The election is over except for the crying. When Trump won in 2016, the Democrats cried for four years. They did nothing for America. They are a disgrace to JFKs, Profiles In Courage.
Now, we face four years of Republicans crying. They never read JFKs work. They only read profit and loss statements. The only truth about the party is their initials, GOP - Guardians of Privilege.
This is America. When the people cry for real change, they get labels like Populism. There is little change. This reality has a label. It is called Gridlock. As the dust clears, we will be able to see the tears of the losers. We will be able to see the tears of joy for the winners. We will never get to see the tears of pain by citizens who are suffering due to the pandemic, loss of work and all the repercussions of the two issues. As the lingering effects of the last stimulus fades and new data shows the increase in bankruptcies, a call to end bipartisanship will emerge. This will be nothing more than someone seeking to imprint their name on the national scene. Politicians are already looking at 2022. They have no interest other than ego. Maybe because Congress consists of millionaires and not real people with first hand knowledge of what life is really like in America. This is why I call for a new third political party for the people, the Liberty Party.
Nevertheless, whatever happens from impeachment to stimulus, it will effect the stock market, our economy and currency. The market is fooling themselves under the eye of greed. Reality will hit the market and them like a car skidding on ice at an on coming truck.
I have already provided you with insights to our dollar. My calls have been correct and the dollar will fall into a new range of 86 to 92. This devaluation will be good for gold. In addition, the stimulus talk will only cause more dollars to be printed which is also a positive for gold. By the way, this is the year of the white metal (read silver) according to the Chinese zodiac. Biden will push for another $1400 to make the original talk of $2,000 a reality. The dollar will not only be hit by stimulus, but medical costs for vaccines, for other stimulus like infrastructure and projects for reelection by politicians, especially Republicans. They will sell their vote in private to democrats for legislation. After last weeks disgrace by Trump's followers, people will forget that the "Donald" even advocated the $2,000 check.
The real important aspect will be the timing of whatever comes forth as stimulus. The Democrats will seek impeachment again. They want to put the nail in the coffin on Trump. The Republican politicians will be looking at 2022. They will do nothing for America unless they can spin some positives for themselves. They want Biden and the Democrats to fail. It is like the Eagles song, Lying Eyes.
If the stimulus talk is pushed back until after the inaugural, the timing will be too late. The whole event will drag out until spring. By that time, we, at Evolution see a "M" economy. The pattern is already appearing. The first leg down was last March. Then, we had a quick recovery after the lockdown. The present second wave is casting doubts about the recovery. The election results will raise hopes. Reality will cause everything to crash. This completes the pattern. How long it lasts can only be told as it happens.
Bonds...
are saying that a good stimulus plan is fading fast. Price levels suggest that inflation is awakening. The real trendline will appear by the end of January. By that time the number of bankruptcies will be alarming. Unemployment has fallen to 6.7%. It will probably drop even further due to the holiday season hiring. When the layoffs start hitting over 750,000 each week by the end of January, the trendline will have its new direction. In addition, so will the price of gold.
Gold Trendline...
had been in correction mode since 7th of August when gold hit its new all-time high of $2062.50. It found a resistance bottom at $1850. Last week this down, trendline was broken. Last Friday, it surged upward on strong volume to $1951.70. Gold got confirmation with GDX. GDX rose from the corrective low of $36 to close at $41.42. Yes, they whacked god again last week, but when the knowledge and reality of spending and taxes and more spending hits the news, gold will soar. Gold is forming a "W" pattern.
2cd. Opinion
There are other ways to look at gold. One can see the miners are rising. This is harmony in the sector. There are the historical references like the price of one ounce of gold to the Dow Jones price. When the ratio is one, gold is fairly priced. Given this aspect, the price of gold has a long ways to go. Then, you can view charts with inflation adjusted price? Then, you can look at the relative evaluation of gold to the price of gold miners? You can relate the price of gold to the Federal Reserve balance sheet? You can also see how the ETFs in gold will raise the price of the miners when the gold price rises. By the way, the ETFs have more gold under their portfolio than ever before. All of these are check marks for certain people. These are stat guys. They are like football bettors who want to know how a team does on grass as opposed to artificial turf. I like some of their studies, but our Economic Evangelist is more practical. He uses this study.
!965 Ford Mustang...
sold for $1995. The price of gold that year was $35.12. Keep in mind the price of gold was suppressed until Nixon's move to drop the gold standard in 1971. The Dow Jones was at 969 in 1965. You could also buy a Hershey candy bar for .05 cents. Today, that candy bar costs more than one dollar. Inflation caused a 20x price increase. Inflation shows the effects of devaluation. Devaluation's chief cause is by excessive printing. Stimulus is printing. Our model uses the previous high of gold. This was in 1980. It reached $850. A new 1980 Ford Mustang cost $5338. So, if we use that price when gold was free to trade on the market and divide it into the cost of a 2021 model, inflation points to 5x. If we multiply $850 by 5x (times), we get a price for gold. It is $4250. I don't think fiat governments will let that happen. They will use all their power to intervene. However, they cannot stop gold completely. Continue the exercise.
A new 2021 Ford Mustang can be purchased for $26,900. However, a top line version costs over $74,000. How about those numbers for the value of the dollar that is destroyed by inflation. Inflation also acts positive for gold. Gold never really loses its value. By using this example. we expect gold to rise to a minimum of $2650. and as high as $3700.
As stated in previous pieces, we like four gold miners along with gold or silver coins. One in the group can be replaced by a fellow miner in Australia. Newcrest Gold is good, but Kirkland Lake Gold (KL) could be better. We also like Barrick Gold (GOLD), Wheaton Precious Metals (WPM), and Argonaut Gold (ARNGF). Dear Reader, at least, American readers, if you make out well with gold, buy an American car. Maybe the electric Mustang? It is beautiful. Peace.
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