This morning I received an email alert from Michael Swanson editor of WallStreetWindow.com in it Mike makes this shocking statement…
“It’s all about the US dollar for Trump and his advisors. Wild markets mean that we cannot make bets any longer based on rigid assumptions of the future as Trump has destroyed all such scenarios. We are now in a Trump takeover. Trump changes everything. The mantra in the past was “don’t fight the Fed.” Next year it’s going to become don’t fight Trump!”
Read the rest below. ~ Tim McMahon, editor
Gold Dropped Despite this Japanese Central Bank Bombshell
By Mike Swanson
Some crazy swings happened yesterday in gold and crazy news broke.
It’s all Donald Trump.
Yesterday Donald Trump met with Japan’s Prime Minister Shinzo Abe.
The only people with the new President-elect were his daughter, her husband, and his newly appointed National Security Advisor Michael Flynn.
Japan’s Abe only had an interpreter with him.
They took photos together and after the meeting was over Abe talked to the press and said they had a great meeting and he was looking forward to doing stuff with the US.
Well as this was going on the Japanese Central bank released a bombshell announcement that said that it would print any amount of money needed now to keep its interest rates at zero.
ANY AMOUNT OF MONEY.
Think about that.
Since the Trump election, US long-term rates have been rising and so has the value of the US dollar as traders are positioning themselves ahead of a giant Trump economic program.
That program will grow the economy, but it will also increase the US budget deficit by lowering taxes and increasing infrastructure and defense spending.
Trump’s team wants rates to rise and for the US dollar to go up too.
Really a rising US dollar is the key to getting their programs to work without causing chaos in the US debt markets.
And a rising US dollar is bad for Japan.
Rising US Treasury bonds is putting pressure on Japanese debt too.
And so the Japanese central bank put out that bomb sell announcement in reaction.
Today the US dollar is trading above its key $100 resistance mark I talked about yesterday in my first public post on Trump’s impact on the US dollar and gold.
I have been talking with my private Power Investor members about this issue for a week now, but yesterday was the first time I made a post about it on the free area of the website.
The Japanese Central bank announcement is in an article in the WSJ titled:
Bank of Japan Surprises With Plan to Buy Unlimited JGBs at Fixed Rates
Here is the thing in the past a central bank announcement like this would trigger a rise in the gold price chart.
We have been in a monetary environment in which the banks would coordinate together to make markets hold up and such action would lead to gold price advances.
But yesterday this happens and gold stocks fall and gold investing feels tough again.
Why?
That is the key question.
The banks are not working together with Trump getting ready to make the US dollar go up.
So I’m looking for gold to trade weaker than I thought it would before Trump’s election for a longer period of time.
Before Trump’s election, I accepted the reality that gold was going through a consolidation/correction period after its big run for most of the year.
I thought that the consolidation period would end in January and we’d see gold begin to go up for real again.
Now I’m not saying that Trump is going to crash gold, but I am not sure anymore when the next giant rally in gold is actually going to start.
And yesterday’s news is going to spell big declines for the YEN going forward.
The Euro is even down hard overnight too.
It’s all about the US dollar for Trump and his advisors.
Wild markets mean that we cannot make bets any longer based on rigid assumptions of the future as Trump has destroyed all such scenarios.
We are now in a Trump takeover.
Trump changes everything.
The mantra in the past was “don’t fight the Fed.”
Next year it’s going to become don’t fight Trump!
Read the full article here.
