When will gold finally take off again?
The moment the new Warsh Fed begins cutting.
And he will cut all the way down to 2 percent. And then lower.
There's a lot being made of Warsh being a data dependent and administration independent Fed Head. That's a joke. He's been put in to cut rates. Everybody knows it. Few can say it. Because that would make it seem like nobody cares about inflation.
Of course the administration does care about inflation. They need it very badly. It's the only way to deal with a trillion dollar burn rate every hundred days. If they don't get the requesite inflation they get a debt depression and nobody wants that.
But nobody can acknowledge the need for inflation because that would spook a shaky consumer who would then desperately binge buy to front run the coming inflation which would provoke a hyper inflation. And nobody wants that. That's what's meant by managing inflation expectation.
A nice managed stagflation with aburdly understated government stats is the best we can hope for. All the while convincing the consumer that the inflationary yoke is transient and will surely dissipate as soon as A) oil prices subside, B) the AI boom boosts productivity, C) the national reshoring of industry kicks in, D) The tooth fairy puts big fat refund checks under everyone's pillow.
But really, gold will skyrocket the moment Warsh starts cutting even while 90 percent of the hard working consumer base is barely hanging on pay check to pay check, while everything from housing to energy to insurance to health care to education to food costs keeps spiraling out of control.
So hang in there with your gold positions because Warsh will not disappoint.
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