Housekeeping: Good Morning.
“The Gold reset is a process, not an event”
Today
Discussion: Closing the Gold Lease-Loop
Premium: Closing the Gold Lease-Loop
Discussion:
1- Bullion banks have been leasing gold from central banks for decades. (Pic-1)
2- Chinese physical demand made it a little bit harder to get gold for leasing.. and stress began to form in that. (Zoltan's “crisis of collateral” )
3- The US Gov seeing this and knowing that it had extensive IOUs on its own gold, (along with Moths pic 2) sitting in Fort Knox, either began calling their IOU’s back or US Bullion banks seeing the collateral was scarce started securing gold to satisfy their own Fort Knox IOUs.
4- Bullion banks with exposure and risk needed to replace gold that they were using. (Musical chair analogy pic 3) They glommed as much as they could from European central banks and couch cushions, with the BOE seemingly being the repository of most of the risk now.
5- There are probably double and triple counted gold leases sitting at Central banks in Europe now. (Pic 4). The EU is ideologically comfortable with this because they believe the leases will be honored when the gold is called by them. But the gold will never be called by them. Because doing that would be like revealing the emperor is naked, and so they will continue to self delude, kick the can down the road, and hope that somewhere someone’s gold will be made available to replace their lease. (Similar to their behavior with green energy)
Finally: All that remains is an answer to why the gold is being brought back here so briskly. Given the geopolitical backdrop, Trump’s policies geared towards resetting the economic drivers of USA and a pressing need to stem debasement by deficit— the answer will involve harnessing Gold’s monetary power in some way to address these circumstances.
Bonds, Stablecoins, International Mercantile Money, or a type of gold standard, we will probably know after the Ukraine war ends. When that happens, money will never be the same again.
Full Analysis at bottom…
News/Analysis:
Markets Recap:
US stocks rallied Friday while all major indices posted strong gains and all sectors were in green with out-performance in Tech, Energy and Financials.
SPX +2.13% at 5,639, NDX +2.49% at 19,705, DJI +1.65% at 41,488, RUT +2.53% at 2,044.
Market News:
Recession/Fusion/Stock Lapdances
“President Trump has launched an unprecedented challenge to a geopolitical order that has prevailed for decades. One potential victim: the U.S. dollar. WSJ
“Wall Street’s infamous dark pools are getting even darker... these off-exchange trading platforms are touting a way to buy and sell stocks that’s even more opaque. They’re offering what are dubbed private rooms, the rooms are independent from one another and each is invisible to anyone not invited, raising questions about both market transparency and fragmentation.” Source: Bloomberg- VIP lap dances
“China and the U.S. are in a race to create the first grid-scale nuclear fusion energy. After decades of U.S. leadership, China is catching up by spending twice as much and building projects at record speed. CNBC
“US shoppers are cutting back on spending and sentiment is sliding as President Donald Trump’s tariffs and market volatility threaten to undermine one of the key drivers of the world’s largest economy.
“Treasury Secretary Scott Bessent said Sunday the Trump administration is focused on preventing a financial crisis that could be the result of massive government spending over the past few years... CNBC
Geopolitics/ Politics:
UKR Walls/ Houthi-Iran Focus
US President Trump ordered the US military to launch ‘decisive and powerful’ military action against Houthis in Yemen and told Iran to end support for Houthis immediately.
US President Trump said he will be speaking with Russia's President Putin on Tuesday and may have something to announce on Ukraine-Russia talks by Tuesday. Trump added that land and power plants are the focus of talks toward a Russia-Ukraine deal and they are already talking about "dividing up certain assets" between the two sides.
US Defence Secretary Hegseth said the US campaign will be unrelenting, while he added that Iran has been enabling the Houthis far too long and they better back off.
Ukrainian President Zelensky said Ukraine’s partners must define a clear position on security guarantees and the path to peace must begin unconditionally, while he added there must be a foreign troop contingent based on Ukraine soil as part of a peacekeeping arrangement and the question of territory is complex and should be discussed later.- build a wall
Russian Defence Ministry said Russia will demand Kyiv's neutral status and NATO's refusal to accept Ukraine in a peace treaty on Ukraine, while Russia opposes any troops in Ukraine as part of post-conflict guarantees, not just NATO troops.
H/t Newsquawk for Geopol
Data on Deck: FOMC
MONDAY, MARCH 17 U.S. retail sales
TUESDAY, MARCH 18 Housing starts
WEDNESDAY, MARCH 19 FOMC interest-rate decision
THURSDAY, MARCH 20 Existing home sales
FRIDAY, MARCH 21 None scheduled1
Summary and Final Market Check
