Gold just had quite a bull run, setting a new all-time high along the way. But Money Metals’ Midweek Memo host Mike Maharrey says this is just the opening act. If you enjoyed that, you’re really going to like the feature.
In this episode, Mike explains what drove this recent bull run and why he thinks it’s just a prelude to a bigger gold and silver bull market in the future. He also covers the most recent CPI data.
Mike opens the show talking about a recent concert he recently attended and how the opening band knocked it out of the park. Even so, their show paled in comparison with the main act.
“I think this recent gold rally is a little like the Twilight Sad. Solid opening act, but it’s going to have nothing on the main event.”
Mike gives an overview of gold’s record-setting run last week and explains how anticipation of Fed rate cuts sooner rather than later helped drive the gold bulls. But as he points out, the Fed didn’t actually do anything.
“So, what’s going to happen when the Fed actually does cut rates? And it is going to cut rates.”
But Mike doesn’t think rate cuts are coming for the same reason the markets anticipate them. He thinks the central bank will end up cutting even deeper than expected because of an economic and/or financial crisis.
“The bottom line is if this little rally based on hope was this big, the rally when the Fed actually delivers rate cuts far beyond what anybody today expects is going to send the price of gold and silver into orbit.”
Mike goes on to cover another factor that he thinks helped gold rally – the weaponization of the dollar.
He piggybacks off last week’s show and points out that worry about de-dollarization isn’t just a conspiracy theory. There are people in the mainstream expressing the same concerns. He covers a recent article by a Bloomberg reporter to support his point.
To wrap up the show, Mike covers the February CPI data, pointing out that it doesn’t indicate price inflation is dead.
“Now, nobody is going to look at the data and panic. It wasn’t panic-worthy. But it wasn’t great either. I mean, nobody is throwing a party. Inflation is just like that annoying gum residue on your shoe. You just can’t shake it off. And that should come as no surprise given the amount of money the Federal Reserve and the U.S. government have injected into the economy since 2008.”
After highlighting some of the data points, Mike reiterates a case he’s made in past shows – the Fed simply hasn’t done enough to slay price inflation.
Mike ends the show with a call to action.
“So, if this little rally in gold and silver got your attention and you are intrigued by the opening act, you may want to get your seats before the headliner takes the stage. Because it’s going to be a banger. You’re not going to want to be trying to buy gold and silver in the middle of the show. You saw how fast it went up with really no fundamental driver.”
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