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Federal Reserve Announces First Rate Cut in Over 4 Years

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Today, the Federal Reserve announced their decision to cut interest rates by 50 basis points (0.5%) marking a significant shift in the central bank’s monetary policy.

This is the first such cut since the early days of the COVID-19 pandemic, which will reduce the federal funds rate to a range of 4.75%-5%.

While the decision aims to combat a slowing labor market and maintain economic growth, its implications are far-reaching, affecting everything from mortgage rates to precious metals prices.

While this is generally good for consumers in the short term, the long term implications could lead to higher inflation and other economic problems down the road.

Effect on Precious Metals Prices

Precious metals, particularly gold, often benefit from lower interest rates. When interest rates are cut, the yield on bonds and other interest-bearing assets falls, making non-yielding assets like gold more attractive.

Investors flock to gold as a store of value, especially during times of economic uncertainty or when inflation is a concern. In the short term, the Fed’s decision to cut rates will likely continue to push gold prices higher to new records, as lower rates will weaken the U.S. dollar and boost demand for safe-haven assets.

If inflation starts to pick up again, gold prices are likely to continue to climb. Historically, gold has performed well in low-interest-rate environments, particularly when real yields turn negative. Silver, which often follows gold’s price trends, may also see a boost in demand and price as a result of the Fed’s actions.

The Fed’s 50 basis points rate cut is a double-edged sword. While it provides immediate relief in the form of lower borrowing costs, it also signals concerns about the health of the economy and the Fed’s ability to manage future risks.

Everyday consumers will feel the effects in their mortgages, car loans, credit cards, and savings accounts, while investors will need to weigh the impact on stocks and precious metals carefully as the Fed navigates an uncertain economic landscape.

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Gold Price Reaches New All Time High

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Precious metals continue to shine as a safe-haven asset as the gold price climbs to a new all-time high of over $2,555 per ounce, driven by economic uncertainties, a tame inflation report, and expectations of an upcoming Federal Reserve rate-cutting cycle.

ING projects that gold will average $2,700 per ounce by 2025, with a short-term target of $2,580 by the end of 2024. This surge in gold prices is attributed to lower interest rates, which make gold more attractive as a non-yielding asset, alongside growing geopolitical tensions and increasing central bank gold purchases. Additionally, gold-backed Exchange Traded Funds (ETFs) have seen renewed interest, adding to the positive momentum in the market.

Moreover, BRICS countries are discussing the potential for a gold-backed currency, which could challenge the U.S. dollar’s global dominance. This currency proposal aligns with the bloc’s broader goals of reducing reliance on the dollar and increasing economic sovereignty. At the same time, Switzerland’s imports of gold from Kazakhstan and Uzbekistan have raised concerns about potential sanctions violations, with suspicions that Russian gold is being smuggled through these nations. These developments underscore the growing demand for gold and the broader geopolitical implications of the global gold trade.

ING’s Gold Price Projections

A report from Dutch financial group ING projects that gold will reach an average price of $2,700 per ounce by 2025, with a short-term forecast of $2,580 by the fourth quarter of 2024. The anticipation of a Federal Reserve rate cut is a driving factor behind these projections.

During a recent speech at the Jackson Hole economic symposium, Federal Reserve Chairman Jerome Powell hinted that the U.S. economy may soon see a rate cuts. Analysts are expecting a rate cut of 25 basis points at next week’s Board of Governors meeting, which will likely further fuel the gold market. Additionally,

The Federal Reserve’s Impact on Gold

Gold thrives in low-interest rate environments and lower interest rates make it more attractive to investors. In addition, cutting rates and increasing the money supply could lead to higher inflation, making gold a hedge against further currency devaluation.

Despite some efforts to shrink the balance sheet, the Fed has only managed to reduce it by about $1.8 trillion of the nearly $5 trillion in liquidity that signficantly expanded during the pandemic. With signals of upcoming rate cuts and a halt in balance sheet reduction, the central bank is effectively preparing to reintroduce inflationary policies, which typically strengthen the demand for gold.

