Friday Recap (4/19/2025)

AU: $3327 --($3236- Last Week Spot)

AG: $32.54 --(32.23)

HUI: 399 --(390)

DXY: 99 --(99)

S&P: 5297 --(5363)

10-Yr: 4.33% --(4.49%)

Oil: $64 --(61)

Gold was up $90 this week, and the S&P was down 66 points. Gold continues to lead in 2025 and is the canary. What is gold doing at $3300 and Wall St is struggling? I think it is obvious. Trump lit the match when he announced his tariffs on Liberation Day two weeks ago. What did he set on fire? Everything: the economy, the US dollar, the UST bond market, and the entire US financial system. He's burning it all to the ground. Liberation Day was the equivalent of the Titanic hitting the iceberg. Now we wait to sink (economic growth will stop, but the economy won't completely crash).

Powell is in denial and thinks the Fed is still the Master of the Universe. He said this week that he will wait and see how the tariffs affect the economy and inflation. It's too late! He could drop rates by 1% at their next meeting in May (he will likely cut 50 bps in June), but it wouldn't matter. He could adopt QE and inject liquidity. It won't matter. The ship is going down. This is the end of the US era.

Powell is not the only one in denial. So is all of Wall St. Most of them are optimistic for the second half of the year. They believe that Trump will back down on his tariffs (he won't) and the Fed will work its Fed magic (it won't). This is why gold is at $3300. Gold has sniffed out what is coming. It won't be long now before the S&P gets below 5000 and ignites the fear trade. A fear trade is when no one wants to own the S&P 500. There is only one gold miner in the S&P 500 (Newmont), and there are zero silver miners. That is what investors will want to own.

Trump's problem is that Triffin's Dilemma and the Von Mises debt bubble have both climaxed. Trump probably has no clue what either of those are, but what he does know is that the USA can no longer use an economic system based on free-trade globalism in its current form. He knows it is quickly bankrupting us. He knows that we have kicked the can as far as it will go. So, he has decided to try to save America. Unfortunately, it is too late. I've known this outcome was inevitable. What I didn't know was that it would take this long. I'm not looking forward to the unraveling. It won't be pretty. There will be winners and losers, and a lot of hardship. Sadly, America in its current form will not survive.

Okay, okay, I know what you want. Do we buy or sell? As I've said, gold is not going to crash, so any corrections will be shallow (10% or less) and won't last long. As gold has risen, the floor for gold has also risen. The HUI had a floor of 200 in early 2024, and then it rose to around 250 at the end of 2024. Now the HUI's floor is probably 280 to 300, and perhaps higher. Gold's floor is probably $2750 to $2850. Those are not levels to be afraid of because they will be temporary. Gold is going higher, and so are the gold miners. Yes, we will get a dip, we always do. But it won't be deep. Best guess.