A new-ish gold rush and other indicators

Summary

Podcast Summary: The Indicator from Planet Money – "A New-ish Gold Rush and Other Indicators" (Released March 21, 2025)

In the March 21, 2025 episode of The Indicator from Planet Money titled "A New-ish Gold Rush and Other Indicators," hosts Waylon Wong, Mary Childs, and Adrian Ma delve into significant economic and geopolitical developments shaping today’s landscape. This episode intertwines personal narratives with critical economic indicators, offering listeners a comprehensive understanding of current events.

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1. Personal Update: Adrian Ma's Return

The episode opens with a heartfelt welcome to Adrian Ma, who shares a personal tragedy that has affected his recent absence from the show.

Adrian Ma ([00:17]):
"I recently lost somebody that I loved. Her name was Kia Duggans. She was an incredible person. You should actually look her up if you get a chance."

Adrian recounts the loss of his girlfriend, Kia Duggans, in the tragic American Airlines plane crash in January, one of the 67 fatalities. He expresses gratitude for the outpouring of support from listeners during his difficult time.

Adrian Ma ([01:37]):
"During that time, though, I've also gotten a lot of messages from listeners who offered condolences and words of encouragement..."

His openness sets a compassionate tone for the episode, reminding listeners of the human stories behind economic discussions.

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2. Indicator of the Week: Germany's Massive Defense Spending

Waylon Wong introduces the first economic indicator, highlighting a significant shift in Germany's fiscal policy.

Waylon Wong ([03:56]):
"My indicator is 513. That is the number of lawmakers in Germany's lower house that voted to approve huge new defense spending plans."

These plans necessitated a constitutional amendment, requiring a two-thirds majority in Germany’s lower house. The approval of 513 votes marks a historic moment for the country, signifying a major pivot in its defense and infrastructure strategy.

Key Points:

• Scope of Spending: Up to 1 trillion euros allocated towards military modernization and infrastructure enhancements, including hospitals, schools, and roads.
  Waylon Wong ([04:52]):
  "There is talk of up to 1 trillion euros, which honestly is a staggering amount."

• Climate Initiatives: A portion of the budget is designated for climate-related projects, a concession to the Green Party, ensuring bipartisan support.

• Geopolitical Context: Adrian Ma contextualizes the spending amid rising tensions in Europe, particularly concerning the war in Ukraine and apprehensions about Russia.

Adrian Ma ([05:34]):
"The case. It's obviously a huge change to be talking about German rearmament. This is a very sensitive subject."

This substantial increase in defense expenditure reflects Germany's response to the evolving geopolitical landscape and its commitment to NATO alliances.

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3. Indicator of the Week: US Corporate Mergers and Acquisitions Decline

Adrian Ma presents the second indicator, focusing on the slowdown in corporate mergers and acquisitions (M&A) within the United States.

Adrian Ma ([06:18]):
"Turning things to the US my indicator of the week is 894 deals. That is how many corporate mergers and acquisitions were announced in February."

This figure represents the slowest month for deal activity in the US in several years, primarily driven by heightened economic uncertainty.

Factors Influencing the Decline:

• Tariff Policies: President Trump's tariff strategies have introduced significant uncertainty, deterring companies from engaging in large-scale mergers and acquisitions.

  Adrian Ma ([06:44]):
  "A lot of it caused by President Trump's tariff policies."

• Operational Uncertainties: Businesses grappling with decisions such as pricing adjustments and inventory management amid fluctuating tariffs are less inclined to pursue M&A activities.

  Waylon Wong ([07:25]):
  "If you have officials in the Trump administration saying like maybe we'll have a recession. I mean, then you don't want to hire, you don't want to spend money, you don't want to buy a factory."

• Investment Hesitation: The fear of a potential recession and ongoing trade wars contributes to a cautious approach among CEOs, stalling strategic corporate expansions.

Adrian underscores how these uncertainties create a restrictive environment for companies to engage in mergers and acquisitions, impacting overall economic dynamism.

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4. Indicator of the Week: Surge in Gold Prices Amid Market Uncertainty

Mary Childs introduces her indicator, shedding light on the resurgent interest in gold as a safe-haven investment.

Mary Childs ([07:58]):
"My indicator of the week is 3,000. As in dollars, as in that's how much you'll need for one troy ounce of gold."

