Gerald Celente: Central Banks Can’t Stop a 2019 Debt Disaster (Podcast)
Gerald Celente: Central Banks Can’t Stop a 2019 Debt Disaster Podcast by Mike Gleason – Money Metals
Coming up the one and only Gerald Celente joins me to talk about the upcoming trends for 2019 both geopolitically and economically. Gerald breaks down the chaos in Europe, tells us whether or not major protests are likely to break out here in the states and shares his outlook for the metals. Don’t miss a tremendous interview with Gerald Celente, publisher of the Trends Journal and top trends forecaster in the world, coming up after this week’s market update.
Well, as Democrat leaders face off against President Donald Trump over the federal budget, bulls and bears in the gold and silver markets are facing off at key price levels.
The gold market attempted to rally above the $1,250 level this week but ran into some selling pressure. As of this Friday recording, gold prices come in at $1,236 per ounce, off 1.0% for the week.
Turning to silver, prices rose into a critical resistance zone between $14.75 and $15.00 per ounce. Silver has traded in that area many times over the past couple months but it hasn’t managed to close above the $15.00 level since August.
A break above that stubborn chart resistance could force a lot of institutional bears in the futures markets to cover their short positions. A big short covering rally could then follow.
Silver currently trades at $14.58 per ounce on the heels of a 0.7% weekly decline. Platinum prices are down 0.9% this week to trade at $792. And finally, palladium looks lower by 0.3% as prices for the white-hot white metal come in at $1,237 per ounce to essentially trade at parity to the gold price.
Next week’s trading could get volatile following the much anticipated Fed meeting. Policymakers are expected to hike interest rates once again, but they may strike a dovish tone for 2019.
St. Louis Federal Reserve Bank president James Bullard recently called for his colleagues to hold off on further rate hikes. Wall Street and Washington are also putting pressure on the central bank to pause.
President Trump continues to express frustration and concern over rising interest rates. He sees a threat not only to the stock market but also to the government. The Treasury Department is being forced to go on a borrowing binge due to rising budget deficits. It faces higher borrowing costs as it rolls over trillions of dollars in debt at higher interest rates in the months ahead.
The Treasury Department reported on Thursday that the federal government ran a higher than expected deficit in the month of November, coming in at $205 billion. That’s an alarming amount of red ink to spill in one month. Federal spending for November was up 18% compared to the same month just a year ago.
There is plenty of blame to go around for the rampant fiscal irresponsibility in Washington. Congressional Democrats insisted on boosting domestic spending. Congressional Republicans insisted on boosting military spending. And President Trump failed to use his veto pen when bloated bipartisan spending bills reached his desk.
The President is now telling Democrats he is willing to shut down the government over funding for his proposed border wall. Unfortunately for Trump and his allies in Congress, they have little negotiating leverage over Democrats. Republican leaders have already caved on funding Democrat priorities in the budget.
The GOP love to talk about cutting wasteful spending and shrinking deficits when Democrats are in charge. But it’s all talk. When voters entrust Republicans with the power to put words into action, they make excuses for why they can’t.
Only a small handful of Republicans, it seems, are actually willing to vote for smaller government. One of them is Senator Rand Paul. He recently weighed in on the budget deficit and the prospects for a government shutdown.
Sen. Rand Paul: I’m not for shutting the government down on purpose. But I’m also not for keeping it open and spending a trillion dollars we don’t have. And so, I think we really out to have a big knockdown, drag out fight but, it out to be over how much deficit we have. So, about a year ago the Republicans, unfortunately my party, gave up on spending caps. And so, the deficits that we’re having right now, about a trillion dollars a year, are about as bad as they were when I ran for office pledging to stop President Obama and the Democrats from borrowing so much money. I’m still voting that way but unfortunately, some of my brethren in the GOP decided that it was more important to spend money. But it is a real problem and it makes our country weaker to have a burden of a $22 trillion debt.
Annual interest payments on the national debt will soon become the largest single expenditure in the federal budget.
The trends of rising deficits and rising interest rates are pushing the country toward a funding crisis that now seems unavoidable. The time for a possible political solution has passed. The only solution remaining for unsustainable federal finances is monetary in nature. The debt will have to be monetized – bought up by the Federal Reserve in some future Quantitative Easing program that will make the last one look like small potatoes.
At next week’s Fed meeting, officials could drop some hints that they are preparing to change course. A dovish Fed would likely trigger a sell-off in the U.S. dollar and a rally in inflation-sensitive assets, including precious metals.
Well now, without further delay, let’s get right to this week’s exclusive interview.
Mike Gleason: It is my privilege now to welcome in Gerald Celente, publisher of the renowned Trends Journal. Mr. Celente’s perhaps the most well-known trends forecaster in the world and it’s always a joy to speak with him. Mr. Celente, thanks for the time again today and welcome back.
Gerald Celente: Always great being on with you, thank you.
Mike Gleason: Well, Gerald, as always, there’s no shortage of topics to discuss with you. Why don’t we start with Europe? The Yellow Jacket Protests have been making headlines. The French President Macron is extraordinarily unpopular and citizens there are more than a little frustrated on how out of touch the government is, both in France and in Brussels at the EU. People have taken to the streets, Macron has responded by delaying the very unpopular fuel tax hike and he plans to increase wages and pensions.