Could BRICS+ Adopt a Gold-Backed Currency at their October Summit?

There is speculation that the BRICS currency could be backed by gold, a proposal first floated by Russian President Vladimir Putin.

A gold-backed currency appeals to BRICS nations since it has a long history as a stable and universally valued asset, particularly in light of the U.S. dollar’s reliance on fiat money since the end of the gold standard in 1971.

Recent data indicates that BRICS countries are actively building substantial gold reserves, with Russia, China, and India ranking among the top 10 countries for central bank gold holdings. This comes at the same time that China and others have been dumping US Treasury Bonds.

Gold has been a significant focus for the BRICS bloc and the implications of a BRICS currency could be far-reaching. The announcement of new gold-backed currency would signal a shift towards a multipolar world order, where the dollar no longer holds monopoly status in international trade.

This would likely accelerate the de-dollarization trend and alter the balance of power in global markets. Sectors like oil and gas, banking, commodities, and international trade would be the most impacted, as trade agreements and transactions would start to involve the new BRICS currency.

Central Bank Gold Buying and ETF Inflows

Another critical factor driving the gold market is central bank purchases. According to the World Gold Council (WGC), central banks globally added 37 tons of gold to their reserves in July, marking a 206% increase from the previous month.

Gold-backed Exchange Traded Funds (ETFs) have also seen renewed interest. As the gold price reaches new highs, inflows into gold ETFs have picked up since May 2024.

Max Keiser on Bitcoin vs. Gold

Max Keiser, a longtime advocate of Bitcoin, highlighted an interesting distinction between gold and Bitcoin back in 2021. While Keiser is a vocal proponent of cryptocurrencies, he concedes that gold has one key advantage: fungibility. Gold can be melted down and recast while maintaining its intrinsic value and anonymity, which is not the case for Bitcoin. Bitcoin operates on a public blockchain, which, while secure, is transparent and traceable. This feature has led to a decline in Bitcoin’s use for criminal activities, with criminals now favoring cash or gold for transactions that require anonymity.

Keiser argues that Bitcoin’s lack of fungibility makes it less private and anonymous compared to gold. Criminals have shifted away from Bitcoin because law enforcement can track blockchain transactions, leading to arrests. Gold, on the other hand, can be reshaped and remelted without any record of its past, providing an extra layer of privacy.

Switzerland’s Gold Imports from Kazakhstan and Uzbekistan

A somewhat shadowy development in the gold market involves Switzerland’s surging gold imports from Kazakhstan and Uzbekistan. Trade data suggests that since the start of the Ukraine war, these Central Asian nations have become major gold exporters to Switzerland, raising concerns about the possibility of these countries serving as conduits for Russian gold.

As international sanctions have curbed Russia’s ability to export gold, there is a growing suspicion that some of the gold being exported from Kazakhstan and Uzbekistan may actually be Russian gold circumventing sanctions. An analysis by Swiss gold industry experts suggests that the quantity of gold imported from these countries exceeds their domestic production, pointing to the likelihood of Russian-origin gold being smuggled into the international market.

Swiss banks and refineries, including UBS and Valcambi, have been named as potential buyers of this gold. While these institutions claim to comply with due diligence and international regulations, the opacity of the global gold trade makes it difficult to trace the exact origins of the precious metal once it is melted down and re-refined.

Analysts argue that the potential influx of Russian gold into the global market through Kazakhstan and Uzbekistan poses reputational risks for companies and financial institutions involved in its trade.

Gold’s Favorable Outlook

With the U.S. Federal Reserve signaling an imminent rate-cutting cycle, combined with geopolitical tensions and rising central bank purchases, gold is set for a sustained rally. ING’s projection of gold reaching $2,700 by 2025 reflects these favorable conditions for the precious metal.

While Bitcoin remains a popular investment asset, gold’s fungibility and anonymity still give it an edge in many scenarios. As global tensions persist and economic policies evolve, both gold and Bitcoin may play important roles in investment portfolios, but for now, gold continues to shine as a reliable store of value, particularly during times of uncertainty.

