A quick preview of next year
Gold is approaching its record high again, but this time at a more sustainable pace. Silver is breaking new records practically daily. Rotation continues in stocks. Synthetic Systems indicates an elevated probability of significant downside in 2026 Q1.
Non-gold-silver commodities also deserve a closer look in 2026. Gold and silver still look good long term but have run up a lot and are historically expensive. Other commodities not so much. Oil especially is historically cheap and broad commodity indices like the SPGSCI, heavy in energy, could be the sleepers that awake in the coming year. The iShares ETF COMT would be one way to play it. And although I generally avoid mentioning individual stocks that I own, TPL would be another. It responds powerfully to rising oil prices; although it is not an “energy stock”, but a land stock … it just happens that the land is in the Permian Basin.
XS stocks have begun to pull away from US stocks in 2025, and I expect that trend to continue in 2026, as valuation finally matters. With the Rotation under way, dividends, quality and value, featured in our Model Portfolios, are outperforming.
It’s been five years since we posted our Outlook for the 2020s. So far this decade, markets have broadly performed in line with the expectations we posted at the outset, just before the Covid panic. Metals have outreturned stocks, and bonds have underreturned, although our forecast that XS (foreign) stocks would outpace domestic (US) has only begun to be realized last year.
Trump’s ‘cute’ tiny car plan could spark radical change in US auto industry. But do Americans want Japan-style compacts?
You can’t get the right answer by asking the wrong question.
Some Americans want tiny cars. Absolutely. But if the industry expects one size to fit all it will be sorely disappointed.
What’s the matter with making small cars, big cars, and everything in between? Everybody can be happy!
“What’s the matter with making small cars, big cars, and everything in between? Everybody can be happy!”
Because they want to sell debt & its tough to sell debt if its a small car. Car manufacturing is a rather unfortunate side to selling debt. Here in blighty i see SUV’s (Stupid unless vehicles) parked outside peoples homes because they cant fit up their (1970’s) size driveways.
More than plausible. Most Americans lean towards large and mid sized vehicles anyway, but definitely not all. One of those pint sized EVs would be perfect for my driving habits … almost all short trips around (a small) town.
Mega’s look into 2026:- Much of the same, but different.
Trump will carry on being unreadable, FED will keep on printing.
European union has backed away from stealing Russian assets but are about to all club together to “Loan” Ukraine 90 Billion Euro’s.
Russia will keep chipping away, now a dead cert they will want Odessa. Ukraine heading to becoming a land locked nation. Meantime in Blighty the loon in charge (PM) has decided that he will “Delay” more local elections due for May. Freedom denied!
The economy has flatlined, growth now turning negative, borrowing rocketting. Meantime those “Disability” number are climbing fast, by 2030 1 in 8 will be on this “Benefit”. However i am delighted to report a somewhat negative response to “War with Russia” appeal.
The powers to be have said that war is very likely, indeed the head of Mi6 herself said that “sacrifices will have to be made by everyone”…….(interesting titbit her Grandfather was a Ukraine Nazi war criminal…….just saying).
In Germany the SOB running the job (Merz) after overseeing the implosion of Germany industrial output has now said that he intends to draft the young men of armed services if he cant get enough volunteers.
The Young men are already on the streets telling them to piss off.
Here in Blighty the push back has been eye opening!…….you see, these Bastards have spent the last 30+ years trying to do-a-way with the idea of nationhood or any identity that would slow down their MAD immigration policy. White British & proud of your forefathers? your a Racist!
Now said Bastards are trying to pull the national heartstrings……….& getting told to pull the other one! As for the “New arrivals” they have expressed a preference NOT TO FIGHT, indeed they will ship out to another national to avoid this sh1t, i mean that’s why they did a runner from their old nation!
Nope, things are influx…………”May you live in interesting times”
>Synthetic Systems indicates an elevated probability of significant downside in 2026 Q1.
What would you consider “significant downside”? 10%? 20%? Even more than that?
I had been expecting at least a 20% correction (that stayed down more than a few days or weeks) for years and held a slug of Treasury bonds in anticipation of that scenario. I finally gave up this year and dumped almost all my Treasury bonds and invested the proceeds elsewhere.
If only my crystal ball were so clear! By “significant” I mean enough to warrant preparation. Check out the latest of the Quarterly Charts for context … there you can visually see the forecast selloff and compare to previous events. But bear in mind SS tends to be more timing than magnitude oriented … the vertical axis isn’t even calibrated in dollars … it’s each asset in terms of the average … so what you see is always relative performance.
For what it’s worth, I’m going into next year with a bit more treasuries and commodities than usual (SHV-GOVT & COMT) and correspondingly less stocks, but as always, am prepared to change my mind when the facts change;-)
I’ve always been a bit puzzled as to how to accurately read the charts generated by Systems. If I am reading the chart correctly, then it looks like equities could be seeing something on the order of a 20% correction all while Treasuries don’t offer much in the way of countercorrelation and gold is seemingly unphased (!).
I guess we will see. I am not much exposed to the U.S. equity markets and I am totally out of anything directly related to the AI bubble.
A 20% correction, while not insignificant, is a far cry from from the kind of correction necessary to bring the U.S. equities markets back to somewhat sane valuations. The kind of correction required to bring equities markets back to the verge of inexpensive would probably see people jumping out of skyscrapers a la 1929.
I do wish the casino “capitalism” would end. I’m quite sick and tired of it even though I did quite well the past few years. I see a fair number of more knowledgeable market players who have done quite well also feeling lousy. Maybe I’m not watching or listening to the right people but I don’t get a sense of exuberance at all, unlike 1998 or 2006. This makes me think that, unfortunately, the party is going to continue a bit longer.
Synthetic Systems plots each asset in terms of a weighted mean of all four. The idea is simpler than that sounds … it aims to show relative total returns. Wherever one line has a greater slope than another, the one asset is outperforming the other.
Contrast this with the conventional practice of reporting or forecasting stocks in terms of prices and bonds in terms of yields, which leaves the reader a lot of work to do to extract whether stocks or bonds have or are expected to provide higher total returns. Different units all over the place … pounds for copper, ounces for gold, shares for stocks … SS puts everything on the same footing.
If you look closely, you see that in fact bonds are expected to rise when stocks fall next quarter. The rise in bonds is less than the fall in stocks though, because of different durations; the bonds plot represents the entire Treasury market, from 0-30 years maturity. It is further weighted in favor of shorter maturities, as is the market itself, and shorter maturity prices move less than longer maturities. The upshot of this is that if you wanted to fully balance out a stock position, you’d want a larger bond position or one that was more weighted towards longer maturities.
Gold, meanwhile, is just not well correlated with stocks, either positively or negatively. Historically at least, it does indeed just march to its own drummer, sometimes moving with stocks, sometimes moving counter to stocks, and other times just not giving a damn what stocks are doing.
Not to imply that bonds can’t or won’t … remember in 2022 they infamously fell with stocks. Other times they move counter. Which path they take is primarily determined by what’s driving stocks. In 2022 it was bonds themselves … inflation and rising rates resulted in higher bond yields and lower prices, with stocks falling as a result of a higher discount rate being applied to future earnings. The opposite happens if stocks are falling due to business weakness … in which case the relative safety of bond payments leaves them more attractive.
From this we can surmise that, correctly or not, SS thinks that 2026 Q1 stock market correction is associated with a “growth scare” of some sort.
