GOLD MAKES A NEW ALL TIME CLOSING HIGH: NOBODY HERE NOTICES

 

Gold continues to climb.  It's moved up over 100 dollars since the debate.  But all we can talk about is our domestic political situation - which is leading us to ruin,,,,  And not one person in a million can see it...

Why?

Gold loves the move towards autocracy.

Gold loves Tarrifs and trade wars.

Gold loves mass deportations that will devastate the suppy of labor in a country with a dangerously declining birth rate.

Gold loves tax cuts for the wealthy that lead to massive deficits.

Gold loves - more than anything elrse - the idea of a dependent Fed that will drop rates back to Zero on the orders of the President/Autocrat.

America thinks a Strong Man leader witll lead the county back to Prosperity.

We can't wait.

But look at the other countries with strong man leaders:

Some people think Hitler was good for Germany.  But Germany was devastated and didn't recover for 50 years.

Just look at Orban in Hungary.  Hungary is mired in a perma-recession with out of control inflation - that has moderated a bit from last year's 17 percent but is still decimating the middle class - or whatever's left of it.  True you don't have to worry about Ttrans-sexual athletes auditioning for school sports teams.  So if you care more about that than eating you're set.  Otherwise, it's a disaster.

Look at Putin in Russia.  Russia suffers from peremanent Stagflation and a decimated middle class.  Its offical growth rate is temporarily jacked by the wartime economy but life there is miserable - unless you are an Oligarch.  The young and educated are fleeing the country in droves. 

China, on the other hand,  is an animal we don't understand.  They are autocratic but the autocracy is committed to developing a free market economy - that is tighly regulated so that the top 5 percent can't fleece the bottom 95 percent.  This idea is so foreign to Western thought it's no good even trying to analyze it.  Over many years they may succeed.  For right now, suffice it to say that they view America as the number one impediment to acheiving their aims.  And they think that by de-dollarizing the world they will achieve financial dominance.

So far we are doing everything in our power to help them.

And the number one weapon we use to Help China is by weaponizing the dollar thus stoking inflation at home and encouraging de-dollarization abroad.

Why?

I don't know.  

It's so stupid it beggars belief.

But a lot of Americans seem to view it as a sign of strength

So, go figure...

Or don't figure... just buy gold...

THE US FISCAL HEALTH: NOTHING TO SEE HERE

 

The fact of the US fiscal situation is this: Defense, Entitlements and Interest Payments - three things that only go up - never come down - are now 120 Percent of tax receipts.

Do the math.  

All the difference to pay our obligations and anything discertionary: infrastructure, scientific exploration, disaster relief, war, ANYTHING comes from PRINTING MONEY:

INFLATION.

This is a fact.

This is another fact: nobody running for political office talks about this.  Because nobody has the courage to lose their job over telling the truth: we have to cut our spending.  (and tax cuts is the exact same thing as spending in this environment because they add to the deficit - the last three trillion of tax cuts added three trillion dollars to the deficit and that much more in interest payments.)

Nobody Cares.  Everyone complains.  But nobody is willing to even talk about the real problem. 

In stead, everyone talks about Social Issues, Lefties, Fascists, Socialists, White Supremacists : Fear, Crime, Immigration, Climate Change, Palestine, Abortion, Transgender High School Swimming Scandals, the war on the Bible, Gun Safety, the War on Christmas, Wokeness (whatever the hell that is), the war on Democracy, the war in the middle east, the war with Russia...

Anything but the one thing that really matters to everybody's quality of life - except the billionaire class.

And that is the fact that as our debt soars, our two fiscal choices are INFLATE or DEFAULT.

If we default all asset prices will crash and chaos will ensue. In the Chaos only gold and hard assets you can protect with your guns will survive.  So it is not likely the Govenment will choose to default.

That leaves Institutionlized Global Inflation forever - or at least until  we have a crisis stemming from that fact that nobody can afford anything.

In that scenarion every asset inflates - except bonds - and then as proift margins get crushed, stocks crash,  then as nobody but billionaires and private equity can afford a house, housing crashes,  and  then as everything becomes too expensive - everything crashes but gold.

