The New Metals Bull Market Is Set Up To Be More Powerful Than The One From 2001 To 2011

Well the spending and debt junkies in Washington are working hard to push Trump’s big spending bill through by Independence Day. Which will make the Death Spiral of Debt much worse, rapidly. What is happening in Washington is pure political theatre, they will pass the bill and put wind in the sails of gold and silver.

The most alarming part of the bill coming out from the Senate version is that it will allow Trump to increase the debt ceiling by $5 trillion. They will blow through that probably in less than a couple years of deficits that will be on their way to $3 trillion annually.

The debt crisis has been somewhat a stealth event, amongst most Americans, which is about to get much less stealthy. Within a year, the debt will likely hit $40 trillion and if interest rates are anywhere near where they are now, the cost of servicing the debt will be over $1.5 trillion.

No wonder Trump is irate at Powell, he needs lower rates so he can spend like a drunken sailor plus to bring down the cost of servicing the debt. Instead of looking in the mirror and blaming himself for not slashing spending (or how much he grew the debt during his first term) he wants higher spending and to pile on more debt.

The latest theory is they need more spending and higher debt to fix the debt crisis. That is the kind of logic you get out of spending and debt junkies in Washington.

Elon Musk is livid which is inflaming the breakup of him and Trump. Just this morning Trump was musing that they may have to look into deporting Musk and sending DOGE after him. The irony is incredible, the guy who started DOGE could have it come back to investigate his companies.

The bond market is not cooperating as the bond vigilantes have wanted higher rates as they are concerned about another strong wave of inflation incoming. They can also clearly see the already excessive supply of debt is only going to get much worse.

Recently, the US debt has gone through a muted rally, but that looks to be overdone. There is an excessive supply of debt, a big spending bill and the cost of servicing the debt is unsustainable. What is causing the rally is the hope that the banks will get new regulation that allows them to leverage up and buy more debt.

The reality that banks need more leverage to support the debt Ponzi scheme should be sending a message loud and clear that the powers that be are scrambling for buyers.

A huge looming problem is that Yellen had to frontload the debt, and there is $9 trillion of it that needs to be rolled over this year, and it doesn’t get better over the next few years as a huge chunk of the overall debt rolls over.

Some blame her for frontloading the debt, saying it was a political maneuver. What they don’t consider is that she probably had no choice as the debt buyers were likely reluctant to lend the government money for long periods of time.

Can you blame the debt buyers? The debt and cost of servicing the debt are unsustainable due to the insane spending on the left and right for the past few decades. By the time Trump leaves office the debt will likely be close to $50 trillion if not at that level.

Now the big question is who will buy the excessive amount of debt, to keep the house of cards from crumbling? Domestic and foreign buyers have to be questioning why they own so much, and if they should buy more, and of course how much interest they should get for lending more to degenerate spenders that have no concern for the level of debt?

Bessent sees the writing on the wall, which is why he wants to unshackle the banks so that they can crank up their leverage. Plus, he is hoping that stablecoins will load up on US debt as well. These two factors alone should cause rampant fear amongst the holders of US debt and everyone considering buying.

Trump may not want to flip out on Powell too much because he might need him to revive his role as the buyer of last resort before Powell leaves office in around a year. With the excessive debt, cost of servicing the debt and big spending bill, it looks like the Fed will have to get back in the QE business sooner than later.

The strength in the economy and jobs market has been overstated for a long time, while inflation has been understated. Consumers lack confidence in the economy to the point which only happens during recessions and they are fatigued by the persistent inflation which has made affordability of everything problematic.

Wall Street CEOs see the same thing, and are unable to give forward guidance due to economic uncertainty and insider selling of their stocks are at highs. While valuations are priced for perfection. This won’t end well.

Uncertainty about what is going to happen to the economy and inflation due to Trump's tariffs can easily become a self-fulfilling prophecy that makes CEOs and consumers pull in their horns. Which results in a recession or gets the economy very close to one.

The real economy and jobs market have been slowing for too long, and real inflation is much too high. Stagflation has been a growing problem for the past couple of years that few have been willing to talk about until recently. Once stagflation starts it is hard to fix as the Fed has no tools to fight it.

Trump’s big spending bill and tariffs will only make real stagflation more problematic as they try to stimulate economic growth by making the Death Spiral of Debt worse. They like to believe that the tariffs won’t slow the economy and drive inflation higher because the economic numbers have been juiced up as companies got in front of the tariffs by stocking up.

When the tariffs fully hit the economy and consumers, it ain’t going to be pretty and that will transpire over the next few months.

The 90-day pause is up in a couple weeks. The line of countries allegedly beating a path to Washington has turned into another smoke and mirrors show. Lately, Trump and his team are coming to terms with the reality that inking trade deals is much harder than they hoped, so now they are saying they are just going to impose tariffs on their trading partners.

They tried that 90 days ago and Wall Street wasn’t happy which caused Trump to relent and have a 90-day pause. Will it work after April 9th, I would imagine Wall Street will send another memo to Washington with stocks getting hit if Trump goes ahead with imposing higher tariffs without being able to ink a significant amount of trade deals.

If I were a trading partner, I would not be interested in signing a win-lose trade deal with Trump as he can’t be trusted. They would be much better off rolling the dice and allow Trump to impose higher tariffs and see if Wall Street convinces Trump of the error of his ways. Tariffs aren’t good for the economy, jobs, inflation, stagflation, the US debt market or Wall Street stocks.

Wall Street stocks and US debt are susceptible to significant corrections, and the US dollar is already in one of its worst first six months of a year since the early 1970s. The three pillars of American exceptionalism look very risky for investors, both for domestic investors and those abroad.

All these issues are very bullish for gold and the gold miners have been able to sell gold in the second quarter at the best average price ever for a quarter. They were already free cash flow machines well before the second quarter and are about to report remarkable results soon.

Major gold miners, mid-tiers and junior gold miners are coiled springs ready for powerful rallies. New gold mine developers and explorers with important discoveries are in short supply. The same can be said for silver stocks, copper stocks, and platinum-palladium stocks as well.

The start of the next great metals bull market is underway and the fundamentals are more powerful than the last one from 2001 to 2011.

We are at the point where it is about to turn into a magical time for the gold, silver, copper and other metals stocks. I’m working on a report to highlight my top picks in majors, mid-tiers, junior miners, developers with high-quality projects, explorers with important discoveries and explorers that could make important discoveries.

All the best,

Allan Barry Laboucan