Alas “casino” capitalism is growing even more so. So called “prediction” markets are being traded right alongside legitimate investments by some outfits like Robinhood. Broker/bookie? Some states and even the FBI are warning that these prediction markets are pushing the limits of legality. Maybe we shouldn’t be surprised given that cryptos were already blurring some lines. An increasing number of yield free or ultralow yield stocks was already encouraging the public to focus less on investment cash flows and more on price speculation. No wonder Warren Buffett has been increasingly standing aside.
>[T]he bonds plot represents the entire Treasury market, from 0-30 years maturity. It is further weighted in favor of shorter maturities…
Thank you for the explanation. Now I understand why the Treasuries line moves so weakly relative to equities.
>Gold, meanwhile, is just not well correlated with stocks, either positively or negatively
If we get a substantial drop in equity prices, on the order of 20% or more, I am still anticipating that gold will fall in price as it did in 2008 (housing bubble crash) and 2020 (COVID-19 correction during which, for a brief blip, gold fell in price). These are the only “all assets down” events I have experienced in my life albeit it was extremely brief in 2020. There is a tremendous amount of leverage in the system, even among retail punters, and I cannot imagine them surviving a 20% correction that doesn’t almost instantly reflate due to central bank or federal government actions. I suspect rather than take a loss, leveraged players will sell unleveraged assets to meet margin calls. I am almost certain that is what must eventually happen (putting good money after bad) as that is human nature. We saw that during the 1929 crash and it is what utterly ruined some people.
I don’t know if Treasury bonds have even one more strong anti-correlative run-up in them in response to an equities correction. I still have about 0.5% of my portfolio in Treasury bonds and on a good run-up, I will sell off the remainder of my position. If I were forced to either hold cash (Treasury bills) or Treasury bonds in preparation for a guaranteed “substantial” correction in the equities market, I’d probably go with cash. I’d lose any chance for capital gains but the fiscal deficit situation is so bad that I think there’s a good chance that Treasury bonds will either remain flat or also fall in price.
>Alas “casino” capitalism is growing even more so.
The whole country has become a bucket shop. 🙁
Correlations can be trickier than meets the eye. Not only do they change, but they differ according to what time intervals you specify. My remarks focused on short to medium time frames. Over long enough time frames – multiple decades- stocks and gold are highly correlated. Both their price increases are due to the same thing … inflation.
The choice of pricing unit figures prominently, although I’ve never seen that acknowledged in conventional economics. When “all correlations go to 1”, it just means that all of the movement is in the pricing unit. This accounts for the apparent high long term correlation between stocks and gold. It also accounts for the apparent high correlation during those periods in 2008 and 2020. Dollars surged in value as people and institutions scrambled to cover their short positions (debt). As a result, it took fewer dollars to price things (prices fell).
It’s common. Whenever you see a trading day when disparate assets all seem to move together, it just means most of the moving was in the unit of account.
There is no spooky metaphysical conspiracy between assets. It’s nothing but the unacknowledged role of the common pricing unit in determining prices.
Conventional economics:
Asset price = value of asset
Finsternomics:
Asset price = value of asset / value of pricing unit
Over 50% of retail traders predict silver will repeat as top metal in 2026, experts see strong potential for platinum to take the crown
As a practical matter, I’m not going the either-or route, sticking with both. But I agree with platinum taking the crown.
I’m on the platinum train. 🙂 I didn’t get as big a position as I wanted, though, because I didn’t do one big buy order. The price kept going up in leaps and bounds and I ended up holding my nose and buying what I did.
I’m actually pretty modestly allocated, if only because of correlations. Given most of my discretionary portfolio is in stocks, gold gets the lion’s share of the metals weighting just because it’s the least correlated. I like platinum but treat it as a niche asset. My strategic allocations pretty closely follow the 20:20:30:30 Portfolio on the Model Portfolios page … which put silver and platinum each at 1.5%, though I’m letting them run a bit hot right now.
I have no special inside line on platinum, but do track historical relative valuations, and platinum, due largely to having done a Rip van Winkle for most of the last couple decades, is still, even after the recent moonshot, historically cheap compared to gold and silver.
Here’s an update of the metals historical valuations:
These are copper, gold, silver and platinum, each relative to the average of the four since 2000. As you can see, both gold and silver are very elevated relative to copper and platinum over the 25 plus years since the turn of the century. Of course valuations alone never give you a complete forecast, but they do give you a sense of how much runway assets have. Though it took some patience, it was this that suggested to me that platinum had lots of room to run.
Over the long term, the main driver of these metals prices is the common unit of account, dollars, and their prices should broadly move similarly. We may not foresee the proximate cause, but what gets left behind tends to have catching up to do.
GMO 7-Year Asset Class Forecast: November 2025
Vanguard weighs in:
Vanguard’s outlook for financial markets
“Our 10-year annualized nominal return and volatility forecasts are based on the September 30, 2025, running of the Vanguard Capital Markets Model®.”
So,,……………..anyone about?
Aye … fresh comments just posted above.
Gold up, Silver up………………….
Quite. Platinum had a good year today.
Platinum is having another good year today. While it’s still cheap longer term, it’s expensive short term. It’s profoundly overbought as I type (two 7%+ days in a row, up 36% in 12 days) and vulnerable to a sharp correction.
I’m also wary of silver at this point … it’s almost as overbought as platinum but without the benefit of being cheap longer term, as the foregoing chart reveals.
The political outlook? Republicide. The extended Obamacare tax credits for those over 4FPL have expired. Though some Reps fought to extend them, they were outnumbered by others who preferred a new program. Alas there isn’t time for that. It might be better and it might not, but from what little I’ve heard about it it’s got more moving parts than a Rube Goldberg contraption. Simplification is desperately needed.
So far under a Republican President and majority in both houses of Congress, domestic fiscal policy has been an utter disaster. One of the biggest surprises is soaring middle class tax rates. And they’ve been sneaky about it too.
The advertised rates have remained the same, but tax breaks for tips, overtime and seniors all come with phaseouts that push effective marginal rates embarrassingly high. Just to take one example, the SS break (not really) is actually a higher deduction for seniors. But it phases out at the rate of 6% for singles over $75k and couples over $150k. So your supposed 22% tax bracket is suddenly 28%. The reversion to the hard 4FPL ceiling on Obamacare credits amounts to a near infinite marginal rate in the vicinity of the cutoff.
All without any offsetting virtue of deficit reduction.
This sneaky assault on an already beleaguered middle class is going to cost Republicans big in 2026. Voters are going to be asking themselves, what’s the point of electing Republicans if they’re going act like Democrats?
One party, two PR firms.
My dear chap
You are looking at the BIGGEST geo-politcal move in the last 50 years.
It started under Biden with the pull out of Afghanistan……trump has set in motion the collapse of NATO/Nazi europe.
Big(er) moves a coming…….
Things went badly off track with the turn of the millennium. Peace turned into war, the budget went from surplus to deficit … the American Empire turned into a nightmare and Pax Americana turned out to be a dream. Can we turn this ship around? Thanks for the view from across the pond … we count on your dispatches from England!
Wow platinum has gone vertical, racking up nearly 20% in barely 48 hours. This is not a sustainable pace.
FWIW I’m not selling, but I’m not buying either. Playing with white hot metal can get you your fingers burnt!
Platinum surges to record highs, eclipsing gold and silver in 2025
“While gold and silver have commanded investor attention throughout much of the calendar year, another precious metal has emerged from the shadows to deliver the most spectacular performance of 2025. Platinum futures have staged a remarkable rally, culminating in a breathtaking nine-day surge that pushed prices to an all-time high of $2,323 per ounce, closing just below that level at $2,320. Today’s session alone saw gains of $171, representing nearly an 8% advance and marking platinum’s first record for the year.