A troy ounce, an ancient unit of measure for precious metals, has seen its price climb by 14% this year, contrasting sharply with a 10% drop in the stock market since February.

Highlights:

• Historical Performance: Since abandoning the gold standard in 1971, gold has yielded annual returns exceeding 8%, outperforming bonds, commodities, and emerging markets.

  Mary Childs ([09:43]):
  "The fact is, gold delivers. So since we left the gold standard in 1971, gold has somehow generated annual returns of more than 8%, according to the World Gold Council."

• Shift in Buyers: Notably, investors are now outpacing central banks in gold purchases, indicating a broader shift towards gold as a preferred investment.

• Safe Haven Appeal: Amidst economic turbulence and declining stock markets, gold's status as a reliable store of value attracts both individual and institutional investors.

  Adrian Ma ([08:57]):
  "When things are getting a little fearful, gold suddenly becomes a really attractive investment for a lot of people."

• Market Sentiment: The surge in gold investments reflects a lack of confidence in traditional financial markets, prompting a move towards tangible assets like gold.

  Waylon Wong ([10:33]):
  "40 percentage points. That is a wild bonus indicator you just brought us."

Mary recounts a personal anecdote illustrating the real-world impact of this trend, where a taxi driver named David opts to invest in gold amid global instability.

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5. Conclusion and Production Credits

The episode concludes with acknowledgments of the production team and a warm farewell to Mary and Adrian, emphasizing the collaborative effort behind the informative discussions.

Waylon Wong ([10:42]):
"This episode was produced by Angel Carreras. It was engineered by Gilly Moon, who we will miss so much."

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Final Thoughts

This episode of The Indicator from Planet Money skillfully weaves personal narratives with intricate economic indicators, providing listeners with a nuanced understanding of current events. From Germany's unprecedented defense spending to the cautious landscape of US corporate M&As, and the burgeoning interest in gold investments, the hosts offer valuable insights into the forces shaping the global economy.

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Notable Quotes:

• Adrian Ma ([00:19]):
  "I recently lost somebody that I loved. Her name was Kia Duggans."

• Waylon Wong ([03:56]):
  "513 lawmakers in Germany's lower house that voted to approve huge new defense spending plans."

• Mary Childs ([07:58]):
  "That's how much you'll need for one troy ounce of gold."

• Adrian Ma ([06:44]):
  "A lot of it caused by President Trump's tariff policies."

• Mary Childs ([09:43]):
  "Since we left the gold standard in 1971, gold has somehow generated annual returns of more than 8%."

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This comprehensive summary captures the essence of the episode, providing clear sections and direct quotes with timestamps to enhance understanding for those who haven't listened to the podcast.

Transcript

[NPR]

Npr.

[Waylon Wong]

This is the Indicator from Planet Money. I'm Waylon Wong here with married childs from Planet Money. Hi.

[Mary Childs]

Hello.

[Waylon Wong]

And Adrian Ma.

[Adrian Ma]

Hey, there.

[Waylon Wong]

So we are here for our weekly Indicators of the Week segment. And before we get going, we wanted to welcome Adrienne back because you have been away from the show for the past few weeks. And, Adrienne, the floor is yours if you want to say hello and talk about why.

[Adrian Ma]

Yeah, if you listen to npr, you might already know this, but I recently lost somebody that I loved. Her name was Kia Duggans. She was an incredible person. You should actually look her up if you get a chance. Kia was my girlfriend. And unfortunately, she was also one of the 67 people who died in that American Airlines plane crash in January. Needless to say, I have been going through it lately. The past several weeks have been incredibly tough. During that time, though, I've also gotten a lot of messages from listeners who offered condolences and words of encouragement and. And even wanted to share their own stories of loss and what they've learned from it. And so to all the people who reached out and offered words of support, I just want to say thank you, Adrian.

[Mary Childs]

We're glad to have you back.

[Waylon Wong]

Yes, we are with you. And we are. It's really nice to be back in the booth.

[Adrian Ma]

Whew. Thank you. It is good to be back. And apologies in advance if it's a little while until I am my normal self again.

[Mary Childs]

I don't think you have to be funny for, like, a long time.

[Waylon Wong]

No. There's no requirement to feel or act normal.

[Adrian Ma]

Oh, yeah. Okay. Well, in that case, you're just gonna get Goth Adrian for the rest of the year.

