Financial Analysis – Week 25, 2021

Jun 30, 2021

Market Overview

 

financial-analysis-week-25-2021

 

The World

Central bank balance sheets increased SIX TIMES between 2006 and 2021, from $ 5,000 billion to $ 29,000 billion.

USA

The money supply of M1 is 19,000 billion dollars in an economy that has an annual GDP of 20,000 billion dollars.

Official inflation is 5.0%, but Johan Williams claims inflation is 11% – www.shadowstats.com

The price of timber dropped from 1,720 dollars to 780 dollars per ton, but the price is still much higher than last year’s price of 450 dollars.

The total assets of the Fed exceeded 8,000 billion dollars, which is twice as much as two years ago. It would be logical if the price of gold also increased, but gold is deliberately kept undervalued in order to strengthen the dollar.

Biden announced a new $ 6,000 billion to support social programs for the poor and unemployed.

The only real economic policy of the Government would be a drastic reduction of public spending and a drop in taxes, but the Biden administration is doing the opposite.

GDP growth in the first quarter Q1 is +6.4%.

Further division in the US is increasing, the lower 50% of the population owns 0.6% of shares of companies and funds, while the upper 1% owns more than 52% of shares.

 

House prices continue to rise in June.

 

Russia

Foreign exchange reserves fell from $ 604.8 billion to $ 595.1 billion.

The central bank is announcing a new increase in interest rates from 5.5% to most likely 6% because inflation is the same.

 

France

The Franco-German summit with Russia and the attempt to bring the EU closer to economic cooperation with Russia failed because the leaders of some topics voted against such cooperation.

The EU is missing the only chance to save itself.

 

China

There are currently 3.2 million patents in the world, while 43% come from China.

China is preparing a golden yuan and is ready to show that it has 20,000 tons of gold.

Does the United States have 8,000 tons of gold, as much as they claim to have?

 

United Kingdom

The interest rate did not change, remained at 0.10%.

 

Germany

Energy price growth 9.4%.

Inflation down 2.3% in June

According to the Federal Bureau of Statistics, between 2010 and 2019, there was an average of about 23,700 bankruptcies. An average of 133,897 employees lost their jobs. With about 2,300 hypothetical bankruptcies, the calculated increase in unemployment is 12,500. The average number of unemployed in Germany in 2020 was 2.8 million, which corresponds to an unemployment rate of 6.1%. An increase in unemployment potentially caused by a lack of bankruptcy would only affect the unemployment rate to the second decimal place.

 

Mexico

The central bank unexpectedly raised the interest rate from 4.0% to 4.25%.

 

Stocks

Stock market indexes unchanged:

DOWJ – 34,259

DAX – 15,739

S&P 500 – 4,281

 

Stock market balloon prevails.

 

Gold

The speculative fall in the price of gold to 1,756 dollars per ounce continued.

The money supply grows exponentially as well as the dollar, interest rates fall, double-digit inflation rises, while the price of gold falls.

It is an unsustainable situation.

The average growth in the price of gold in the last 21 years is 10%.

Basel III entered into force on June 28, 2021, so the investment in physical gold from asset class 3 – risky investment, will move to asset class 1 – when there is no risk.

This does not apply to gold in the paper – EFTs.

It trades $ 180 billion every day.

Gold price growth from 2000 to 2021:

 

Silver

Unchanged at $ 25.67 / ounce.

 

Oil

At one point, oil surpassed $ 76 per barrel, but returned at the beginning of the week and remained at $ 74.81 / barrel.

The constant growth of demand for oil keeps prices high. Forecasts are that by the end of the year, the daily oil demand will be 1.7 million barrels higher than the supply.

Saudi Arabia has announced it will increase supply to meet so much demand and prevent price increases.

Russia did not comment, because it is currently affected by the new Covid wave.

 

USD

The dollar unnaturally continues to strengthen – 1.1879

 

Russian ruble

The ruble in slight recovery against the dollar – 72.6718

The ruble in slight recovery against the euro – 86.4576

 

Bitcoin

In slight growth to $ 36,011.

In South Africa, investors are losing about 70,000 bitcoins as a result of a mega scam. Founders of Africrypt have disappeared from the crypto trading platform. There is no trace of the founding brothers now. Investors are now worried about their investments worth over two billion euros.

 

 

Branko Dragaš

Investment banker

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