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Original Analysis

POSTED ON July 2, 2020  - POSTED IN Original Analysis

Gold just had its best quarter since 2016 and finished at its highest level in over eight years. But Q2 2020 wasn’t an anomaly. Gold has charted gains for seven consecutive quarters.

That represents the longest quarterly run of gains for the yellow metal since the 2008 financial crisis.

POSTED ON July 1, 2020  - POSTED IN Original Analysis

Gold just wrapped up a strong quarter, up 13%, and finishing at the highest price level in over eight years. On the year, gold is up about 16% and many mainstream analysts are starting to eyeball record gold prices in the coming months. But there has been some drag on the gold market, particularly sluggish consumer demand in the East – particularly in India.

That could be changing.

POSTED ON May 26, 2020  - POSTED IN Original Analysis

For years, I have been warning that during the age of permanent stimulus (which began in earnest with the Federal Reserve’s reaction to the dotcom crash of 2000), each successive economic contraction would have to be met with ever larger, increasingly ineffective, doses of monetary and fiscal stimulus to keep the economy from spiraling into depression. I have also said that the enormity of the asset price gains over the last 10 years had increased the danger because reflating the bloated stock, real estate, and public and private debt markets would bring on doses of stimulus that could prove lethal for the economy. But even though I expected that the next financial crisis would be catastrophic, I thought that it would come into the world in the usual way, as a credit crisis triggered by over-leverage. But the Coronavirus ripped up those stage notes, and instead ushered in a threat that is faster and deeper than I imagined, and I imagined a lot. It’s a perfect storm, a black swan with teeth.

POSTED ON May 14, 2020  - POSTED IN Original Analysis

Federal Reserve Chairman Jerome Powell went negative in a webcast speech on Wednesday, May 13.

I’m not talking about negative interest rates, although that could be coming down the pike as well. Powell went negative on the prospects of a quick economic recovery.

He’s right about the prospects for the economy, but he’s wrong about the solution. That’s because he doesn’t even realize it’s Fed policy at the root of the problem to begin with.

POSTED ON May 11, 2020  - POSTED IN Original Analysis

Are negative interest rates in our future?

The markets are starting to think so.

On Thursday, Fed fund futures contracts began pricing in negative interest rates. They were initially priced in for December but then shifted to early 2021. This doesn’t guarantee negative rates, but it does indicate markets are beginning to expect them.

POSTED ON April 20, 2020  - POSTED IN Original Analysis

A lot of people still seem to think the economy will fire right back up and things will snap right back to normal when the government-imposed coronavirus lockdowns end. I don’t believe we’re going back to normal for a number of reasons – primarily because things weren’t normal before coronavirus. The economy was a big, fat, ugly bubble. Coronavirus was a pin that popped the bubble.

But even if things were normal before the pandemic, the economy still wouldn’t just fire back up and restart on a dime.

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