Israel’s Netanyahu Urges Officials To Ban 200-Shekel Note & ‘Large Amounts of Gold, Silver’
Israel’s Netanyahu Urges Officials To Ban 200-Shekel Note & ‘Large Amounts of Gold, Silver’
Amidst geopolitical tension on multiple fronts, last week Israeli Prime Minister Benjamin Netanyahu urged officials to ban the 200-shekel note, and “large amounts of cash alternatives such as gold and silver medals and coins.”
YNet news reported that the impetus behind the proposal is to fight against ‘black market money,’ and the measures listed include:
Immediate discontinuation of the 200-shekel banknote (the highest denomination of Israeli currency)
Expanding reporting obligations for citizens with income to the tax authorities
Utilizing artificial intelligence to identify tax evaders
Banning the holding of large amounts of cash alternatives, such as gold, silver, medals, and coins.
Specific details have not been released. Although I’m told there’s resistance by the Bank of Israel, and that there are still several significant hurdles that would need to be cleared before becoming law, including getting approval by the Israeli Congress.
Yet given the trend we’ve witnessed towards the war on cash globally, not just in Israel, it’s a disconcerting development, and we’ll report back as more information becomes available (although here is an update from Rafi Farber who is on the ground in Israel).
How Will US Fund A Sovereign Wealth Fund When They’re Running A Deficit?
The New York Times reported that Donald Trump has indicated interest in establishing a sovereign wealth fund for the United States that could be used “to invest in great national endeavors for the benefit of all of the American people.”
The Times also noted that White House senior officials “had been quietly working for months on a proposal for a sovereign wealth fund that Mr. Biden and his cabinet could review.”
But how does a country that’s already $35 trillion in debt and continues to run large annual deficits fund it in any non-inflationary manner?
Even cutting government spending enough to bring the budget into a surplus would have a devastating impact on an economy where government spending already represents over 22% of GDP.
(Courtesy of The St. Louis Fed)
Federal Reserve’s ‘Preferred PCE’ Index Comes In Slightly Lower Than Expected
On Friday the latest PCE price index figures were released, and they rose 0.1% for the month of August, leaving the 12-month PCE at 2.2%. This was versus an expectation of 2.3%, and a July figure that came in at 2.5%.
The 2.2% for August is also the lowest since February of 2021.
Core PCE (excluding food and energy) rose 0.1% in August, and was up 2.7% from a year ago (versus expectations of 0.2% and 2.7% respectively).
Yet aside from whether the PCE index is really an accurate gauge of inflation, the slightly cooler numbers at least feed into the Fed’s narrative that inflation is heading towards its 2% target, and clearing the runway for additional cuts.
Which we will dig into further tomorrow.
Although for now, I do just hope your week is off to a fantastic start. And as always, if you have any questions, just respond to this email and we’ll be happy to help.
thanks for sharing that Vince!