Real interest rates have been negative in the US for many decades. Eric Dubin joins the Metals & Markets this week to discuss NIRP and more…
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Not merely a returning guest, but a returning original host of this SD Metals & Markets bullion podcast.
Eric Dubin drops by to talk financial markets and some of the craziest news from this week.
Such as a more than 23 yr employee and up until last month, the global head of JP Morgan’s precious metal trading desk has been on a leave of absence from work.
We ponder what that might mean as the US Department of Justice continues its investigation of financial crimes committed for more than a decade at that bank’s derivatives trading desks.
President Trump tweeted on 9/11 for the Fed to cut not just to Zero percent but even nominal Negative Interest Rates ahead. If you think gold loves negative real rates, just imagine what nominal negative rates in the USA could do to the over-leverage gold derivative complex.
Those topics and more covered in this week’s Metals & Markets bullion podcast.
A week of price pullbacks, and consolidations for 3 of the 4 major precious metals.
Silver looks to be closing this week with a spot silver price of around $17.50 an ounce.
Gold has dropped below the 1500 support level, looks like the spot gold price is closing this week around $1490 fiat Federal Reserve notes per troy ounce.
The platinum spot price fell about ten bucks, closing near 950 per ounce.
And the spot palladium price continues to show the other precious metals their new nominal fiat dollar high futures, likely to close trading over 1,610 per troy ounce (a new nominal record high for palladium fiat USD prices).
SIDENOTE: for listeners, before we begin, my internet blackout this morning forced me to make this call outdoors, though I did my best to mix out background noises, there will be a little on my side towards the end of the phone call.
That all said, below we jump into the conversation with Eric Dubin at the 2:50 mark.
Silver Podcast | Gold Podcast | We’ve Had Real NIRP since the 1990s
Welcome to this week’s SD Metals and Markets Wrap.
I am your host James Anderson of SD Bullion.
With us today September 13, 2019, a returning statesman to our long-running bullion podcast.
We welcome back Eric Dubin to our show.
Eric, on behalf of our longtime and new listeners to the show, thanks for taking the time today.
Trump’s ZIRP and NIRP tweet:
The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt. INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term. We have the great currency, power, and balance sheet…..
….The USA should always be paying the the lowest rate. No Inflation! It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing. A once in a lifetime opportunity that we are missing because of “Boneheads.”
No Inflation! – nice lie there POTUS.
WE HAVE BEEN LIVING UNDER multi-decade negative real interest rate regimes here in the USA, since the middle 1990s.
Just think about your own life experience. When was the last time a bank paid you more interest on your deposited fiat US dollars than the compounding annual real inflation rate?
Last time was following the early 1990 decade’s mild recession, around the years 1994-1995 real interest rate went negative never having returned. It has been real NIRP ever since. Perhaps nominal NIRP is next if President Trump gets his tweet fulfilled.
JP MORGAN global head trader of precious metals, +23 yrs, taken leave of absence from the desk since last month
We did not get to this topic today.
Silver and gold looking back and ahead?
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Have a nice day!
About the Author/Interviewer
James Anderson has a BA in finance from Loyola University New Orleans. He has both worked and invested in the physical investment grade bullion markets prior to the 2008 global financial crisis.