My Vote Is For Gold, Silver And Copper To Go Much Higher To Draw In Generalist Investors To Get Greedy

The week ahead will be full of fireworks with the U.S. election on Tuesday and the Federal Reserve meeting the next day. 

When it comes to politics, for me it is all about the economy, while voters are fixated on their traditional left and right battle lines. The decision of which candidate will win is hanging in the balance of the party that most effectively gets their voters to the polls and what happens in a handful of swing states.

It is a sad state of affairs that the two best candidates that the parties and voters support are massive spenders that will make the debt crisis even worse. One wants to cut taxes, increase tariffs and get America out of wars. 

The other one has been poor at articulating her economic plans. Probably because she doesn’t really understand them herself, and struggles to talk about her economic plans without a teleprompter or an earpiece getting fed talking points. She has let out some details such as increasing taxes and going as far as taxing unrealized capital gains which would be economic suicide.

Both Trump and Harris have earned their stripes as insane spenders. Trump in his first term having the record for highest spending in one term, and Biden and VP Harris trying their hardest to outspend Trump in his one term. Whichever one wins, they will do their best to set a new record for insane spending during the next term. 

In the runup to the election, neither candidate has addressed the debt crisis. This is understandable because first they would have to accept their hands in creating it, then commit to addressing it, when ultimately they both want to spend to make the Death Spiral of Debt worse. The debt crisis is already on cruise control due to entrenched spending, and is so big that the cost of servicing the debt is the straw that will break the debt camel’s back.

Politicians on the left and the right have been kicking the can of debt down the road for decades and stuffing it with IOUs in the ultimate Ponzi scheme. They could keep going on their merry ways while interest rates were near zero. But now the debt is so large, and with interest rates around 5% the road to kick it down is getting shorter by the day. 

Compounding interest is wonderful if you receive it, not so much when you pay it. The cost of servicing the debt is on its way to becoming the highest thing the government spends money on that will jeopardize all government spending on social programs, medical care and the military. 

Neither Trump nor Harris want to cut spending and based on their track records will only increase spending to new records. As they take the previous presidents’ records as challenges to see how much they can exceed them by. 

What is bringing the expiry date of the debt system Ponzi scheme into the picture is the cost of servicing the debt. I know, I know, the not so common sense argument that the system can’t be broken because America has the printing press for the world reserve currency, and the biggest economy in the world, and the largest military.

That kind of arrogance caused the demise of past world reserve currencies. The only way to combat the problem for the US dollar (USD) and US debt market, is to cut spending and work on actual plans to fix the Death Spiral of Debt. Instead of making it worse which Trump or Harris will do without a doubt.

Paul Tudor Jones has recently been doing interviews in which he mentions the actual measures needed to fix the Death Spiral of Debt. The basics are to dramatically cut spending, increase taxes and the Fed will have to slash interest rates back to near zero allowing the economy and inflation to run much hotter than they would like.

No matter what politicians say along the campaign trail, they know cutting spending and increasing taxes are not going to win them votes. But the prolonged insane spending of the past presidents and politicians on the left and the right have created the mess. 

It would cause a revolt with voters arriving in Washington pitchforks in hand, which in reality tells the story that voters support insane spending that has resulted in the Death Spiral of Debt. 

Voters on the left and right can point fingers at the other side saying they caused the debt crisis and they wouldn’t be wrong. Both parties are equal opportunity spenders. But they can also point at themselves because they have supported presidents and politicians that created the debt crisis. 

Another major player in creating the debt system Ponzi scheme is the Federal Reserve. Without the Fed being the key accomplice, and by extension Wall Street bankers, there would be no  Death Spiral of Debt. Their interest rate policies are the most important cause of allowing insane spending.

Prior to the 2008 GFC, three presidents got the debt system Ponzi scheme rolling. Reagan turned America from the largest lender to the largest borrower. George H. W. Bush and George W. Bush took Reagan’s debt creation as a challenge, not something to be avoided and cranked up the spending. Then Barack Obama became the new spending record holder for a two-term president. 

Trump tried to exceed Obama’s spending in one term followed by Biden and VP Harris trying to not be outdone by Trump in one term. Any rational person that looks at the trends in spending would think that both Trump and Harris should be disqualified for the job of president. But here we are, on Tuesday, voters will go to the polls to elect the next president to spend, spend, spend.

The next day, the Fed who should be soundly denigrated for being the key accomplice to the building of the Death Spiral of Debt will have their meeting on interest rate policy. They have several issues to contemplate that will be done behind closed doors, then they will come out with their decision on interest rate policy and pitch the Goldilocks narrative to the ever compliant media at their press conference.

After the Fed’s prolonged near zero rate policy after the 2008 GFC, which ultimately caused inflation to go from ‘transient’ to uncomfortably persistent. Not really uncomfortable to the Fed in their public relation talking points, but certainly troublesome to every consumer when they buy everything. 

