Gold is the best hedge against a scenario in which central bank digital currencies (CBDCs) eradicate the dollar and financial privacy, says Southbank Investment Research’s John Butler. “Moving headlong towards CBDCs in the current political context is very dangerous,” warned the investment director. “Hold precious metals … Gold’s traditional, timeless I would argue, store-of-value properties are actually enhanced by CBDCs,” he advised. In other news, as of April, the short-term Treasury yield curve determined the probability of a recession to be 99.3%. Recessions have followed the few times that indicator was above 99%. At the same time, the US is getting even closer to a debt default. 144 top executives, including Goldman Sachs’ David Solomon and Morgan Stanley’s James Gorman, are urging Biden and congressional leaders that the debt-ceiling standoff be resolved before a stock-market disaster occurs. “Action to end the pending debt crisis is necessary now,” read the open letter.
Kitco News/Cornelius Christian & Michelle Makori
CBDCs will lead to ‘dangerous’ world without privacy or cash, gold is your best protection – John Butler
Central bank digital currencies (CBDCs) will cause financial privacy and anonymity to end, as cash will likely be eradicated. That is according to John Butler, Investment Director at Southbank Investment Research, who also suggests that gold is the best hedge against this future scenario.
“Moving headlong towards CBDCs in the current political context is very dangerous,” he told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. “It becomes a very frightening proposition to hand over any and all financial privacy to some central organization.”
CBDCs are programmable, digital tokens issued and controlled by central banks. They operate as fiat currency and can be used as a medium of exchange. Proponents of CBDCs claim that they will improve financial inclusion and efficiency while reducing the likelihood of bank runs and money laundering. However, critics warn of CBDCs’ potential to be used as a tool of surveillance and control.
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MarketWatch/Steve Goldstein
‘So you’re telling me there’s a chance?’ This recession indicator now puts the likelihood of a U.S. economic reversal at 99.3%.
Many economists, as well as market implied gauges, are saying the U.S. economy is likely to enter a recession. But there’s one gauge that’s about as high as it possibly could be.
The model uses the difference between the 3-month forward Treasury rate beginning 18 months ahead and the 3-month Treasury bill to estimate the probability of a recession in the United States 12 months ahead.
It’s based on the methodology outlined in the Federal Reserve Board’s Finance and Economics Discussion Series Note titled “(Don’t Fear) The Yield Curve” and elaborated on in a working paper titled “The Near-Term Forward Yield Spread as a Leading Indicator: A Less Distorted Mirror” by Eric C. Engstrom and Steven A. Sharpe.
You can read the full article, here.
Markets Insider/George Glover
There’ll be a stock-market disaster if the US debt crisis isn’t resolved soon, Goldman Sachs’ David Solomon and other top execs warn
There could be a stock-market disaster if US lawmakers don’t vote to lift the debt ceiling soon, some of the biggest names on Wall Street warned Tuesday.
Goldman Sachs CEO David Solomon, Morgan Stanley boss James Gorman, and 142 other top execs signed an open letter addressed to president Joe Biden and congressional leaders that urged them to resolve the ongoing impasse before the government runs out of cash.
“We write to emphasize the potentially disastrous consequences of a failure by the federal government to meet its obligations,” the execs said. “Absent a resolution, the government is likely to run out of money as soon as June 1.”
You can read the full article, here.
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