Posts On Economic and Geopolitical News

Another Blow for the Dollar

The dollar is getting dumped by one of the globe’s largest oil producers and exporters. Russia’s Rosneft has decided that it will ditch the dollar in favor of euros for all deals going forward. The switch could potentially limit the effects of any sanctions imposed by the U.S. The company is Russia’s largest oil company, exporting some 120 million tons per year. The company’s move to euros is likely a direct response to threats of U.S. sanctions for its re-selling of Venezuela’s oil to Asian... Continue Reading

It’ll Keep Going

Recent pieces of key economic data have not painted a rosy picture. ISM manufacturing and services data have both shown significant declines, and the global financial market is now getting increasingly worried about the prospects for a recession in the U.S. Markets are now pricing in another Fed rate cut this month, and the central bank could even allude to further cuts if the data does not rebound. Although the risks of recession do appear to be on the rise, the next major recession could... Continue Reading

Manufacturing is Not Looking Good

Stocks are sharply lower today as another key piece of economic data shows significant weakness. The latest reading of the ISM Manufacturing is not looking good. It showed a drop to 47.8% from a reading last month of 49.1%. This reading marks the lowest level since June 2009, when the Great Recession ended. Consensus estimates were looking for a reading of 50.2%. The decline in activity is significant. Readings above 50 show expansion while readings below 50 show contraction. Only three of 18 sectors tracked... Continue Reading

No Shortage of Bullish Catalysts

The gold market has shown some significant upside in recent months, and with good reason. There are a variety of issues currently working in gold’s favor, and a strong fundamental and technical backdrop could keep the metal on the offensive. Regardless of whether the Fed cuts rates further or how much, the current state of the global economy and geopolitical landscape could be supportive for the metal and other hard assets. Here are three issues that may make now the ideal time to build a... Continue Reading

Just Another Reason

The current economic and geopolitical landscape is filled with potential landmines, and the climate just got even more tedious. Over the weekend, an attack on Saudi oil facilities reportedly cut production by some 5.7 million barrels per day, or over half of the Kingdom’s production. This amount accounts for about five percent of total global oil supply and could send crude oil prices soaring. Brent crude jumped by about 20 percent after the news, while WTI also made a significant double-digit leap. Thus far, it... Continue Reading

Recession With or Without A Deal

The ongoing U.S./China trade war has had a significant impact on the economies of both countries. The war on trade has seen several stages of escalation in recent months, and thus far, the two aides still appear to be quite far apart when it comes to making some type of long-term agreement. Talks are set to resume next month, and that news has stock markets moving higher as risk aversion abates. Some key economic indicators have already begun showing some significant cracks. Recent manufacturing data,... Continue Reading

Is a Major Currency Debasement Ahead?

The U.S. Fed and other global central banks are in the process of easing monetary policies again. Although interest rates got nowhere near previous levels during the Fed’s recent tightening cycle, the central bank has decided that it is time to start cutting again. The Fed is not cutting from only 2.5% instead of 5.5%, however. The ECB tomorrow will present its latest plans to boost the region’s economy which will likely include a bazooka of rate cuts and fresh QE. Other central banks are... Continue Reading

Fed Still on Track to Cut

The highly anticipated jobs report for August showed the U.S. added just 130,000 jobs, a significant downside miss from expectations for 150,000 new jobs added. The unemployment rate was steady at 3.7 percent. This figure looks especially weak compared to the ADP employment report released earlier in the week, which showed a gain of 195,000 jobs when market expectations were looking for 140,000 jobs. The jobs data falls into the camp of the policy doves who want to see further rate cuts. The Fed will... Continue Reading

Don’t Wait Any Longer

In early action on Tuesday, the gold market is once again on the offensive and moving higher. As the Dow Jones Industrial Average see a drop of nearly 400 points, the yellow metal is up nearly $15 per-ounce. A test of resistance in the $1600 region looks very likely in the sessions ahead. With stocks potentially on the verge of a major meltdown and gold potentially headed back to all-time highs or beyond, you simply cannot afford to wait any longer. The time to start... Continue Reading

Central Banks Are Still Buying

The recent central bank buying spree looks set to continue. It was reported that Russia’s central bank purchased another 300,000 ounces of gold in July after topping the $100 billion reserve level the month before. The latest figures reportedly show Russia’s gold reserves now stand at nearly 20 percent of its total reserves. The nation has purchased nearly 3.5 million ounces so far this year and has been a consistent buyer on a monthly basis. Russia’s gold reserves have now increased nearly 10-fold over the... Continue Reading