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News — recession

Key Recession Indicator Hits Highest Levels Since 2009

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By John McDonald The New York Federal Reserve’s probability model, which the Fed uses to predict the probability of a recession in the United States in the next 12 months, hit a reading not seen since 2009 this past June.  The reading, 32.9 percent, might not seem that high at first. However, every recession since 1960 has been preceded by the model breaching the 30 percent threshold. Feel like the measure probably has a way to go before things get serious? Think again. The most recent recession never weighed in anywhere near what most people believe is a sure thing:...

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Presidential Criticism of European Central Bank President Raises Fear of Currency Wars

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By John McDonald Despite suggesting earlier this summer that European Central Bank President Mario Draghi would be better in charge of the Federal Reserve than sitting chairman, Jerome Powell, President Trump has recently criticized Draghi for aggressive monetary tightening in Europe.  Draghi had signaled that the ECB could lower interest rates as early as July while speaking at a central-banking forum in Portugal. The euro responded by plummeting in value while global equity markets reacted positively to the news that the ECB might restart its bond-buying program to support the Eurozone economy. President Trump’s issue with Draghi’s policies came in...

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Negative-Yield Debts Hit Record Volume in June

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By John McDonald Government bonds are supposed to be among the safest, most secure investment vehicles around. However, an increasing volume of these bonds the world over are now yielding below zero, with that number hitting a record-setting $13 trillion worth of bonds at the end of June of this year.  At that time, both Austrian and French 10-year bonds entered negative territory. Bonds with negative yields are investments guaranteed to be worth less than the bond’s principal amount if they are held until maturity. With more and more sources of potential income vanishing, foreign investors may be more likely...

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Billionaire Hedge Fund Manager: “Gold Has Everything Going For It”

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By John McDonald Paul Tudor Jones, billionaire founder and manager of hedge fund Tudor Investment Corp., said in mid-June that gold is his “favorite trade” right now and will likely remain so for the next 1-2 years.  “[Gold] has everything going for it,” he told Bloomberg, adding that if the precious metal reached $1,400, it would “push to $1,700 rather quickly.” That particular insight is likely extremely exciting to gold investors looking to buy the metal in July, given gold prices have been hovering right around $1,400 since the beginning of July.  Thanks to easing tensions on the world geopolitical...

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Will The Next Market Correction Be Cataclysmic?

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  By John McDonald With some amusement, I read a recent article on MarketWatch by Mark Hulbert. The core concept behind the article was to use available data to make a relevant prediction about the severity of the downturn whenever the U.S. stock market next tumbles into a bear market phase. Such prediction is, as Hulbert begins by admitting, something of a fool’s game. To spoil the surprise for you, I’ll go ahead and tell you that Hulbert concludes that the next bear market will sink the Dow Jones Industrial Average by a whopping 35.3%. However, I strongly question the basis...

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