Sive Morten
Special Consultant to the FPA
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- 18,639
Fundamentals
Yesterday we've taken in-depth view on recent job market statistics and explain why we do not take an idea of common euphoria around these numbers. The structural crisis that now stands underway across the Globe is too complicated, especially for our analysis, when we get statistics numbers with some delay and adjusted for the needs of US government and Fed reserve. We just now the nature of economical processes that are going now, and we do know the direction and consequences that they will lead the US economy, in particular. But of course, we can't know definite terms of destruction one or another market. While real estate market shows evident signs of decrease, job market is still stand on the surface due some factors that we've mentioned yesterday, but its decrease is unavoidable as well. And one of the signs of turning point might be the collapse of stock market that also definitely will happen, if Fed will not start printing money again.
On a gold market we also see a bit irrational behavior. Take a look - why we have gold market rally, if it is widely suggested now the "soft landing" and Fed easing, with inflation downturn? This combination suggests higher real interest rates, which is negative to the gold, but yellow metal keeps going higher...what's going on?
Market overview
Gold prices kicked off 2023 by hitting their highest levels in more than six months on Tuesday as benchmark Treasury yields fell, while investors assessed the prospects for more Federal Reserve interest rate hikes, which acted as a significant headwind to bullion last year.
A majority of the 10 global asset and hedge fund managers surveyed by Reuters said commodities are undervalued and should thrive as global inflation stays elevated in 2023. Their other top picks included inflation-linked bonds to shield against price rises and selective exposure to corporate credit, as higher interest rates restore some differentiation in company bond spreads.
London-based hedge fund manager, Crispin Odey, who profited last year from short positions on British government bonds, is betting inflation will remain high. Odey's OEI MAC fund ended 2022 up about 145% for the year and, though he has reduced his short position in gilts, he has remained long inflation-linked gilts.
Most hedge funds that Reuters spoke to are bearish on equities, particularly if the Federal Reserve keeps raising rates to fight inflation.
Jurrien Timmer, director of global macro at Fidelity Investments, tells Bloomberg, that it seems like a no-brainer that if we’re going to have economic weakness and now that inflation is coming down — the CPI peaked at 9% year-over-year in June, and it’s well off of those levels — and most economists that I follow, and even our in-house economics team, say it seems fairly likely that inflation will continue to come down at least till about 4%.
But the risk is that it stops there or that it doesn’t go all the way back down to 2%. And one thing that the Fed has been very clear about recently is that it’s not enough just to see inflation come down — it has to come down to the Fed’s target, which is 2% PCE. So basically 2.5% on the CPI is the Fed’s target. And the risk is that the Fed will go to around 5% in the next three months or so.
The risk is the Fed wants to contain inflation all the way back to its target — because if it doesn’t do it now, even at the risk of a recession, then it may never be able to do it unless much more severe measures are taken. And imagine we do go into a recession the second half of this year, and inflation goes all the way to 4%, which is, of course, a hell of a lot better than 9% — but that’s then the trough. And let’s say inflation then accelerates in the following expansion off of a base of 3% or 4% instead of what normally would be zero or 1%.
Do you feel that we’ve definitively made the switch from worrying about inflation to worrying about growth? Yes. I think for 2023, that is correct. Maybe in 2024 we’ll be worrying again about inflation. But for now, clearly inflation is on a decelerating track.
China reported an increase in its gold reserves for a second straight month, topping up holdings again after its first reported purchase in more than three years. The People’s Bank of China raised its holdings by 30 tons in December, according to data on its website on Saturday. This follows November’s addition of 32 tons, and brings the nation’s holdings to a total of 2,010 tons.
Central bank purchases of bullion hit a record in the third quarter of last year at almost 400 tons, with only a quarter going to publicly identified institutions, according to the World Gold Council’s demand trends report. China’s disclosure of its gold buying sheds some light on the identity of these mystery buyers. Market watchers speculate Russia could be another purchaser.
Gold held near seven-month highs reached on Wednesday after the minutes of the Federal Reserve's last meeting showed all its policymakers remained committed to fighting inflation, but agreed on the need to slow rate hikes in 2023. Officials at the Federal Reserve's Dec. 13-14 policy meeting acknowledged they had made "significant progress" over the past year in raising rates enough to bring inflation down, the minutes showed. Fed fund futures kept bets that the central bank would raise rates another half of a percentage point in coming months before pausing just shy of 5%.
