JP Morgan Predicts Record Highs for Gold

The Fed raised rates last week – now up 0.25 percentage points to a range of 5.25% to 5.5% – in an ongoing effort to slow inflation. Yet, they are still far away from their desired 2% inflation goal.

Meanwhile, the largest bank in the U.S. is predicting gold will reach record highs in 2024...

Let’s dig in.

ICYMI: JPMorgan Sets Gold Price Target at $2,175/oz — JPMorgan Chase & Co. is forecasting gold prices to exceed $2,000 an ounce by the end of this year and reach new highs in 2024 as interest rates begin to decline. The bank sets its average price target for gold at $2,175 an ounce in the last quarter of 2024.

The Fed Raises Rates Another Quarter Percent — The Fed lifted interest rates by ¼ of a percentage point at its meeting last Wednesday. With inflation still above the Fed's 2% target, Chairman Powell reiterated the central bank has "a long way to go" on inflation – but provided little guidance about whether the bank with raise rates again in September.

Putin Wipes Over $20 Billion in African Debt — Russia's leader pledged to give free grain to six African countries, just days after Russia stopped an agreement that let Ukraine, a major grain producer, send its farm products across the Black Sea. The Russian leader also said that they have cancelled over $20 billion in debts owed by African countries.

The U.S. Economy Actually Grew in Q2 — The U.S. gross domestic product (GDP) increased at a more than expected 2.4% annualized rate last quarter thanks to robust consumer spending and significant business investments. At the start of 2023, many were calling for a recession, but so far, the economy has fared better than expected.

61% of Americans Think A.I. Could Lead to the End of Humanity — According to a survey by Ipsos, Reuters reports that 61% of Americans believe that the rapid development of AI could pose a threat to humanity's future. The survey, which included 4,415 U.S. adults, found that only 22% disagreed with the potential hazards, while 17% were uncertain.

BlackRock: U.S. Could Be in for “Rollercoaster” Inflation

BlackRock is the largest asset manager in the world, with over $9 trillion in assets under management, so when they speak it pays to listen.

In a note on Monday, BlackRock warned the economy could be in for chaos, as the US risks rollercoaster inflation and an unusual “full employment recession.” Here are a few of their findings:

• Despite historically tight labor markets and strong consumption, the U.S economy has barely grown over the past 18 months.
• We are seeing a combination of a shift in consumer spending from goods to services, which is driving goods deflation.
• At the same time, the labor market remains tight, which is driving wage inflation as workers push for higher pay.

“The result? A rollercoaster trajectory over the next quarters before inflation likely settles near 3% – well above the Fed’s 2% target,” strategists said. This is bad news for stocks, as falling inflation cuts into profits. “We expect a squeeze on corporate margins if inflation stays high — and an even larger squeeze if it falls,” the note added. “So good economic news like falling inflation is not necessarily good news for markets.”

If inflation settles at 3%, that’s still well above the Fed’s 2% target. So while 3% is a lot better than the 9.1% we saw in the summer of 2022, we’ll still continue to see the purchasing power of the dollar decline. That isn’t a reassuring thought for many Americans already struggling in recent years with the staggering rise in the cost of living.

Gold, on the other hand, has relatively stable value compared to volatile paper currency.

Number to Watch: $253,357*

This staggering figure represents the U.S. National Debt divided by the number of U.S. taxpayers. To put it simply, each taxpayer would need to shell out $253K to settle our national debts.

Source: usdebtclock.org Numbers as of 7/26/23.

So, what exactly is the U.S. National Debt? It's the cumulative amount of money that the United States government owes. Think of it as a colossal credit card bill but on a national scale, and yes, it accrues interest.

As the U.S. National Debt surpasses $32.6 trillion, these crazy figures can seem overwhelming and almost unreal.  But seeing the numbers expressed another way – $253,000 per taxpayer and $97,000 per citizen – puts it in a much more relatable perspective. For that amount you could get a starter house in some areas or a fully-loaded Porsche.

