Good morning.
Good morning. We will be off the desk today taking care of some other business.
Have a good day.
A few extemporaneous tactical thoughts on current events
I truly think the reason gold repatriation has ramped up so aggressively into the US, is because banks and government realize this will get worse before it gets better. And it may not get better for a decade.
This is the next logical step in a world that’s gone from globalism to mercantilism. Get your gold back, because we don’t know what’s next.
And it certainly is something the US would do prior to escalating International trade problems.
With regard to tariffs, we hesitate to anticipate what will happen next, but only look for conditions upon which they will happen.
The lower oil stays with stocks relatively stable, the longer Trump can stay his course. The weaker dollar also helps him.
Ironically, or rather paradoxically, the lower oil goes the more confident Trump is in his strategy. The more confident Trump is in a strategy, the more nations become concerned about future sanctions and dedollarize even more.
So ultimately, while this is going on cheap oil ends up being supportive for gold and silver and now copper prices..
Right now, many nations believe Trump is bluffing because he is historically a person who likes to play brinkmanship.
But as they start to feel that he’s not going to pull back, gold will get even stronger.
Resolution, of course will bring a decline in gold prices. The resolution does not mean a return to a good old-fashioned love fest. The world is irreparably different.
Finally as a simple overview to Trump style, he tends to come out of the gate with chaos and close with resolution as a negotiator. Basically, he stirs the shit up everywhere. Always has.
He leads with “sticks” to friendlies and finishes with “carrots”.
He leads with carrots to enemies and threats of sticks, and finishes with sticks.
As far as China is concerned, they will retaliate his indirect attacks by stepping up stimulus even more. Their goal is to weather, a recessionary storm instigated by US policy. All of it just drives them further from USD and towards Gold.
The concern is when tariffs start involving food. Then things could get really dangerous.
Cheers
While the near term is blurry, the longer term seems to have more clarity. 47 is on a mission to make America competitive, and have less reliance on the those that are not our friends. Just like the 70's where oil increased in price by more than 400% in a short time frame in order to satisfy the House of Saud and to make the petrodollar big enough to handle the size of the UST market as it became the worlds reserve asset. Now 47 and Bessant understand that in order to meet their objective of transforming the global trading system as elaborated by Stephen Miran the UST will have to be replaced by a neutral reserve asset to replace the UST which will by virtue of this action lower the value of USD making us more competitive and allow for repatriation of our industrial base. Gold is the natural neutral reserve asset to replace the UST, just looking at the balance sheet of most central banks around the world will show this movement of exchange has been in the works for 10 years (since 2014). Now the size of the gold market must be made bigger to handle the oil market. One only needs to track the oil/gold ratio over the last couple of years. I would not be surprised to see this ratio up near 100 within the next couple of years.
Short-squeeze in silver is buzzing and I haven't checked it out. Because your last two mornings were a repeat of founders Sunday, have you seen anything in the Silver market structurally or for miners that would indicate a change or that a squeeze is on the table at this moment?