[This blog post is an excerpt from a recent commentary at specuative-investor.com] We consider gold bullion and the S&P500 Index (SPX) to be effectively at opposite ends of an investment seesaw, with the SPX doing better when confidence in money, central banking and government is rising and gold doing better when confidence in money, central banking and government is falling. As discussed in a few TSI commentaries and blog posts over the past two years (for example, HERE), our investment seesaw concept was part of the inspiration for the Synchronous Equity and Gold Price Model (SEGPM) crea ..read more

[This blog post is a brief excerpt from a commentary published at speculative-investor.com last week] The combination of the ISM Manufacturing New Orders Index (NOI) and the yield curve, our two favourite high-frequency leading indicators of US recession, has been warning of imminent recession since September-2023. Clearly, the warning has not been timely in that no recession has materialised yet. Furthermore, a month ago we noted that while the message of the yield curve was unchanged, the NOI had just risen by enough to move well above its recession demarcation level of 48. Although this did ..read more

[This blog post is an excerpt from a recent commentary at speculative-investor.com] The year-over-year growth rate of the US CPI was reported last Thursday to be 3.4%. This was 0.3% higher than the number reported for the preceding month and 0.2% higher than the average forecast, but the overall picture (refer to the chart below) is unchanged. The downward trend that began in June of 2022 is intact and we expect that the 2023 low will be breached during the first quarter of this year. However, the main purpose of this discussion is not to delve into the details of the latest CPI calculation bu ..read more

[This blog post is an excerpt from a recent commentary at speculative-investor.com] Over the past few hundred years there has been a relationship between the extent of global military conflict and secular trends in commodity prices, with secular upward trends in commodity prices coinciding with increases in both the frequency and amplitude of military conflict. We’ve covered this topic in the past, but not recently (the most recent discussion was in 2017). Due to what has happened over the past two years, this is a good time for a revisit. In his book “War Cycles Peace Cycles”, Richard Kelly H ..read more

[This blog post is an excerpt from a commentary published at speculative-investor.com about one week ago] The latest calculation of the Personal Consumption Expenditures (PCE) Index, an indicator of “inflation”, was reported on Friday morning (22nd December) in the US. The following chart shows that the latest number extended the downward trend in the index’s year-over-year (YOY) growth rate, which is now 2.6%. Moreover, the “core” version of the PCE Index, which apparently is the Fed’s favourite inflation gauge, has risen at an annualised rate of only 1.9% over the past six months. This essen ..read more

[This blog post is an excerpt for a commentary published at speculative-investor.com on 19th November 2023] There was a government-spending-fuelled burst of economic activity in the US during the third quarter of this year that led to a high GDP growth number being reported for the quarter, but signs of weakness are now appearing in coincident economic indicators. The most important of the aforementioned signs is the rise in Continuous Claims for Unemployment Insurance. With reference to the following weekly chart, Continuous Claims bottomed in September-2022, moved higher into April of this y ..read more

[This blog post is a brief excerpt from a recent commentary published at speculative-investor.com] Why has the junior end of the gold mining world performed so poorly over the past two years. In particular, why has it performed so poorly over the past 12 months in parallel with a relatively strong gold market? Understanding why begins with understanding that in the absence of a mining operation that can be used to PROFITABLY extract it from the ground, gold in the ground has option value only. The option could be valued by the market at almost zero or a lot depending on many factors, the most ..read more

[This blog post is an excerpt from a commentary published at speculative-investor.com on 29th October 2023] Thanks largely to rapid government spending, inventory building by the private sector and about $500B coming out of the Fed’s Reverse Repo (RRP) Facility, US ‘real’ GDP grew at an annualised rate of almost 5% in Q3-2023. The GDP number included strong quarterly growth in Real Gross Private Domestic Investment (RGPDI), which could be explained in part by investment incentivised by the Federal government’s misnamed “Inflation Reduction Act”. What are the implications for the financial mark ..read more

[This blog post is an excerpt from a commentary published at www.speculative-investor.com on 25th October 2023] We aren’t geopolitical experts and do not know how the Israel-Hamas war will unfold*. Nobody does. There are far too many unknowns at this stage for even the geopolitical experts to do anything other than guess. What we are able to do is figure out what the markets are discounting, that is, what the majority of market participants currently believe will happen. Today’s assessments of how the conflict will play out may turn out to be wrong and therefore could necessitate large price a ..read more

[This blog post is an excerpt from a commentary published at https://speculative-investor.com/ last week] There is currently a major divergence within the US economy. Over the past 12 months industrial production has been flat and the ISM Manufacturing Report has been warning of imminent recession, but according to GDP calculations and forecasts the economy has grown and will continue to grow at a healthy pace (US GDP grew at a 2.1% annualised pace in Q2-2023 and is projected to have grown at a faster pace in Q3-2023). Furthermore, despite the warnings from reliable leading indicators, the dom ..read more