Gold and Silver Will Get a Big Boost (Uncut) 03-27-2025

Gold and Silver Will Get a Big Boost from the U.S.’s “Deteriorating Outlook for Public Finances”.

What I’m trying to say here, just like gold, it’s going to happen in silver, the dollar, the pounds, the euro, they’re going to make new lows versus silver. And I think silver is going to really put a rocket up the gold market. I know gold has been doing well, but it’s going to do even better once silver really breaks out above 40, 50.

It’s going to be quite something to watch because silver has been so trampled upon, so manipulated for so many years that it’s like a pressure cooker. Tuesday, March 27th, 2025, Marneco64, Home of Alternative Economics and Contrarian Views. We’re going to look at a couple of headlines that have come out that I think are going to benefit gold even more.

One of them is to do with the United States rating, credit rating. Moody’s warned just a day or two ago that the deteriorating outlook for U.S. public finances could hurt treasuries, could push it to downgrade the U.S. from a AAA rating that it has with Moody’s. The other factor I think that’s kind of related to the dollar’s status as a reserve currency is what’s going on in China and the fact that about a month or so ago, maybe a little more, it was announced that Chinese insurers would be allowed to start buying gold, to use 1% of their assets to buy gold.

And we’re going to give you an update on what’s going on there. It’s developing really quickly. So before we go further, I just wanted to thank all the new subscribers, all the existing subscribers.

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I would say the minimum amount you need to put in a month is a dollar, which isn’t that much these days. So there you go. So back to Moody’s, back to gold, back to China.

I’ve been around for a long time and I remember very well in 2011, I was still working in the financial markets in London. YouTube and Monaco 64 channel wasn’t even an idea at the time. But be as it may, I think that summer of 2011, you had a few things happening.

You had Venezuela repatriating like, I think, almost 100 tons of gold from the Bank of England, actual physical, shipped to Caracas. And then you had another one of these debt ceiling impasses, crisis. And it was pretty serious.

And S&P actually downgraded the United States from their top rating to the second highest rating. And I think it’s still there. And one thing that happened is eventually the CEO of S&P stepped down for some reason.

They found something on him. But yeah, gold that summer traded from around $1300, $1400, all the way up to the record high at the time of around 1921. So there were those two factors there.

I think Venezuela showed that the LBMA is very thinly spread and asking for actually 100 tons of gold and moving it out of there was very serious. I knew at the time that we already had this LBMA scam. I knew about it.

And I think it was one of the big factors of driving gold higher. They didn’t want to wait five or seven years. They wanted it pronto.

And it’s not surprising that I think it was Hugo Chavez at the time was present. A year or two later, he, yeah, unfortunately, he got cancer and passed away. You kind of wonder, right? But anyway, right now, Moody’s is coming out.

And here’s the story. It came out actually yesterday. Moody’s warns on deteriorating outlook for US public finances.

And the other thing I’ve seen before I go over that article is this post here from Richard Whalen, who actually I think worked for the New York Fed. He said yesterday, the Congressional Congressional Budget Office says US Treasury risks payment default as soon as August. Does this mean no tax cuts, right? So things are like heating up quite quickly here fiscally.

So the article says here, credit rating group Moody’s has worn on the US fiscal outlook, saying President Donald Trump’s trade tariffs could hamper the country’s ability to cope with a growing debt pile and higher interest rates. And talking about tariffs, everything is changing so quickly. Trump just imposed a 25% tariff on car imports, all cars imported into the US 25% tariff.

So just wanted to update you on that. The rating agency said on Tuesday that America’s fiscal strength is on course for continued multi-year decline, having already deteriorated further since it assigned a negative outlook to America’s top notch AAA credit rating in November 2023. While Moody’s highlighted the extraordinary economic resilience of the US and the role of the dollar and the Treasury market as backbones of the global financial system, its analysts also warned on Tuesday that the policies of the second Trump administration, including sweeping tariffs and plans for tax cuts, could do more harm than good for government revenues.

I just want to make a couple of comments about this last batch or paragraph. Moody says extraordinary economic resilience. Well, I would say that that’s been based on heavy deficit spending that took place under the previous administration.

And that’s probably going to happen in the current administration. A few weeks ago, they passed this current continuing resolution or something. I think it was only Republican Congressman Massey who voted against him.

He’s the only one. Trump wanted to have him removed. And he said that it’s just like passing the continuing resolutions or a budget from the Biden administration.

He said budget deficit is going to increase by over $300 billion this year, about $290 billion the year after, and like $200 billion the year after that. So yeah, let’s continue. The potential negative credit impact of sustained high tariffs, unfunded cuts, and significant tail risks to the economy have diminished prospects that these formidable strengths will continue to offset widening fiscal deficits and declining debt affordability.

In fact, fiscal weakening will likely persist even in a very favorable economic financial scenario. Yes, I know the current administration is trying to cut out the waste and corruption, trying to get manufacturing back on board or reshoring. But these things don’t happen in 6-12 months.

