“We begin tonight with Breaking News: US money supply has just passed the $22 trillion level, its pace over the past two years increasing by $1 trillion every four months, or some $8.6 trillion. dollars per day. {You should think about it} Later on this developing story, but first, at Gold…”

That title for this week’s missive is a quaint way to put it, huh? More bare, he might just read “Hardened gold, tarnished silver” Where “Beat gold, shellacked silver!” Yet however we present it, the short-term technicalities look terrible. We love gold, but as the late great Howard Cosell would say, “It’s saying things as they are!” This is what we strive to do week after week.

Indeed, from top to bottom since we met a week ago, gold has been kicked in the teeth to the point of losing 75 points (from 1854 to 1779) in the past four days. of scholarship. Maintain this rate of point loss and gold will hit zero (“0”) on June 15 of this year.. (That would be pretty terrible, just in case you scored at home).

Our joyous opening notwithstanding, let’s return to University and Macroeconomics 101. No doubt you remember well this class: guns and butter, price stability, marginal propensity to consume, the super cute person sitting one row down to your left, economic growth, etc.

Fast forward and let’s focus on the latter – economic growth – given the first look last Thursday at the annualized pace of fourth quarter gross domestic product (“GDP” +6.9%) against its deflator. chain (“CD” +6.9% ). Recall from your class Professor Iamecon’s formula for calculating real growth (“RG”):

■ GDP – CD = RG … so for Q4: 6.9% – 6.9% = 0.0%

Additionally, the Federal Reserve’s favorite inflation gauge, core personal consumption expenditure, after being +0.5% in October and November, held steady with another +0.5% in December. Annualizing these constant increases gives us +6.0%, essentially in line with the chain deflator.

So, as noted there are two missives, StateSide’s economy – rather than “really” growing – stagflate. And you, regular readers, will also remember: during such a scenario, historically, the price of gold has skyrockets.

But given today’s paradigm in which ownership of gold has been relegated to the League of Elders, the price performance – rather than a firework display – is just a fizzy dud. That’s right, Bud. Nowadays, people we meet under the age of 50 laugh when we talk about gold: none of them own it and have no intention of doing so (until they know it). eager to buy it at a price above 10,000). Either way, today’s road to riches – rather than paved with yellow bricks – is littered with shiny objects. So be it until it’s not.

“Well again, mmb, there’s all that dollar strength too…”

As baffled as ’tis Squire, the dollar refutes all the things learned in college in Professor Iamecon’s macroeconomics class. For today’s axiom is: the Following there is something, the Following It’s worth. The figures prove it over the past two years:

■ US money supply (“M2”) as of January 3, 2020: $15.5 trillion; Dollar index: 96.521

■ US money supply today, January 29, 2022: $22.1 trillion; Dollar index: 97.215

It’s true: M2 in just two years has increased by +43%; but nevertheless, the Dollar Index is now higher as well. (Write to the University to request reimbursement of your tuition fees).

So as titled, technically for gold, it now looks terrible. According to the following chart of gold’s weekly bars from a year ago to date, the parabolic long trend indicated by the rightmost series of blue dots is about to reverse: price should simply trading below 1779 in the new week and that seals the deal. Gold having stabilized yesterday (Friday) at 1790 and the expected weekly the trading range is now 49 points, normal price floating alone will do so. Yes Bunky that’s right: prepare yourself at least for the annoying permanent price of 1780 again:

Plus, it’s not just our Meadville analytics that look lousy for gold: the standard “canned” studies that come with whatever platform you’re using also have short-term negative notions: whether by gold’s daily bars, weekly or even monthly ones. , MACDs (“Moving Average Convergence Divergences”), Price Oscillators, Money Flows, EMAs (“Exponential Moving Averages”) and Parabolics are not promising in the near term. ‘Of course against the grain, this is all a massive buy signal… We’ll see …

Yet, to be fair, the burning question “How low is it? » should be addressed. It is not a prediction, but if the year-over-year lows of the 1680s bust, structurally on the shelf comes 1613. (Let’s not go there).

