Anomalies Not Seen Since the Great Depression

Today's news that the US Supreme Court will not allow up to $20,000 in student loan debt forgiveness attempted by the Biden administration, is another reminder that during this coming fall, additional headwinds to our US consumer driven economy are about to unleash.

I can certainly understand the angst of many younger people given that beginning in the 1990s, US federal government had the short sightedness and most likely was systemically corrupted by insider interests, to begin guaranteeing student loans to help kids pay for degrees often earned in fields that have no real value add to the modern economy. The amounts and sizes of college loans exploded following the 2008 financial crisis leading us to this lasting societal issue today.

It is not a coincidence that costs to attend US colleges exploded this 21st Century, the incentives to allow college administrators to get fat and happy was after all, essentially government guaranteed by these exploding outstanding college loan figures.

Following the over three year freezing of student loan payments, which began during the 2020 pandemic and are set to unfreeze this coming fall 2023, over 43 million US Citizens still owe coming payments on student loan debts. 

Here is a bit more detail on the US Supreme Court decision today.

A few sobering charts and data dives to remind us where the United States currently stands with many of its younger generations mired in student debt again coming due.

Currently nearly half of young adults in the USA aged 19 to 29 years old, live with one or both of their parents. These are levels not seen since the Great Depression and the start of World War II.

And given the average sales price of a house in the USA ramped 25% higher over the last 3 years to nearly a half million for an average US house, I would not expect to see this disturbing trend to change for some time to come.

The supposed American dream of going to college and buying a house was not always sold to citizens as a way to get ahead. 

If we look back far enough in US history like on this chart starting in 1890. 

We can see that US house prices divided by the ongoing gold price have both outperformed and also underperformed for some long durations. 

This chart shows that gold bullion owners have over lengthy time periods been able to afford more house than they might have if they were simply saving devaluing government issued currency units.

It would not surprise me given current circumstances in the US economy, that later on this decade we see a move back towards the 1980 and 2011 lows enjoyed by gold bullion owners buying and affording more in terms of US home values.

For young bullion stackers or for those who inherit bullion from their elders, they will likely have the chance to take advantage of a wealth transfer in real value terms swing away from US homes and toward escalating bullion values.

Society neither collapsed nor fell apart in 1980 nor 2011 respectively. Advantages in real value gains simply swung to those who had the foresight to own prudent bullion positions ahead of the right time frames.

The silver and gold markets traded sideways for the week.

The spot silver price closed at $22.75 oz bid while the spot gold price finished just under $1920 oz bid. 

The spot gold silver ratio stayed flat closing the week at 84.

We want to take a moment to wish our US bullion buying customer base a safe and happy 4th of July holiday week coming up.

Updates for Indian gold bullion demand came in strong for last May yet Indian silver bullion demand continues to be lackluster.

Reports of solar and silver demand out of China continue to paint a bullish pattern of heavy physical silver bullion buying and China reportedly now five years ahead of solar panel capacity by 2025.

One look at how much silver bullion has been sucking out of the Shanghai silver futures exchange since the start of this year 2023, continues to corroborate the reports of heavy silver use in Chinese solar panel manufacturing.

Historically we are in the summer silver doldrums in terms of seasonal price action so it was not surprising to see large drops in COMEX silver futures market open interest to close this week's trading.

Sentiment of silver derivative traders in the western world at the moment are at recent low levels and it's a similar story in the gold derivatives market on the COMEX as well.

This long now over three year sideways spot price consolidation for both precious monetary metals has worn out many of the speculative leveraged bulls all while the fundamental drivers for silver and gold bullion respectively continue to strengthen.

For those currently buying bullion on the recent spot price weakness, get ready for coming 4th of July specials on silver and gold products from our team here at SD Bullion.

Have a great holiday week, and as always to you out there.

Take great care of yourselves and those you love.

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James Anderson
James Anderson
Senior Market Analyst & Content

A bullion buyer years before the 2008 Global Financial Crisis, James Anderson is a grounded precious metals researcher, content creator, and physical investment grade bullion professional. He has authored several Gold & Silver Guides and has been featured on the History Channel, Zero Hedge, Gold-Eagle, Silver Seek, Value Walk and many more. You can pick up Jame's most recent, comprehensive 200+ Page book here at SD Bullion.

Given that repressed commodity values are now near 100-year low level valuations versus large US stocks, James remains convinced investors and savers should buy and maintain a prudent physical bullion position now, before more unfunded promises debase away in the coming decades...