Chip makers and tech investors such as Samsung and SoftBank plunge as potential interest rate hikes spook markets
  • inari@piefed.zipEnglish
    20 hours

    This seems to be the proximate cause:

    The sell-off came after US data on Wednesday showed stateside inflation jumped to a higher-than-expected 3.7% in September, marking the fastest increase in prices since the consumer price index (CPI) rate hit a three-year peak of 4.2% in May.

    Fresh data on Thursday showing US producers increased their prices by 6.3% year on year in September – the sharpest rise since December 2022 – added to inflationary jitters.

    The figures have rattled investors who are now expecting fresh interest rate increases by the US Federal Reserve, with some punters pricing in another increase as soon as the end of the month.

    It seems that investors are worried AI debt will be even more difficult to pay off once the Fed jacks up interest rates

    • peopleproblems@lemmy.worldEnglish
      17 hours

      Well, yeah. It’s usually not the principal that gets out of hand anyway. It’s always the interest that gets ya.

  • Ninja876@lemmy.worldEnglish
    21 hours

    Funny I’m not “seeing” this in the PM’s markets. In fact silver right now is about the lowest I have seen in ages, fighting off the idea of buying some Au/Ag.

    EDIT:

    But in the spirit of what I think the AI boom is going to do:

    Pop Goes The Weasel

    • Aceticon@lemmy.dbzer0.comEnglish
      7 hours

      Check it with a 1y or 5y window.

      Both Silver and Gold climbed massively in the last 3 years (though they’ve been steadily climbing since around 2020) and hit a huge peak early this year and then came back down. Now they’re both sitting at roughly were they were at the start of the year.

      IMHO PMs are not really great speculative investments since they’re not all that volatile (though early this year volatility was unusually high) and they’re more mid and long term wealth holding mechanism in the face of Economic problems that hit major currencies making the value of those currencies (and hence all assets denominated in them) go down. It helps that actual physical metals (especially for Gold) are not managed by Governments or Central Banks - you cannot create new Gold beyond the roughly 2% mined per year hence there is no such thing as Gold interest rates so states can’t just make more of it or tweak its long-term returns - hence it cannot be mismanaged, unlike government issued currencies.

      In a long-term perspective it’s not as much that you make money from PMs as it is that everybody else around you is getting poorer because their incomes, savings and assets are in a currency which is losing purchasing power, whilst you managed to retain the purchasing power of your savings.

      From my own experience in the 2008 Crash, expect PMs to first go down as Markets plummet and traders are forced to sell in more stable and liquid assets (such as Gold) to cover margin calls in other areas, and then turn and start climbing fast as the crash hits the broader economy and hence the value of the main currencies (this time around, especially the USD) starts falling meaning that PM prices in those currencies go up.

      Also keep in mind that Silver is very exposed to the status of the broader Economy since it’s mainly used as an industrial metal, so if the Economy slows down, fewer products containing it are made hence demand for it goes down - Gold tends to be more insulated from the broader Economy than Silver.