That is where we are.  That is who we are.  It takes time to unfold.  But as Hemingway said: Gradually - then suddenly.

Prepare yourself.

UNDERSTANDING THE GOLD TRAJECTORY: TRUEFLATION

 

According to a recent study by Scott Golloway:

Boomers entering work force average entry level job adjusted for inflation: $70,000 (1970)

Gen Z entering the work force in the average entry level job $56,000

If that doesn't answer why 80 percent of the populace is angry and hopeless...

Add to that:

Annual cost of college as percent of income:

Boomer: 14 %

Gen Z: 42 %

Home price to income ratio

Boomer: 3X

Gen Z: 7X

Cost of McDonalds hamburger and fries 

Boomer (1970) 35 cents

Cost of McDonalds hamburger and fries

Gen Z: $7.75

And even more recently:

Average mortagage payment 2019: $1100

Average mortgage payment 2024: $2300

Average home cost 2019: $290,000

Average home cost 2024: 420,000

Now take into account that when the Government takes its CPI measurements they exclude everything above (Home prices, Education, Food)

Now take the average ounce of gold in 1970: $253

Average ounce of gold 2024: $2350

Take into account that as the debt levels grow in our economy this trend intensifies.

And the debt levels are growing exponentially.

Now think about the value of Gold in protecting your wealth over time....

UNDERSTANDING GOLD'S TRAJECTORY (and by extension the entire Hard Asset class).

 

Expensive is a psychological determination.

Stable is a psychological determination.

For the last 50 years the United States has gone through periods of relative stability and relative price gyrations.  There was the Viet Nam war and the social unrest surrounding that.  There was the massive inflation of the 1970's and the social unrest surrounding that.

The enormous difference between then and now is the United States was a Creditor Nation with the world's unchallenged reserve currency.  Households did not amass debt.  Corporatioins did not amass debt. The Government was paid for with tax receipts.  And the government was run by relatively well educated serious people who cared about solving probelms. 

Through all the unrest our House was in order.

Even the protesters realized that.  They were angry that solutions they wanted weren't being offered.  But they saw that solutions were possible.

Stable.

Now the United States is a massive debtor nation.  And most of the major central banks of the world are aggressively de-dollarizing.  Led by China, Russia, Iran - but also including Saudi Arabia and other oil producing countries in the Middle East and South America. 

Households are drowning in debt.  80 percent of the country lives paycheck to paycheck, and their kids can't afford college and will never ever be able to afford a house.  And food is too expensive.  Food is shockingly expensive.

Unstable.

And 20 percent of every dollar the Government spends is borrowed  - which means PRINTED and injected into the economy.  And the percentage increases every year.  And the more you print and the less other countries want your debt - the higher inflations soars.

Now when you have social unrest it is expressing an anger born of Hopelessness.  Solutions are not obvious.  Solutions do not even seem possible.   The problems of debt once they reach the point that the debt can never ever be realisitcally paid off - or even paid down - it simply has to be rolled over for ever - mean you have problems that have no solutions.

That can go on for an indeterminate period.  But as you print more and more money to support this unstable structure all the wealth accrues to the top few percent and the everybody else gets ground under the pityless wheels of inflation.

This is a very unstable situation.

And Gold and Hard Assets are the only assets that survive in a massively unstable society.

Right now we are at the point where gold price is just beginning to reflect the Central Bank buying  of China, Russia, India, Iran, Saudi Arabia and others preparing for a period of massive instability.  These are very old societies that remember centuries of prior instability.  It's baked into the psychology.

Here in the US we have been conditioned by 50 years of stability.  The psychology is that of a very young country that has no shared long term memory.

But psychology is strange.  It can flip.  And when it does, it tends to move in the new direction for quite a wbile.

It is just beginning to dawn on Americans that the problems we have are grinding them down in a way that doesn't present any obvious solutions.  The politicians we have now have no interest in solving or even addressing these problems.  They are far more interested in taking advantage of the social rifts that develope from the underlying problems.