Additionally, the complex issue of gold imports from Central Asia highlights the potential for ethical and legal complications in the global gold trade. Investors and institutions must navigate these challenges carefully, ensuring that they comply with international sanctions and avoid the reputational risks associated with trading gold of uncertain origin. With strong demand drivers and an array of factors boosting gold’s appeal, the future for this precious metal remains bright.

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Federal Reserve Expected to Lower Rates At September Meeting

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The Federal Reserve has kept its benchmark interest rate unchanged at a two-decade high. The Fed’s rate-hiking campaign has been the most aggressive since the 1980s, and it sparked some turmoil in the banking sector, the stock market, and the global economy during this period.

However, following the recent jobs report, calls are growing for the Board to consider lowering interest rates sooner to minimize further meltdown in the economy into a full blown recession. Even though the market is now pricing in a 94% probability of a Fed rate cut in September.

Economists like Ryan Sweet, chief U.S. economist at Oxford Economics, have predicted that the Fed will likely use the July meeting to plant a seed that a cut in September is on the table.

Some economists, like those at Citi, have predicted that the U.S. Federal Reserve could slash interest rates by 200 basis points in its next eight meetings through the summer of 2025 as the U.S. economy slows down.

Jahangir Aziz, an analyst with JPMorgan, told CNBC that he expects a 50 basis point (bps) rate cut by the Federal Reserve in September and another during the November meeting.

The dollar is dropping primarily due to a combination of economic factors and global economic conditions.

One significant factor that is contributing to the lower dollar value is the Federal Reserve’s monetary policy that has led to an increase in the money supply, causing inflation to skyrocket in recent years.

Additionally, the ongoing trade tensions between the United States and China and Russia, have also contributed to the weakening of the dollar.

Investors often turn to gold as a safe haven during times of economic uncertainty or when they expect the value of the dollar to decrease.

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Fed Report Admits that Gold is Displacing the Dollar in Central Bank Reserves

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Earlier this week the Federal Reserve released a report that showed that some countries are moving away from the dollar as their main reserve currency in favor of gold.

While the Fed tried to downplay the revelation, former Coinbase chief technology officer Balaji Srinivasan pointed out in a post on X that the small group includes China, India, Russia and Turkey, which “represents 3 billion people. So 37.5% of the world is moving away from dollars towards gold.”

“The Fed now admits some countries are moving to gold,” tech investor and former Coinbase chief technology officer Balaji Srinivasan posted to X, pointing to what the Fed says is a “small group” that “represents 3 billion people. So 37.5% of the world is moving away from dollars towards gold.”

This helps to provide some explanation for the steady and continuous increases in the price of gold over the last 18 months. While the price of the shiny metal goes up and down based on global activity and futures trading, physical gold continues to move from the West to the East.

Buyers in the Shanghai Exchange are paying a higher premium for gold, which is driving up prices in the New York and London and brokers make a commission on the arbitration of buy/sell spreads between markets.

China

China’s central bank, the PBOC, has been the largest buyer of gold in recent years, topping 2,235 tons at the end of 2023. According to reports from the Gold Council, the bank has continued its buying levels at a steady pace this year. Analysts expect the bank to continue to drive demand for central bank gold throughout other member nations. Roughly 4.3% of the nation’s official foreign exchange reserves are held entirely in gold.

India

In recent weeks, the Reserve Bank of India, RBI, transferred more than 100 tons of gold from London to be stored in vaults inside the country. However, the country’s consumers are already represent one of the largest group of buyers in the world.

In India, gold holds a significant cultural, religious, and economic value. It’s most common form is in the form of 22-karat gold jewelry. It is considered a symbol of wealth, power, and status, and is often passed down through generations as a form of inheritance and also for financial security and stability. Many families invest in gold as a means of saving and wealth preservation

Russia

Despite the sanctions targeting its financial system, oil sector, and individual oligarchs, Russia has managed to maintain economic growth.