[Mary Childs]

Goth Adrian.

[Adrian Ma]

Yeah.

[Mary Childs]

Okay. Emo Adrian, we're here for it.

[Adrian Ma]

Mary, Waylon and Emo Adrian, we're gonna do what we do most Fridays, which is highlight numbers from the news, crack a few jokes, and help people make sense of what's happening in the economy.

[NPR]

Support for this podcast and the following message come from Spectrum Business. Whether it's the shoe design studio one couple runs in North Carolina or the fast growing tutoring company based in Los Angeles, no two businesses are the same. But there are things that help businesses of all sizes run smoothly, like fast, reliable Internet, multi layer security and exceptional service. That's why Spectrum is committed to delivering connectivity solutions for businesses of any size and will help create a plan that's right for you. Whether your business is big or small. The Spectrum commitment is the same. Providing reliable connectivity, exceptional service, and local teams who are there when you need them and they're committed to helping business owners save with flexible pricing. Learn [e-mail] business restrictions apply services not available in all areas. This message comes from Charles Schwab. When it comes to managing your wealth, Schwab gives you more choices like full service, wealth management and advice when you need it. You can also invest on your own and trade on thinkorswim. Visit schwab.com to learn more. This message comes from NPR sponsor Shopify. No idea where to sell? Shopify puts you in control of every sales channel. It is the commerce platform revolutionizing millions of businesses worldwide. Whether you're a garage entrepreneur or IPO ready, Shopify is the only tool you need to start, run and grow your business without the struggle. Once you've reached your audience, Shopify has the Internet's best converting checkout to help you turn them from browsers to buyers. Go to Shopify.com NPR to take your business to the next level today.

[Mary Childs]

Waylon, kick us off with your indicator.

[Waylon Wong]

My indicator is 513. That is the number of lawmakers in Germany's lower house that voted to approve huge new defense spending plans. These plans, you guys are so big they required a change in the constitution to happen. Change in the constitution requires a two thirds majority in the lower house. And these 513 votes, that was enough. It still has to be voted on by the upper house. But it looks like they will also approve.

[Mary Childs]

They're changing the constitution. Is that like an amendment here or is this a bigger deal than that?

[Waylon Wong]

Well, it is a pretty historic moment for Germany. I will say. The country's constitution has something called a debt break. That's B R a K E and it's a limit on borrowing. And what the lawmakers would a yes on was exempting most defense spending from this limit.

[Adrian Ma]

How much are they talking about spending here?

[Waylon Wong]

Well, hold onto your butts. There is talk of up to 1 trillion euros, which honestly a staggering amount. And this will go into military and infrastructure. Like part of these plans is a 500 billion euro fund to modernize hospitals, schools, roads, that kind of thing. A chunk of this fund will also go toward climate related spending. This is something that Germany's Green Party insisted on and the other two political parties, you know, they needed support from the Greens as they're called, to get all of these votes.

[Mary Childs]

Okay. Money for climate, for infrastructure, but also a lot, a lot of money for the military. Right. Because it seems like European defense is a very hot topic right now. Y'all have done a couple Episodes on it.

[Waylon Wong]

We have.

[Adrian Ma]

That's the definition of when it's hot.

[Waylon Wong]

Everybody needs to indicator spent a couple episodes on it. The case. It's obviously a huge change to be talking about German rearmament. This is a very sensitive subject. The country you might remember had to demilitarize after World War II. And then it wasn't until the Cold war in the 50s that it was allowed to build up its military again and join NATO. But you know, we have war in Ukraine, we have nervousness about Russia's moves in Europe. We have rapidly deteriorating relationships between the US and its allies in Europe. So this vote in Germany fits into this bigger geopolitical shift we're seeing. And we'll have more on that in an episode next week.

[Mary Childs]

That's exciting. I can't wait to learn more. Adrian, what do you got?

[Adrian Ma]

Turning things to the US my indicator of the week is 894 deals. That is how many corporate mergers and acquisitions were announced in February. And that makes this past February the slowest month for deal activity in the US in at least a couple of years. And a big reason for this slowdown in corporate matchmaking is uncertainty. A lot of it caused by President Trump's tariff policies.

[Mary Childs]

Yes. It seems pretty obvious we are in a trade war. There's all the back and forth of Mexico and Canada. There's tariffs on China, the European Union, Japan. And the White House is promising more to come.