The magnitude of this rally is extraordinary by any measure. Over nine consecutive positive trading sessions, platinum prices surged by an astonishing 38.82%, awakening what many had considered a sleeping giant among precious metals. The metal’s journey this year has been equally impressive from a broader perspective. Platinum began 2025 trading below the $1,000 threshold, languishing in relative obscurity compared to its more celebrated counterparts. It was not until mid-May that futures contracts managed to break decisively above the $1,000 mark, setting the stage for the explosive rally that would follow. …”
Silver is trading at over $78 in China how high could it go?
Mike
Silver tops $75 as gold and platinum surge to records
Black Rock’s iShares ETF line breaks metals mining companies into three categories: Those that mine mostly other metals, those that mine mostly gold, and those that mine mostly silver. The tickers are PICK, RING and SLVP. I have positions in all three.
PICK covers stocks of companies that mine mostly metals other than gold and silver, including copper, iron, platinum, aluminum, lithium, uranium, etc. It has, for obvious reasons, lagged the other two over the past year. Although here lagging means putting in a rather respectable 46.63% year to date.
Investors looking for other commodity related investments that haven’t yet gone ballistic could consider energy and agriculture. Besides the energy related investments cited in the post, I also have positions in farmland stocks such as FPI, WY, and CRESY to approach the agricultural sector.
My God…………GOLD JUST FLAT LINED!
Anyone seen silver?
Yikes!
How high can it go?
Metals are on fire.
Looking forward, sooner or later the gap between metals and other physical commodities will narrow, mostly by the others playing catchup. Oil especially has been lagging.
To be fair, there’s a fundamental difference between elementary commodities like the metals and compound commodities like oil … unlike the latter the former can be neither created nor destroyed outside of nuclear reactions and the quantities on earth are rigidly fixed. But that can only go so far in justifying the gaping disparity.
Many analysts are projecting more downside for oil, and they could well be right. But it’s not too soon to begin accumulating … at the bottom, they will still be projecting downside…
Quite a week for metals. After the dust settled, here is the scorecard. I’m citing ETF proxies because they open and close at the same time and trade on the same footing as other assets like stock and bond ETFs, facilitating apples-to-apples comparisons.
Stocks (VT): +1.42%
Bonds (GOVT): +0.17%
Copper (CPER): +6.58%
Gold (IAU): +4.44%
Silver (SLV): +16.72%
Platinum (PLTM) +22.61%
These weekly silver and platinum advances would make a good year for most investments.
>These weekly silver and platinum advances would make a good year for most investments.
While I do not have tremendous exposure to silver or platinum–never mind leveraged exposure–I am feeling a bit uneasy about the huge daily jumps. On the one hand, it is exhilarating because I’ve held silver for a long time and the platinum investment has performed far more quickly than I anticipated.
However, the thrill of making such large and gains brings back a somewhat painful memory from the dot-com bubble. I cannot remember the exact details but shortly before the NASDAQ cracked, there was a tremendous up day of maybe 200 points. I remember reading a message board and one of the busiest threads had a title of “YEEEEEE-HAAAAAWWWW!!!” In that thread were various people talking about the tremendous gains they made on the day (they did far better than 5% as they only had Internet stocks) and talking about even bigger gains to come. We all know what happened next.
If we are currently in a silver/platinum bubble top and it pops shortly, I guess I’ll still have metal to show for all the Sturm und Drang while I wait for the next silver/platinum bubble. I already missed the 2011 exit with silver. 🙂
For what it’s worth, I don’t think we are in a bubble quite yet but even if we are, I think it’s quite early and I don’t think we are close to a top. I hope. 🙂 I continue to hold to my silver and platinum.
Egads. I forgot to add another reason why I’m still holding my silver and platinum as well as some mining company equities that have gone up a lot this year.
It feels like we are gambling in a casino and winning big. We have greatly increased our piles of poker chips, don’t want to lose our gains, and we really don’t want to stay in the casino too long because it’s on shaky financial footing. You never know when the casino will go bust and the poker chips will be worth nothing or a lot less.
If it were a traditional casino in a sane environment, we could cash out our chips for dollars and walk out the door. However, in the current insane environment, we would be cashing out our casino chips for casino chips of a far larger casino that is on equally or perhaps even shakier footing.
This looks to me more like an overbought rally than a bubble. The short term is always a crap shoot … it could get more overbought or it could correct. It’s easier to say what won’t happen … go back to where it was. If I were a trader, I’d probably sell just on the basis of too far too fast. Investors might check their allocations and maybe trim a little off the top if the rally had taken them higher than they wanted, ie rebalance, or do nothing at all. FWIW the reasons I bought in the first place haven’t gone away, so neither will I;-)
am almost frightened to see wot happens to silver on monday
I think silver is similarly situated to where gold was in October before it sold off. At least that’s a lot closer than January 1980, when silver peaked and then took decades to recover. Point being a correction can happen at any time without it being an end to the bull market.
This leg up has been too far too fast and may be running on fumes, but longer term I think the metals have a ways to go. There isn’t really much in the way of attractive alternatives. In 1980 stocks were cheap and poised for years of great returns. They’re nothing like that now. When stocks are attractive again then the metals will have some competition.
There’s no Paul Volcker at the Fed either.
No Paul Volckers but a surfeit of Ben Bernankes and Janet Yellens. 🙁
There might be other factors……….for some time now its being said that Solid state battery will require a lot of silver, also data centres………..
………..as for Copper
https://www.themanufacturer.com/articles/asian-oem-commissions-uk-developed-aluminium-motor-technology-for-passenger-vehicle-integration/
Media narratives are suspect … not that they aren’t true, but that they’re missing something bigger. Eveything seems to have its own story. For gold, it’s the story du jour … Ukraine, then central banks, then tariffs, then generalized “uncertainty” … the all purpose explanation for anything when you don’t know what you’re talking about. For silver, it’s solar panels, batteries, data centers … for platinum, catalysis, copper, wiring, motors … etc.
Just a coincidence that they’re all happening together?
I don’t think so. There’s one bigger story behind them all. Central bank monetary recklessness and a government debt pandemic. Fiat money is going down the tubes and the world is casting about for replacements … going back to the real thing. These metals to one degree or another all have one thing in common … a history of use as money.
Readers will note that I have been calling out the corporate media for years for its diversionary narratives and its obsession with linking every market development with something in recent headlines. It doesn’t want to scare the horses with the truth about the systemic monetary failure. Financology model portfolios and investment orientation have included allocations to these metals for years, not because we saw tariffs or data centers or whatnot coming, but because of this.
5,000 years of history
Corporate media continue to speak with forked tongue. Tonight gold is rallying supposedly on safe haven buying prompted by the Venezuela story. It’s like Roseanne Roseannadanna world … it’s always something. Media’s simplistic headline-driven narrative meanwhile has no explanation as to why gold is actually up less than copper tonight. Same old same old … either they’re economic ignorami or lying through their teeth. The big picture hasn’t changed … metals are flying because fiat is swirling down the porcelain receptacle.
For a little deeper look at where silver and platinum stand, here is a five year chart of each in terms of gold, using the ETF proxies SLV and PLTM versus IAU:
Looked at this way, the recent rally in both is a catchup move; though silver has overshot a bit while platinum has undershot a bit. Silver is pricier than it was five years ago, while platinum is cheaper. Of course none of this assures that reversion to parity will take place, or when, or how, but it does take the fiat out of the equation. This is metal versus metal.