The Russian economy grew by 3.6% in 2023 and is projected to grow another 2.6% in 2024. This growth is partially attributed to the country’s strategic response to sanctions, including the pegging of its currency, the ruble, to gold.

Russia is now the second largest producer of gold, second to China. Mines in the country produced 324.7 tons of gold in 2023, with it expected to increase production capacity over the coming years.

Turkey

Turkey led central bank gold buying in April, adding 33 tons to their reserves. In 2021, Turkey began a policy that allows commercial banks to accept gold deposits and use them to meet reserve requirements. This has led to a significant increase in gold demand in Turkey.

The country is the 5th largest gold market in the world and stands out with a long tradition of gold demand underpinned by a deep cultural heritage. Not only does gold play an important role in weddings and other aspects of religious life, generations of Turkish savers have turned to gold as an effective hedge against the ravages of inflation and currency weakness.

The BRICS Alliance Pushing Dedollarization

The BRICS countries continue to wage economic war against the Western economies, promoting dedollarization through various initiatives.

The BRICS alliance is pushing dedollarization through various initiatives. One of the most significant steps is the creation of a common currency, which is expected to be unveiled at the 2024 BRICS Annual Summit in October. This aims to reduce the dominance of the US dollar in international trade.

In 2024, several countries officially joined the BRICS alliance. These include Saudi Arabia, along with four other nations. The Saudi membership was due to start on January 1, but there was a delay before it was confirmed.

More than two dozen countries have expressed their desire to join, and 97 countries have confirmed their participation in the BRICS 2024 Games in Russia.

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House of Representatives Passes Bill to Block CBDC

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cbdc blockchain for tracking gold bars

The CBDC Anti-Surveillance State Act was introduced in September 2023 by House Majority Whip Representative Tom Emmer of Minnesota. This week, the House passed the bill 216 to 192, with 213 Republicans voting in favor. Three Democrats voted for the bill, while 192 Democrats opposed it.

Emmers introduce the bill as a way to halt the efforts of unelected bureaucrats in Washington, D.C. from issuing a central bank digital currency (CBDC) that dismantles Americans’ right to financial privacy. The bill was supported by 50 original cosponsors.

An press release from Whip Emmers office when the bill was introduced says:

“The administration has made it clear: President Biden is willing to compromise the American people’s right to financial privacy for a surveillance-style CBDC. That’s why I’m reintroducing my landmark legislation to put a check on unelected bureaucrats and ensure the United States’ digital currency policy upholds our values of privacy, individual sovereignty, and free-market competitiveness,” Whip Emmer said.

“If not designed to be open, permissionless, and private – emulating cash – a government-issued CBDC is nothing more than a CCP-style surveillance tool that would be used to undermine the American way of life,” Whip Emmer concluded.

CBDCs, or Central Bank Digital Currencies, are digital forms of a country’s fiat currency, issued, regulated and centralized by the respective central bank. They aim to provide a digital alternative to physical cash and traditional banking systems, with the potential to improve financial inclusion and streamline transactions.

The main differences between CBDCs and cryptocurrencies lie in their control and governance. CBDCs are centralized, meaning they are issued and regulated by a central authority, typically a country’s central bank.

In contrast, cryptocurrencies like Bitcoin are decentralized, operating on a distributed ledger technology called blockchain, without any central authority controlling them.

The controversy around CBDCs primarily revolves around concerns about privacy and government control. Since CBDCs are centralized and programmable, they could allow the government to monitor and control financial transactions, including rules that allow you to only spend your money at stores the government approves of and which products and services that you are allowed to pay for with your money

Critics and citizens argue that this level of control will likely be used to suppress financial freedom and impose restrictions on individuals’ economic activities, in much the same way that economic sanctions are imposed on foreign countries that go against US Government policies.

Federal Reserve’s Position

In the United States, the Federal Reserve has served in the role of central bank since 1913. In recent years, the Fed has issued a variety of white papers, hosted working groups as well as launching pilot CBDC projects with a variety of existing banking institutions.