The Fed never takes responsibility for their role in creating the Death Spiral of Debt and inflation. They never will because that would negatively affect their legacy which is more important to them than economics. In their last meeting instead of saying that inflation is still rising they went with declaring victory over inflation and cutting rates by a half-point which is a pretty drastic move after a period of higher for longer. 

Instead they went with the message that they are ready to declare victory over inflation and cut by a half-point and go with the public relations Goldilocks narrative. 

But everything is not fine. Inflation keeps growing and the interest rate policy has thrown workers and the economy under the bus. They can come out with all the smoke and mirrors statistics they want, but that doesn’t change reality.

For over a year the economy has been shedding high paying full-time jobs causing workers to have to take on a part-time job or two in order to make less money. Losing a full-time job to take on two part-time jobs is considered a gain of one job by the inept BLS. 

Then opening the border to immigrants willing to take on low paying part-time jobs is considered a good thing by the politicians in power, the Fed, and the BLS that never gets anything right and keeps revising the phantom jobs numbers down.

Lately, the government has been on a hiring spree, trying to prop up the jobs numbers. Government jobs are a drain on the economy, but nonetheless they are trying to mask jobs market problems for election purposes.

The BLS manufactures numbers that the politicians at the White House then try to brag about, regardless of what is really happening in the jobs market. The Fed that even publicly admits to taking the BLS numbers with a grain of salt while behind closed doors adjusts them as unreliable and artificial. They still use them to justify their actions and present them and other economic numbers to then sell the nonsense of their Goldilocks narrative.

Workers know without a doubt that the jobs market is not good, which means the economy isn’t either. Consumers know that there is no victory over inflation as prices keep rising after jumping dramatically after the period of not transient inflation.

The politicians and Fed will play folks as fools and the financial media talking heads sing from whatever song book the Fed gives them. Make no mistakes about it, the jobs market is stumbling and this is not a Goldilocks economy.

Wall Street clearly prefers Trump over Harris. In addition to certain stocks moving up that are moving on the basis of Trump winning, the betting sites are predicting a Trump win. 

I can’t blame Wall Street because although both candidates have troublesome economic plans, Harris’ eagerness to make folks pay capital gains taxes on unrealized gains is economic suicide. I know Harris’ backers will say that is only on high net worth individuals, once that Pandora’s box is open it will result in all unrealized gains being taxed. 

Trump’s plans for tariffs will cause inflation to go through the roof. But it is not economic suicide to the degree Harris’ plans to tax unrealized capital gains. Starting at the top that will then move down the investor food chain.

Both candidates are equally as bad on spending, either one will ultimately prove to be the most prolific spender during the next term. The next Spender-in-Chief is going to make the Death Spiral of Debt much worse.

So, when it comes to the election, it is a question of which candidate will do less harm. My fear is that Harris has plans that are economic suicide and Trump, although a massive spender, I don’t think will run the risk of economic suicide. On the question of who will be worse for the economy, I see Harris as the winner.

I hate war and warmongers, as does Trump. Cheney backed Harris, and the increase in wars during the Biden-Harris regime is clear that the Democrats will keep the wars going. If the only topic on voters' minds was about wars, Trump wins when it comes to this issue by a landslide.

I’m not a fan of the Fed and their actions, and in addition to dealing with poor trends in the jobs market and economy, plus a loss of the battle against inflation, they have other issues to deal with. They want to cut rates, as I think behind closed doors they know the jobs market and economy are being thrown under the bus.

They also can’t be stupid enough to not see that the Death Spiral of Debt is going to get much worse with the next Spender-in-Chief. Both candidates are uninterested in fixing the spending problem (sorry Elon, Trump won’t allow you to slash spending as it is political suicide) and the rapidly increasing costs of servicing the debt with interest rates where they are making matters much worse.

The Fed has tough decisions to make, keep cutting rates so they don’t cause a severe recession or stop cutting and cause a steep recession. 

At the last meeting they declared victory over inflation, so if they stop cutting, then they send the message that they were wrong to cut rates by a half-point and that inflation is still a problem. It is, but that is not the narrative they went with at their last meeting.

Another issue they have is that after their half-point cut, the debt buyers went on strike and yields aren’t cooperating with the Fed’s desire to go into a rate cutting cycle. If they want to keep cutting rates, they will have to manipulate the yields by cranking up their balance sheet.

How is that for a dilemma? To keep cutting rates, they have to get back into the business of quantitative easing while the economy is supposedly expanding, not in recession. QE makes selling the Goldilocks narrative pretty challenging. They seem to have no alternative because if they don’t, they can’t keep cutting rates and the odds of a soft landing are decreasing while improving for a hard landing.

Another issue the current Fed has to deal with is if Trump wins, they will all be fired. 