It’s also not to favor either over the other … personally I just allocate equally to silver and platinum. There’s nothing special about the five year time frame either … I see the longer time frame cited earlier (repeated below) as more meaningful; it just hasn’t been updated to reflect the past week’s action. Metal versus metal versus metal versus metal.
Looking at the metals chart closely, in a broad sense, silver tends to follow gold’s moves except for the 2011 run-up. Platinum however appears to be inversely correlated with gold in most situations, except when the value of the unit of measurement (USD) changes. I’m keen to understand what drives this, e.g. it boils down to a choice of either gold or platinum by investors and other actors and the rationale behind your equal treatment of silver and platinum.
Bear in mind that the four metals chart isn’t of dollar prices; it’s each of the metals relative to the average. The purpose here is to get the dollar out of the equation and highlight valuations, about which dollar prices alone aren’t informative. The apparent inverse correlation between platinum and gold is due to the fact that gold is part of the average that platinum is being compared to … all else being equal a surge or dip in any of the metals while the others remained constant would make the constant ones look like they were doing the opposite.
In a sense that would reflect the reality that the constant ones did move oppositely on a relative basis, but you wouldn’t see it on a dollar price chart. Notice the most visible feature of the platinum plot is its multi-decade downtrend … which simply reflects the fact that platinum long underperformed the average.
Was platinum really flat for over a decade? Or did it get cheaper in real terms? This is the gist of what this chart is intended to show. It tipped that platinum had become unsustainably cheap.
Thank you. It takes a while to get one’s head around the concept, but it’s clear now. If one metal’s price stays constant or increases at a slower rate, it moves away from the average, creating the effect you’d described, which in this case happens to be platinum.
China/Silver (13%) goes off line VERY soon……………….
Oh Humbug!
I was hoping for more……………oh well
I was thinking before about the high speed train line between LA & Las Vegas…….if no one now wants to go to Vegas……….is the project doomed?
Mike
Aye, humbug. This is why I hate when stuff takes off like that. It’s thrilling while it does but you know it’s unsustainable. Tortoise beats hare.
The metals need a rest here. Look for support around the 50 day exponential moving average (considerably below the highs due to the rapid ascent). Meanwhile, as the post says, beaten down oil has a lot of headroom. XUS stocks too. For the first part of the year ahead, maybe cash and bonds too.
Not feeling well today,,,,,,,,,off to bed
Hope you feel better soon!
This is probably good for ordinary investors; slow down the fast money a little:
Gold and Silver Prices Plunged Monday After Last Week’s Big Rally. Here’s Why.
You have to wonder why margins weren’t higher to begin with though…
>You have to wonder why margins weren’t higher to begin with though…
What’s wrong with a few more bubbles? The Federal Reserve *loves* bubbles! 🙂 When has caring about the little people ever driven Federal Reserve policy?
Let’s get a super bubble in precious metals. Why not? At least we own a lot of the assets in question and, if we’re clever, we can sell and make nice capital gains and capture a tremendous amount of fictitious bubble-gains. 🙂
A little more detail on the CME margin hike:
“But the biggest reason, at least on Monday, was something commodity veterans all know can happen. The rules of trading were changed.“
>”The rules of trading were changed.”
This quick run-up in the price of silver has had a lot of people on the Internet talking about the Hunt brothers and how they cornered the silver market and then were blown out and destroyed in 1980. Every comment claimed that the Hunts were destroyed when the CME raised margin requirements.
I can no longer seem to find the source but I read years ago that that was not what wiped out the Hunts. Yes, the exchange changed the rules in the middle of the game but the way the Hunts managed to make the price of silver go so high was that they were taking delivery on their futures contracts instead of settling in cash.
When they finally cornered the market and demanded delivery, the counterparties that wrote those futures contracts were bust as they didn’t have any silver they could deliver. Evidently, there were some very connected or systemically important counterparties who were bust so the CME changed the rules such that a futures contract can be settled in cash, breaking the delivery requirement.
Do you remember the issue of delivery versus cash settlement being the key rules change that broke the Hunts? I guess the feeling that the talk of raising margin requirements breaking the Hunts is just more Wall Street lies to hide the reality that the exchange broke rules to save the Hunts’ counterparties. There was never a clause in the futures contracts that exempted a writer of a future from delivery.
On a related issue, I seem to recall that the whole reason crude oil went negative in price in 2020 is because people who held the contracts were forced to take delivery. If people long crude oil futures in that incident were allowed to settle in cash, I very seriously doubt the price of a futures contract could go negative. It probably would have traded at zero or some slight amount above zero as traders with the ability to take delivery (they had storage tanks) would pay a nominal amount to get ridiculously cheap crude oil
I don’t remember much about the Hunt Bros affair … back in those days I was mostly occupied by my engineering studies, playing in bands and women. I had begun to develop an interest in economics too, though; my dad was a metals investor in the seventies and I had read his copy of How You Can Profit From A Monetary Crisis by Harry Browne. Highly recommended reading … one of the best introductions to economics you could wish for. My whole semester of Econ 101 had less insight.
I never really dug into the details of the 2020 negative crude prices, if only because it passed quickly and never really became economically significant. At least not unless you were a commodities trader…
As you may have gathered by now, I’m more of a big picture type when it comes to economics. There’s no shortage of smart people who are brilliant with details, but very few understand the whole. I like to go where I’m needed most!
Well Silver having a day again………………
Hmmmmmmmmmm………Reported attempt to “Drone” Putin, Channel tunnel service break down…………just saying
Mike
https://www.goodnewsnetwork.org/samsungs-600-mile-range-batteries-that-charge-in-9-minutes-ready-for-production-sale-next-year/
“Samsung’s ASSBs use a silver-carbon layer as the anode and a nickel-manganese-cobalt material for the cathode. Silver is not only the most electrically conductive metal available, it’s also substantially more plentiful in the Earth’s crust than lithium”
You might find this amusing:
Silver quietly crashes Nvidia’s party
“According to NDTV Profit, silver’s total market value surged toward roughly $4.7 trillion after spot prices ripped above $80 an ounce, briefly putting it level with or even ahead of Nvidia’s roughly $4.6 trillion market cap on some measures…”
“… You’re effectively seeing two sides of the same macro coin: AI chips on one side, conductive metal on the other.”
Metallic Melt-Up: the Year of Living Preciously
The Daily Reckoning is where Finster first appeared many years ago and has a lot of good stuff; this article by geologist Byron King is especially timely and it is one of the few that addresses together the four metals Financology regularly covers; copper, gold, silver, platinum. It nicely complements our technical and valuation perspective with fundamental insights.
…………..& so was 2025.
2026?
Metals
Battery tec
Drones
Its going to be busy, Happy New Year GUYS!!!!!!!!!!!!!
Sooooooooooooooooooooooooooo
Wot prices for Gold/Silver in 2026?
Your thoughts
Mike
For 2026 as a whole, see the post; I don’t really expect anything new to add until the 2026 Synthetic Systems run. It needs the closing data for this week so will be at least a few more days. But based on the 2025.75 run, the bull market is expected to continue. No guarantees, but it was right on the money for this quarter, anticipating both the gold correction and the copper spike (note in SS silver is a combo of copper and gold).
Right now there’s more noise than signal in the metals area. Silver and platinum did a moonshot. Then they were taken out and shot. Then the corpses were dragged up, propped against the wall and shot some more. But this is not at all unexpected; they had become extremely overbought and were begging for correction. We waved caution flags (here & here & here) before the selloff hit.
