The Handwriting is On The Wall

Judging by these metrics, we had a slight “risk-off” emotion for the week ending 12/11/20. Stocks were down and safe havens were up, evidenced by a slight increase in gold and a 2.3% increase in the T-bond. I really think the markets are biding their time to see how the new government in the U.S. is going to shake out. My view is that if the Democrats win the Senate, the day for a hyperinflationary blowoff is likely to come sooner rather than later. It’s coming in any event, but with a Republican Senate, it will take a bit more time for the complete destruction of the America as we know it than if the Democrats take total control.

Either way, the handwriting seems to be on the wall, or on my IDW, if you will. The rise was a bit more subdued this week, thanks to declines in the S&P 500 and silver. But when I checked the individual components of my IDW since March 13 when the country pretty much went on COVID-19 lockdown, I found that silver has by far been the biggest gainer since we have seen massive money created out of thin air in our policymakers’ very foolish attempt to beat COVID-19 with trillions of immorally created counterfeit money.

Yes, I know you can make the case that it would be immoral not to create it because the alternative would be too painful. While this may be delaying the day of painful reckoning, it can only end up with the worst of all worlds, namely, a hyperinflationary depression as opposed to a deflationary depression when those who lived their lives in a financially responsible manner would be rewarded. I think it’s important to note that the top four items in my IDW are tangible items that will retain intrinsic value no matter how much money is created. By the way, gold is not included as a component in my IDW because gold is money, as is the dollar. And from March 13, 2020, to the present, gold is up 20.51% while the dollar in the dollar index is down 7.57%.

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.