Gold, Silver, and Miners | Market Rundown
Charts and Monetary History
The FOMC wants to see American businesses cut their workforce to induce lower consumer spending and slower economic growth. They are convinced this is the only way to lower inflation over the long run.
- Money forecaster March 2023
Today:
Market Rundown.
Excerpts from a very special comprehensive weekly chart package for Gold, Silver and mining stocks, a very interesting history lesson, and a Goldman Macro report
1- Market Rundown:
Good morning. The dollar is down 20. Bonds are mixed with back end yields climbing from the 10 year on out. Stocks are down 20 to 50 bps. Gold is up $3, hovering right above the teens. Silver Fu1. is down 1 cent. Crude is up 7 cents. Nat gas is also up 7 cents. Crypto is mixed. Grains are also mixed with Wheat down small.
Comment: The last two days Chairman Powell kind of decimated hopes of a pivot or pause.
Many takes are available out there regarding the effect on stocks. An alarm bell was rung for us, in that Powell directly referenced something Zoltan Pozsar said way back in February 2022. Powell Wednesday:
POWELL: DOESN'T LOOK LIKELY LOW LONG-TERM RATES WILL CONTINUE
POWELL: WE ONLY BUY MBS IN SEVERE SITUATIONS
These two statements in unison mean a lot as to where bonds are going (much lower), how they will get there (slowly and painfully), and what it means for Gold — a deflationary drop out followed by the relentless climb higher just like 2002 to 2012 when the Fed had no choice but to let Gold float higher. Think of the covid reaction, but much slower and much bigger.
We’re not as sure of this as we were of our Mercantilism and Anti-Goldilocks prognostications yet, as so much of it is tied to how the Fed handles each juncture. But we are getting there and hope to share it this weekend.
Until then, enjoy the charts
2- Charts and History
Charts
GoldFix does not hold itself out as TA experts. We rely on Michael Moor and others for that on a day to day basis. We used to rely on Leon Tuey, who sadly is not longer with us, for the bigger picture Technical stuff.
But All Star fits the bill for those purposes right now. As a result, we will be subscribing and sharing select excerpts from their 75 chart easy to read weekly package with premium subscribers.
More below…
History
Today, the Federal Reserve is running a monetary playbook that reminds me very much of the one used by the Fed back in 1919. I know 1919 seems like a long time ago, but it is very recent March 2023 9 history in the grand scope of things.
Let me set the scene. In April 1917, the United States entered World War I. Suddenly, the government needed money to build weapons, not just for ourselves but also for our allies. This sudden jump in wartime spending put a tremendous strain on the US government’s finances, and it needed the Fed’s help to pay for it all. Toward that end, the federal government altered the rules regarding how much “real” money the Fed needed to keep on its balance sheet to cover the creation of new currency.
By reducing the currency backing from $1.00 in US currency and $0.40 in gold for each new dollar created to $0.60 in currency and $0.40 in gold, the Fed had lots of room to “print” new money, which it used to buy newly created US government debt
More below…