This is my abbreviated Thanksgiving week report. I hope your holiday was happy and you are enjoying the rest of the weekend.
While most people still put together a Thanksgiving celebration in a traditional manner, many noticed the significant jump in food prices as they shopped for food before the holiday.
We are in a period of Quiet Collapse as most people continue to live life the same way they have been living in the past. Inflation was not too much of a problem; interest rates were zero, and money was available if needed.
This has all changed now, and we are beginning an economic collapse. Rising prices of commodities and survival assets are here to stay for some time yet to come.
The mainstream media has created the idea that inflation is moderating, while JP Morgan issues a press release expecting a million job losses by 2024.
The tight job market will likely deteriorate in the coming months, Feroli and Silver warned. And even in a mild-recession scenario, a weaker labor market at the hands of the Fed may cause the U.S. to shed over 1 million jobs by mid-2024.
“There are already signs that firms' appetite to hire is easing, and we expect that to continue next year to the point where we see outright declines in the monthly job figures in 2H23,” the economists stated. “Markets are now rewarding companies that prioritize cutting costs, and labor costs are often the largest cost category.”
Declining job growth is likely required to bring down inflation and recalibrate the economy after several years of pandemic disruptions, the economists argued, and would likely be a key factor for the Fed to start cutting rates again in 2024.
The problem with the above narrative is it inconsistent with the reality of a debt-based currency in the final days of life support.
Our economy is suffering the bleed out of inflation in hyper-inflated markets like real estate and the automobile markets. In these markets, we are seeing deflation.
Housing and Automobiles
Housing starts continue to fall Residential housing starts fell 4.2 percent in October from the revised estimated total of September, according to monthly figures reported Thursday by the U.S. Census Bureau. Housing starts were also down 8.8 percent year over year.
According to Real Estate Economist Lawrence Yun, single-family starts are 21% below one year ago and well below historical averages.
The automobile markets (new and used) continue to collapse both in sales and prices.
It is becoming more difficult to finance new vehicles because prices of cars are dropping so fast the financed vehicle is quickly underwater in just a few weeks.
A growing number of customers with standing orders at dealers are not showing up to pick up and pay for the cars. But on the brighter side, the dealers are dropping fees to move the inventory off their lots.
Wholesale prices for used cars are dropping 1% to 2% per week and even faster.
Physical Silver & Gold Premium Update
Supplies of registered silver continue to fall at the major exchanges, and mints cannot keep up with demand. Further, Mints and Miners cannot supply the blanks and raw materials to keep up with silver coin demand. [ I repeat this with updated links to help make it clear that something unusual is happening in the silver supply situation]
Silver Spot Price: $21.43 | 1 oz. Silver Eagle Price $39.65 | Premium 85.03% ↓
Gold Spot Price: $1754.00 | 1 oz. Gold Eagle Price $1995.85 | 13.70%
$50 face value junk silver $1147.00 | 49.7% over spot price for 71.5% silver quarters ↓
10 Yield: 3.69% ↓
Crude Oil Price: $76.28 ↓
* note arrows show price increase or decrease over the last article.
Liquidity issues are a symptom of rising prices and rising interest rates. The Federal Reserve's attempts at reducing inflation by increasing interest rates have no effect on inflation while the money supply continues to grow to service existing interest payment demand.
China Cuts Reserve Requirement Ratio By 25bps, Boosts Economy With $70BN In Fresh Liquidity.
Currently, the U.S. Bank Reserve Requirements are at 0%. Banks are not required to keep on hand significant percentages of the money they have on deposit (ledger only). This means the U.S. banking system is primed for disaster if even a tiny portion of the people holding their wealth in dollars in a bank shows up to cash out their funds.
Expect bank failures coming in 2023.
At this point in the financial collapse, it is prudent to keep your money out of banks except for just enough to support your bill payments and other repeated withdrawals.
If you still want to support banks, move some of your deposits to other banks. Bank diversity will be the best way to obtain funds when liquidity issues force banks to close.
I hope your holiday was enjoyable, and I apologize for this abbreviated report. Still, family time is essential to keep our spirits high as we face this situation together.
I will leave you with my list of things to do right now. If you have questions about silver and gold, please ask in the comments.
Oh – I plan to do a special report on storing gold and silver and my take on the future of cryptocurrencies.
Here are a few things of immediate importance
- Move out of cities
- Convert dollars that will be held hostage in the banking system to silver (and gold).
- Keep Enough cash on hand for a month of typical requirements.
- Keep stocking up on food.
- Purchase productive assets (farms, farmland, tractors, specialized machinery).
- Make preparations for gasoline and diesel fuel shortages coming this winter.
- Obtain necessary components of cooking – cooking oils, flour, sugar, seasonings, etc.
- Learn new skills. Fishing, hunting, food storage, gardening.
- Purchase a water purification system
- Invest in solar equipment for power generation
- Consider communications a priority and invest in radio equipment (shortwave receivers, shortwave radios (get your license), GMRS radios.
Please note that the so-called “Junk Silver” is a fantastic way to own fractional silver and carry and use silver in a familiar, safe manner. Please see my new article, What is Junk Silver and Why You Should Buy Some. In this article, I explain how to price and buy “junk silver” and why it is a good idea to get some – oh, and get it soon.
** Ideas and suggestions in this article are my own opinions and are not intended to be financial advice.
Jack Mullen, MBA
* Note I am not giving advice, only my opinion, I am not a financial advisor. This article represents my thoughts about the economy only.