It is becoming increasingly clear that easy money is going to be the mandate as increased bankruptcies and financial distress rules the day.
Easy Money Will Rule The Day
June 26 (King World News) – Peter Boockvar: What’s becoming really clear is that whoever the next Fed Chair will be, easier money is going to have to be their mandate in order to satisfy the boss. What doesn’t have to agree is the longer end of the yield curve and it’s going to be really interesting in coming years to see how the two sides of the yield curve are going to get along, or not.
Meanwhile, the US dollar continues to fall, particularly against the euro, with the DXY at a fresh multi year low and now at a level last seen in February 2022.
I’ve written on platinum as another metal we are long and bullish on and today it’s rallying to the highest level since 2014. About 40% of platinum is used for catalytic converters (about 80% of palladium is used for this purpose) with the balance used in other industrial end markets, jewelry, tableware and as an investment metal. We are in the 3rd year of supply deficits with the three largest global suppliers being South Africa, Zimbabwe and Russia.
One of my go to earnings calls is from Paychex as they tap into the payrolls of small and medium sized businesses. This is what they said of note yesterday as their stock fell 9.4%:
From Paychex:
“Now turning to the macro environment. We are observing a mix of both optimism and uncertainty within the market and our client base. Many businesses are frozen as they wait for more clarity about a number of macro issues such as tariffs, inflation and taxes. The hard data continues to indicate that small businesses remain fundamentally healthy despite the headlines. Our small business employment watch revealed stable employment levels with moderation in hourly wage inflation in the recent months. Our data does not currently show any signs of recession. We also see in our interactions in the market that the uncertainty is prompting businesses to exercise caution when making decisions and being cautious about how much they are spending on products and services.”
“We have also seen an increase in bankruptcies and financial distress in the micro end of the market and in our client base in the fourth quarter. Many businesses, I think on the edge of failure, may have decided not to fight the new headwinds they see in front of them. We also saw losses due to increases in business combinations and mergers increased more than typical. Both are signs of businesses making strategic decisions based upon their view of the current and future environment.”
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James Turk discusses what is happening in the gold and silver markets and much more CLICK HERE OR ON THE IMAGE BELOW.
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