Originally published by Chamber of Merchants
Good morning Patrons of the Chamber of Merchants.
You may or may not have noticed that I have not posted even a fraction of what I used to post. The reason is very simple: I have attained complete and utter peace with regard to what the future holds for my portfolio. In a blink of an eye it all became quite clear to me and the need for daily postings became redundant. So what I will be focusing on more now will be longer term trends with regard to gold, wealth, economics etc… which is how this site originally started.
Additionally I will be commenting on individual companies , especially the ones in my portfolio.
I read an interesting summary from another trader in my network last night. Given the surge in gold and and gold miners, they have wiped out most of their gains from the last 8 weeks (being short precious metals).
The Merchant on the other hand has again shifted tactic to a big picture view.
You see, originally I was focused big picture. Then, on Trump’s election win, gold was sold off, the stock market rocketed and everything was flipped. Hence, my new year’s resolution of trading actively and prudently (you can check it out by using the search function). However, about eight weeks ago, the picture became really clear: the Trumphoria was wearing off and the reality of the economics was setting back in: low GDP, weakness in full time employment, worrying inflation, low productivity and to top it all off, a Federal Reserve that was hell-bent on raising rates to project strength.
When I saw the big picture, I realised that time will be the remedy to madness. Got gold?
So below here is a no mess, no fuss chart of the area I believe gold will be headed in 6-24 months with variation.
- I firmly believe we will never, ever see less than $1100 gold ever ever again. Those days are past. Sub $1100 USD gold will be a value in time immemorial:
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1.
a time in the past that was so long ago that people have no knowledge or memory of it.
“markets had been held there from time immemorial“ - I believe a majority of USD gold will be spend around $1400-$1600 over the next 2 years. Chart below:
In my estimation (wrongly or rightly, it will result in AUD and CAD gold prices of $2000-$2200 (give or take a few hundred lol.)
And it’s all coming to a head when the Fed makes their final interest rate decisions over the next six months: the wheels will be set in motion and the ride will be for those who bought tickets now.
Why?
Consider this: GDP is failing in the US… the money is failing as consumer expenditure weakens and dies. Retail is dying as a reflection of the state of the U.S consumer… consumer business failure is reflecting that development. The Trump stimulus has failed to materialise and consumer sentiment soft data had fallen into the same miry pit.
Everything that was occurring prior to the Trump win appears to be resuming course. Add to that: the Fed has raised rates twice which will, in Keynesian theory, slow down an overheating economy. So I’ll say it for the record: The Western nations appear to be teetering on the edge of a recession and the most powerful financial establishment in the world has been tightening the reigns, ultimately accelerating the slow down.
I’ll end off with this mud map which is in my brain, that calms me during volatile and disappointing days. It may be completely incorrect…but I am betting my entire wealth that it’s not.
Each to their own.
Next post will be on Blackham Resources Ltd (AX:BLK)