The near term is always a crap shoot, but I think that’s all this is … the overboughtness coming back out. It will take a few more trading sessions for the dust to settle. In general I think the bull market remains in effect for the rest of the decade. As I mentioned earlier, I suspect the next shoe to drop is that it broadens out into other commodities, especially those like crude oil which have so far been left behind. At minimum, I expect fiat to continue to depreciate, that gold will end the third decade of the century still ahead of stocks, and a good year for the 20:20:30:30 Portfolio. Stay tuned …
There is something I’m looking for as a sign the bull market in gold is nearing an end. Gold should trade in excess of the S&P. Now there’s nothing magical about the relationship between these two numbers; one has units of dollars per troy ounce and the other dollars per share, but happens to be an easy bit to remember, while getting an extraneous variable (dollars) out of the equation. Gold can still rise against depreciating fiat, but it would be signaling that stocks are nearing a level in which they are reasonably priced in terms of real money.
Another such rule of thumb might be yet more meaningful because it covers the entire world stock market; when IAU trades in excess of VT. For reference, IAU closed 2025 at $81.17 and VT at $141.06. Gold having beaten stocks since the turn of the millennium so far, IAU>VT would suggest stocks have better returns ahead.
Why look at gold:stocks instead of gold:dollars? Many analysts give price targets for gold in dollars. But how do they know what dollars will be worth? Stocks are a more reliable comparison. Stocks and gold are both inflation hedges. Going into the 1970’s, stocks were expensive. Gold, having been suppressed for decades by a dollar link, was cheap. So gold was the superior hedge in the seventies. But by 1980, stocks were cheap and attractive, poised to reward investor dollars with outstanding returns for two decades.
That’s why today is not like 1980. Stocks, particularly US stocks, are expensive and priced for poor performance. That’s why gold, as the default asset, is still the superior inflation hedge. Attractively priced stocks would be its main competition.
2026 Synthetic Systems has been posted.
OK, Wot to watch for in 2026:-
Sodium ion battery tec:-
CATL & BYD & others are now rolling out SI battery production…….with some surprising 1st products. Not EV Battery nor Grid storage…………but a potential death blow to the Lead-acid battery!
LA batteries are heavy, large & don’t last that long…Heavy Trucks & Busses go though a lot of them, SI would be much longer lasting smaller & lighter.
However Grid store & EVs will be quick to follow. SI battery life is 2-5 times that of a normal LI battery & can charge at vastly faster rates. They also operate a very low temps unlike LI. With Sodium there is no shortage to worry about.
CATL are at 175W/Kg thats at match for cheap LFP & they be going to 190 W/kg very soon.
So i think we see this as a major development in 2026 on………..
Alu-motor (Copper free) EV motor:-
A major cost to EVs is the traction motor, lots of design work has been done over the years with major advancements that have cut the weight & size of said Motors. France (Renault) is about to go into low scale production of an EV with motors built into the hubs!
However as many say there is no way enough copper to cover the EV production. Well British engineering has come up with a copper free EV motor & it looks like its heading for production.
KEI Cars (Pleb mobiles) for the people:-
The harsh truth ref Ukraine etc is now beginning to dawn on the powers to be. Suddenly the next BIG idea is going small. Not being able to bribe all those welfare sh1ts with free LARGE GERMAN cars means cheap replacement cars are required.
Not being able to pay (real money) to import Hydro-carbons to power them is also a factor.
Small, compact & light these cars based on the Japanese KEI car. Small battery thus small performance, they might end up with Alu motors & SI batteries!
“France (Renault) is about to go into low scale production of an EV with motors built into the hubs!”
They should all be this way! A motor for each wheel. No driveshaft, no transaxle, a platform for all wheel drive with computer controlled torque delivered to each wheel…
No so sure about the aluminum though. Sure, you can make a motor with aluminum windings, but copper is better. (And think of all those zillions of copper pennies no longer being minted!) Maybe even SILVER for high-end EVs…
😉
2025 metals scoreboard:
CPER: +38.07%
IAU: +61.73%
SLV: +139.21%
PLTM: +120.69%
Bonds and stocks price only:
GOVT: +2.47%
VT: +20.32
Given yields of about 3.75% for bonds and 1.75% for stocks, total returns for bonds and stocks come out to roughly:
GOVT: +6.22%
VT: +22.07%
Price only for the S&P:
VOO: +16.68%
Adding in the paltry yield of about 1.25%:
Total return for the S&P:
VOO: +17.93%
… Less than the world market (VT) due to the underperformance of US stocks.
More:
The Investment Scorecard for 2025: Top Performers and Biggest Decliners
The above chart from Investopedia is admirably comprehensive, including commodities as well as stocks and bonds. It’s important to recognize one flaw however … the units for foreign stock indices like the Dax and Nikkei are conventionally given in local currencies. There’s nothing intrinsically wrong with this, but the units for everything else are conventionally given in dollars. As it happens, for example, the 23% gain for the Dax in euros, because the euro gained relative to dollars, translates to, in dollars, a return of over 37%.
Convention is apples and oranges. In order to properly compare returns of different assets they must all be stated in the same units. Otherwise it would be like saying Jim is taller than John because Jim is 160 centimeters tall and John is only 70 inches tall.
This may be common practice in economics and finance, but no other field with a pretense to science would tolerate such slop.
Clear winners & losers
Mike
Gold and silver hit records in 2025. They aren’t the only metals having a massive year.
Some decent coverage of metals fundamentals, except for the short shrift given to the role of Fed rate cutting and money printing.
“We’re just not going to have enough supply for the projected demand.”
You can demand all you want, but it can have no effect on prices without a fistful of fiat to back it up.
Create a trillion dollars, then “demand” appears, outstripping supply, and blame “supply” bottlenecks for rising prices. This is just playing coverup for inflationary policy.
Ok, Trump just went “Weapons free”………..lets not talk Geo-political but practical results come Monday morning.
Oil?
Gold?Silver?
$?
Mike
Maduro Captured, Indicted After US Airstrikes on Venezuela
Thoughts?
Deep breath………………..
Trump has:-
Tanken their Oil off the market
Placed to Oil in US hands
Opened up Rare earths Gold Silver Copper to US only sales…
Stopped Europe from getting access to them
Allows US to strike Iran once Oil production brought on line.
Or
Started the biggest US war since Vietnam
Brass. Balls.
British PM has no idea it was happening……usually the UK would demand a role in any major operation, but not this time………….I wonder wot China thinks?
Venezuela’s Allies From Brazil to China Denounce US Attack
I’m not a geopolitics guy (you’re our point man in that department), but I start from the point of being skeptical of any forceful foreign intervention; burden of proof on the aggressor. I don’t know the full history of this, but if this reflects the new regional dominance model, it’s at least a step in the less bad direction. And although I don’t trust American media reports, it does appear Maduro was a bad actor.
So right now this doesn’t look appropriately characterized as an attack on Venezuela … as opposed to on the Maduro regime. In fact it appears a credible contingent in Venezuela is supportive. So despite my general opposition to foreign intervention, I’ll give this one a tentative thumbs up.
Convince me otherwise…
The Trump admin may be looking at this as a hemispheric issue…
A Trumpian Twist on the Roosevelt Corollary to the Monroe Doctrine?
” In fact it appears a credible contingent in Venezuela is supportive. ”
Vichy France.
Just like Iraq easy in, very hard out…….am told it would take 20 years to meaningfully get Oil production back to stuff. In a World fast moving to Green power EV cars & new battery tec allowing longer term storage ……….why do this?
Rather than yet another Bloody war just think if the investment was used in the aforementioned.