Among Thursday's comments, guys it is interesting market view on NFP numbers - they have expected that positive NFP data should push gold prices lower, but, as we do know, the opposite has happened:
But...
Gold prices shot up over 1% on Friday to seven-month highs as Treasury yields and the dollar fell after U.S. economic data cemented expectations of a less-hawkish Fed, setting the metal on track for its third consecutive weekly rise. The nonfarm payrolls rose by 223,000 jobs in December, data from the Labour Department showed.
Additionally, U.S. services industry activity contracted for the first time in nearly three years in December, offering evidence that inflation was abating.
Jim Wyckoff, senior analyst at Kitco Metals said gold could continue to trade sideways to higher in the first quarter, having seen new interest on the long side from hedge funds at the start of the New Year.
Why gold is rising?
While our followers mostly understand already long term crisis processes that are under way in the world and in the US in particular, short term gold rally needs to be explained. Recent information that we've placed above in fact, explains this well, but is a bit messy. Let's take a look first at Fed's results of 2022:
On the charts below you could see that QT efforts has led to contraction of money supply approximately for ~ $400-500 Bln. But Fed has compensated this step by using of US Treasury account and has spent approximately the same sum to support economy. This money at the final point has appeared on the accounts of Commercial Banks and have been distributed into loans for companies and households. It means that Fed is drying liquidity by one hand but providing it by another. In fact no tightening has happened, but Fed has spent 2/3 of US Treasury reserves in 2022
Now take a look how these 400 Bln have been spent. Almost all of them have come to US Stock market. Since January 2009, the main buyers of shares of American companies have become ... American companies themselves via buybacks. The total cash flow that was distributed from the American business to the market excluding initial and special public offering (IPO+SPO) amounted to 4.7 trillion for the 3rd quarter of 2022. On the charts below you could see that 2022 year counts for the same 400-500 Bln - Bing!
Individuals (residents of the United States) directly and through intermediaries purchased securities worth $ 268 billion for the period from January to September 2022, compared with purchases of 1.04 trillion in January-September 2021. Individuals have become the major purchasing power who was buying the "falling knife" for the entire first half of 2022 for $ 382 billion. Since September, households have sold ~ 135 Bln shares. As a result it confirms 100 Bln of loans value (268-135), provided in 2022 on the earlier chart above.
In the first three quarters of 2022, net purchases from US residents (all entities) amounted to 126 billion compared to 667 billion in 2021, where there were sales of 170 billion in the 3rd quarter.
All other structures (pension and insurance funds, commercial banks, state funds and others) are net sellers of 2.8 trillion shares from January 2009 to September 2022, and since 2016 the sales rate has sharply accelerated (compared to 2009-2015) and remains approximately uniform at 200 billion per year.
What is important to note here is the funding for the buybacks. It so happened that net borrowings in bonds and loans from 2009 to 2012 are equivalent to the volume of repurchase of shares. In other words, the entire buybacks formally goes under debt. From 2009 to Q1 2022, companies borrowed $ 1 for every dollar of buyback, and from Q2 2020 to Q3 2022, the debt grows by $ 1.4 for every 1 dollar of buyback , which indicates an integral decrease in margin level in the conditions of the inflationary crisis and a shortage of funding for investment projects.
And so what? How does it rely to Fed and Gold?
Based on information above, Fed has only around 360 Bln to support stock market and corporate earnings, because, as you understand companies report earnings due to stock rising that they have bought on the balance. It calls as Treasury shares and changing of its price is booked in Income statement. This Fed reserve should be enough until March-April probably and then problems could come.
Since gold is moving higher, investors expect drop of real interest rates (if we ignore political background for now). Here is our chart of real 30 year interest rate and Gold market. You should remember it as we've discussed it often in the beginning of the year.
Real rate could start dropping only by two reasons. FIrst is - inflation remains high but Fed start easing the rate. Second - inflation will move higher faster than the Fed rate. Now just take 2+2.
Recall what Jurrien Timmer, director of global macro at Fidelity Investments, tells above - we're worry that inflation remains around 4-5% ignoring any Fed efforts to cut it more, and the risk is that the Fed will go to around 5% in the next three months or so. But the problem that Fed can't stay for too long around 5% rate. Despite what inflation will be, it will have to start easing either in a way of rate cut or in a way of QE money printing. Whatever scenario they will choose - real interest rates will drop.
Markets now anticipate the first scenario - rising to 5-5.25% and so there! 1-month rate stands stable around 5% since November.