In March, Fed Chairman Jerome Powell told Congress and news outlets that they are “nowhere near recommending, let alone adopting” a CBDC. Adding that if they were to implement a CBDC, that it would be done directly through the nation’s banking system.

This bill aims to curb the powers of the Federal Reserve by blocking their ability to implement a CBDC.

In the first part of last year, lawmakers in Indiana, Florida and Alabama passed legislation that would ban the implementation and use of CBDCs inside their states.

Since then, 11 additional states have similar pending legislation that aims to prevent the Federal government from implementing a CBDC due to the inherent privacy issues.

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Congressman Introduces Legislation to Abolish the Federal Reserve

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Representative Thomas Massie of West Virginia announced the introduction of a new bill, Federal Reserve Board Abolition Act (H.R. 8421) to repeal the Federal Reserve Act of 1913, which would put an end to the Federal Reserve.

In a press release linked from his post on X, formerly Twitter, Massie blames the Federal Reserve for creating the current economic crisis consisting of record high inflation, compounded with ongoing high interest rates.

“Americans are suffering under crippling inflation, and the Federal Reserve is to blame,” said Rep. Massie. “During COVID, the Federal Reserve created trillions of dollars out of thin air and loaned it to the Treasury Department to enable unprecedented deficit spending. By monetizing the debt, the Federal Reserve devalued the dollar and enabled free money policies that caused the high inflation we see today.”

“Monetizing debt is a closely coordinated effort between the White House, Federal Reserve, Treasury Department, Congress, Big Banks, and Wall Street,” Rep. Massie continued. “Through this process, retirees see their savings evaporate due to the actions of a central bank pursuing inflationary policies that benefit the wealthy and connected. If we really want to reduce inflation, the most effective policy is to end the Federal Reserve.”

The bill includes a list of twenty co-sponsors.

The day before, Massie ran a poll on his X.com account, asking his followers “Should I introduce a bill to abolish the Federal Reserve?”. With more than 100,000 respondents, the results shows more than 86.6% of poll respondents choosing in favor of Ending the Fed.

In 2023, Massie re-introduced the Federal Reserve Transparency Act, which is intended to audit the Federal Reserve, which is a semi-public, semi-private organization that manages the country’s financial and banking system. The audit the Fed bill was originally introduced by former Representative Ron Paul (R-TX) in 2009.

Polling in 2013 showed that 74% of Americans support auditing the Federal Reserve, including it’s decisions and financing.

The Federal Reserve was established following the passing of Federal Reserve Act of 1913 on December 23, 1913 while most of Congress was already away for the Christmas and New Year’s holiday. President Woodrow Wilson signed the bill into law on the same day.

Creation of the Federal Reserve

Following a series of banking crises and bank runs that happened during the late 19th and early 20th centuries caused by a fragmented banking system, a group of bankers and politicians held a secret meeting at Jekyll Island, Georgia in 1910 to devise the plan to force a central banking system on the populace.

Citizens at the time were skeptical and very much against the creation of a central bank. The United States had previous attempted to implement a central bank twice.

The first Bank of the United States was in place from 1791-1811 and the second Bank of the United States from 1816 until 1836. Each lasting only 20 years, President Andrew Jackson, who opposed renewing the charter of the second US central bank, famously referred to it as “a den of vipers and thieves”.

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What was Roosevelt’s Executive Order 6102?

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When Franklin Roosevelt was elected in 1932, public confidence in and support for the nation’s banking system were at an all-time low. Roosevelt’s campaign capitalized on Hoover’s failings and promised a new approach to the economic crisis.

During the banking panics of 1930, 1931, and 1933, the Federal Reserve failed to provide adequate liquidity to struggling banks. This inaction led to numerous bank failures and a significant reduction in the overall money supply as people hoarded gold coins at home.

Just one day after taking office, Roosevelt declared war on ordinary American citizens by referencing an old World War I statute called the “Trading With The Enemy Act” of 1917. He declared a four-day bank holiday and closed all banks, including the Federal Reserve.

A few days later, the Emergency Banking Act was signed into law, which gave Roosevelt unprecedented power and control over the economy.

