Vigilant News

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Economy

Sales of Gold Bars at Costco Reach $100 Million as Economic Collapse Looms
The gold is sold "within a few hours" of its online listing, according to Costco CEO.

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Last quarter, Costco sold approximately $100 million worth of one-ounce gold ingots, according to CFO Richard Galanti, in response to consumer inflation concerns.

CBS News reports that the bars sold for as much as $1,980 during the fall, but they are presently unavailable. Google Finance reports that gold futures have surpassed $2,030 as of Sunday.

During an earnings call on Thursday, Galanti disclosed the triumphant sales of gold bars in response to a query regarding holiday consumer trends.

“They’re buying gold,” he said, according to Business Insider.

One 24-karat, 1-ounce gold bar from the Rand Refinery in South Africa and another bar of the same weight and karat from PAMP Suisse in Switzerland are both available on the Costco website. Memberships are restricted to two purchases at each establishment.

Given the persistent inflationary pressures surpassing the 2% objective set by the Federal Reserve Bank, consumers might consider allocating a portion of their portfolios toward gold, an asset class that has historically served as a hedge against inflation.

 

 

California Budget Deficit Reaches a Record-Breaking $68 billion

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The California budget deficit has reached $68 billion, according to an announcement made Thursday by the Legislative Analyst’s Office.

According to Politico, the amount is significantly greater than the June estimate of $14.3 billion, and it coincides with a decline in tax revenues throughout the Golden State. Fortunately, Sacramento does not face an entirely negative outlook, as the state possesses the necessary resources to tackle the situation, specifically a substantial cash reserve.

“The state remains in a good cash position, and that wasn’t the case back at the start of the Great Recession. We don’t face the same kind of liquidity challenges that we had at that time, and so I would stop short of describing it as a crisis,” LAO Analyst Gabriel Petek told the outlet.

Democratic Governor Gavin Newsom, who last week boasted about the achievements of the Golden State during a televised debate with Florida Republican Governor Ron DeSantis, views the numbers as something of a black eye.

The news source noted that Newsom will likely be required to implement substantial cost reductions in order to accommodate the unforeseen deficit.

Newsom is expected to release an updated budget proposal and deficit projections in May of next year, but with his sights very likely set on the presidency, it’s uncertain how invested Newsom is on remedying this issue.

U.S. Banks Desperately Try to Stay Open Amid a Flood of Branch Closings.
JPMorgan Chase will close a total of 159 local branches by the end of this calendar year

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Things will work out well in the long run if you do them the right way. Conversely, things will go badly if you do them the wrong way. Unfortunately, our banks, the circulatory system of our economy, have been seemingly intentionally doing things wrong for a long time.

The whole system is being shaken up because of this. An alarming number of loans are becoming past due, there have been numerous “banking glitches” in the past few months, tens of thousands of banking workers have already been let go, and U.S. banks are holding on to hundreds of billions of dollars in hidden losses.

It looks like things will get even more confusing over time. As smaller banks fall, the bigger banks will take them over. Of course, the big boys will also be having a hard time staying living as things progress toward an inevitable conclusion.

If you think I’m just pulling all of this out of my derriere, consider that it is being reported that JPMorgan Chase will close a total of 159 local branches by the end of this calendar year…

In 2023, JP Morgan Chase has or will close 159 branch locations across the United States. The banking giant is not alone in its decision to scale back its physical presence as banking moves online; Bank of America, Wells Fargo, and Citi Bank have announced closures at similar scales that will continue into 2024.

Bank of America is following close behind. More than 100 local offices will be shut down for good by the end of 2023, we’ve been told.

Bank of America is the second largest bank in the United States, and this year, the financial giant has announced that it will close up to 138 locations. To date, 95 branches have been closed this year, and 15 more are to shutter by the end of the year. The remaining locations are planned to close in 2024, meaning that the trend, common among nearly all of the big banks of shutting local branches will continue.

Naturally, this “avalanche” of closed branches didn’t start yesterday. We saw more than 3,000 bank stores closed in 2022. It’s unprecedented in modern times, but the consensus is that more branches will close in 2024.

At this very moment, U.S. banks are sitting on a huge pile of deferred losses. Not only that, but new numbers just out show that U.S. banks have a total of $684 billion in unrecognized losses…

“Unrealized losses” on securities – mostly Treasury securities and government-guaranteed MBS – at FDIC-insured commercial banks at the end of Q3 jumped by $126 billion (or by 22%) from the prior quarter, to $684 billion, according to the FDIC’s quarterly bank data release on Wednesday.

