Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Elections in South America and Europe Reveal Backlash against Socialism

Politics / Social Issues Nov 26, 2023 - 08:37 PM GMT

By: MoneyMetals


As markets reopen following the Thanksgiving holiday, investors are feeling thankful that interest rates are no longer rising.

Stocks, bonds, and precious metals have all gained ground in recent days as long-term rates have come down. Meanwhile, expectations for the Federal Reserve to cut its benchmark short-term rate in 2024 have risen.

Minutes from the Fed’s latest meeting were released on Tuesday. They revealed policymakers intend to keep rates “restrictive” at current levels until inflation comes down further.

Despite giving no indication of cutting rates anytime soon, markets aren’t buying the Fed’s hawkish posturing. Traders in Fed funds futures are pricing in monetary easing next year starting in May. They currently expect four rate cuts before the end of 2024.

That’s reflective of a strong likelihood of recession next year amid deteriorating economic conditions. The recession by some measures may have already begun. The leading economic index fell again in October, marking a new low for the year in the LEI. Tighter credit conditions combined with persistently high inflation are crimping consumer spending as well as business investment.

For now, though, the stock market is flush with cash as investors see reason for optimism at least through the holiday season.

Gold, meanwhile, continues to oscillate around the $2,000 level, and silver has posted some nice gains to trade well above $24 per ounce.

Looking ahead, metals markets could benefit from a bearish combination of headwinds for the U.S. dollar’s exchange rate – namely falling interest rates and a slowing economy.

They also stand to get a lift from bullish supply and demand fundamentals. Supply shortfalls emerging across the metals space. Deficits are becoming especially large in silver, platinum, and palladium in particular.

According to the 2023 World Silver Survey, demand outstripped supply last year by nearly 238 million ounces, representing a massive 20% deficit. Another large deficit is expected this year amid rising industrial demand and flat, at best, mining output.

An even more lopsided supply and demand imbalance is occurring in physical platinum. The World Platinum Investment Council reported this week that the platinum market is on track to post a record supply deficit of over 1 million ounces for 2023. Total supply is down 3% this year. Demand, meanwhile, is up a whopping 26% compared to last year.

The story behind falling platinum prices in recent years has been that automotive use in catalytic converters is going away. But that story doesn’t square with the fact that platinum demand is gaining from a variety of sources.

Meanwhile, as over 70% of mined platinum comes from South Africa, the supply outlook for the scarce metal is precarious. South Africa has been plagued by constant power blackouts that have hampered production of some of the country’s largest platinum and palladium mines.

Of course, the media continues to insist that post-Apartheid South Africa under one-party rule is a bastion of democracy.

But the reality is that South Africa can no longer keep the lights on. And as basic infrastructure fails, sky-high crime rates coupled with threats of land and business seizures by the highly corrupt government are driving talented entrepreneurs and technical workers to flee the country.

Meanwhile, institutionalized racism against whites has risen to even higher levels as the nation rushes headlong into Marxism and Wokeism, with new laws even making it illegal for larger South African businesses to hire people with lighter skin.

That all bodes poorly for the future of South Africa’s critical mining industry.

In other parts of the world, the political landscape is shifting to the right. This week elections in the Netherlands and Argentina delivered big victories to anti-establishment populists.

Free-market economist Javier Milei won Argentina’s presidential election. Derided in the media as a “far right libertarian” and a “madman,” Milei campaigned with a chainsaw in hand to represent his plans to cut government bureaucracy. He has also vowed to abolish the country’s central bank and link the Argentine peso to the U.S. dollar in an effort to stamp out inflation.

Argentina was once known as the most prosperous country on the continent. But in recent years its economy has been wrecked by waves of inflation that have regularly exceeded 100% on an annual basis.

While the Federal Reserve note dollar has lost value at a much slower pace, it’s not exactly a sound and stable anchor for the Argentinian currency. Instead of being ripped off by Argentinian central bankers, citizens would see their purchasing power arbitrarily taken away by the U.S. Federal Reserve.

Regardless of the shortcomings of some of his reform plans, Javier Milei has the potential to turn around a troubled country much like Nayib Bukele has done in El Salvador. In just a few short years, El Salvador went from one of the most dangerous countries on the planet to the safest on the continent and one that’s now open for business.

Bukele has championed Bitcoin as an alternative to U.S. dollar hegemony and invited cryptocurrency enthusiasts to move to El Salvador. While Bitcoin has its advantages, it’s also quite volatile and untested as a monetary reserve asset on par with gold.

Biden administration officials and establishment media outlets are trying to paint Bukele as a dictator despite the fact that he has a higher approval rating than any other major head of state.

Media mouthpieces are also freaking out over poll numbers that show Donald Trump running ahead of Joe Biden in a 2024 rematch. Behind the scenes, Democrat operatives are panicking over Biden’s sinking standing with voters. They are trying to nudge the 81-year-old incumbent to bow out gracefully so that California’s publicity seeking Governor Gavin Newsom can finally admit that he seeks to be the Democrat nominee for President.

It’s not just Biden’s perceived lack of energy and concerns over cognitive decline that are behind his bleak poll numbers. As shock elections in Europe and South America suggest, broader forces may be building for a voter backlash against the entrenched political left.

By Mike Gleason

Mike Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2023 Mike Gleason - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in