Hello, Adam. I agree completely with the points about the TGA and the Blackout period ending.
A little over a month after the fed closes the BTFP window I wonder how this event fits into that equation as we saw a real increase in bond yields this week.
It was announced after your recording yesterday that the first bank failure of the year occurred. The FDIC shuttered Republic First Bank. Its total equity, or assets minus liabilities, was $96 million at the end of 2023, according to FDIC filings.
“Philadelphia-based Republic First Bank was closed by state regulators Friday night and its assets were given to the Federal Deposit Insurance Corp., FDIC announced in a news release.”*
Just think, the bank had $262 million of unrealized losses on bonds that it labeled “held to maturity,”which it hadn’t counted on its balance sheet.
This may be the start of the air pocket Mr. Pento spoke about. And to paraphrase him: ‘Powell squawks like a Hawk. But Powell will ask Bernanke to hold his beer as the new interventions roll out.’
Does the Fed reopen BTFP? I feel sure Powell steps into the void somehow. And when that happens then it is “to the moon, Alice”.
Good comments, Joe. So far, Republic First rescue looks orderly, so not sure that is the match that sets of a conflagration. But it's sure a sign that the banking system is still under stress and may be why Powell suddenly wanted to start cutting rates. Time will tell, and it could very well get more interesting.
As Stephanie Pomboy once said, when rates go high enough for long enough, "the bodies start floating to the surface"
One (currently) compelling part of their offering is that they don't charge storage fees. That make this quite different from other allocated physical bullion offerings. Most storage companies make their money off annual storage fees vs buy/sell commissions.
So no storage fees for allocated physical gold in your name is big differentiator IMO.
But they say "Paxos does not charge gold storage fees to its customers at this time." "At this time" seem the important words to me.
That gives me the sense they can /will change that in the future. Which could dramatically reduce the cost advantage. But are you really going to move your gold in response when that happens? I'm guessing they're betting on no.
I appreciate the question, Ricardo. I don't have an informed opinion as I hadn't heard of paxos before now. If I get the chance to look into them, I'll let you know any thoughts I have. But it prob won't happen this weekend.
Hello, Adam. I agree completely with the points about the TGA and the Blackout period ending.
A little over a month after the fed closes the BTFP window I wonder how this event fits into that equation as we saw a real increase in bond yields this week.
It was announced after your recording yesterday that the first bank failure of the year occurred. The FDIC shuttered Republic First Bank. Its total equity, or assets minus liabilities, was $96 million at the end of 2023, according to FDIC filings.
“Philadelphia-based Republic First Bank was closed by state regulators Friday night and its assets were given to the Federal Deposit Insurance Corp., FDIC announced in a news release.”*
Just think, the bank had $262 million of unrealized losses on bonds that it labeled “held to maturity,”which it hadn’t counted on its balance sheet.
This may be the start of the air pocket Mr. Pento spoke about. And to paraphrase him: ‘Powell squawks like a Hawk. But Powell will ask Bernanke to hold his beer as the new interventions roll out.’
Does the Fed reopen BTFP? I feel sure Powell steps into the void somehow. And when that happens then it is “to the moon, Alice”.
* https://www.cbsnews.com/news/republic-bank-failure-fulton-bank-pa-nj-ny-fdic/
Good comments, Joe. So far, Republic First rescue looks orderly, so not sure that is the match that sets of a conflagration. But it's sure a sign that the banking system is still under stress and may be why Powell suddenly wanted to start cutting rates. Time will tell, and it could very well get more interesting.
As Stephanie Pomboy once said, when rates go high enough for long enough, "the bodies start floating to the surface"
Please consider for interview David Hay or Louis Gave. I benefit immensely from your podcast. Ty!
I interviewed David not that long ago: https://youtu.be/DyaFRxaUvR4
And I'll have Louis on before long, too.
Hi Adam. I would like you opinion about pax gold from the company paxos.com as a digital way to invest in gold. The say they are audited. Thanks
One (currently) compelling part of their offering is that they don't charge storage fees. That make this quite different from other allocated physical bullion offerings. Most storage companies make their money off annual storage fees vs buy/sell commissions.
So no storage fees for allocated physical gold in your name is big differentiator IMO.
But they say "Paxos does not charge gold storage fees to its customers at this time." "At this time" seem the important words to me.
That gives me the sense they can /will change that in the future. Which could dramatically reduce the cost advantage. But are you really going to move your gold in response when that happens? I'm guessing they're betting on no.
Just one of the risks to be aware of.
Thanks Adam
I appreciate the question, Ricardo. I don't have an informed opinion as I hadn't heard of paxos before now. If I get the chance to look into them, I'll let you know any thoughts I have. But it prob won't happen this weekend.
Every stock is now Sun Microsystems. 😂