Tomorrow is election day, which might or might not mean much in regard to the election outcome. With the vast increase in moving parts for national elections, determining the outcome is much more difficult than it used to be. The potential for fraud is greater, and the number of people involved in running the election has greatly increased.
Along with millions of other people, this writer anticipates a contested outcome. The Democrats have pulled out all the stops to prevent Donald Trump from becoming president again. If he wins, he will likely have something to say about all that. I suspect the Dems will try to prevent it at all costs. That’s not hyperbole. By their own admission, they perceive their grip on enduring power and perhaps even their lives (their assessment, not mine) to be at risk, so I do mean at all costs.
And like the old saying “there’s many a slip ‘twixt the cup and the lip,” there’s also “many a complication ‘twixt the election and the inauguration.” Just because Trump might win the election doesn’t mean they’ll allow him to be inaugurated. In their verbiage, he is a convicted felon, a fascist, a destroyer of democracy and the Constitution, and much more.
Preventing such a threat to civilization from taking office would justify even a declaration of martial law in many people’s eyes. That’s not a prediction, just an analysis of the facts as presently known—hopefully an incorrect one. If Harris wins, she will also likely face significant challenges to taking the office given the nature of her campaign and questionable election practices in various jurisdictions.
None of this is intended as scare-mongering. It’s merely meant to underscore the very obvious fact that we live in unsettled times. The election will not likely end the turmoil. In fact, things might get much worse from here.
The entire world is caught between revolutionary “me-ism” and respectful “thee-ism.” Power mongers buy support from short-term thinkers by promising them spoils from fleecing the rich, while those who value other people, peace, property, and long-term prosperity struggle to compete with such short-sighted opportunism. It’s not pretty, and each side has chosen its time horizon. The short term favors the revolutionaries, while the long term favors the industrious peacemakers.
The audience for this blog, almost by definition, consists of the latter. Faith, morals, tradition, legacy, passed-on skills, delayed gratification, and enduring value of any kind—including money—are long-term things. Such things can be temporarily overshadowed in a society by people who take much more exciting opportunities to enrich themselves by beggaring their neighbors, but there’s always that sowing/reaping problem. Not only are planting and harvesting joined by phylum, genus, and species, they are also joined in vigor. “The revolution,” it is said, “always eats its children.”
So don’t be fooled or disheartened by events to come. Take heart, love God and your neighbor, and keep your eyes on the road and your hope in the future. As for the present troubles, “this, too, shall pass.”
Key Takeaways:
- BRICS and gold challenge the dollar
- The death of bond vigilantism has been greatly exaggerated
- Even the big investors are looking to gold
- Gold still on the move
The McAlvany Weekly Commentary: BRICS to Steal Dollar Dominance
This week, David and Kevin look at the efforts of the BRICS countries to separate themselves from dollar dependence. The number of countries involved is growing steadily as time goes by. Though none of these countries has a strong enough currency to replace the dollar for international trade, the answer for de-dollarization increasingly appears to be gold. This is the currency that has proven itself stable and reliable over time. It cannot be devalued or weaponized as the dollar has. For countries that find themselves on the outs with the United States, this option is increasingly attractive. Although no country has an alternative tothe American SWIFT money transfer system, alternatives do exist in the form of digital currency exchanges. Despite all the talk of currency issues, David believes the true issue is the US bond market. “If we have currency weakness, wouldn’t that likely follow on the heels of a bond market capitulation, which requires monetization of US debt on a scale never seen in US history?” Given the action in the US bond market—discussed in this space over the past several weeks—this is a huge issue.
Credit Bubble Bulletin: Vigilantes Mobilizing
Doug, too, focuses on bonds this week. He summarizes recent volatility and concludes, “It’s tempting to just write off poor Treasuries performance to pre-election positioning. But there’s clearly much more to current market dynamics than election uncertainty. For one, it’s global. Looks important. Vigilantes mobilizing.” To illustrate the global nature of this phenomenon, he gives data from Europe and emerging markets. He then asked a provocative question: “Might the weakness in key EM bonds and currencies be associated with ongoing yen ‘carry trade’ deleveraging?… Global bond markets trade as if deleveraging has taken hold.” He then proceeds into even more provocative territory. After summarizing extraordinary developments in AI and the ominous wars and threats of war among various countries, he concludes, “From my analytical framework, these incongruencies have a common thread: They’re all consistent with late-cycle dynamics—an incredible endgame for a historic multi-decade super cycle.”
Hard Asset Insights: All Eyes on Gold
Morgan showcases severe schizophrenia in jobs market reporting this week. The JOLTS report showed job openings way down, the ADP report showed job openings way up, and the October non-farm payrolls report showed job openings in the toilet. What gives? No answer to this question is yet apparent, but Morgan believes that the strong jobs data from ADP gives Jay Powell all the ammunition he needs to continue cutting rates. Morgan quotes ex-Bridgewater executive Bob Elliott, “Since U.S. yields started rising after the Fed meeting in September, global bond yields are higher while the dollar and gold are surging, reflecting an increasingly global debt contagion…” The most compelling conclusion, according to Morgan, is that if gold is rising against bonds, currencies, and commodities around the world, widespread capital flight out of paper assets into gold is occurring.
Golden Rule Radio: Pushing For Austerity
Miles’ chart recap has gold up again with a volatile week in the white metals. Rob broadens the outlook by looking at a chart of the past three years of gold performance. This year shows a sharp increase in the price, even compared to the two good years before it. The hosts acknowledge that gold may continue to go up in price, but they take a look at what it might look like if it retreated. They identify a couple of levels at which it might find a bottom from which to resume its upward progress. Given the looming election, they reiterate that developments in the gold price are very little affected in the long run by election outcomes. The host also take a look at developments in the bond market. Rob points out that the Fed can’t raise interest rates any further. The government’s debt repayment costs forbid higher rates than we have now. He foresees the ballooning of the Fed’s balance sheet as it is forced, along with the government, to deal with the debt problem. Miles notes the things that would need to happen in order for us to get back to fiscal sanity: 1) increase the interest rate, 2) decrease governmental spending and borrowing, 3) decrease the Fed balance sheet. This is not politically doable, so the hosts emphasize the need for people to protect themselves. Having part of one’s funds in a safe and unchanging currency is a big part of doing so, and the best currency in that regard is always gold.
