THE BIG SELL OFF

 

G0ld has crashed from about $2750 to $2550.

Is it over?  Who knows.

At the start of the year most overly bullish analysts predicted that gold could go as highas $2500 this year before embarking and the real upswing at the beginning of the bullish cycle due to commence in 2025.

So as brutal as this drop has been we're just back to this year's most bullish projections. (By analysts like Felix Zulauf, I mean, not some BOZO on the internet.)

Some "analysts" confuse - as always - correlation with causation when noticing the drop timed with the election.  Then they tried to retrofit explanations like the Trump Pease dividend or the Trump return to American Exceptionalism.

Delude yourself all you like.

Or look at the math.

The tax cut extension will add 5 trillion to the deficit.  Normal operation of the government will add another 2 trillion.  That's without mass deportations that should add at the least another trillion.  And without the expansion of the military which should add another trillion.  And the addition of at least 2 new government cabinet level departments - the Orwellian super costly "Department of Government Efficiancy" and the massive expansion of ICE that should add another few trillion more to the budget.

SO we're talking about Many Trillions of new spending while CUTTING TAXES, and crushing revenues - all as the FEd cuts short rates - and LONG RATES ARE SHOOTING HIGHER.

This has never happened to the US before.  EVER.  LONG RATES RISE AS THE FED CUTS!!!!!!

It is happening because nonody is buying our debt but us.  That is the definition of monetizing the debt.  That is the cause of massive inflation, slow growth: STAGFLATION.

It is simple math.

And if you think a Peace divident will offset that you're smoking chronic.  Because Trump has already given carte blanche to Netenyahu.  And he has promised carte blanche to Putin.

Hard to see where the peace comes from there.

Maybe it will come by Magic.

Maybe.

But then maybe 1+1 will continue to equal 2.

If so, whereever gold ends up  in the short run, in the long run it's going much much higher.