According to the minutes from the March meeting of the FOMC, the effects of the banking crisis are likely to cause a U.S. recession this year. “Given their assessment of the potential economic effects of the recent banking-sector developments, the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years,” said the meeting summary released Wednesday. In the uncertain time of today’s markets, abrdn’s director of ETF Investment Strategy, Robert Minter, advises investors to hold onto gold. Not only is gold a safe-haven asset, but it is also outperforming the S&P 500, with prices up nearly 9% so far this year. It’s only a matter of time before prices hit record highs again, according to Minter. “Historically, when the Fed balance sheet rises, gold rises,” he added, referring to the Federal Reserve extending $323.3 billion in credit since the start of the banking crisis.

CNBC/Jeff Cox
Fed expects banking crisis to cause a recession this year, minutes show

Fallout from the U.S. banking crisis is likely to tilt the economy into recession later this year, according to Federal Reserve documents released Wednesday.

Minutes from the March meeting of the Federal Open Market Committee included a presentation from staff members on potential repercussions from the failure of Silicon Valley Bank
and other tumult in the financial sector that began in early March.

Though Vice Chair for Supervision Michael Barr said the banking sector “is sound and resilient,” staff economists said the economy will take a hit.

Continue reading, here.

Kitco News/Neils Christensen
Five reasons why you should be overweight gold in today’s uncertain markets – abrdn’s Minter

Investors need to be overweight gold as the precious metal still has room to run in a world full of uncertainty and as the U.S. dollar’s reserve currency status is chipped away, according to one market strategist.

In a recent interview with Kitco News, Robert Minter, director of ETF Investment Strategy at abrdn, said he sees five reasons why investors should like gold this year.

“Gold should never be a zero weight in a portfolio, but investors could be wise to increase their allocation,” he said. “People learned kind of the hard that they’re under-allocated to gold.”

You can read the full article, here.

Goldseek/Jon Forrest Little
More Bailouts for Bankers Won’t Fix a Broken Financial System

The Federal Reserve Board reduced banking reserve requirements to zero in March 2020. So banks in the United States are technically not required to back customers’ deposits with anything.

Even as Chairman Jerome Powell had previously insisted that the Fed already had all the “tools” it would need to handle any crisis, the Fed created an extravagant new tool in response to the failures of Silvergate Bank, Silicon Valley Bank, and Signature Bank.

The Fed’s new Bank Term Funding Program (BTFP) is a modified bank bailout program, and it’s being accessed by other banks now buckling under pressure from their bad investments and fleeing depositors.

You can read the full article, here.

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