Bear is Enticing Investors back Into Den

Market results during the first four days of this week have me believing that the patients are again in charge of the asylum.  Bear markets always try to draw as many people back into the bear’s den as possible before the next mauling, by convincing investors that the bottom is in. That way a well-fed bear maximizes his food stash so he can be well fed when the winter is over. True enough I was sick of losing money with PSQ this week so I threw in the towel on my NASDAQ short. But I do not see any reason to assume we are anywhere near a bottom for equities.

This week’s macro market letter by Alasdair Macleod is titled: “Gold & The Upcoming Recession.” Here is an executive summary of the weighty contents on Alasdair’s July 21, 2022, missive:

“We are now seeing the initial stages of a currency, credit, and banking crisis develop. Driving it are an inflation of prices, contraction of bank credit and a pathological fear of recession. One can imagine that the major central banks almost wish a mild recession upon us so that they can keep interest rates suppressed and bond yields low.

“The key to understanding the course of events is that the cycle of bank credit is turning down, and this time the factors driving contraction are greater than anything we have experienced since the 1930s, and possibly in all modern monetary history. 

“This article joins the dots between inflation and recession and puts the relationship between money (that is only gold), currencies, credit, and commodity prices into their proper perspective.” You can read Alasdair’s latest piece in its entirety at the research page of website. I have however included a major portion of his July 21 article below as it helps to explain why gold has been performing so poorly of late. 

Alasdair’s views are indeed consistent with Michael Oliver’s views voiced on my show last week. Michael believes that it is entirely possible that within the next five years the Federal Reserve may no longer exist. In that, he agrees with David Stockman’s views that the Fed is fearful of being eliminated, but unlike David, Michael and Alasdair believe the Fed may want us to think they will be serious about defeating inflation but their actions will in fact be massively inflationary. That explains why both Alasdair and Michael remain hugely bullish on gold and perhaps even more so on silver. Following is part of Alasdair’s July 21 missive, which explains why there is reason to believe gold will soon have its day despite the fact that gold price manipulation is now acknowledged by insiders.

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.