And then there is Silver. After having enthusiastically extolled her virtue here a week ago, she underwent her third worst weekly drop in points and percentage loss since the “Ovid to Covid” back in March 2020. The precious metal Silver has settled its week at 22.49…and yet it is “worth” 61.75…go figure, (we do):

■ Gold Dashboard Valuation 4108 ÷ Average Gold/Silver Ratio 66.5x = Silver Valuation 61.75

Next, let’s stay ugly by looking at the percentage trails for gold as well as those for the major precious metal stocks at this time since the start of last year. We have Franco-Nevada (FNV) +8%, Newmont (NEM) 0%, gold itself -3%, VanEck Vectors Gold Miners (GDX) listed index fund -15%, Global X Silver Miners exchange – traded funds (SIL) -27%, Agnico Eagle Mines (AEM) -34% and Pan American Silver (PAAS) -35%. Ugly indeed:

More ugly? We have it here —> The Economic Barometer:

That on the heels of Dow Jones Newswires just reporting last Thursday the “US Economy Expands as Fourth Quarter GDP Shows Strongest Year in Decades.” Any mention of the string deflator? No. Nor was there a detailed account of any of this in The New York Times. Nor was there any on the CNBS website. Oh sure, those with a political bent might suggest “Anything to make Joey look good”; but the gift Leaning from the Econ Baro is now ugly. And the panicky bunch in the Baro at the bottom right is a good representation of the throng of arguably “younger” shiny objects that haven’t seen a real market “correction” yet. Why even the venerable CNN tells us “Prepare for wilder swings. Volatile markets are back. After a long period of calm, market volatility has returned dramatically.” They don’t know what “spectacular” is. Except for the above and very short-lived (big pun) “Ovid to Covid”S&P futures haven’t updated “limit down” in about 12 year. (Be ready).

Looking back to last week’s metrics, December new home sales improved and there was less pressure on initial job applications. Corn: Consumer Confidence, Sustainable Orders, Pending Home Sales, Personal Income, Personal Spending, Employment Cost Index, and Michigan “Go blue!” The sentiment came in worse than their previous period.

Then there’s the fourth-quarter earnings season, which for the S&P 500 (with 148 of the 505 constituents reporting) finds 80% better over the same period of 2020. Corn: the average year-over-year increase – while admirable at +37.5% – is far from what is needed to halve the price-to-earnings ratio (our live reading now 42.0x ) to return to its median as the yield environment increases. That of the S&P all risks is currently 1.419%; yields on 5-30 year risk-free debt range from 1.624% to 2.083%.

And specific to the Fed, we got Wednesday from its Open Market Committee exactly what was expected: tapering towards stopping asset purchases with a doubling of the FedFunds rate on March 16…unless the Baro continues to tumble…or in between inflation causes a Volcker crisis “massacre”.

Speaking of which, have you recently bought a liter of oil for your car? With (except for one trading day) the first month of this year now on the books, Big Oil is the only positive so far among the eight BEGOS markets. Here’s how they stand:

And as he begins his disappearance, believe your eyes, it’s the S&P 500 in last place. As inferred above, -7% at this point is peanuts; and true, from high to low of the year, the index has already been -12%. Corn: Assessed today at 4432, we see this current downtrend initially testing 3984 (-17%); would then come 3950 (-18%), followed by 3827 (-21%), then more vigorously 3588 (-26%). Just some good “back of the napkin” numbers for reference if you find yourself conversing with a “shiny objects” person.

Visualizing said S&P trend, it’s bottom left as we circle the horn for all BEGOS markets over the past 21 days. The sky blue dots indicate the consistency diagonal gray trend lines. And specific to our triumvirate of metals (Gold/Silver/Copper), this doesn’t look good, with all three trendlines given their declining “Baby Blues” turning negative. You tell them, Howard:

Now moving on to the 10 day market profiles, we go for gold on the left and Money on the right. Obviously, both are low, with technically more disadvantages:

Finally, as it is the end of the month (except for Monday), here we have the structure of monthly candle gold since 2011. The endless battle between The Northern Front and Final Frontier continues as it did ten years ago , when the US money supply was at half that was today. To which we are again inclined to say, ‘it’s diabolical:

Next week seems to bring more bad news for the Econ Baro: of the 13 metrics on file, by consensus, at least half should be worse than the previous period. “Of course, we have learned in the 25 calendar years of Baro maintenance that the ‘consensus’ barely turns out to be ‘real’. Corn: fortunately for Gold — to end on a positive note — its “real” value (4108) is better than twice its price (1790)!

Cheers!