Q: How do you view the recent Trump election? Good for gold short and long term? Why did we have the panic up and the the downturn the same day?
A: All market fluctuation is a function of human emotional reaction to events. It is never the fact of what has happened but the thinking and feeling that makes it so. I am reminded of the line from Hamlet: nothing is but that thinking makes it so. My view: short term the market makers saw and opportunity to scalp the public and did so. Short term we are still in a bear market phase for gold and a bull market phase for the DJIA. Same as the last five years. We have not yet seen the bear market low in the gold market Long term, I am of the view that Trump is good for gold in that he may artfully participate in bringing gold more directly into the monetary system.
Q: Do you think that Trump will make the USD convertible to gold?
A: I do not have any inside information but from the public record that is an option that he should be comfortable with.
Q: Please explain.
A: Trump has used the bankruptcy law to default on about two billion of debt of his Atlanta City casinos. It is a simple matter in a crisis situation to issue new money backed by gold or silver at a one new dollar for ten old dollars and so cut the debt by ninety percent.
Q: Sounds far fetched.
A: The USA federal government has defaulted three times: continental dollar debt repudiation; the 1933 75% devaluation of the dollar and closing the gold window in 1971. Then there are the state and municipal defaults: too numerous to catalog here.
Q: Do you have a time line you can share with us?’
A: Look for a low in two to three months.
by Arthur Fixed
Photo credit: fabfotophotography via Visual Hunt / CC BY-NC-ND