| In investing, perception is reality, especially over the short term.
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| And right now, a lot of traders believe that the incoming Trump administration is going to be very pro-Bitcoin...and for some reason that’s also supposed to be anti-gold.
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| Bitcoin is continuing its post-election rally, reaching nearly $85,000 after surging over 7% today.
In contrast, both gold and silver are off over 2.5%, in a follow-up to the big sell-off experienced the day after the presidential election.
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| The consensus view among traders is that the incoming Trump administration will be very friendly to institutionalizing Bitcoin not only as money, but potentially as a national reserve holding. Speculators have jumped onto this view, which is, frankly, completely understandable.
What isn’t understandable is why this would be bearish for gold.
As you know, the fundamental underpinning of this gold bull market is concern over the size of the U.S. federal deficit and debt, and worries over Uncle Sam’s ability to continue servicing that debt.
The Trump administration will do nothing significant to address this issue. It can’t — because the problem at this point is insurmountable.
Even Elon Musk’s cost-cutting goals, although admirable, can do little against the behemoth that is the federal budget. The vast majority of government spending is on autopilot, with only about 25% of it being discretionary. Even if Elon and his compatriots are able to cut discretionary spending by about half, it would do little to affect the trajectory of the debt.
And if the Trump administration’s track record is any gauge, they’ll actually increase spending.
These factors will once again become obvious to investors, once this wave of selling passes.
Regardless of the long-term story for Bitcoin, the current move is based on rampant speculative buying of the rumor. When, and if, the rumor becomes news, the speculative nature of this rally will become a disadvantage.
Again, gold has benefited from a strong undercurrent of buying for longer-term reasons. I think both assets can have a place, but right now the traders are buying Bitcoin and shorting gold with equal fervor.
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| This episode will pass...but it reinforces the important and value of next week’s gathering of dozens of the world’s top experts at the 50th Anniversary New Orleans Investment Conference.
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| If you’ve been reading my missives recently, you know that our roster of experts includes James Grant...George Gammon...Rick Rule...Danielle DiMartino Booth...Brent Johnson…Jim Iuorio...Peter Boockvar...Jim Bianco...James Lavish...Adrian Day...Dave Collum...Alex Green...Bob Prechter...Tracy Shuchart...Avi Gilburt...Adam Taggart...Lawrence Lepard...Mark Skousen...Doug Casey...Tavi Costa...Peter Schiff…and Lyn Alden.
Plus, Chris Powell...Russ Gray...Robert Helms...Nick Hodge...Sean Brodrick...Lobo Tiggre...Jennifer Shaigec...Mary Anne & Pam Aden...Dana Samuelson...David Morgan...Gary Alexander...Jeff Deist...Byron King…Albert Lu...Omar Ayales...Gerardo Del Real...Rich Checkan...Thom Calandra...and more, including yours truly.
You also know that we’ll cover the post-election environment like a blanket, not only from the above speakers but also with a panel featuring popular political pundits Mary Katharine Ham, Charles C.W. Cooke and Scott McKay.
And now, the events of the past few days have highlighted the value of our always-fascinating Future of Money Panel, featuring some of today’s top authorities on gold, Bitcoin and macro-economics.
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| As I noted last week, while there is great uncertainty ahead in the economy and the investment markets, there are some things that we can rely on.
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| One is that current levels of debt cannot be managed without significant depreciation of the dollar and other fiat currencies...a fact that will send some investments to the trash bin and others skyward.
The other is that the experts listed above can help guide us to safety and profits through these tumultuous markets.
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| If you have significant assets at risk in the markets, I urge you to click on the link below to learn more about this year’s New Orleans Conference and guarantee your place at this historic event.
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| Brien Lundin
Publisher, Gold Newsletter
CEO, the New Orleans Investment Conference
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| CLICK HERE
To Learn More
And Claim Your Place At
The 50th Anniversary
New Orleans Investment Conference
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| CLICK HERE to watch interviews by Brien Lundin and Kai Hoffmann with many of today's most exciting junior mining companies on the
Gold Newsletter Youtube channel.
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