The real danger will be if Americans, seeing that certain banks cannot honor withdrawal requests, decide to make bank runs. Do you remember when Silicon Valley Bank failed earlier this year? Well, that is precisely what happened.

A new report says that three banks are especially at risk right now…

As per the Daily Mail:

Regional banks Comerica, First Horizon and Zions are at risk of being targets for acquisition by larger rivals, according to a new report.

Since the collapse of Silicon Valley Bank in March, the US banking industry has been poised for a reconfiguration that could see smaller regional banks wiped out.

At the same time, the housing bubble is poised to burst.

A recent report showed that the number of potential home sales in the U.S. has dropped to its lowest level ever…

Pending home sales, a measure of signed contracts on existing homes, dropped 1.5% in October from September.

They hit the lowest level since the National Association of Realtors began tracking this metric in 2001, meaning it’s even worse than readings during the financial crisis more than a decade ago. Sales were down 8.5% from October of last year.

Spend some time mentally marinating on those paragraphs.

Pending home sales have never been this low, not even in the worst days of the financial crisis in 2008 and 2009.

Let’s hope that everyone stays calm and things keep going as normal for as long as possible. Because there will be a huge problem as soon as people start to worry and take their money out of banks.

Lots of U.S. banks are “financial zombies” right now, as are a lot of U.S. customers, with the U.S. government being the biggest “financial zombie” of all.

New 40-Year Record High Inflation, 9.1%—The Real Number is Much Worse

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The latest economic figures released by the US Bureau of Labor Statistics confirm what everyone’s been feeling in their wallets—record high inflation.

Released earlier today, the consumer price index (CPI) came in at 9.1%. The CPI measures a carefully selected basket of goods and services—the official method for measuring inflation. This is the single largest increase since 1981.

Inflation refers to the average increase of products within an economy, which indicates the loss of purchasing power. For instance, if a gallon of milk cost $8 last year, rising to $8.80, this means that the cost has remained essentially the same—but the value of the dollar has dropped by 10%.

What Prices Increased the Most?

Inflation hit the energy and food sectors most sharply, with unleaded gas prices peaking at a national average of $5 per gallon.

Removing food and energy reduces the rate to 5.9%, confirming that these sectors have risen the most.

While gas prices sharply increased by nearly 50% from last year, the price at the pump has leveled off for the most part since early June, in part due to crude oil price leveling out, falling below their $126 mid-May peak to $96 as of July.

Nevertheless, price discovery for most of the economy remains on the high side.

“The concept of price discovery—determining the fair price of a particular good or service based on supply and demand—is a primary function of every public market, from ancient souks to auction houses.”

Everyone is uncertain how far inflation will go—especially since it’s approaching the mid-70s record highs, whether a small business or a transactional conglomerate. Prices will likely continue to rise as supply chains continue to crumble, supplies decrease due to global trade upset from Ukraine and Western-bloc sanctions, and gouging by oligopolies continues, per the norm.

Price Gouging and Collusion

In simple terms, big businesses pay market analysts to forecast costs and profit changes, advising higher prices even if the impact of inflation hasn’t hit their bottom line. As a result, this triggers inflation across the economy, as large portions of the technology sector are in cahoots with each other, called oligopolies.

While most people believe businesses compete, the increasingly obvious reality is that collusion is more the norm. Why else would most retail and tech prices seem to go up at once in response to a crisis like the Ukraine conflict?

As Wall Street Journal Reporter Dion Rabouin notes in an NPR interview from April of this year,

“Inflation sort of disguises these price increases. When prices for everything around you are rising, it’s much easier for companies to raise their prices and not experience that consumer blowback.”

True Inflation Much Worse

As bad as things appear with 9.1% inflation, it’s a lot worse.

A campaign to suppress real inflation started in the 80s as a response to increasing liability obligations for social security beneficiaries.

In the 1970s, before the calculation methods changed, inflation spiked to nearly 15%.

But, strangely, after changes were implemented, the volatility of inflation was reduced.

30a Chart 1: Inflation as Measured by CPI 600×600

According to Investopedia,

“Originally, the CPI was determined by comparing the price of a fixed basket of goods and services spanning two different periods. In this case, the CPI was a cost of goods index (COGI). However, over time, the U.S. Congress embraced the view that the CPI should reflect changes in the cost to maintain a constant standard of living. Consequently, the CPI has evolved into a cost of living index (COLI).