“May be am a dreamer but am not the only one”
Aye, just one reason I’m skeptical of these kinds of adventures in the first place. Vietnam, Iraq, Afghanistan, Ukraine … all very expensive not only economically but in loss of life with little to nothing to show for it; very poor return on investment. DJT has made no secret of the oil angle here either, but that’s no legitimate ground; it’s the moral dimension. So far pretty clean in terms of human costs of action compared to human costs of the status quo … if it stays that way, fine; if it doesn’t, not so much. Is this a quick coup d’état? Or the beginning of a protracted war? Will the ongoing disaster that has been Venezuela turn a corner? Only time will tell.
I am in the camp that says DJT has been spending too much time and energy on the rest of the world and not enough on our domestic problems. Especially for a guy who promised America First. Social Security, Medicare, the tax code, inflation, debt … all a mess. So it wouldn’t take much time for my tentative optimism to prove misplaced.
My thing here is the tendency to conflate a nation with its government. They are not the same thing. Venezuela is not Maduro, it’s the land and its 31 million people.
China reacts with condemnation — but no threats — as the fallout from Trump’s Venezuela attack begins to ripple
“Energy analysts at JPMorgan wrote in a note to clients that “while the administration’s recently released National Security Strategy aims to limit Chinese, Russian, and Iranian influence in the Western Hemisphere, Chinese companies may still be permitted to pursue investments in Venezuela’s oil sector.””
This bit is one of the few reports that appear to be getting at the root of the admin’s motives for its Venezuela incursion; an effort to counter incursions by others.
Wots next?
iran or Canada?
Angry town halls nationwide find a new villain: the data center driving up your electricity bill while fueling job-killing AI
You heard it here first … the costs of AI have not been fully factored in. So-called hyperscalers will have to foot the bill not just for silicon and software … they will have to fund the energy to power them with. Not just tap into the grid and drive ordinary families into the dark so Big Tech can prosper.
Has The AI Bubble Sprung A Leak?
“And you might have to build your own nuclear power plant to run it all.”
Ho Ho Ho
Suddenly demand matters
Metals off to a strong start for 2026…
you bet ya!
Also recall that asset price inflation leads consumer price inflation. Asset prices have been romping the past three years, especially stocks and metals. On top of that, the Federal Reserve gave up its inflation fight prematurely, has cut interest rates and resumed money printing, and the federal debt continues to soar as increased revenue from tariffs has been outrun by tax cuts in other areas and spending increases.
The timing is uncertain, but sooner or later either asset prices have to correct or consumer prices rise to meet them.
Another 2026 prediction … and this time I’m stepping out of my economic comfort zone and into geopolitics, but … the United States will annex Greenland.
President Trump has plainly expressed his interest in doing so, and despite the controversy, it’s not clear what would stop him. The national security and economic interest is well covered, so there’s no need to rehash it here. Whatever else it may be, it’s better than allowing Greenland to fall under the control of Russia or China. It’s also not without precedent; the Louisiana Purchase and the addition of Alaska and Hawaii happened. Puerto Rico is another analogy. Greenland is geologically and geographically a part of North America, and becoming a political part as well would be consistent with the multipolar world order taking shape.
It would serve as a very bad precedent, however, if it were done against the will of the people of Greenland. We have a number of words for taking things without permission, none of them flattering. And few political principles are as quintessentially American as government by consent of the governed. The idea of buying support has been raised. It’s not intrinsically bad, but the United States has other work to do … being a country that Greenlanders would want to join. Crushing debt, inflation, byzantine health care, social security and tax systems, and an overbearing federal government aren’t exactly the things that made it a good deal for the people of the aforementioned annexed territories, and not so different from Europe. Make them a better offer. Only by offering Greenlanders liberty, the rule of law, self determination, and free markets can America truly be said to be worthy. Fix America First.
Mega’s Dispatch from England:- Trump crazy………like a Fox?
Sorry for the lack of posts, Mum needs a lot of support just now. The weather here in Blighty is not the best for a 93 almost 94 year old & she is very much feeling her age. Its having an effect on me as well. I had to leave my job at Home office intel (miss the team) but she needs me & that’s that.
My Metal health has suffered as well, i sleep downstairs mosty these days. Mum bursting into the bedroom in the early hours screaming for tablets or my late Father. I am Sertraline right now, it helps but i might have to try something else.
Anyway, Trump
Been questioning wot he is up to?
His latest adventure into South America is unlikely to yield much in the results of a steady flow of heavy crude. They can get that from many other sources & just print $ to pay for it……so why the “Police action”?
China?………yes but that too but i think the main driver is Europe. With Russia OFF line Europe needs Hydro carbons & they are limited just how many Euro’s or £ they can print. Europe was in the process of doing a deal with “Ven” when Trump dropped by.
With that deal sunk (I bet the ex Bus driver is telling all now) SUDDENLY IRAN kicks off. Having already tried once & failed the City of London/Euro scum are at it again using their Agents in Israel etc to try their luck.
From what i can tell its mostly Kurds causing the bother in Iran & i believe TURKEY has been most helpful to Iran with Intel + other support.
Meantime the EURO/LIMEY delusion of grandeur carries on.
We just had (Yet another) meeting of the “Collection of the willing” (the weak). Where Germany.France & Blighty are will to send forces to Ukraine once there is a ceasefire & US gives article 5 cover for them.
Yes Russia won, but they still want Ukraine as an Nato asset.
Game on Guys
Mike
Peace be with you
its mid night here in Liverpool & the metals are OFF
Just what we predicted five years ago!
Outlook for the 2020s
Je Sus!
Metals will be down tomorrow.
They be back!
lol yes they will
I just uncovered an unexpected bit of market trivia. The Invesco NASDAQ 100 stock fund, QQQ, you know, the one with Nvidia, Apple, Microsoft, Amazon, Alphabet, Meta, etcetera, is up by 6.22 times over the past ten years. The iShares gold mining stock fund, RING, is up by 7.61 times.
Remarkable, considering the ratio of coverage of these two groups of stocks in the financial media has to have been at least 100 to 1.
Another item for our “you will not hear this on CNBC” collection!
Move the ten year window back one year and the return of RING is quite a bit worse relative to QQQ. 🙂 Move the ten year window back two years and RING looks like a dog with atomic fleas compared to QQQ.
I bring this up because I was essentially in that boat as a lot of my equities exposure was in gold and silver mining companies. They all looked good on paper but the stocks languished for years. That alone is enough to make one think that one made a bad investment (or multiple bad investments). However, when the NASDAQ 100 or Magnificent Seven is roaring higher while the mining companies are essentially flat, the sense of panic becomes quite difficult to bear. And if one is so unfortunate as to have a neighbor who is getting rich investing in QQQ or the Magnificent Seven, it’s enough to drive one totally insane. 😀
Fortunately, 2024 and 2025 recovered all the underperformance relative to the major indices and then some.
The key lesson of this real-life experience, I guess, is that even if a given investment is guaranteed to give a certain compounded rate of return over a specific period of time (let us hypothetically say 10% compounded over 10 years, 2.59x the money at the end of 10 years), there is absolutely no guarantee that the return will be smoothly distributed over the investment period. It is entirely possible for the investment to do nothing for nine years and then gain 159% in the tenth and final year.
The mining stocks were very difficult to hold for a lot of the 2020s and it had a lot of people invested in them kicking themselves and wondering where they erred.
Just to be clear, my point was about media bias. I’m not a particularly big fan of either investment, at least not now.