Stock market also anticipates liquidity squeeze. Based on Fathom consulting report, the spread between the returns from small-size value stocks (i.e., with low market capitalisation) and from growth stocks tracks investors’ expectations about monetary policy, and, in turn, reflects the economic cycle. When this spread breaks substantially above zero, at 1.5% or above, it indicates expectations of monetary tightening and slower growth, revealing that liquidity is expected to come at a higher premium. Investors started pricing in a significant monetary tightening almost a year before it actually began — the longest divergence on record between the equity market and the Fed on this measure.
This perfectly agrees with our analysis of liquidity based on monetary statistics above. The final part of the puzzle is inflation level. While analysts still gambling concerning whether it will drop below 4% or not - you do know our position that we've explained yesterday.
We are in structural crisis. Structural means that all US (and global) manufactures have to re-structure, re-build the business under the new model with lower consumer demand. That's why we're sure for 99% that inflation will not drop below 5-6% in 2023, 2024 and maybe within 2-3 years more. US economy has to become twice smaller to ~ $5-7 Trln. dollars to stop this process. This will take at least 3 years more. That's why we're sure that Fed start easing in the nearest future because it will have to. The stock market now is surviving only on a buybacks from US Treasury reserves and households demand that is exhausting already. Thus, the stock market collapse will be probably a by-product of ongoing fundamental destructive processes in the US economy. Also you cold use it as a signal. Once stock market collapses - deterioration of job market accelerates.
Political background
Now all eyes are upon US and new Speaker of the House. Recent events let us to suggest that Twitter files disclosure concerning 2020 elections, FBI activity, CV19 and Fauci, H. Biden laptop, election of McCarthy as a speaker and D. Trump activity are the parts of the same chain. Once McCarthy has been elected, it has proclaimed the new programme, that is aimed to control the government. Here is new House rules have been taken. As you understand, the Speaker is a 3rd major person in the
country. So it could directly impact on the politics of the country.
Here is just few new issues initiated by the House under control of Republicans:
CHANGES IN THE STANDING RULES:
One congressman may decide to remove the speaker if he renounces his word or political agenda
No more consolidated bills thrown out in the dead of night before the vote. Bills should be one-time and give at least 72 hours for their reading
Covid control mandates will be terminated, including their funding
No more debt ceiling increases
Restoration of the requirement to vote by a three-fifths majority on the issue of tax increases
The restoration of the "Holman rule", which allows for the reduction of wages or the dismissal of specific federal employees or the reduction of a specific program
Permission to allocate funds to cover the costs of "Settlement of disputed elections"
BILLS TO BE PUT TO THE VOTE:
Development of a plan to increase oil and gas production in the United States
Cancellation of financing for 87 thousand new agents of the Tax Service
Permission of the Minister of Internal Security to suspend the entry of foreigners
A ban on the depletion of the Strategic Oil Reserve and its sale to China and other countries
Speaker Term Limits
The requirement of the national Instant Criminal Background Check system to notify U.S. Immigration and Customs enforcement and relevant state and local law enforcement agencies whenever a person illegally in the United States attempts to obtain a firearm
Prohibition of taxpayer-funded abortions
Prohibition of medical workers not to provide proper care in the case of a child who survived an abortion or attempted abortion
FORMATION OF NEW COMMITTEES:
Establishes a Special Committee on Strategic Rivalry between the United States and the Communist Party of China
Establishes a special subcommittee to investigate the use of weapons by the federal Government
Establishes a special subcommittee to investigate the Covid pandemic
Not occasionally E. Musk few weeks ago has posted the picture of Washington 1776 boat, while McCarthy has mentioned it in his inauguration speech. Also it is obvious the link between E. Musk, D. Trump, General Flynn, Mc Carthy and few other high posted republicans. Things that they are doing are aimed against existing government and J. Biden. They have made few very strong steps and they are aimed on 2024 elections to get country under control.
The first most feasible problem that US government gets already - refuse to increase of a national debt limit. D. Trump warned and called to not vote for 1.7 Trln budget. And now Biden administration will meet serious problems.
All in all, for the gold market it means the only thing - as opposition becomes stronger, it brings more political uncertainty and investors should start thinking about safe haven more often. To keep it simple, we're getting few hints on Independence Christmas Story of 1776, the end of the printing press, the Gold Standard is on the way. Not occasionally E. Musk few times in a Twitter told that this picture is on his bedroom table. We cover this subject in our Telegram channel, so join if you're interested. Here we mention it only partially as it has relation to gold market performance.