Just a month later, Roosevelt signed Executive Order 6102 mandating that all American citizens hand over their gold, including bullion, coins, and other forms, to the US Treasury.

Public Response to EO 6102

During his “fireside chats,” Roosevelt portrayed gold confiscation as a patriotic duty, suggesting that citizens should support the government’s efforts to revive the economy.

Under threat of prosecution from the Federal Government, millions of ordinary citizens were forced to hand over their gold or go to jail. In exchange, the government “generously” compensated people at the mandated gold price of $20.67 per ounce.

The executive order immediately ordered the US Mint to destroy all newly minted 1933 gold coins, except twenty coins, which were documented to have been stolen.

Citizens were allowed to keep a nominal amount of gold, up to $100 worth of gold. That was the equivalent of just five $20 St-Gaudens Double Eagle Gold Coins in those days. Today, those five coins are worth more than $12,000.

After the order, the US effectively went off the gold standard and allowed the Federal Reserve to increase the money supply by printing more fiat currency. Just thirty years after establishing the Federal Reserve in 1913, Roosevelt signed over control of the economy to a cartel of bankers who profited from the debt created by the government.

Exceptions to the Gold Confiscation

The exception allowed citizens to own small gold jewelry and up to $100 in gold coins.

Scott’s Stamp & Coin Company Advertisement from April 1934

There were exceptions for gold coins, such as collector coins, those with numismatic value, and those that were rare or unusual.

A 1934 issue of The Coin Collector’s Journal featured an advertisement for a local coin shop in New York City that sold uncirculated $2.50 quarter eagle gold coins from the 1920s for $4.50, a 180% premium.

Other denominations show similar premiums due to the dollar’s devaluation, which increased the price of gold from $20 to $35 per ounce.

Many investors looking for the stability of gold became coin collectors practically overnight. In addition to maintaining their intrinsic value today, these gold coins carry cultural heritage and historical significance. Americans during that time understood the actual value of gold.

In today’s market, it is common to find inexpensive Pre-1933 gold coins at bullion prices that may have an added jewelry clasp. This became a common way for citizens to continue to hoard gold. These bullion coins often have lower premiums and can be a cheaper option when compared with graded collectibles.

One of a Kind 1933 Saint-Gauden’s $20 Double Eagle Gold Coin

One of the stolen coins was sold to King Farouk of Egypt. It was lost for decades before being turned over to the FBI by a coin dealer from London named Steven Fenton in 1996.

The one-of-a-kind 1933 Saint-Gauden’s $20 Double Eagle gold coin eventually became legalized. It was first auctioned by Sotheby’s in 2002 and purchased by shoe designer Stuart Weitzman. The coin hit the auction block again in 2021, fetching over $18,000,000.

Legal Challenges Against Executive Order 6102

Executive Order 6102 faced several legal challenges based on its constitutionality and the forced seizure of private gold.

The most notable case is Norman v. Baltimore & Ohio Railroad Co. (1935), which reached the U.S. Supreme Court.

This case and Perry v. United States revolved around gold clauses in contracts. These clauses stipulated that the government was required to repay the bond in gold or the equivalent value of gold coin, which was standard practice in many contracts before 1933.

Perry v. United States involved a U.S. government bond with a gold clause. The bondholder, Mr. Perry, argued that the government had failed to uphold the bond terms by not repaying it in gold, as promised.

After Executive Order 6102, Congress passed the Joint Resolution of June 5, 1933, to address these clauses by declaring them null and void.

The government argued that gold clauses significantly threatened the nation’s recovery efforts during the Great Depression.

Supreme Court Ruling on Executive Order 6102

The Supreme Court agreed that, while the government had technically violated the terms of the contract by not paying in gold, the bondholder had not suffered any actual damages because the bond’s value remained the same in dollars.

The Court upheld the government’s action, ruling that Congress had the constitutional authority to regulate the currency under the Commerce Clause and that abandoning the gold standard was necessary for economic recovery.

This ruling allowed the government to continue printing money without being constrained by the need to redeem it in gold.