All we hear here is invective against fellow citizens who have become our enemies.  That's so much easier than addressing the massive unfunded liabilities.  Or the problems of a predatory financial industry like private equity.  Or our unwillingness to allow large institutions to be responsible for their own losses.

And still many here remain hopeful.  Because we are coming off 50 years of prosperity.  Somehow things will turn around.

But every day that possibility seems more and more remote to many.

At some point Psychology flips. And people become frightened.  And Angry.  They stop spending on crap they don't need while the things they do need become ever more expensive.  And that makes them even more frightened.  And Angrier.

If you think that the last vestiges of hope are born of realistic possibility for solutions then the gold price would be a blip to be ingored.

If you think that hope is misplaced and the problems we have will get worse for quite a while before serious people come in and try to address them - then gold and hard assets will go much much higher than they are now.

Simple as that.  

AN EXCELLENT POLITICAL BACKDROP FOR GOLD

 

Right after the debates the yeild on the 10 year notes soared over 200 basis points.  Evidently the message to the bond market was that neither candidate is at all concerned with bringing down inflation.  Though gold is temporarily consolidating the movement in the long bond should be read as extremely beneficial long term for gold.

Then today July 1st, the Supreme Court handed down a decision that is should be the coffin nail for the dollar as reserve currency when they transferred all the power from the judiciary - which is in charge of settling international conract law, to the  President = who can now settle all international currency policy by fiat.  

The ten year note reacted by jumping another 100 basis points! 

Why:

This means that the President alone has final word on who to sanction, who should pay tarrifs and in what amount, and who should suffer confiscations.  He need not consult any other branch of Government as he is no longer bound by laws or conventions.

This is a tremendous development for Gold as it takes away the final support for the the dollar as an international settlement currency - or the world's reserve currency.

The dollar has already become unattractively loaded down with debt, with both candidates pledging to increase debt exponentially, 

But now the US Judicial system has now been sufficiently gutted so that the President is first, last and final arbiter of how the dollar will be used as a weapon going forwards.

Both candidates have already demonstrated their love of weaponizing the dollar.  Now they have unlimited power to do so.

This makes the dollar that much more unattractive to Global Central Banks.

Over the next few years this is the most excellent news Gold could have ever hoped for.

SEASONAL GOLD

 

Seasonally, gold peforms as it does because of the Chinese and Indian wedding and festival seasons which provide a massive support of physical gold buying,

There are all sorts of charts you can look up but the one above provides a pretty good summation of stronger and weaker periods for gold - based heavily on the Chineses and India physical gold buying seasons.  That's about 3/8th's of the world's population that stores its wealth and passes it along from generation to generation in thre form of gold.

You can simplify this down to say that Feb thorugh June and into early July is the traditional weaker period.  August through January is the tradtional strong period.

Beyond this there is the eight year cycle with three strong up years and 5 down years that many technical analysts follow.  The beginning of the new technical up cycle is January of 2025.  Some eminent technicians like McClellan believe the yearly parameters are worth sticking to, others like Zulauf believe the upcycle has already begun here in 2024 and that it can last more than three years.

Obviously we've been in a strong upcycle since oct of 2023 and a pronounced upcycle since January of 2016.  And an overall upcycle since 2001 - and a permanent upcycle since Nixon took us off the gold standard in 1971.  Long term charts bear all of this out.

There are many secular factors that outweigh the Eastern festivsal and marriage buying season that affect these cycles.

First and foremost, without the gold standard the US has been free to churn out as much debt as it wants as it can always be paid back with printed dollars.

But a slew of secualr developments have had a huge effect on the gold price more recently.

Among them:

1. Central Bank buying has shifted heavily away from US dollars and towards gold especially in the last few yars.  This is because of A) the massive buildup of dollar denominated debt and B) the weaponizaion of the dollar through Tarrifs, Sanctions, and Confiscations.

