Longer Duration Treasuries, Gold And Silver Parting Ways Since The Fed's Rate Announcement
Since the Federal Reserve’s FOMC interest rate announcement on September 18, 2024, where the Fed announced things were going so well that they needed to cut interest rates by 0.5%, gold, silver and Treasury bonds have decided to part company.
Since the Fed announcement, digital claims for silver and gold are up 4.5% and 3.5% respectively while long-dated Treasuries of 20 year+ duration (approximated by the TLT Treasury Bond ETF) are down 2.5% - see Figure 1 below.
In short, the Market is buying gold and silver and selling long-dated claims for future delivery of fiat currency thereby increasing the interest rates for these bonds while the Fed has announced it is lowering short term interest rates.
While 6 trading days is a very short time and does not define a market, it is an interesting trend.
We have been told for decades that gold and silver don’t give a yield and should be shunned in comparison to government fiat currency denominated bonds.
Yet, the market is voting with its feet and doing the exact inverse.
Figure 1 - Gold (gold line) vs Silver (silver line) vs Long Dated Treasuries - TLT-NY ETF (red line) September 18 2024 to September 25, 2024.
If this very short trend continues, it would be a continuation of a trend in place since March 2022 when the Fed started to raise interest rates as can be seen in Figure 2 below.
Figure 2 - Gold (gold line) vs Silver (silver line) vs Long Dated 20 Year+ Treasuries - TLT-NY ETF (red line) February 2021 to September 25, 2024.
If this continues, the implication over the longer term is for higher interest rates and lower bond values and higher rates are problematic for our debt-dependent economies that have been thus structured by secular central bank policy.
An Estimate of the Scale of the Movement into Gold
The revaluation of the world’s gold that is currently underway is not trivial.
As a point of reference, it is estimated that a total of 6.8 billion (B) oz. of gold have been mined throughout history and that 95% (6.5B oz.) of that gold is still held.
At a current gold price of $2,660 /oz. this values total above-ground gold at $17.3 trillion (T).
For every 1% that the gold price is revalued higher, and this seems to be occurring with almost daily regularity, we are currently seeing an increase in value of $170B of the world’s gold.
There is a powerful move underway.
Best regards,
David Jensen
I think the Fed raised rates on purpose years ago to begin collpasing the current system, in order to;
(1); Transition to the new CBDC/Crypto monetary slavery surveillance system economy & (2); To transition power from west to east.
The bankers would never have purposely introduced an imbalance to the system like raised rates, unless they were ready to begin the transition.
The collpase has already happened. We just don't look like Venezuela overnight.
1. The USD has already collapsed because; it has negative purchasing power even though people still accept it as payment.
2. $35 trillion in debt unpayable
3. Interest in debt unpayable
4. $217+ trillion in unfunded liabilites unpayable
5. The population has no wealth.
6. The population has no savings.
7. Real interest rates are negative
8. We have been in a Recession since 2008 that was papered over by QE and Artificially low interest rates. A Hyperinflationary Depression since 2020 Hence why 80% of all US currency ever exist was created in 22 months and did nothing to "stimulate growth". That's how worthless the dollar is.
A country that has unpayable debt, unpayable liabilites, unpayable interest, a worthless currency, a population with no wealth or savings in a depression= collpase.
The process has already happened. Its just that visually, looking like a fourth world country happens slower.
Metals are starting to show what has already been a reality but just ignored.
-Dillon Critique from what's THE DILL? (substack)
https://www.blackboxpolitics.substack.com
Would enjoy hearing your thoughts on Bix Weir’s musings (hope I get this right) that the available silver investment stock isn’t that far off from gold’s (due to industrial silver consumption); hence, we could see at least a temporary spike in the Ag:Au ratio to near parity at some point.
We might need a new premium dating website for those seeking a silver stacker for a partner.