Interest Rate Rise in UK - Impact on Precious Metals?

[HerefordBullyun]

the thing is this isnt just secular inflation its global now. Its all going to end in tears, becuase if one of the big players goes then its domino affect in the markets globally. Developing countries with low Debt to GDP will prosper, others will be down the swanny.

[JoncreteCungle]

47 minutes ago, HerefordBullyun said:

the thing is this isnt just secular inflation its global now. Its all going to end in tears, becuase if one of the big players goes then its domino affect in the markets globally. Developing countries with low Debt to GDP will prosper, others will be down the swanny.

The big Chinese property developers still look in big, big trouble. $13.2 billion of claims have been filed in Chinese courts by Chinese companies owed money by Evergrande alone. Add to that the other big developers in trouble and all the international bond holders who will likely take a severe hair cut or get nothing back if/when the plates all stop spinning.

What will the global reaction be? I can’t see any response by the Fed, BoE etc other than reverse the small rate rises and slam the money printers back into full speed ahead. 

[GoldDiggerDave]

If interest rates ever got close to this I'd liquidate every physical asset I had. Forget PM's  It would make sense to sell the car if you had 10-15k in it and buy a banger to use for a few years.  

 

 

 

 

[HerefordBullyun]

15 minutes ago, JoncreteCungle said:

The big Chinese property developers still look in big, big trouble. $13.2 billion of claims have been filed in Chinese courts by Chinese companies owed money by Evergrande alone. Add to that the other big developers in trouble and all the international bond holders who will likely take a severe hair cut or get nothing back if/when the plates all stop spinning.

What will the global reaction be? I can’t see any response by the Fed, BoE etc other than reverse the small rate rises and slam the money printers back into full speed ahead. 

The issue is the deriratives markets and bond markets are toxic, the evergrande is scratching the surface that lies beneath. Its a massive poweder keg underneath, We are in an everthying bubble now, tech, stocks housing the full thing now. When the 2008 crash happened it was the housing market and before the 2000 dot com crash also, we have had the small pandemic crash back in march 2020. None of it has been fixed, None of it-  you can fix stupid by printing more money, its  a temporary supressent, inflation has been enacted by all the printing and now it catches up, the Boe are only doing interest rises to stop people spending money, but the money is awash in the system like its going out fashion.  

Edited December 17, 2021 by HerefordBullyun

[whitesands1]

24 minutes ago, GoldDiggerDave said:

If interest rates ever got close to this I'd liquidate every physical asset I had. Forget PM's  It would make sense to sell the car if you had 10-15k in it and buy a banger to use for a few years.  

 

 

 

 

Well done!  That was a real trip down Memory Lane....... aaah, the good old days.

[silversky]

I'm not so sure that the old argument that 'rate rises are bad for PM's because investors can find a better yield on Bonds' is valid anymore.

Higher rates because central banks have printed and lent their nations into an inflationary nightmare, might not find many investors still seeking a paltry yield over safety...  Gold is of course the ultimate bond.  Natures bond.  It has zero risk of contagion, no expiry date, but no yield.  In a world where western nations are well over 100% debt/gdp ratios, who really wants to lend their life's savings to a government, who might suddenly default.  It's no longer a crazy idea that a "stable" western nation could default within a few months.  In fact it's almost certain that default will have to happen at some point.

If governments dare to chase inflation, their debt repayments will exceed what their taxpayers can be fleeced.  So in the meantime, it's the man with no assets who's being fleeced as his salary goes backwards. It's an untenable situation and eventually it'll have to give.  Probably another 3-4 years of cope left in the system before an everything meltdown.

Real interest rates are negative, and they have to remain that way if profligate western governments are to survive.  There is just no way that they can be raised by the required amount to put a lid on inflation, and everyone knows it.