[Adrian Ma]

Yeah, totally. And this is creating a lot of uncertainties for CEOs about how to run their businesses. Right. Because if you're, if you're a company that imports stuff from other countries, you are probably wondering right now, should I raise the prices of my products to account for those tariffs or should I stock up on a lot more imported stuff before the tariffs go up? So with all these companies trying to navigate these kind of day to day micro business decisions, it's kind of hard for them to think macro.

[Mary Childs]

Right.

[Adrian Ma]

To think about big strategic moves like buying or merging with other companies.

[Waylon Wong]

Yeah. And like if you have officials in the Trump administration saying like maybe we'll have a recession.

[NPR]

Yeah.

[Waylon Wong]

I mean, then you don't want to hire, you don't want to spend money, you don't want to buy a factory.

[Adrian Ma]

Totally. Business uncertainty has all these ripple effects.

[Mary Childs]

Well, Adrian, speaking of business uncertainty rippling. Ooh. My indicator of the week, I'm pleased to announce is 3,000. As in dollars, as in that's how much you'll need for one troy ounce of gold.

[Waylon Wong]

What's a troy ounce? I'VE never known what a Troy.

[Mary Childs]

I know, I know.

[Waylon Wong]

I read it in the news.

[Mary Childs]

I'm so glad you asked, because I did Google it. It is an ancient way from the middle ages that we measure precious metals. And supposedly it originates from Troy, France. So I guess it could be a Troy ounce. It is a little bit more than a normal ounce. It's 31.1 grams for a troy ounce versus 28.35 grams for a regular ounce.

[Waylon Wong]

That's very specific.

[Mary Childs]

The price for gold per troy ounce has risen 14% this year alone.

[Waylon Wong]

That is like the opposite direction as the stock market, which has dropped, I think, like 10% this year.

[Mary Childs]

Yes, it dropped 10% from its peak in February, although it has clawed some of that back. But as you know, and as Adrian just relayed, there is a lot of uncertainty, a lot of fear.

[Adrian Ma]

Of course, you know, when things are getting a little fearful, gold suddenly becomes a really attractive investment for a lot of people. Historically, it's been seen as a safe haven investment.

[Mary Childs]

That's exactly right. And it just so happens that I saw this in real life the other day. So I was coming home from New York, and I took a lift from the train station, and the guy who drove me, his name was David. Super nice guy, David, if you're listen. Hello. He asked what my job was. I told him. He was like, oh, so what do you think of this gold rush?

[Waylon Wong]

He just got right down to business.

[Mary Childs]

He did, because he is out there buying gold. And I'm paraphrasing, but he basically thinks that the world order has been upended, is being upended, governments around the world in upheaval without exception. He wants a store of value. I think part of it is like gold is this traditional and trusted and, you know, ancient way of opting out of financial markets in a way, because. And even if you hold cash, you're still kind of playing in the arena because you got to pick which currency to hold.

[Adrian Ma]

When it comes to holding gold, we're not just talking about individual people like David, right?

[Mary Childs]

No. Yeah. It's not just David alone causing this surge. It is also central. Although I wish that for him, it is also central banks. For years and recently, investors have started outpacing central banks in their gold buying, which is remarkable. And this surprised me. The fact is, gold delivers. So since we left the gold standard in 1971, gold has somehow generated annual returns of more than 8%, according to the World Gold Council. That beats the bond market, commodities, emerging markets, cash, everything but US Stocks, which is salient. Right now because the picture for US Stocks is really changing. Investors cannot flee fast enough. A Bank of America survey this week showed that fund managers have cut their holdings of US equities by the most on record by 40 percentage points.

[Waylon Wong]

40 percentage points. That is a wild bonus indicator you just brought us.

[Mary Childs]

Thank you. More where that came from.

[Waylon Wong]

Well, Mary, thank you so much for joining us today. Always fun to have you.

[Mary Childs]

Thank you for having me. It's always a delight to be here.

[Waylon Wong]

And great to have you back, Adrian.

[Adrian Ma]

Thanks, Waylon.

[Waylon Wong]

This episode was produced by Angel Carreras. It was engineered by Gilly Moon, who we will miss so much. Good luck at your new adventure. Gilly. It was fact checked by Cierra Juarez and edited by Kate Concannon. The indicators of production of NPR Support.

[NPR]

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