Over the years, the methodology used to calculate the CPI has undergone numerous revisions. According to the BLS, the changes removed biases that caused the CPI to overstate the inflation rate. The new methodology takes into account changes in the quality of goods and substitution. Substitution, the change in purchases by consumers in response to price changes, changes the relative weighting of the goods in the basket. The overall result tends to be a lower CPI. However, critics view the methodological changes and the switch from a COGI to a COLI as a purposeful manipulation that allows the U.S. government to report a lower CPI.”

This issue is quickly summarized in a Dirty Money video entitled Why the Official US Inflation Rate is a LIE.

John Williams, a maverick economist, reveals the true inflation numbers on his site Shadowstats.com.

According to Williams’ charts, a more accurate inflation figure is about 17%—nearly double the adjusted mainstream number of 9.1%.

Note in the above chart that the two different indexes, SGS CPI in blue and CPI-U in red, were trending in unison until 1982, when the new calculation methods were implemented.

Final Thoughts

Inflation is a hidden tax on the working class—those citizens who don’t have excess capital to invest in the stock market—where prices of stocks tend to rise with inflation.

Inflation reduces the cost of debt due to the fact payments are enumerated in fixed currency amounts—your mortgage payment doesn’t go up or adjust for inflation.

This means inflation favors the wealthy and those with debt, like the US government.

What prices have you seen rise the most? What are you doing to mitigate the impact?

FED Dolling Out $250 Million PER DAY in Interest Payments to Unknown Beneficiaries as Economic End-Times Approach

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The current global, socioeconomic paradigm has allowed for a small group of mostly unidentified beneficiaries to reap hundreds of millions of dollars per day by way of interest payments. This cushy racket was all made possible by the Federal Reserves’ reverse repo program.

The impending collapse of the financial system as we know it looms on the horizon while those in a position to do so feed the crisis (and themselves) through endless money laundering schemes. 

Whether it’s the war in Ukraine, Executive orders, experimental vaccines, the push for Solar panels and electric vehicles… there are few things being heavily marketed to the world today that weren’t designed to reap maximum profits for the financial elite in Davos Switzerland and the Washington DC political establishment.

In fact, Peter Schweitzer wrote a phenomenal book about how all of this works back in 2011 called Throw Them All Out, a highly recommended read for our audience.

In response to the record inflation, caused either by the reckless or intentionally destructive spending of the Biden Administration, the FED decided to raise interest rates by 75 basis points last month – the largest increase since 1994 – in an effort to slow the Bidenflation tidal wave.

To the surprise of no one, there’s been virtually no improvement to the economy since this change. Quite the contrary, as inflation continues to trend in the wrong direction since the FEDs rate raise. Not only that, but the FED revised its quarterly projections to show negative GDP growth will be expected for the second quarter in a row, essentially proclaiming that a recession isn’t on the horizon, it’s already here.

RELATED: Key FED Indicator Suggests That The US is Already in a Recession

When faced with the hard decision to either help ease the economy back on track or raise interest rates to make the already skyrocketing inflation markedly worse, the FED chose the latter. This change quietly paved the way for a small group of mostly unidentified beneficiaries to start collecting hundreds of millions of dollars per day by way of interest payments, this is thanks to the Federal Reserve reverse repo program.

The program has seen a record 2.330 trillion in cash holdings, and interest payouts have ballooned since the aforementioned FED rate hike, totaling over 100 million per day. The 108 depositors, who hold assets in the fund, are the recipients of these absurd payouts.

As per Zerohedge:

there is a record $2.33 trillion in cash parked at the Fed’s overnight facility, doing nothing…

…Well not nothing: it was nothing when rates were zero, but at 1.55% which is the current reverse repo rate, that $2.33 trillion is a golden goose for the 108 counterparties that are parking cash at the facility, a mixture of money market funds, banks, GSEs and various other financial intermediaries.

How big is this particular Golden Goose? The chart below shows the payment in interest that the Fed makes day on this record $2.33 trillion in funds: as of today it amounts to just over $100 million every single day! That’s right, more than $100 million in interest payments on funds parked with the Fed, which is by definition the world’s only risk-free counterparty!

As ZeroHedge points out, the interest profits are only due to the FED’s past reckless spending.

Also from ZeroHedge:

“All of the above is with the Fed Funds rate at 1.75%. As a reminder, the Fed hopes to keep hiking at least another 175bps (or more) in the next 6 months, which will push the rate to 3.50% and will mean that the Fed will be paying half a billion in interest every single day to a handful of mostly unknown counterparties every day, money which for said counterparties is also known as (riskless) profit and which is only the result of the Fed’s previous money printing.”