Stocks were in sell-off mode today as rude reality gave the paper assets reverie a rap on the knuckles.
So, you might ask, ‘why didn’t gold rally as a safe haven?’
And all you need to do is look at the US dollar chart. The dollar was rallying in the forex crosses as the Chinese continued to depreciate the yuan and the forex traders were barfing on the Brexit pound.
Speaking of jinxes, Krugman was congratulating himself today on his call that Brexit would have no negative impact on the British economy. Paul, they have not Brexited yet. And in addition to the usual economic lags, the certainty of Brexit and what it might really mean is hardly clear yet.
The dollar is now overbought, and at a high from earlier this year. But it may have some more upside, especially in the cross trades which tend to ‘overshoot.’ But longer term a strong dollar is anathema to the real economy exports. Of course if Hillary has her way, there will be no national borders, and we will all serve one big happy new world order ruled by the self-appointed philosopher kings.
As you know, sometimes the precious metals are traded as currencies, and their prices rise and fall without regard to fundamentals and even risks. The aggressive and often officially sanctioned misprcing of risk is one of the hallmarks of the serial bubbles which populate the landscape of our markets since the recent turn of the century.
But hang in there. Every dawg has its day, and the yellow and silver dawgs look like they might be getting ready to cry havoc and run loose.
I have been thinking quite a bit about the next 12 months. It does seem likely that Hillary Clinton will win the presidency. She is also likely to ‘tip her hand’ in the first 100 days of office, especially in the people whom she appoints to key positions.
This was absolutely the case in Obama’s first 100 days, where it quickly became apparent that hope was dead, and change had left town.
Hillary strikes me as more Nixonian than even Obama, who certainly is given over to secrecy in the service of parochial elitism. If you do not think so, look up US actions taken under the Espionage Act since its inception.
But in the case of Hillary, in addition to the usual Nixonian lies, scheming, and stone-walling, she and Bill have previously given themselves over to a more ‘hawkish’ interventionist hard line both abroad AND at home.
Let’s hope it does not roll that way again. But we might be keeping a close eye on the appointments for all the economic and financial positions, and the Attorney General.
I admit I am gloomy. Remember that in my own projections for the Empire, Obama is a very credible Claudius, and Nero is next in line. And either of the presumptive party picks seems capable of filling out that toga. No matter who wins, this election is just embarrassing.
But why be glum? The Chicago Cubs look formidable to win the World Series. They last played in one in 1945, and last won it in 1908! Although the equally formidable Giants are giving them a real run for their money in their series.
What could be more poetic than if the Cubs play against the injury plagued yet resilient Cleveland Indians in the World Series, if they can make a good showing against a very tough Blue Jays team.
Last night the Tribe swept the formidable Boston Red Sox, who were tops among the favorites to win the World Series itself at the end of regular season play. And the Indians themselves have not been in the World Series since 1954, and last won one in 1948.
What an improbable pairing that hardly anyone would have anticipated.
And yet it may happen. And so we should treat most forecasts including mine with due skepticism, and remember that we all approach the future, planning for the worst but hoping for the best, as unlikely as it may seem.
Who knows, we may be surprised? Obama often ignored the wishes of his most ardent supporters, and Hillary may also cross hers, the kingpins of Wall Street, Silicon Valley, and Big Healthcare.
Have a pleasant evening.