Deep State deep pockets doing what they can for Kamala. Bill Gates vs. free speech. Birthdays.
The system obviously hates Trump. Powell’s 50 basis point reduction of the Federal Reserve rate is clearly political – goose the market in time for Kamala to get elected. Here is some more indirect evidence – there has been a mystery buyer propping up the stock market, pushing it higher as the major institutional investors are selling.
The Federal Reserve balance sheet is 7 ½ trillion dollars, of which 4.5 trillion is in US government obligations and 2.4 trillion are mortgage-backed securities. 7 ½ trillion dollars gives a lot of room for slosh. The Federal Reserve open market operations lost $117 billion in 2023. I am not experienced in reading their balance sheet, and I am sure what I would look for is hidden, but my bet is that they lost this money by propping up stocks such as the Magnificent Seven and suppressing the price of precious metals and Bitcoin.
Prognosticators have been relentlessly bullish about gold and silver for years now, predicting a catastrophe which has seemed never to materialize. My inbox is full of come-ons from all sorts of investment firms touting precious metals. On the other hand, I read that American investors have been impervious to their blandishments. Only a small percent own precious metals, and in general they represent a small fraction of the portfolios. Individuals acting on their own, and individuals participating in the market through ETF’s, retirement fund managers and so on have been and remain invested in stocks.
Over the past couple of years money flowed out of precious metals ETF’s even as metal prices have risen. This anomalous situation appears to be ending, according to market watchers. Individuals are buying. Central banks throughout the world have been net buyers of gold over that timeframe, especially recently Turkey and China. The market manipulation that has allegedly been holding the price of metals down since the 1960s has not been effective against huge players such as sovereign entities. Opinion is that gold is rising now because the manipulators have given up.
Silver and Bitcoin, unlike gold, have been bouncing up and down rather wildly over the past few months. At about $1 trillion each these markets are smaller than the $10 trillion for gold, rendering them still manipulable. You need simply look at the charts of all three. You can make the same observation about the even smaller markets for platinum, palladium and alt-coins.
Bitcoin is of course nothing but vapor – digits floating around in cyberspace. Silver and platinum are tangible. In addition to serving as monetary metals, they are used in industrial processes. They are both in a deficit position – aboveground stores are small and shrinking as demand outstrips supply. There are kickers. Silver is an important complement in solar panels and thousands of other electronic products, and platinum in catalytic converters. Though most silver comes from politically stable countries, platinum comes mostly from Russia and South Africa. It may appear more attractive as electric cars lose their luster as an alternative to the internal combustion engine and cataletic converters remain in demand.
The bottom line is that we are happy with our very conservative choice to remain invested in the gold ETF’s we have held for years. The same prognosticators are saying that gold could hit $3,000 by the end of the year. If the last months’ gains are an indication, it may happen. All of the precious metals jumped up on the news of the Federal Reserve rate cuts. If nobody is going to fight inflation, it is time to hedge with precious metals. I agree with Don Durrett, the author of How to Invest in Gold and Silver, that there are higher returns to be had in silver than gold, and higher returns from owning stock in metals miners than the metals themselves.
On another topic, here’s Bill Gates, looking like the out-of-shape old man he is, hunched like a vulture, shifty eyes darting back and forth, claiming that free speech should not be permitted to people who question his vaccines. Thank goodness that is a growing number. The news about vaccines keeps getting worse and worse. I am not sure that I believe The Exposé with regard to what it is doing to life expectancy, but on the other hand, they have been more right than wrong on the subject of vaccines. I certainly trust them more than Mr. Gates.
That’s the news from Lake WeBeGone, where we are in the middle of birthday season. Zoriana turned seven three weeks ago and Marianna turned four this week, and Eddie will become a teenager in October. We are all enjoying the lovely fall weather, bicycling to and from school as the daylight becomes perceptibly shorter with each passing week. Oksana and I just celebrated our 14th anniversary. Last time I had a fourteenth anniversary I already had a sense of foreboding. This time I’m happy to report that things just get better and better.
Timing is everything. Write this in the morning, and silver is up almost 5% by afternoon. More significant, IMHO, our nuclear stocks OKLO and SMR are on fire again since Microsoft's announced plans to bring Three Mile Island back to life.
Firstly, congrats on your 14th! We celebrated our 25th this year, though we were separated at the time due to the ongoing unpleasantness . . .
On PM, I had some Swiss physical ETFs which, because I wasn't sure how to trade them (it had to be done over the phone, as Fidelity could't just do it from the Webapp), probably kept us out of the millionaires club (which means little these days). Of course, all my physical assets were lost in a terrible boating accident, along with all my guns and ammo.
As to the DS perpetrating shenanigans against DJT (just like last time), most of us in Ukraine certainly are wondering whether or not that is good for us. President Zelenski is shopping his "Victory Plan" to not just the Demented-in-Diapers, but also to BOTH Kamala and the Donald. So, here we sit with bated breath, wondering what, if anything will come of all this. Were things going well for our guys on the front lines, I doubt that President Zelenski would be acting in such a desperate fashion. This doesn't help me to sleep better.
The channels are rife with the pundits' conjectures about what the plan really is. Certainly, Zelenski is pushing for permission to use long-range weapons on the deep interior of Russia. The idea is also being disseminated that Ukraine must be added to NATO before the coming election, the idea being that Russia will retreat with her tail between her legs rather than face the prospect of all out war with NATO, via Article 5.
If the world still exists, I'll be having a minor surgery, recuperating, and then replacing my beloved back in Kyiv by November. Somehow, I'm the best choice for managing the house during the winter. My only issue is having to walk Bruno, the idiot dog.
Hope to see you all in the not TOO distant future.