Conclusion

The legal challenges to Executive Order 6102 were significant, as they questioned the federal government’s ability to seize private property and regulate the monetary system during an economic emergency. Although these challenges raised valid constitutional concerns, particularly regarding property rights and contractual obligations, the U.S. Supreme Court consistently upheld the government’s actions. The Court’s decisions in cases like Norman v. Baltimore & Ohio Railroad Co. and Perry v. United States solidified the government’s authority to regulate currency, invalidate gold clauses, and move away from the gold standard, ultimately allowing for more flexible monetary policies to support economic recovery.

After Executive Order 6102, the U.S. government invalidated all gold clauses in contracts, effectively making it impossible to demand repayment in gold or its equivalent value. The Supreme Court upheld the government’s action, ruling that Congress had the constitutional authority to regulate the currency under the Commerce Clause and that the abandonment of the gold standard was a necessary measure for economic recovery.

While these challenges did not overturn the executive order, they raised significant questions about the limits of government power during times of economic crisis.

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Visualizing the Commercial Real Estate Crisis

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In his testimony before the Senate Banking Committee, Federal Reserve Chairman Jerome Powell told Senators that there will be bank failures resulting from the commercial real estate crisis.

Recently, the folks at Visual Capitalist brought to life a report published by UBS Bank in February 2024 that shows a breakdown that shows which of the country’s banks have the greatest exposure in the commercial real estate sector.

It should be no surprise that the nation’s largest bank, JP Morgan Chase, sits at the top of the list with over $171 billion in commercial real estate loans, roughly 12.6% of their total loans and leases.

New York Community Bank (NYCB), the most recent bank to fail, reportedly held 57% commercial real estate loans.

There are some mid-size banks that are holding a significant share of commercial mortgages, which may be the ones Powell was referring to in his testimony to Congress.

In recent years, Well Fargo has paid more than $3.7 billion in fines in recent years for illegally creating new accounts for customers and other violations. Wells Fargo is holding around 21% of their loan portfolio in CRE.

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New Catalyst $10 bill expected in 2026

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It’s been more than ten years since then US Treasury Secretary Jacob Lew announced a new project to redesign the nations currency, beginning with the $10 note.

At the time of the announcement, the designs for the new $10 bills were expected to be released in 2020 to correlate with the 100th anniversary of 19th Amendment, which granted women the right to vote.

For a while, the proposals were circulating in the media that a woman would be featured in the design. However, it was announced in 2016 that Alexander Hamilton would continue to appear on the $10 bill, due in part to his sudden resurgence in popularity due to the Broadway musical. That led to discussions of potentially Harriet Tubman being featured on the $20 note, but that movement seems to be flailing at the moment and the replacement for that is not expected until 2030.

While millions in taxpayer funds has been spent on research and development of new security features, along with the implementation of new intaglio printing processes, no prospective designs have been released to the public.

The USDebtClock has recently included some suggestions in their secret messages regarding what they think a gold-backed sound money currency design might look like.

Much of the official information comes from court filings, reported by Coin World, that are part of an ongoing lawsuit against the Bureau from Women On 20s, an advocacy group for the visual impaired.

A scant amount of information can be gleamed from some of the Annual Reports issued by the Bureau

Recently, in the 2024 Federal Reserve Note Print Order includes a note indicating the need to allocate resources to achieve to meet the 2026 issuance of the new Catalyst $10 bill. With production of the new currency note expected to begin in 2025. The same notes related to resource allocation was also included in the 2023 Print Order.

The selection of the $10 note for redesign was determined by the Advanced Counterfeit Deterrence (ACD) Steering Committee, which is comprised of stakeholders from Treasury, BEP, the Federal Reserve Board, the Federal Reserve System and the U.S. Secret Service.

iBill Currency Reader

The new $10 bill will include new tactile features for improved usability for the blind and visually impaired. This is in addition to other features such as larger, high-contract numerals, new currency readers and mobile applications.

New $10 Bill Design

It has been ten years since this project was first announced, and so far, no prospective designs have been released to the public.

