STILL WAITING - FOR ANYONE IN THE US TO NOTICE....

 

Gold just closed over $2500.

No unusual geopolitifal event transpired.  (for these turbulent times.)

No unusual economic print.  No unusual interntational economic event (like last week's Japan carry trade fiasco.)

No sudden bunkruptcy (other than the normal parade of  bankruptcy belying this fantastic economy)

Just the normal boring old story of the world drowning in so much debt while no politician is even willing to broach that boring old story.

Meanwhile... Gold broke $2500 in a new closing high and still nobody in the US is noticing.  Still no stock broker at any major brokerage is reccomending a gold exposure.

Still the average portfolio contains a 1/2 percent exposure to gold whereas the long term average is 2 percent and in times of turmoil often reaches 5 percent.   

That's pathetic head in the sand behavior.

And still both candidates, Republican and Democrat are proposing bold new economic plans that promise to boldly increase the debt!

Republican: Tarrifs, Trade war and take rates back to Zero!  (hyperinflation)

Democrat: Price controls, and a general increase in benefits. (stagflation)

Two bold approaches to massive new debt burdens.  (Anyone who thinks either approach is anything but massively inflationary please pull your head out of the sand.)

But there is a good reason:

A) because there is no easy solution.  Every bank in the country including the Fed is bankrupt on mark to market accouting.  The Federal government is in permanent trillion dollar a quarter budget deficit.  And interest rates can not be brought down much lower without restoking the virulent inflation that is now a part of every day life for every American.  And every European.  And every South American   And every Russian, Chinese, Indian etc.  

The only way out is to inflate your way out of debt.

B) because any other real solution would involve massive short term pain, which is political suicide.

But you can not run an economy on a permanent deficit spending regiem without eventually causing virulent inflation - or a virulent debasing of the currency.  Two ways of saying the same thing.

And eventually has become NOW.

Why gold has chosen this exact moment to register an economic consiousness that the debt is out of control is a mystery.

But it has.  

Not to say it's straight up from here right now.

But over time.... it's straight up from here.