My followers know I follow central bank movements closely. Their interest rate policies affect us and our lives and everyone should be paying close attention. That's why, whenever I see yet another central bank mirroring another central bank's moves, I feel the need to report on it. They're all independent they claim, so why are they always behaving like they are all identical? Well, this morning, the second oldest central bank in the world (Founded 1694), did just that.

Following in lock step with yesterday's FED announcement of a 50 basis point rate hike and the Bank of Canada doing the same last week, early this morning we got word that the Bank of England has added another 50 basis points to their key lending rates.

According to an article published on Zero Hedge, this is the ninth increase in a row, now at 3.5% and is at a 14 year high (highest since Nov. 2008). Another thing to note is that the bank signaled the U.K. is now officially in a recession. The article goes on to add that the bank's board of governors were more divided on their decision than when they last raised rates 2 months ago. Two of them had called for no change while one called for a 75 basis point hike while 6 recommended a 50 point hike. Yet, inflation remains some 5 times higher than their projected 2% inflation rate. There's more in the article which can be read by clicking here.

Did someone say RECESSION?

I expect the USA and Canada to officially go into recession in January after the numbers for the last quarter ending December 31 are published. The increase in borrowing rates literally guarantees this. I feel sorry for those who are renewing their mortgages in the new year as I expect a few more rate increases throughout 2023. The central banks themselves are confirming this in their own wording. 

Hint: Now is not a good time to be borrowing money.

After yesterday's FED announcement, gold hardly moved. In yesterday's post, 'FED increases rates by 50 points', I noted how gold hardly reacted to the rate increase but then look what happened overnight.

England is 5 to 6 hours ahead of us as far as when their exchanges come online. I expected gold to come down a bit overnight as Asia reacted to the FED rate increase. I expected a brief selloff to cover losses from weakened Asian currencies. On a related note, some $3 billion worth of crypto was withdrawn from the Binance exchange in the last couple of days, as reported by CryptoNews yesterday. Great timing!

I expect the gold selloff to be brief as it is mostly on paper, Real gold purchases are actually robust at the moment with the biggest buyers of late being.... you guessed it, central banks. In fact, China just admitted to being the recent mystery buyer of 32 tons of gold. They rarely admit to anything so this was a big surprise.

Heading into the holidays, I expect gold and silver to do well. Buying a silver coin and placing into someone's Christmas stocking would make an excellent gift. I've given silver bars away as gifts for Christmas, birthdays and retirement celebrations and every time, I saw a big smile on their faces. It's a gift that can come in handy later on if / when the $#@T hits the fan.

Looks like that time has finally arrived!

Peace and Love to everyone.

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