With the way elections are now, it could take days or weeks to know who won the election. It certainly won’t be clearly known when the Fed has to make an interest rate decision the next day after the Tuesday elections.

It looks like another half-point cut is off the table and it will be a quarter-point cut. I don’t think they can change course and stop the rate cutting cycle as they know they are lying when they try to sell the Goldilocks economy narrative. 

What is not a topic being discussed much is that in order to keep the rate cutting cycle going will mean they have to increase their balance sheet. QE during a supposed economic expansion is not good, even worse is throwing workers and the economy into a hard landing.

What Are Investors To Do

The playbook is out there for investors to follow. Ray Dalio, Stanley Druckenmiller, Paul Tudor Jones and others are ringing the alarm bells of the Death Spiral of Debt and growing cost of servicing the debt, and the importance of investing in gold.

Gold is the soundest money and the best way for investors to protect their wealth and fight inflation. It is the best protector against the ravages of constant purchasing power destruction in every fiat currency.

Many central bankers are selling their American debt and fiat currencies to buy gold. They are putting themselves on the Gold Standard as we speak. It is the smartest economic move they can make and will result in a much better world economy than one built on debt and excessive money printing. 

Even many gold bulls don’t get it. I have heard high profile gold bulls say they fear a world with gold multiples of its current price. They think that it means economic calamity. I disagree.

I think the Gold Standard is the best thing that could happen to the world economy. It will force politicians and central bankers to have restraint when it comes to debt and money printing. Another added benefit will be that gold which is the soundest money is a much better currency for international trade than fiat currencies that are constantly destroying purchasing power.

If I were them, I wouldn’t stop at increasing their reserves of gold as silver is also an excellent choice. In addition, instead of sitting on fiat currencies in their reserves, they would be well rewarded to increase their strategic reserves in the most critical mineral, copper. Other metals as well, at a minimum to the reserves that are needed for their domestic economies.

Investors can get ahead of the trends by putting themselves on a personal Gold Standard and Silver Standard.

For investors that want to grow their wealth, the gold, silver and copper stocks are tremendous opportunities. Many generalist investors don’t realize that we are in the earliest days of a metals bull market the likes of which has never been seen before.

Even most long-term metals stock bulls don’t see the big picture because they are so focused on day to day, or even hour to hour, and in many cases minute to minute, fluctuations in stock prices. If they did, gold, silver and copper stocks would not be trading at historically low valuations based on every important metric. While we are in the earliest days of a metals bull market that will take gold, silver and copper multiples of their current prices.

I don’t think the metals stock bulls will drive the stocks higher, it will be when the generalist investors join the party. Some of them are paying attention to the bullish comments coming from the high profile investors that have records of performance that have constantly got them ahead of the crowd. The beginning of the trend for generalist investors to join the gold party has happened over the past few months as outflows from gold ETFs turned to inflows. 

A comment that I have heard many times over this year is why are the gold stocks so soft while gold is so strong. The reason is that the central bankers in the BRICS nations, and retail investors in China as well as other countries, buy gold, they don’t buy gold stocks.

Gold stock buyers are in the West and the gold stock bulls have been licking their wounds for a long time. The real excitement that will drive gold stocks much higher are generalist investors. The gold stocks are not trading like there is any fear of missing out or that holding on for dear life has arrived yet, but it is likely much closer than many think.

Ultimately, the emotions that affect stock prices are fear and greed. Currently, there is plenty of fear going around in gold stocks, even though gold is in a powerful bull market and primed to go much higher. 

Agnico Eagle showed some fear right after absolutely blowing it out of the park in their third quarter report that came out in the middle of this week. They are firing on all cylinders, brilliantly managing costs of producing gold, making new records in production, and setting their fourth consecutive quarter of record free cash flow. 

In the second quarter they made a half billion dollars in free cash flow, and in the third quarter it jumped up to $620 million. They are leading their peers in free cash flow growth and are making money at a rate that any company in any sector would love.

They are making money hand over fist. Plus, increasing production and making efforts to bring costs down while they are already the lowest cost producer of all the major gold miners. They are the epitome of excellence in execution when it comes to the major gold miners. Yet, their stock didn’t trade like it after their quarterly report, showing fear in the gold stocks even affects best in breed gold miners.

Go down the gold stock food chain and the fear factor is even higher, this is tremendously bullish. Gold is trading from the bottom left of the chart to the top right. It is making a series of higher highs and higher lows, with each new high a new record high. The basing periods after each important rally are getting shorter in duration and tighter in the range. 

Gold is in a perfect storm and 2025 is shaping up to be even stronger than 2024, yet the gold stocks are trading on fear with pretty much zero greed. This is exactly the kind of situation that makes greed kick in.

The gold stocks are compressed and looking for any excuse to trade on greed. Getting in while the going is great is just what the Gold Stock Doctor has ordered.

All the best,

Allan Barry Laboucan