Yesterday we've taken in-depth view on recent job market statistics and explain why we do not take an idea of common euphoria around these numbers. The structural crisis that now stands underway across the Globe is too complicated, especially for our analysis, when we get statistics numbers with some delay and adjusted for the needs of US government and Fed reserve. We just now the nature of economical processes that are going now, and we do know the direction and consequences that they will lead the US economy, in particular. But of course, we can't know definite terms of destruction one or another market. While real estate market shows evident signs of decrease, job market is still stand on the surface due some factors that we've mentioned yesterday, but its decrease is unavoidable as well. And one of the signs of turning point might be the collapse of stock market that also definitely will happen, if Fed will not start printing money again.
On a gold market we also see a bit irrational behavior. Take a look - why we have gold market rally, if it is widely suggested now the "soft landing" and Fed easing, with inflation downturn? This combination suggests higher real interest rates, which is negative to the gold, but yellow metal keeps going higher...what's going on?
Market overview
Gold prices kicked off 2023 by hitting their highest levels in more than six months on Tuesday as benchmark Treasury yields fell, while investors assessed the prospects for more Federal Reserve interest rate hikes, which acted as a significant headwind to bullion last year.
A majority of the 10 global asset and hedge fund managers surveyed by Reuters said commodities are undervalued and should thrive as global inflation stays elevated in 2023. Their other top picks included inflation-linked bonds to shield against price rises and selective exposure to corporate credit, as higher interest rates restore some differentiation in company bond spreads.
London-based hedge fund manager, Crispin Odey, who profited last year from short positions on British government bonds, is betting inflation will remain high. Odey's OEI MAC fund ended 2022 up about 145% for the year and, though he has reduced his short position in gilts, he has remained long inflation-linked gilts.
Most hedge funds that Reuters spoke to are bearish on equities, particularly if the Federal Reserve keeps raising rates to fight inflation.
Jurrien Timmer, director of global macro at Fidelity Investments, tells Bloomberg, that it seems like a no-brainer that if we’re going to have economic weakness and now that inflation is coming down — the CPI peaked at 9% year-over-year in June, and it’s well off of those levels — and most economists that I follow, and even our in-house economics team, say it seems fairly likely that inflation will continue to come down at least till about 4%.
But the risk is that it stops there or that it doesn’t go all the way back down to 2%. And one thing that the Fed has been very clear about recently is that it’s not enough just to see inflation come down — it has to come down to the Fed’s target, which is 2% PCE. So basically 2.5% on the CPI is the Fed’s target. And the risk is that the Fed will go to around 5% in the next three months or so.
The risk is the Fed wants to contain inflation all the way back to its target — because if it doesn’t do it now, even at the risk of a recession, then it may never be able to do it unless much more severe measures are taken. And imagine we do go into a recession the second half of this year, and inflation goes all the way to 4%, which is, of course, a hell of a lot better than 9% — but that’s then the trough. And let’s say inflation then accelerates in the following expansion off of a base of 3% or 4% instead of what normally would be zero or 1%.
Do you feel that we’ve definitively made the switch from worrying about inflation to worrying about growth? Yes. I think for 2023, that is correct. Maybe in 2024 we’ll be worrying again about inflation. But for now, clearly inflation is on a decelerating track.
China reported an increase in its gold reserves for a second straight month, topping up holdings again after its first reported purchase in more than three years. The People’s Bank of China raised its holdings by 30 tons in December, according to data on its website on Saturday. This follows November’s addition of 32 tons, and brings the nation’s holdings to a total of 2,010 tons.
Central bank purchases of bullion hit a record in the third quarter of last year at almost 400 tons, with only a quarter going to publicly identified institutions, according to the World Gold Council’s demand trends report. China’s disclosure of its gold buying sheds some light on the identity of these mystery buyers. Market watchers speculate Russia could be another purchaser.
Gold held near seven-month highs reached on Wednesday after the minutes of the Federal Reserve's last meeting showed all its policymakers remained committed to fighting inflation, but agreed on the need to slow rate hikes in 2023. Officials at the Federal Reserve's Dec. 13-14 policy meeting acknowledged they had made "significant progress" over the past year in raising rates enough to bring inflation down, the minutes showed. Fed fund futures kept bets that the central bank would raise rates another half of a percentage point in coming months before pausing just shy of 5%.
