that author’s saying that a lot of the people, even some who weren’t supportive of Xi Jinping now rallying behind him.

So again, I’m not in China, but from the reports I’ve read, it seems like China is unifying against the US over this situation and not ideal in many ways. And at the same time, seeing that happen, continue to see reports of conditions in these supply chains, shipping volumes already down. And one of my takeaways from Luke Grohman, who many of you know, I’m quite a fan of, and I don’t want to speak for him, but he mentioned several times in one of his recent columns that China can simply outweigh the US in this one.

Now I’ll certainly defer to him on that one, and I agree. It is interesting because I’ve seen a lot of views about how well without their biggest customer, then they have an issue as well. And I think that is true. So in either case, it’s just going to be fascinating to see how this plays out and gets resolved. Here’s another one that certainly I think for people in gold and silver, you’d want to be aware of, for anyone want to be aware of, but interesting shift in whatever is going on in Ukraine right now, because this was from Trump on Friday, just landed in Rome, good day in talks and meetings with Russia and Ukraine, very close to a deal.

Two sides should meet to finish it off, stop the bloodshed. So it seemed optimistic going into the meeting. Then this one came to me yesterday. Trump turns against Putin. That was on Saturday. Trump turned on Putin after holding one-on-one talks with Zelensky. Trump says there was no reason for Putin to be shooting missiles into civilian areas, cities and towns over the last couple of days. And here’s the key one. It makes me think that maybe he doesn’t want to stop the war. He’s just tapping me along and has to be dealt with differently through banking or secondary sanctions.

By all means, I’m not going to sit here and debate the war policy of this and who is right or not, but to the degree that there’s impact on finance. If A, the fact that we went from going to end it on day one, which interesting here he says, Trump said in a new interview that he was joking when he promised to end the Russia-Ukraine war in the first 24 hours. I didn’t realize or pick up that it was a joke when he said it. Not sure that would be the best place or topic for a joke yet.

Either case, we’re seemingly in a much different situation here now. Obviously has a life and world impact. And also even the idea that sanctions are being raised, at least as you’re pricing your volatility into the different markets that you’re trading or investing in, not a non-zero probability. And hopefully that makes sense because there’s, I wish finance were more of a wish that, but certainly it’d be easier if you knew X was going to happen, Y was going to happen, and then you make your trade. Well, they’re different probability events and not knowing something is guaranteed is different than if you have 10, 50-50 shots, there’s an expectancy to that.

And anyway, that’s how we used to look at it back on the option floor. I would price some additional volatility and for that, how much you could have a fun time debating. Maybe we’ll do that at Silverfest. So yeah, certainly bring your option questions there, but it seems like things have changed. And if we have dysfunction in the bond market, how is that going to play out? Well, an interview last week, Scott Besson, treasury secretary said, they have a big toolkit if needed. So in the midst of that, here was from Craig Hemke last week.

He had a note, solar stocks gain after US set new duties as high as 3,500% on solar imports. And I’m just thinking how, all right, if they’re soaring, this is the US stocks. What does that mean? Well, maybe they get some more market share, but if the prices of the imports go up, is there a good chance that the prices for the consumer are going to go up? I would say yes. I know Trump mentioned in one of his other posts recently that he thought Powell was not doing what he would like.

There’s no inflation, things like that. You’ll see more of and will lead to not inflation, actually the increase in the money supply, the price increase, the result of said inflation, but here we are. Here’s PC 2.7% well above the Fed’s mandate. Here is the PCE core at 3% also above the Fed’s mandate. Now, interestingly in their dot plot, the Fed did have inflation in their projections coming down. They’re also going to pull that off while they cut interest rates even further. Now that we’re in, and I would say that that first 50 basis point cut back in September.

So we’re in that time range now, we’re probably going to start to feel the impacts of this more. Here’s 2.8% on, that was the CPI. Here’s core CPI 3.1% has not been below 3% since April of 2021. That’s four years ago now, but the Fed says they’ll get there three years from now by cutting interest rates. The great Jim Willy said, which means they need the rate hike and the rate cut. They need a rate hike and a rate cut. Here we have PPI 3.2%. Here we have core PPI 3.5%. So we’ll see how that whole inflation thing goes.

Of course, maybe one way they do it is because we head for a recession and here’s Jamie Diamond told investors last week, the best case outcome is now a recession. So if that’s the best case, that means that there would in his mind be a lot of possibilities that are less ideal than a recession with the recession being the best case. So we also did see the economy shrink 0.3% in the first quarter. Private payroll growth slowed this morning to 62,000 and we do have a labor report coming out on Friday, so plenty going on there to keep you entertained.

Of course, we’ll be keeping you posted here on the channel and also at the Arcadia Economics Gold and Silver Daily Substack, where we do now have a written column that comes out each day and like to think easy to go through if you want to get a quick daily update. Not complex, but hopefully written well, I’ve been told. So other people are enjoying it. You can find it at goldandsilverdaily.substack.com. And with that said, going to wrap up here for today, but a lot happening out there. Most importantly, I hope you’re having a great day and feeling good about, I mean, there’s going to be things that happen, although I guess how we respond is what we have control over.

So hopefully you’re feeling great about that and we’ll look forward to seeing you again tomorrow morning with Vince. [tr:trw].

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