Month: November 2019

Divergence in Misery Index and Gold

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What’s a bit concerning to me is that the misery index (unemployment + inflation) has been going down, while gold has been going up. This is not normal.

Either misery is going to increase or gold is going to go down. I believe misery is going to go up.

First off, the unemployment rate is going to rise as nonfarm payrolls have been declining.

Second, inflation should be going up in time due to QE of the Fed and massive amounts of debt financing and budget deficits. The trade war is also not resolved yet. Productivity has been going down with industrial production and manufacturing all declining, which will lead to higher inflation.

So the misery index will be going higher and that will also mean that P/E ratios will come down together with stock valuations. Gold will be going higher.

COMEX registered silver: September 2019 is a Turning Point

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Registered silver at COMEX still going down, bullish for silver. It started going down in September 2019.
 

J.P. Morgan registered silver at COMEX went down begin September 2019.

 
This happened at the top of the silver spike in September 2019.

So something happened in September 2019 and they are panicking. Which can be seen from the spike in open interest in September 2019.

Monetary Base Vs. Gold Reserves

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The following chart shows the U.S. Monetary Base Vs. U.S. gold reserves.
These two should match with each other. Either the price of gold goes up, or the U.S. gold reserves should go up. This is why I include the monetary base in the Gold Forecaster Index, because it is correlated to the gold price. The more the Federal Reserve prints money, the more U.S. gold reserves are needed. The more gold reserves are acquired, the higher the gold price.
Today, the gold price should be at $5000/ounce.