Among Thursday's comments, guys it is interesting market view on NFP numbers - they have expected that positive NFP data should push gold prices lower, but, as we do know, the opposite has happened:
But...
Gold prices shot up over 1% on Friday to seven-month highs as Treasury yields and the dollar fell after U.S. economic data cemented expectations of a less-hawkish Fed, setting the metal on track for its third consecutive weekly rise. The nonfarm payrolls rose by 223,000 jobs in December, data from the Labour Department showed.
Additionally, U.S. services industry activity contracted for the first time in nearly three years in December, offering evidence that inflation was abating.
Jim Wyckoff, senior analyst at Kitco Metals said gold could continue to trade sideways to higher in the first quarter, having seen new interest on the long side from hedge funds at the start of the New Year.
Why gold is rising?
While our followers mostly understand already long term crisis processes that are under way in the world and in the US in particular, short term gold rally needs to be explained. Recent information that we've placed above in fact, explains this well, but is a bit messy. Let's take a look first at Fed's results of 2022:
On the charts below you could see that QT efforts has led to contraction of money supply approximately for ~ $400-500 Bln. But Fed has compensated this step by using of US Treasury account and has spent approximately the same sum to support economy. This money at the final point has appeared on the accounts of Commercial Banks and have been distributed into loans for companies and households. It means that Fed is drying liquidity by one hand but providing it by another. In fact no tightening has happened, but Fed has spent 2/3 of US Treasury reserves in 2022
Now take a look how these 400 Bln have been spent. Almost all of them have come to US Stock market. Since January 2009, the main buyers of shares of American companies have become ... American companies themselves via buybacks. The total cash flow that was distributed from the American business to the market excluding initial and special public offering (IPO+SPO) amounted to 4.7 trillion for the 3rd quarter of 2022. On the charts below you could see that 2022 year counts for the same 400-500 Bln - Bing!
Individuals (residents of the United States) directly and through intermediaries purchased securities worth $ 268 billion for the period from January to September 2022, compared with purchases of 1.04 trillion in January-September 2021. Individuals have become the major purchasing power who was buying the "falling knife" for the entire first half of 2022 for $ 382 billion. Since September, households have sold ~ 135 Bln shares. As a result it confirms 100 Bln of loans value (268-135), provided in 2022 on the earlier chart above.
In the first three quarters of 2022, net purchases from US residents (all entities) amounted to 126 billion compared to 667 billion in 2021, where there were sales of 170 billion in the 3rd quarter.
All other structures (pension and insurance funds, commercial banks, state funds and others) are net sellers of 2.8 trillion shares from January 2009 to September 2022, and since 2016 the sales rate has sharply accelerated (compared to 2009-2015) and remains approximately uniform at 200 billion per year.
What is important to note here is the funding for the buybacks. It so happened that net borrowings in bonds and loans from 2009 to 2012 are equivalent to the volume of repurchase of shares. In other words, the entire buybacks formally goes under debt. From 2009 to Q1 2022, companies borrowed $ 1 for every dollar of buyback, and from Q2 2020 to Q3 2022, the debt grows by $ 1.4 for every 1 dollar of buyback , which indicates an integral decrease in margin level in the conditions of the inflationary crisis and a shortage of funding for investment projects.
And so what? How does it rely to Fed and Gold?
Based on information above, Fed has only around 360 Bln to support stock market and corporate earnings, because, as you understand companies report earnings due to stock rising that they have bought on the balance. It calls as Treasury shares and changing of its price is booked in Income statement. This Fed reserve should be enough until March-April probably and then problems could come.
Since gold is moving higher, investors expect drop of real interest rates (if we ignore political background for now). Here is our chart of real 30 year interest rate and Gold market. You should remember it as we've discussed it often in the beginning of the year.
Real rate could start dropping only by two reasons. FIrst is - inflation remains high but Fed start easing the rate. Second - inflation will move higher faster than the Fed rate. Now just take 2+2.
Recall what Jurrien Timmer, director of global macro at Fidelity Investments, tells above - we're worry that inflation remains around 4-5% ignoring any Fed efforts to cut it more, and the risk is that the Fed will go to around 5% in the next three months or so. But the problem that Fed can't stay for too long around 5% rate. Despite what inflation will be, it will have to start easing either in a way of rate cut or in a way of QE money printing. Whatever scenario they will choose - real interest rates will drop.
Markets now anticipate the first scenario - rising to 5-5.25% and so there! 1-month rate stands stable around 5% since November.
