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“The Gold reset is a process, not an event”
Today
Discussion: Is Microstrategy a Ponzi scheme?
Premium: Weekly: Gold’s Path Gets More Certain
Discussion:
Is Microstrategy a Ponzi scheme?
MicroStrategy (MSTR) owns a small software business but primarily focuses on buying Bitcoin. In effect, it operates as an investment company holding Bitcoin. The stock trades at a significant premium to the value of its Bitcoin holdings. The strategy involves raising funds from new investors at a premium and using those proceeds to buy more Bitcoin. This setup results in dilution for new investors but is accretive for existing ones. MSTR’s promoters have branded the return created for existing investors through this model as the “Bitcoin yield.”
The question then: Is MSTR a Ponzi scheme?
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Complete analysis can be found in the Founders post: Must Read- MSTR Ponzi-Like Scheme Explained.. and More
Gold’s Path Gets More Certain
Last week, we saw Trump’s campaign ambitions (Tariffs and a stronger USD) run into the reality of a weaker dollar (with much cheaper oil) as an easier path for him to launch his MAGA agenda. Tariffs remain on the table for sure, especially for China (and that is why China will keep buying), but tariffs are not the first weapon of choice. Bessent said as much in— Bessent to MAGA: A weak dollar powers a boom.
We find it unlikely that across-the-board tariffs, as currently reported by the media, would be enacted at the same time as he moves to fix the immigration crisis. The tariff gun will always be loaded and on the table but rarely discharged. Of course, strategic and national security issues around China will remain.
In combination, western players finally got a clear signal that Trump was going to back-off on Tariffs for now, while pursuing cheap energy and simultaneously leaning on Powell for lower rates. In sum: Western buying stepped up after collectively believing the USD path will be lower as was described in three stories last week.
Expect similar behavior until the FOMC on Wednesday. Then, if Powell does not push back on Trump , or the stick market precludes his desire to pushback, expect that correlation to the upside to accelerate.
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News/Analysis:
Markets Recap:
US equities slightly fell on Friday after reaching new records earlier in the session. Large caps and small caps declined: S&P 500 (-0.29%) vs. Russell 2000 (-0.30%). MSCI Emerging Markets (EEM) and MSCI EAFE (EFA) added 0.66% and 0.56% respectively.
Market News:
"A Chinese artificial-intelligence company has Silicon Valley marveling at how its programmers nearly matched American rivals despite using inferior chips. AI models from DeepSeek, the Chinese company, have zoomed to the global top 10 in performance, according to a popular ranking, suggesting Washington’s export curbs are having difficulty blocking rapid advances in China." Source: WSJ- Marvelling? More like panicking
"Meta CEO Mark Zuckerberg on Friday announced the company plans to invest around $60 billion to $65 billion in capital expenditures in 2025 as it continues to build out its artificial intelligence infrastructure CNBC
"Wall Street’s securities watchdog has made it easier for banks to expand their [virtual] currency businesses by overturning a Joe Biden administration rule that made it prohibitively expensive to hold digital assets. FT
"U.S. existing-home sales fell in 2024 to the lowest level since 1995, the second straight year of anemic sales due to stubbornly high mortgage rates.WSJ
"The Bank of Japan has raised short-term interest rates to “around 0.5 per cent”, the highest level in 17 yearsSource: FT- suspicious
"America’s biggest gambling companies... are making a killing on [multileg bets], called parlays. [They] deliver a bigger cut of money to sportsbooks after paying out winners than single bets. And they are a growing portion of bets overall—especially among casual sports fans, who are part of a new and fast-growing segment of the world of online sports betting... Source: WSJ- Uncle Tony, Ohio state and Chocolate Egg creams
Geopolitics/ Politics
via Newssquawk
Data on Deck: FOMC, GDP, PCE
MONDAY, JAN. 27
10:00 am New home sales Dec. 671,000 664,000
TUESDAY, JAN. 28
8:30 am Durable-goods orders Dec. 0.7% -1.1%
WEDNESDAY, JAN. 29
2:00 pm FOMC interest-rate decision
THURSDAY, JAN. 30
8:30 am GDP Q1 2.5% 3.1%
FRIDAY, JAN. 31
8:30 am PCE index] Dec. 0.3% 0.1%
Final Market Check
Premium: Tomorrow we breakdown the WGC’s 2025 Gold Report
