Three Things to Know in the Gold Bull Market

09 Jul

Three Things to Know in the Gold Bull Market

gold bars stacked in a pyramid

1. The World Is Starting to Notice Gold!

“Gold prices ticked past $1,800 an ounce this week, and are now not far from the all-time highs reached in 2011, in the bleak aftermath of the financial crisis. New records could be ahead.”

That is the lead from a story about gold in the Wall Street Journal Thursday morning (7/9/2020).

The dominant news media, including the mainline financial press such as the WSJ and the financial cable networks, have always had a difficult time reporting on gold.  Serving as the lapdog press of the financial establishment, Wall Street, the Federal Reserve, they don’t much like gold.  So their reporting about it is often wrong and almost always clumsy.  

Take for example the way the WSJ concludes its Thursday story: “… it isn’t unreasonable to believe it will reach new highs in the months ahead.”   

Wouldn’t your high school English teacher have called that a double negative, or unnecessarily wordy, or something?  Mine would have said “write what you mean”:  

It’s reasonable to believe gold will reach new highs in the months ahead.

2. The US Budget Train Wreck

The end of June marks nine months of the governments accounting year, Fiscal Year 2020. To no one’s surprise, it’s a calamity.

The government ran a deficit of $863 billion just for the month of June.  The nine-month deficit is $2.7 trillion, which is more than three time the first nine months the year before.  

In June 2019, unemployment insurance spending totaled $2 billion.  This June is was $116 billion.  

All we can say is, “It’s reasonable to believe gold will reach new highs in the months ahead.”

3. Could the Fed Become the Socialist Branch Bank for the Poor?

Former Vice President Joe Biden and Vermont Senator Bernie Sanders have come up with a 110-page joint policy paper as part of an effort to get Bernie Bros. and other socialists on the Biden bandwagon.  

Bob Wenzel, Economic Policy Journal, writes, “Most alarming in the paper is a recommendation that bank accounts be made available at the Federal Reserve for low- and middle-income families.”

“This would be a shocking expansion of the government role in the banking sector.

“Specifically, the statement says:

‘One in four American households are either unbanked or underbanked, putting them at risk of losing money due to exorbitant fees or usurious interest rates. Democrats will support and encourage Congressional efforts to guarantee affordable, transparent, trustworthy banking services for low- and middle-income families, including bank accounts and real-time payment systems through the Federal Reserve and easily accessible service locations, including postal banking.’ “

Well, why not risk-free, no fee, subsidized interest rates, guaranteed accounts for everyone?  They’re printing money for everything else under the sun!

And people wonder why gold is going up!