2. Gobal Inflation fears which have exploded in about 2016 and went into overdrive after covid.

3. Faith in integrity, fairness, and competence of major Dollar/Euro/Yen driven governements that dominate western economy.

4. Fears of war, trade war and violence fueled by income inequality and the morally bankrupt demagogues seaking to profit from this inequality which has led the United States to the brink of civil war, while hot wars rage throughout the Middle East and Eastern Europe.

5. De-globalization which is a highly inflationary secular movement bound to last decades.

All of these trends are intensifying by the minute. 

But when you add these trends to a technical backdrop which is shifting powerfully to the advantage of gold and a coming commodity supercycle and you get the potential for a powerful upward move in the price of gold that could/should last at least through 2028.

Technically the better season is about to begin for gold after perhaps one more selloff to scare the weak holders out of their positions.

So you get the Eastern buying season somtime this fall and that coincides with the most extraodinarily incendiary election season since the 19th century with two of the most unpopular and underqualified candidates in the history of elections,

This  coincides with the beginning of the powerful 8 year technical upcycle in gold.

And add to this the most technically overbought stock market in history which can provide little competition for the hard assets market.

And you get perhaps the most powerful support for an upward gold move in our lifetime.

Of course, all of this could fail and gold could fall.  Nothing is certain in life.  

But the current odds are really in the favor of the gold buyer

GOLD and the RARE COIN MARKET: Market report

 

A ‘Petition Crown’ of Charles II has been sold for CHF 949,375 ($1 million) to become the most expensive British silver coin ever sold at auction. The coin was included in a joint sale on May 8, 2024, by Numismatica Ars Classica, Classical Numismatic Group and Numismatica Genevensis 

The rare coin market - like the gold market - is being dominated by the Eastern countries.  Japan and China have both become voracious buyers of high grade ancient and European Rare coins and medallions. 

The US rare coin market it dominated by US buyers - as always.  But the Ancient and European markets - especially the coins of Great Britain in high grade has been very hot for over three years  now, principally because of Eastern Buyers.

Amercans have been moving into Ancients too.  But they have been quite slow to pick up on the the hot European areas which right now include (but are not limited to):

Gold Coronation medals: British, French, German, Holy Roman, 

Gold 5 guinea and 5 pound pieces.

Gold Triple Unites.

Silver  Victoria Gothic Crowns

British and French proof coinage and essais.

Any coins of particular rarity and beauty like the British Petition Crown.

Large Gold medals, Salvator Mundi medals, Bank Portugalosers, multiple ducats of the German Kings and Holy Roman Emperors.

Italian presentation multiples.

in Ancients the popular areas right now are:

Gold Alexander Staters

Gold Kroisos Staters

Gold Oktodrachms 

Large gold and silver pieces of Arsinoe.

Gold Julius Caesar Aurei

Very High grade gold and silver 12 Caesar coins.

Silver Decadrachms.  Especially of Kimon.

High Grade Signed Tetradrachms - especially of Eukliedes.

These are only some of the hottest areas.  Right now the emphasis is on technical grades.  The temptation - especially for novices - is to buy the holder rather than the coin.

The holder is an excellent starting point.  But when dealing especially with ancients the holder will tell you very little about the long term value of a coin which is also dependent on Beauty, Rarity, and Historical Importance.  And the the holder can shed little light on these attributes.  Nor is it supposed to.   It supports authenticity and state of preservation - both crucial starting points.  So Ancients is still an area for experts - or at least those who have put some time into study.

On machine made modern and early modern coins the holder is more instructive, as coins tend to be more uniform.  But and MS61 gold coronation medal maybe 61 because of an invisible rim knock and some light cleaning marks that can hardly be seen when you turn the medal in the light - or perhaps it is MS61 because of some nasty marks right on the King or Queen's face.  It makes a difference to many collectors.  Some 61's are quite attractive.  Some 58's are quite attractive.  Some are not.

And as always, the best opportunities are in coins and medals of great rarity, beauty and historical importance that have not yet found wide popularity.  Because over time what is popular shifts.  

What is historically important does not.