Podcast Summary
Gold prices surge, outpacing S&P 500 growth: Gold prices have risen by 14% this year, surpassing the S&P 500 index's growth. Factors like economic uncertainty, inflation fears, and safe-haven demand are contributing to this trend. The Biden administration's spending plans and the blurring lines between streaming services may also be influencing the market.
The price of gold has seen a significant increase of around 14% this year, outpacing the growth of the S&P 500 index of stocks by about 4%. This could be due to various factors such as economic uncertainty, inflation fears, and safe-haven demand. Additionally, the Biden administration is attempting to spend a substantial amount of money before the elections, and streaming services are starting to blend together in the market. These are just a few of the interesting economic stories making headlines this week. If you want to stay informed on the latest economic news and insights, consider subscribing to Planet Money's newsletter.
Central banks and institutional investors buying gold at an unprecedented rate: Central banks and institutional investors are buying gold due to falling interest rates and geopolitical uncertainty, contributing to a surge in demand, with central banks holding about a fifth of the world's gold.
Central banks and institutional investors are buying gold at an unprecedented rate, with over 290 metric tons purchased in the first quarter of 2022. This trend is driven by expectations of falling interest rates and geopolitical uncertainty, as investors seek safer alternatives to traditional stores of wealth like US dollars and Treasury bonds. Central banks hold about a fifth of the world's gold, and their purchases are contributing to a surge in demand. While Costco's sales of gold bars may be a tongue-in-cheek observation, the larger trend is significant. With half the world's population set to vote in elections this year, central bankers and investors are turning to gold as a hedge against an uncertain global landscape. Adrian's indicator of the week is 17%.
Biden's Infrastructure Spending Progress: Despite over $1 trillion pledged for infrastructure, only 17% has been spent due to project complexity and political interference risks.
While the Biden administration has passed several major infrastructure bills, totaling over $1 trillion in pledged investments, only about 17% of that money has been spent so far. This is due in part to the complexity of some projects, particularly those related to green energy and US manufacturing. With an election coming up in six months, there's a risk that some of this spending could be slowed or even halted by the opposing candidate. Some infrastructure projects, such as those aimed at replacing lead water pipes and offering tax credits for energy efficient appliances, have seen faster progress. However, larger projects in the areas of green energy and US manufacturing are moving more slowly. For example, a hydrogen energy storage facility in Utah and a semiconductor plant in Arizona have received some funding, but these types of projects are not yet seeing the same level of investment as more straightforward projects. The potential for political interference in the spending process adds an additional layer of uncertainty to the situation.
Politics and Business Intersect: Trump's Clean Energy Policies and Streaming Bundles: Former President Trump may reverse clean energy policies for a billion-dollar fund, while Disney and Warner Brothers Discovery announce a streaming bundle deal, bringing us back to the cable era with three streaming services.
The political landscape and the entertainment industry continue to evolve at a rapid pace. In politics, former President Trump hinted at reversing clean energy policies if he manages to secure a billion-dollar fund. Meanwhile, in entertainment, Disney and Warner Brothers Discovery announced a streaming bundle deal, marking the latest consolidation trend in the industry. This brings us back to the cable era with a bundle of three streaming services - Disney Plus, Hulu, and Max. Streaming services have been around since 2007 when Netflix pivoted from DVD rentals to streaming, sparking a revolution in media consumption. However, with the increasing number of options, only a few have managed to turn a profit. The world of streaming is moving away from live, scheduled programming towards on-demand content, giving consumers the freedom to watch their favorite shows whenever they want. This week's news highlights the intersection of politics and business, with the potential impact on clean energy policies and the entertainment industry's consolidation. The past and the present continue to blend, as we move towards a future where entertainment and politics are more interconnected than ever.
Streaming services team up to offer bundles: Streaming services bundle channels to reduce churn rate and keep consumers entertained with a variety of content
Streaming services are now teaming up to offer bundles of different channels in an effort to keep consumers subscribed. This is a response to the high churn rate in the industry, which didn't exist to the same extent with cable TV when there were only a few providers. The idea is to keep people entertained with a variety of content and reduce the number of subscriptions they need to manage. A newsletter subscription is cheaper than a streaming bundle, but if you're looking for an ad-free listening experience and bonus episodes from NPR shows, consider signing up for the NPR Plus podcast bundle. This episode was produced by Cooper Katz McKim, engineered by Josephine, Neo, Nye, and Sina Lofredo, fact checked by Sierra Juarez, and edited by Kate Kinkin. Support for this show and public media can be found through NPR Plus or from sponsors like Capella University and Saatva. Capella University offers flexible online degree programs, while Saatva sells luxury mattresses online at a lower price than traditional retailers.