The price of Gold up this morning reacting to the Presidents tweet warning Syria that missiles are on the way. Oil prices also head higher on the news.
The question that is on investors’ minds this morning is how large of an attack will it be and what, if any, consequences will the U.S. face for these attacks?
In other news, the Labor Department said its Consumer Price Index slipped 0.1 percent last month, the first and largest drop since May 2017. Economists had forecast that the CPI would be unchanged in March and the core rising 0.2 percent. This is news the Fed Reserve hawks will not be happy to hear.
Today at 2pm, the Fed will release its minutes from the March 20 – 21 meeting. The street will be looking to see how the board sees the economy going forward. This news release could move the market needle, so we will be watching and waiting for any news worth sending a “Flash Gage” on this afternoon.
Debt Forecast Looks Stormy
News released on Monday from the CBO has confirmed what we have been saying all along in previous editions of the “Market Gage.”
Due to the reduced amount of revenue coming into the Federal Government from the new tax laws, spending will exceed revenues by $804 billion dollars in the fiscal year ending Sept 30th. Increasing from a projected $563 billion short fall forecast in June. In 2019, the deficit will reach $981 billion, compared to an earlier projection of $689 billion.
The previous CBO report had estimated that deficits weren’t set to surpass the trillion dollar level until Fiscal Year 2022.
So in other words, the U.S. deficit will now surpass One trillion dollars, two years ahead of estimates.
At the same time, to calm some investors’ fears, the CBO predicts somewhat stronger economic growth. They are calling for economic growth to jump from 2 percent to 3.3 percent this year thanks to fiscal stimulus, but they go on to say that this increase will only be temporary
as they expect GDP growth will slow to 2.4 percent in 2019 and even lower to 1.8 percent in 2020.
The CBO’s report on the economic outlook typically is released in January, but it was delayed until now to account for the recent changes in fiscal policy.
It is shocking to me to hear that the U.S. credit rating agencies are turning a blind eye to the mess we are in, just claiming that our debt tolerance is better than other nations.
Really? The whole world is in debt up to their eyeballs, so I guess if we aren’t the worst off, a down grade is not in order. Where does this end?
Once again the markets are only concerned about what is going on now and has not a care for how dangerous this runaway spending can become.
The tax plan took care of corporate America for years to come, but the average American will be in trouble in a very short period of time. Healthcare is not even on the back burner for most politicians in Washington and the cost of infrastructure has not even been calculated yet. What are the folks in Washington waiting for? Another bridge to collapse killing more people?
One thing is for sure, at this pace I predict that our country will experience another recession a lot worse than ten years ago. It’s only a matter of time.
This kind of news should make people realize that an investment in Precious Metals can be a prudent choice to protect any investor’s portfolio.
Have a wonderful Wednesday.
Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.