The democrats had a big night on Tuesday taking over the house, senate, and flipping a few governors. “Markets” are screaming higher. Why? I have no idea.

Did the national debt that measures in hundreds of trillions if we are being honest get any easier to fund or ultimately resolve? Is this the answer to a resolution in the Persian Gulf? Does this create any new food, energy, oil, water, etc.?

Personally, I will go on record and say that this “victory” for ½ the country will turn out to be a trojan horse. Why? There is virtually NO WAY to kick this economic and financial can much further. I fully expect by the next election- which all of the mainstream media propaganda stations will no doubt be speaking about 24/7 after this news cycle settles down, will usher in a new paradigm.

People keep voting for change. They are propagandized by our news media into thinking that one side or the other is “THE ANSWER” to our problems. I believe by 2028 many will realize that we have been bamboozled by both sides time after time. I believe the BIG wakeup call will be that prices will be FAR higher; jobs will be fewer and wage gains will fail to keep up with rising prices. This should lead to an awakening that the “parties” care only about the party and not what is actually in the best interests of us.

For those foolish enough to promote socialism remember what Margaret Thatcher famously said in the 1980s. With socialism it works until you run out of other people’s money. If there was ever a worse time to try that experiment than now, I cannot think of one. We are “printing” trillions before these economic illiterates want to steal more of our money and instead of investing in productive enterprises- spend it. Before any more handouts take place, we are running $2 TRILLION deficits- that they admit to. It is actually FAR more.

While the official numbers are massaged so thoroughly that there is virtually no resemblance to the economy we are experiencing, the happy talk and made-up figures have been exposed and people voted with what their eyes are seeing.

I fully expect the same manipulation of numbers and narrative to continue- and maybe even get worse as the situation deteriorates- but as I have warned about for years the chasm between the “official” numbers and reality is so big that the numbers can’t be believed anymore.

Just a few examples of how the media can distort stories.

· Last week I noted the tens of thousands of job losses taking place in the tech sector. The media reports this as “rightsizing” and “efficiency” while real people are losing tens of thousands of jobs. Of course, a positive headline inflates the stock price. Did you ever hear a CEO admit that the future did not look too good?

· Job openings beat expectations 7.5 million vs. 7.1 million expected. On the surface that is great. Too bad in the fine print (which most people never see) companies are hiring at the slowest pace since 2013. If you take out AI construction and government hiring the number becomes NEGATIVE. This is important because of the problems arising in AI funding, community pushback, and Chinese competition- let alone the fact we do not have enough energy being produced. Similar to the stock indexes rising with 440 of the S&P 500 companies down 20% or more, the concentration risk is VERY real for jobs here. This is particularly true since the election as Texas, Georgia, Ohio, and Michigan are now calling for a pause on AI datacenters. Trillions are being BORROWED and spent and with the stroke of a few pens it could all come crashing down. Keep in mind the only real drivers of growth in the economy are war and AI.

I am expecting far worse numbers and to be fair I would expect the same if the results were reversed. There is really no good option when we have gone so far down the “printing and buying” road. The only genuine answer is a reset. Hopefully, someone can produce a plan, and it can be orderly as opposed to disorderly which could lead to chaos.

History says that gold should be a major player in restoring confidence in the system. This has happened many times in history and in every recorded case a hard asset has been used to restore confidence after the system is self-destructed after too much debt and currency has been issued.

While many are lamenting the current pullback in gold those of us who have seen this before may be a bit surprised at the depth of the pullback, but we have seen this game played before. Actually, gold is slightly HIGHER than it was one year ago today.

My opinion is that major banks and China engineered the price drop. Gold is moving to the east, and they want to get it over there as inexpensively as possible. I have mentioned the fact that China bought 690 TONS of gold during the downturn and there are recent reports that in the past 2 months they have bought more than four hundred tons in addition to the 690.

In addition, large corrections are not an uncommon experience not only in metals markets but in many assets that rise in price a bit too fast. I do not think I have ever seen a more positive setup for gold-EVER. Those who are lamenting the pullback and are not taking advantage of a lower price may be kicking themselves in the future.

Many traders will point to rising rates being bearish for gold. They know trading- not metals markets. Tell me again how high rates are bad for gold when it went from $35.00 to $800.00 during the time when rates moved from 7% to over 18% in the late 1970s. As rates were rising recently in the 2020s, gold had MAJOR gains.

I heard a podcast where the trader brought up negative and positive real rates. That is if there are positive real rates the interest paid is higher than the inflation rate. Negative real rates imply rates are lower than inflation. Since the REAL inflation rate is FAR higher than the “official” numbers that is a flawed argument. In reality, rates would have to rise to double digits if inflation were reported realistically instead of being meant to prove a narrative.

Paper traders can use this to artificially keep the PRICE down in the short term as we all know has been taking place for decades. In reality, the negative rates will reveal themselves in time.

Traders trade. Investors seek VALUE. Traders are like the hare; investors are sometimes seen as tortoises. Who won that race?

Be Prepared!

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