evening wrap, january 20
market vibes
In NY this morning the wires were alive with reports Japan is out of control. Gold and silver were at record highs, stocks and bonds were sharply lower. Mysteriously the only high beta move in FX was EUR/USD. It is possible Madame Von der Leyen’s hints the EU was considering a shift away from USD caused a ripple but the move in gold wasn’t a ripple. My sniff is Japan.
Japan is the 4th largest economy in the world. Debt-to-GDP is $10 trillion or approximately 230%. Private non-financial sector debt including corporate and household debt is 8 trillion. Japan’s Debt-to-GDP is almost 4 times Germany’s and roughly ≈ double all other major economies (in G-7) including China. It’s been a long time coming and this morning it arrived.
In other news…Today was an opinion announcement day at the Supreme Court. They did not render a decision on the challenge to President Trump’s tariffs. At least another month after a 4 week recess or perhaps longer.
Trump declined an invitation to dine with Macron, “Nobody wants him because he’s going to be out of office very soon.” Macron declined to serve on Trump’s “peace board” for Gaza reconstruction. Carney can’t stop saying “New World Order.” Dude… Maybe Macron should have him to dinner?
in the markets
Gold took the lead in NY with a powerful drive to new all-time highs on high volume. There really isn’t anything else to say. The trend is solidly in force and the sources of buying are global. In fact I don’t think there is anyone anywhere that is not buying gold… except the governments attending the WEF at Davos.
Although the media covered gold through the day on BBG TV, Fox and CNBC, I saw little commentary on gold vis-à-vis the WEF.
For a silver comment I’ll refer you to my comments in “cry havoc” this morning and an hourly chart this evening.