Actually not most of the time. As far back as iTulip I posted recurringly on the differences between gold and gold mining stocks, warning that the latter are first and foremost stocks, not gold, and are, contrary to much gold bug commentary, not interchangeable in portfolio construction; eg “put X% of your portfolio in gold and gold mining stocks”. Terrible advice. I know people that got wiped out in 2008 because they loaded up on junior mining stocks. Recent comments here:
https://financology.net/2025/11/26/how-to-survive-a-bubble/#comment-8024
Mass media is worse. Most of its audience fails to appreciate the extent to which it serves as a marketing machine for Wall Street and Silicon Valley financial products while posing as being there to help its audience invest well.
There are times of course to buy either. The best are usually when they’re objects of disdain or apathy. The only times I bought RING and its silver counterpart SLVP were in October of 2023 and February of 2024 when they were pretty much left for dead, with good results. Most of those ten years of gains came since then. FWIW, I haven’t sold them, but wouldn’t buy them here either.
Financology commenting policy can be found on the site menu at Comments.
I want to reiterate a point in the post about commodities. The bull market in metals continues, but investors should be prepared for its center of mass to shift to the broader commodities complex, including energy, which has so far been left behind. Oil is historically cheap, especially in gold terms.
Buy low sell high!
May be………..
If for one moment i play Devils advocate, assuming we looking at this though the lens of Lyndon Larouche or the like:-
Trump refuses to attack Russia for Europe.
Europe left swinging in the wind
Europe attempts to rip Africa
Africa drives out Europe
Europe attempts “Trade deal” with Venezuela
Trump NUKES that deal
Europe via Israel attempts colour revolution in Iran
Iran stands……as yet no sign of the 6th fleet attacking
&………….Trump going to Davos next week (Only Nixon could go to China)…….to give them “Terms”?
Lyndon LaRouche? 🤯
There’s a name I haven’t heard for a while! Quite the colorful character. When I was a youngster he seemed to always be running for president; his perennial television campaigns were memorable…
To the point about gold vs the equities of gold miners – yes, very different.
Gold mines are business operations, and even the giant ones respond to forces that do not affect the physical metal at all. I recall endless chatter years ago about the hedge books of major mining companies. They had signed long-term contracts for future delivery of gold still in the ground. As spot prices drifted downwards for years it worked pretty well for them, delivering at yesterday’s higher prices. They expected further slow drops forever. Then the spot price reversed and started climbing long term. Mining companies took years of losses selling cheap as they unwound those old hedge books. Very different than physical gold.
Ah………………….A BMW for you my friend
https://www.autocar.co.uk/car-news/new-cars/quad-motor-bmw-m3-ev-get-simulated-gearbox-engine-note
Nice! Like the motor for each wheel. Could do without the pretend noises though …
Am sure you can switch it off
Can I not pay for it?
🤪
Ah……………….PLEB cars
https://www.autocar.co.uk/car-news/new-cars/fiat-mulls-73mph-limit-500-panda-city-cars
Shameless Fed boasts about its success in playing “wealth effect” reverse Robin Hood.
High-Income Consumers Are Living Larger, While Others Cut Protein to Make Ends Meet, New Fed Report Finds
Ok, the Iran attack appears to be “Off”………….Did “They” attempt to bounce Trump into war with Iran?
Never mind “They” will be meeting Trump net week…………Oh to be a fly on that wall!
Russia gets Ukraine, America gets Greenland, Iran ceases to be a problem.
Russia GOT Ukraine…………German leader spent more than an hour on the phone with Putin. France is in big trouble ref it Nuclear reactions because they specced the wrong grade of steel during construction……….the pipes are coming apart & very soon they going to lose production.
Trump is using Greenland as away of breaking NATO.
Chatham House (British deep state think tank) stated yesterday that America might have to now be views as potential emery state.
Well reportedly some Denmark pols have said that America taking Greenland would be the end of NATO.
My take … why would they think the deal needed a sweetener?
NATO imperialism caused the Ukraine war. US should have been out long ago. Trump should stop dorking around and stop sending military aid like yesterday. People are dying for no good reason.
America has flubbed up badly with Russia. It should be making an effort to get along better. For its own sake and because a lot of other problems would be easier to deal with … Iran, North Korea, maybe even China. If Europe is saying any friend of Russia is an enemy of ours, Trump should call its bluff.
This is a chart of silver over the past year. It is NOT in terms of dollars, but in terms of GOLD.
Scary.
This is a chart of the world stock market in terms of gold.
Any questions?
AS “Oddball” From Kelly’s hero’s would say:-
“Will you stop with them negative waves”
Silver is just warming up baby
Don’t think I’ve seen that. Have you seen Doc Martin? A top favorite of mine. Always wondered if it was as popular in its home country as it is across the pond. Another Clunes series, William and Mary, is another top favorite. I watch both over and over.
Gold will hit $5,000/oz, silver $100/oz by March, but gold will be vulnerable to correction afterward – Citigroup
Corporate media continue to misrepresent the reasons for metals’ bull market. Usually things that aren’t the establishment’s fault. Citi says gold prices will ease once “geopolitical tensions” ease, also chalking up rising prices to “fears” about “Fed independence”. Before that it was tariffs. No explanation for why gold started taking off long before that. No mention of the real drivers, spiraling debt and inflation. The Fed has been cutting interest rates and just resumed printing money outright. There’s an indirect connection with geopolitical unrest, as it can lead to more war and war is usually financed by inflation, but the milquetoast media don’t make that connection. It’s important to get right what’s driving metals prices, because all these transient factors just keep getting replaced by new ones in the media when they no longer serve their purpose, while the real drivers persist.
Shortages? Inflation creates shortages. Demand is infinite – human wants are unlimited – but only to the extent the currency is there to demand things with can it drive prices higher.
Be careful
Gold went no ware in the 80’s/90’s, plenty of money printing then.
Although they made a song & dance over high rates it did not cover inflation.
Now Geo politically things have changed, 5,000 years of history is back……..may be.
Mike
Yes I’ve addressed that before. Three factors. Gold and silver entered the eighties in a bubble. Stocks entered the eighties cheap. The Volcker Fed was serious about inflation, willing to accept a deep recession to quash it.
None of those factors are in sight here the twenties.
The eighties, when the last gold bull market ended, opened with the S&P yielding 5.24%; the oughts, when this gold bull market started, 1.17%: multpl
Stock valuations are significant because no asset lives in a vacuum. Gold, stocks, bonds, etcetera compete with each other for investor funds. That the stock market is already fully valued has a lot to do with why the response to inflation has favored metals. Bond yields also were much higher in 1980.
In any case, it is ongoing macro factors, debt, inflation, etc, not a series of unrelated accidents, that’s driving this bull market in metals. I predicted metals rising six years ago not because I foresaw Covid, Ukraine, Iran, Trump, etc but because of the financial big picture. The establishment is deliberately misdirecting attention from its responsibility for debt and inflation. It doesn’t want to remind the public of the Fed’s printing by the trillions after covid or its recent resumption of money printing nor of how overvalued its stocks and bonds are (expensive stocks and bonds for buyers equals cheap capital for issuers). It profits from these things and doesn’t want the public to connect the dots lest its golden goose fall under threat.
BTW of course geopolitics definitely does factor in, but not the way media portray. It’s more effect than cause. When people are economically oppressed, they get irritable. When they’re irritable, they look for targets. ZH just ran an excellent article on this point:
Inflation And Revolution
The other side of the coin is that when war threatens, inflation does too, because government funds war just like it does any other really expensive program; with inflation. So currency falls and gold rises. Vague and fuzzy media appeals to uncertainty and unease are either ignorance or misdirection.