In contrast, the revenue per citizen stands at a mere $14,118, and the average savings per family is only $12,973. It just shows how the chasm between our debt and revenue is not just alarming — it's virtually insurmountable.

How are we supposed to pay this off? The stark reality is, we can’t. Mike Maloney has talked about how we’ve passed the point of no return, when it comes to our debt.

The question is not if the debt will impact us, but rather when and how severely. The U.S. National Debt is a problem we can no longer afford to ignore. It's time for us to face the numbers, understand the implications, and start having serious conversations about our financial future.

*Note: These figures are constantly changing. You can monitor them in real time at usdebtclock.org.

The Gold Rush: 1980 vs Today

We're excited to share an excerpt from The Great Gold and Silver Rush of the 21st Century, the latest book by Mike Maloney. In this chapter, Mike uses data to draw a compelling comparison between the gold rush of the 1970s and today's landscape.

With several large banks, like JP Morgan, forecasting gold could reach record highs in 2024, we wanted to provide some data on what a real bull run on gold could look like...

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"Adding it all Up"

So now let’s add it all up to try to estimate just how much currency could come chasing gold and silver in the Great Gold and Silver Rush of the 21st Century.

Versus 1980, today we also have:

• 18 times more people around the world that can buy precious metals.  
• 55 times more currency.
• 56 times more millionaires.
• 200 times more billionaires.
• 220 times more available consumer credit.
• 31.5 times more assets under management.
• 49 times greater global stock market cap.

It’s actually impossible to accurately add all of this up. It really doesn’t matter if there are 18 times more people who can buy gold and silver… what matters is how many people will buy gold and silver. It really doesn’t matter that there’s 55 times more currency in the world… what matters is that almost all of the newly created currency went to people who were already well off… people who have significant assets to protect and therefore have an investor’s mindset. These are the people who will seek the safety of gold and silver in the next crisis, driving their prices to unimaginable heights.

Now, as I said before, I don’t want to double count anything or anyone here, so to make this easier I'm just going to lump currency, credit, assets under management, millionaires, billionaires, people with an investor’s mindset, and people with significant assets to protect all together and then pick a number as best I can. Let’s say that there’s probably 50 times more currency available today for investment in gold than in 1980. Yet the amount of available gold in the world has only about doubled, so that’s 25 times more currency per ounce.

Then, to that 25 times more currency per ounce we must add the speed of light news and market dynamics, and that gold and silver are Giffen goods that create more demand as the price rises, and the fact that their price responds positively to war, geopolitical crises, economic crises, and just about anything else that causes human anxiety… and you can still only get a tiny little inkling of just how big this thing is going to be.

If the bull market of the ’70s drove gold up 25 times and silver up 41 times with only 1/25th the amount of the currency per ounce chasing them, and then you add fear to the mix, just what do you think will happen this time around?

I’m not cold-hearted. Yes, I’m concerned for the plight of the average worker, the average citizen, and the average investor in the crisis I see coming. They are the ones who will end up taking the punishment for our immoral monetary system. I’m sorry for them, and I’m trying to help… that’s why I wrote this book. But please… somebody pinch me because I must be dreaming. I mean, I’m a precious metals investor, and this is just too good to be true. Isn’t it? I’ve gone over this hundreds of times and I keep on coming to the same conclusion; no, it’s not too good to be true… it’s exactly true, or even better.

But remember, price means nothing… value is everything.

I believe that for every ounce of gold and silver you own today you are going to be able to buy many, many times more stocks, bonds, real estate, businesses, and just about anything else you want or need. One day precious metals are going to amaze everyone. Make sure you come back and reread this chapter once gold goes soaring past $3,000… $5,000… $10,000… per ounce and never looks back. Because the Great Gold and Silver Rush of the 21st-Century is absolutely going to take your breath away.”

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The Great Gold and Silver Rush of the 21st Century isn’t just a fascinating read — it's an essential guide for anyone interested in the history and future of gold and silver. Discover why this could be the most important book you read this year.

Stay tuned for next week's edition of GoldSilver Nuggets!

Brandon S.
GoldSilver