In 2017, the Bureau of Engraving and Printing released an updated on the Catalyst $10 project in the Chief Financial Officers Performance and Accountability Report.

“…the first note of the family of notes, currently known as the Catalyst $10, entered the BDP concept phase while the test note completed the BDP development phase. Family design activities, Project Salt, commenced by defining low-fidelity and exploring Catalyst family sub-themes based on the overarching Democracy theme.”

The BDP is an acronym for the Banknote Development Process, which is part of the Technology Development Process (TDP), which is responsible for governing research, development and maturation of security and other features to be incorporated into new currency designs.

In 2021, the Annual Financial Report from the BEP included a brief status update on Project Catalyst, indicating that work had already complete on a Pilot of a new design:

“to include two new public security features, …a raised tactile feature, a low vision feature to support individuals with visual impairments, and a new face portrait and back vignette.”

The BEP reportedly has begun feasibility trials using the intaglio printing process to apply the new Raised Tactile Feel (RTF). These machines are capable of printing currency notes at speeds of up to 10,000 sheets per hour, with 32 or 50 notes per sheet.

So far, the project duration without any public preview of prospective designs, along with the litany of three letter acronyms, are both indicators that one or more large teams of consultants are involved in the project, with taxpayers footing the bill for hundreds per hour for each consultant.

Although the prospective designs remain secret, the release schedule for a new $10 bill is expected in 2026, with the $50 bill following in 2028 and the $20 bill in 2030. Further down the line, a new $5 is expected before 2035. A redesigned $100 note is expected before 2038. With no plans for a redesign of the $1 or $2 notes, it’s highly likely that those will be replaced with $ 1 and $2 coins.

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US Government Debt now over $33.88 Trillion, USDebtClock.org

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Earlier this year, the US Government hit a new milestone. The amount of government debt in the United States has grown to exceed $33.88 Trillion as a result of overspending by elected officials. The growing U.S. government debt is a complex issue with significant implications for American citizens and taxpayers.

This is a significant issue effecting all American taxpayers, whether they realize it or not.

A higher national debt leads to higher taxes in the future. As the government needs to bring in more revenue to service its debt. This leads directly to increasing taxes, pushing the financial burden on citizens and businesses.

A significant portion of the government’s budget goes towards interest payments on the debt. These payments consume resources that could otherwise be used for public services, infrastructure, education, or healthcare.

To manage high levels of debt, the government has resorted to printing more money in recent years, which has directly caused the inflation that we feel today. Inflation diminishes our purchasing power, causing dramatic increase in everyday living costs.

High debt levels also hamper economic growth. Increased government borrowing leads to higher interest rates, making it more expensive for consumers and businesses to borrow and invest, potentially slowing down economic activities.

US Debt Clock

As more of the government’s budget is allocated to servicing the debt, there is less money available for other spending priorities like social security, welfare programs, infrastructure, and education.

A heavily indebted nation finds its global economic and political influence quickly diminishing. This has been happening throughout the world, as many nations join the BRICS initiative, moving towards a universal gold-backed currency and away from the dollar for international trade and oil. The US is likely to face additional constraints for defense funding, compromising national security measures.

Escalating debt also affects investor confidence. Many already see the debt as unsustainable, which has led to increased yields on government bonds, further exacerbating the debt problem.

Despite all the efforts to stimulate the economy during the last few years, the financial stability of the country has been on a downward trajectory, according to leading economists. High debt levels make the country more vulnerable to financial crises and recession. The Federal Reserve continues the struggle to reach the goal of sub-2% inflation target, while repeatedly raising interested rates to levels not seen in decades. The government’s ability to stimulate the economy through additional spending is limited if it’s already heavily indebted.

Younger generations today are already limited in their ability to buy a house, caused by a combination of the housing bubble and high interest rates. Future generations will shoulder the additional burden with the responsibility of paying off the debt incurred today.

A significant portion of U.S. debt is held by foreign entities. This dependence creates complex international dynamics and potential vulnerabilities, particularly as geopolitical relationships shift.