Trump Says Wants To Keep “Hassett Where He Is” Sending Warsh Fed Chair Odds Soaring; Gold Slides
Dollar jumps, gold dumps.
Markets may be making a bit more of this then it deserves … Warsh is perceived as less dovish – less prone to easy money – than Hassett. Hassett is seen as more political and closer to Trump. I lean towards Warsh myself, but no matter who the Fed chair is, the Fed will be under immense pressure to continue to inflate, partly to keep Wall Street and Silicon Valley happy by supporting stock prices and partly to keep treasury prices up and rates low. Alas it’s not possible to both do that and keep consumer prices down, because they are both a function of the same variable, the value of the currency. Whoever the nominee is, he will have his hands full.
Only a serious effort at fiscal restraint and a willingness to accept lower stock prices can stop this thing.
Kevin Warsh touts ‘regime change’ at Fed and calls for partnership with Treasury
OMG
Machado gives her Nobel Peace Prize medal to Trump
TDS world sputtering in disbelief
https://www.aa.com.tr/en/economy/germany-forces-lexus-to-remotely-turn-off-car-warm-up-function-over-environmental-impact-report/3801107#:~:text=German%20authorities%20forced%20Toyota's%20luxury,drivers%2C%20according%20to%20the%20report.
De Fuhrer sez “NIE”
People everywhere were sold on car connectivity without any idea what was down that road.
Something for them to think about: Do you really want to go down that “smart home” road too? AI is the road from 2026 to 1984.
Seriously, think about this. I remember well back in the 1990s when the internet was young. It was exciting and liberating. Information will set you free, they said, and the world wide web let you go anywhere.
But over the years, it began to be used as a means of control. Software updates went from upgrades to requirements. Your car can be used to track your whereabouts and even shut down. Governments began to study central bank digital currencies. The internet fell under the control of a handful of giant corporations who use it to track your activities. You are lured in with promises of empowerment only to become dependent on their services. This vector doesn’t point in an encouraging direction. We have no reason to think it will be any different with AI, and every reason to suspect that the more powerful the technology, the more powerful its purveyors.
I advise all readers to proceed with caution. Limit your connections to specific devices you use to connect with the outside world. Phone, television, online computer. Not refrigerator, washing machine, car. I’ve kept one computer unconnected since I bought it fifteen years ago, and it is just as fast as the day I first booted up, zero maintenance.
If it’s not inherently a communications device, don’t turn it into one.
Mega’s Dispatch from England:- Dog Day afternoon in DAVOS/1
Well, well………here we are.
Trump is packing for his trip to see “Them” at Davos, you know …..i mean you KNOW its going to be a Riot! Few words can sum up my feelings since the end of the Cold War these vermin have appeared.
I 1st became aware of said Scum when George Soros broke the bank of England or rather Mega & his fellow Limeys got “Taxed” to funnel cash to Soros & his gang to fund the start of this painful “Colour revolution” period.
There always been a power struggle between The Yanks & the British. They have never forgotten or forgiven the Suez crisis where the City of London, the Empire got Bitch slapped by a USA/USSR combo!
THe British deeply in love with the Nuclear bomb did everything to try to get one & gain Party with the US. They failed miserably, the best they could do was a small A bomb. They tried all by GOD they tried for a H bomb, but when they tested it….it failed.
THe British had a back up plan……a Bloody BIG A bomb………it was next to useless as a deployable weapon but it did yield 890 Kt (The British claimed a Mega Ton) but few powers were fooled.
What the British needed was Help & a delivery system somewhat better than the Airforce. THe British want ICBM’s & America said “No”. Having run out of money LBJ suddenly agreed that they could have SLBMs (Sub launched) the Prime Minster of the day Wilson was delighted……at last the Limey’s would have demi super power ability.
…………………then the limey READ the contract!
THe Missiles would be held when off the Sub by the US. The Missiles would be serviced by US engineer’s…….the Subs would sail with US missile officers onboard & the US would have the launch codes!
Wilson blew his top with LBJ………he been lead up this primrose path only to be handed (at great cost) a weapon system that was about as useful as a chocolate fire guard.
So fast forward the the end of the Cold war & the British began to plan their moves…
You have to wonder if Trump has even given his Greenland strategy any thought. If he really wanted it, would it make sense to broadcast your intentions to world before you’ve positioned your pieces on the chess board? Give the opposition lots of time to build up before you put anything on the table? Or run your mouth for months first? While your opposition formulates its strategy, and hardens its positions? Threaten tariffs when your power to levy them could get kneecapped literally the next day?
This from a guy who fancies himself the Great Dealmaker. I’m no geopolitical strategist, but it looks to me like Trump’s mouth is his own biggest obstacle.
He does not want Greenland……………..he wants a wedge issue.
He wants something that he can use as an excuse for walking away from NATO.
Thus demand something outrageous & stand back………the Europeans MUST say “NO”.
Signs everywhere “Yanks go home”…………so they will.
Mike
PS Are Trump taffis on top of the ones he already has in place?
Hence my use of the word “if”. It’s not clear what he really does want. But neither way would it endear him to his base. Far as NATO goes, skipping the unnecessary drama and just walking away would sell just fine. It helped elect him because it’s tired of neocon foreign interventionism and NATO imperialism. It’s not happy with his global mind-set; it voted for “America First”. It likes straight talk and it won’t be a good look if he says Greenland or bust then loses. He’s cruisin’ for a bruisin’ this fall.
Besides, he’s already been handed a NATO wedge issue on a silver platter: Ukraine. Stop all military support like yesterday. It would tick off NATO and buck up his electoral bona fides in one blow. Millions will stand up and cheer. Meanwhile getting Greenland might be a winner, but talking about getting Greenland is a loser.
It doesn’t look like he’s thought this through. If he keeps it up, voters will hand the government back to the opposition not only in the mid-terms but in the next presidential election and undo his agenda and it will have been all for naught.
I’m no geopolitics guy, but want to see Trump succeed, if only not to see America overrun by mass illegal immigration again.
Far as I know, he hasn’t been explicit about whether the tariffs are on top of the existing ones, but that would be my read.
Mega’s Dispatch from England:- Dog Day afternoon in DAVOS/2
My friends please forgive me but events are moving very quickly now. I had planned to layout a time line to how we got here but things are now happening fast.
I had intended to show how the vermin used Banks instead of Tanks to support their aims. I think however we need to focus now on what is happening. Last week British defence chiefs had just landed in Ukraine to tour their production/repair facilities in the far North of the nation close to the border with Poland.
They were on route to a base in Livi when suddenly “Mr Oreshnik” entered the chat. The British got a ring side view of wot a March 10 Hypersonic missile can do. This was just after the Limey scum had said they were building a new missile for Ukraine called “Skyfall”. In short this was an advanced system that would allow Ukraine to strike deep into Russia, like Moscow
That would prompt a response from Russia, a target in Blighty would be hit…….at which point the Limy vermin would scream “Article 5” & await US intervention.
Hence Trump now needs to move fast he must break NATO & quickly. Either the Europeans fold & give him Greenland or he gets his excuse to walk away.
The British PM just rang Trump, normally Trump is “Too busy” to talk but tonight he took the call. My Friends i sense we are now entering the “End game”……events might very well move quickly & in unexpected ways………………BUCLKE UP!
Mike
Dammed Colonial Bastards!
Headlines like this are now appearing in the British press:-
Britain must declare independence from America or it will die
Trump is not a deviation from his predecessors. He is merely following the tradition of liberalism
Live from Kitco
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