| What in the world is happening with gold?
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| I told you on Monday that the metal had soared $150 over just 10 days in an unrelenting rally higher. Well, it relented a bit yesterday, dropping about $25 after a slightly hotter than expected CPI number.
It needed that break, as the market had gotten extremely overbought.
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| That said, gold is back at it again today, up about $10 as I write, with silver leaping about 1.5%. Whatever it is that has been sending investors around the world flocking to gold is apparently still in play.
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| So what could that be?
A prime candidate is something that’s been staring us in the face all along....
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| You may have seen some commentators recently noting that the U.S. federal debt is now growing at an even more alarming pace of about $1 trillion every 100 days.
That’s absolutely frightening. But a quick personal story shows that this debt growth could be even worse than that might indicate....
A couple of weeks ago, I was faced with a deadline of Friday, February 23rd to upload my presentation for the big PDAC mining conference. I was kind of aggravated by this, because my speech wasn’t until Sunday, March 3rd, and that early deadline meant that most of my charts would be out of date.
Still, I put it all together, including a slide with a screenshot of the famous USDebtClock.org running total of the federal debt.
Thankfully, the PDAC organizers allowed me to upload an updated version the next week, and I actually gave that presentation at the Metals Investor Forum on Friday, March 1st.
However, I never updated the debt clock slide, because I wanted to see where the total was right before I got on stage a week later.
The number was amazing: In just a week, the debt had grown by $137 billion.
Instead of $1 trillion every 100 days, that equated to nearly $2 trillion.
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| And if you annualize it? That translates to right about $7 trillion added to the federal debt this year alone!
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| In the days since I gave that speech, we’ve added about another $100 billion to the debt, so the rate has slowed to a projection of “only” a $4.3 trillion addition to the federal debt. What a relief.
Granted, we’re in a period just before tax revenues start to pile in and the deficit is growing at a pace that is unlikely to continue throughout the entire year.
But there’s also no doubt that the larger trend of ever-greater deficits and growing debt is accelerating.
President Biden just announced plans to double down on government spending, and I’ve seen nothing to indicate that President Trump will do anything to alter the trajectory in any meaningful way.
Perhaps this is the issue that investors and savers around the world — including central banks — are concerned about.
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| At this pace, it won’t be much longer before things come to a head. And when that happens, we’re going to want to own gold.
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| I’ll tell you again: Get prepared. The macro picture is telling us to own gold and silver, and to leverage the moves in these metals through the best mining stock opportunities.
Don’t let this opportunity get away.
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| Brien Lundin
Publisher, Gold Newsletter
CEO, the New Orleans Investment Conference
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