Stock market also anticipates liquidity squeeze. Based on Fathom consulting report, the spread between the returns from small-size value stocks (i.e., with low market capitalisation) and from growth stocks tracks investors’ expectations about monetary policy, and, in turn, reflects the economic cycle. When this spread breaks substantially above zero, at 1.5% or above, it indicates expectations of monetary tightening and slower growth, revealing that liquidity is expected to come at a higher premium. Investors started pricing in a significant monetary tightening almost a year before it actually began — the longest divergence on record between the equity market and the Fed on this measure.
This perfectly agrees with our analysis of liquidity based on monetary statistics above. The final part of the puzzle is inflation level. While analysts still gambling concerning whether it will drop below 4% or not - you do know our position that we've explained yesterday.
We are in structural crisis. Structural means that all US (and global) manufactures have to re-structure, re-build the business under the new model with lower consumer demand. That's why we're sure for 99% that inflation will not drop below 5-6% in 2023, 2024 and maybe within 2-3 years more. US economy has to become twice smaller to ~ $5-7 Trln. dollars to stop this process. This will take at least 3 years more. That's why we're sure that Fed start easing in the nearest future because it will have to. The stock market now is surviving only on a buybacks from US Treasury reserves and households demand that is exhausting already. Thus, the stock market collapse will be probably a by-product of ongoing fundamental destructive processes in the US economy. Also you cold use it as a signal. Once stock market collapses - deterioration of job market accelerates.
Political background
Now all eyes are upon US and new Speaker of the House. Recent events let us to suggest that Twitter files disclosure concerning 2020 elections, FBI activity, CV19 and Fauci, H. Biden laptop, election of McCarthy as a speaker and D. Trump activity are the parts of the same chain. Once McCarthy has been elected, it has proclaimed the new programme, that is aimed to control the government. Here is new House rules have been taken. As you understand, the Speaker is a 3rd major person in the
country. So it could directly impact on the politics of the country.
Here is just few new issues initiated by the House under control of Republicans:
CHANGES IN THE STANDING RULES:
One congressman may decide to remove the speaker if he renounces his word or political agenda No more consolidated bills thrown out in the dead of night before the vote. Bills should be one-time and give at least 72 hours for their reading Covid control mandates will be terminated, including their funding No more debt ceiling increases Restoration of the requirement to vote by a three-fifths majority on the issue of tax increases The restoration of the "Holman rule", which allows for the reduction of wages or the dismissal of specific federal employees or the reduction of a specific program Permission to allocate funds to cover the costs of "Settlement of disputed elections"BILLS TO BE PUT TO THE VOTE:
Development of a plan to increase oil and gas production in the United States Cancellation of financing for 87 thousand new agents of the Tax Service Permission of the Minister of Internal Security to suspend the entry of foreigners A ban on the depletion of the Strategic Oil Reserve and its sale to China and other countries Speaker Term Limits The requirement of the national Instant Criminal Background Check system to notify U.S. Immigration and Customs enforcement and relevant state and local law enforcement agencies whenever a person illegally in the United States attempts to obtain a firearm Prohibition of taxpayer-funded abortions Prohibition of medical workers not to provide proper care in the case of a child who survived an abortion or attempted abortionFORMATION OF NEW COMMITTEES:
Establishes a Special Committee on Strategic Rivalry between the United States and the Communist Party of China
Establishes a special subcommittee to investigate the use of weapons by the federal Government
Establishes a special subcommittee to investigate the Covid pandemic
Not occasionally E. Musk few weeks ago has posted the picture of Washington 1776 boat, while McCarthy has mentioned it in his inauguration speech. Also it is obvious the link between E. Musk, D. Trump, General Flynn, Mc Carthy and few other high posted republicans. Things that they are doing are aimed against existing government and J. Biden. They have made few very strong steps and they are aimed on 2024 elections to get country under control.
The first most feasible problem that US government gets already - refuse to increase of a national debt limit. D. Trump warned and called to not vote for 1.7 Trln budget. And now Biden administration will meet serious problems.
All in all, for the gold market it means the only thing - as opposition becomes stronger, it brings more political uncertainty and investors should start thinking about safe haven more often. To keep it simple, we're getting few hints on Independence Christmas Story of 1776, the end of the printing press, the Gold Standard is on the way. Not occasionally E. Musk few times in a Twitter told that this picture is on his bedroom table. We cover this subject in our Telegram channel, so join if you're interested. Here we mention it only partially as it has relation to gold market performance.