It takes years. So I’m going to stop right here and tell you why this is important. The fact that Moody’s is warning about this, just the fact that they’re talking about it, is going to put pressure on treasury yields, upward pressure on treasury yields.

And that’s going to put pressure on the treasury financing outstanding debt that comes due at higher costs. That’s going to increase the interest expense. It’s like a vicious circle.

And especially if they go ahead and downgrade the U.S. maybe in a few months, maybe it will be like the summer of 2011. So we need to keep an eye on that. And I think this is very good for gold because domestic investors in the U.S. and foreign investors are going to continue to diversify even more away from treasuries into gold.

Gold, of course, is money, has been a reserve asset for thousands of years. But the other story that I wanted to point out, and I know the announcement was like over a month ago and it came out on Bloomberg, China freeze possible, $27 billion from insurers to buy gold, 10 firms in pilot program that would take effect from last Friday. The companies can put up up to 1% of assets in precious metals.

So I said I’ve got an update. Yeah, I’ve got an update here from by Xiaojun at Oriental underscore ghost. I suggest you follow him.

He covers the Chinese gold and silver markets very closely. And he posted yesterday and he said, or I even think it might be today. But anyway, China finance news yesterday, Ping and Life Insurance Company of China completed its first gold pricing transaction.

That’s on the Shanghai Gold Exchange, SGE, PICC, PNC completed the first pricing transaction. The three major insurance companies have opened the curtain for China’s insurance industry to purchase gold. And I think that’s really significant.

And just another update on the Chinese situation. This is what Eric Young, my friend, King Kong posted as well yesterday. And I’ll just read it here.

Chinese pension funds have around $1.3 trillion equivalent under management. They add around $108 billion. Yes, it’s not Yuan’s dollars equivalent into their funds per year on average.

Imagine if they invest 5% of their assets under management into physical gold alongside Chinese insurance companies. Well, I think the floodgates are open for gold. And these two stories that I’ve covered are very much related, in my opinion.

You’ve got the old king, the paper dollar losing its luster, even with America’s rating agencies. And then you’ve got China trying to protect itself, protect its huge dollar reserves by not accumulating as many dollar reserves anymore, by letting off their holdings mature and not add on to it. And by not just the PBOC and the government buying gold, but encouraging the insurance industry, the Chinese people to get into gold because they know what’s coming.

And it’s the reason why I’ve been doing it as well for over 20 years, because when I first bought a gold coin, a Krugerrand, it makes you want to look into things. It makes you wonder when you hold that gold coin, how special it is. And it gets you down a rabbit hole.

Maybe some of you won’t, but I’m quite inquisitive. And I started reading, and I found out that the whole system we’re under is doomed and going to zero, because that’s what happened to all fiat currencies. So there you go.

Interesting times. Hold on to your gold and silver for dear life. That’s what I say.

It’s not gold and silver that are volatile. It’s the fiat currencies that are all over the place. But the final destination is going to be gold and silver.

And the Chinese know that. Maybe Moody’s knows a little bit of that, but I doubt it. So let’s quickly look at the markets this morning.

It looks like the stock market. Yeah, still under pressure. Just looking from afar, I see a kind of a bear flag developing in the indices on the charts.

And that’s not bullish at all. But you never know. Anyway, it’s 8.34 a.m. London time.

We’ve got spot gold at $3,035. It’s up about $15 bucks. High’s been $39 and the low $16.

Key level here is around $30.56. That’s the all-time high. Silver. Interesting point I’d like to make about silver.

And I’ve spoken about this in terms of gold before, how the Japanese yen has been leading the world, if you want to call it leading, the debasement of its currency through a very high price of gold in yen. We are all-time highs. I haven’t checked it recently, but it’s way above 400,000 yen.

But now we’re seeing the price of silver make new all-time highs versus currencies like the Canadian dollar and the Australian dollar. And even in yen, it’s made a 15 or 14-year high above 5,000 yen. Unfortunately for the yen, it’s still not the all-time high for silver.

I think the all-time high was in 1980 and it was above 10,000 yen. But what I’m trying to say here, just like gold, it’s going to happen in silver. The dollar, the pounds, the euro, they’re going to make new lows versus silver.

And I think silver is going to really put a rocket up the gold market. I know gold has been doing well, but it’s going to do even better once silver really breaks out above 40, 50. It’s going to be quite something to watch because silver has been so trampled upon, so manipulated for so many years that it’s like a pressure cooker.

And that’s why I’m holding on to my silver. As I said earlier, the stock markets are pretty much unchanged. So are the currency markets.

So there’s not really much to talk about here overnight about the markets. Let’s have a quick look at the treasury market. Well, the 10-year yield is continuing to creep up.

We’re fast approaching 440. We’re at 437 now, up three basis points. What about the U.K. gilt market, the equivalent of U.S. treasuries? Well, let’s have a quick look.

Yeah, that’s not looking great either. The 10-year is almost at 480. The 30-year is approaching 540.

So yeah, let’s keep an eye on the bond market. I think that could be another catalyst for even more stock market weakness. So with that, I’m going to wish you all a very good day.

Take care. Bye.