Bitcoin’s Looking Great. Gold Not So Much.

A Tale of Two Assets. Plus an update on gold miners.

Today, we are going to look at gold, bitcoin, and our way of playing it, MicroStrategy (NASDAQ:MSTR), which has now 10xd (!) since we first covered it last year. Amazing.Finally, there’ll be a short update on gold miners. Remember them?

Let’s start with gold.

Gold – and most other metals – has been hit since the U.S. election last week. It’s down $200, or about 7%, with U.S. dollar strength being a big factor (the dollar has been storming higher since October).

While I think this bull market might be punctured, as I put it last week, and that gold probably has a bit further to fall, I am not unduly worried. 2024 has hitherto been a great year for gold, and it remains an essential long-term core holding.

It is an even more essential holding for UK investors. I think sterling has big problems ahead of it, and gold serves as your hedge against crap governments.

Labour or Tory – I’m no fan of either.

They’re both as bad as each other, in my view. The less government there is, the better things run. But that’s irrelevant idealism. Of greater concern here is reality: there has never been a Labour Government that did not devalue sterling.

· Blair and Brown crashed sterling in 2007-8 (though until then their record was okay);

· Under Wilson, Callaghan, and Healey, we ended up going to the IMF in 1976. Callaghan and Wilson also devalued in 1967.

· Cripps and Attlee devalued in 1949.

· Ramsay MacDonald’s National Government, which followed Labour from 1929-31, took us off the gold standard in 1931.

Why should this Labour Government be any different? If anything, it is even less competent. Sterling devaluation is coming. How exactly might not yet be clear. I rather suspect it’ll be an attempt to make us competitive against an ultra-streamlined US, but that’s just a guess. You must own some gold (and some bitcoin) in such an environment: non-government money.

Bitcoin’s Looking Great. Gold Not So Much.

A Tale of Two Assets. Plus an update on gold miners.

Let’s start with gold.

It is an even more essential holding for UK investors. I think sterling has big problems ahead of it, and gold serves as your hedge against crap governments.

Labour or Tory – I’m no fan of either.

· Blair and Brown crashed sterling in 2007-8 (though until then their record was okay);

· Under Wilson, Callaghan, and Healey, we ended up going to the IMF in 1976. Callaghan and Wilson also devalued in 1967.

· Cripps and Attlee devalued in 1949.

· Ramsay MacDonald’s National Government, which followed Labour from 1929-31, took us off the gold standard in 1931.

Today, the top 10% of earners account for half of all U.S. consumer spending. Rate cuts that boost stock prices inflate the purchasing power of the wealthy while widening the gulf for everyone else.

How does fattening the brokerage accounts of the top decile fix affordability?

It doesn’t.

But the Fed must cut because the bottom half of America is already showing signs of breaking. If the Fed doesn’t relieve debt pressure, the consumer cracks. If it does relieve it, inflation cracks upward instead.

Oracle shares managed to pop higher on their AI investment plans over the summer – but quickly gave back those gains as investors digested the total debt the company was taking on.

The AI buildout and its rising costs are raising more questions than answers right now. The CDS market is heating up as a sign of trouble ahead. Keep your eyes peeled!

Altman’s claim is that not only will people get more done with less with AI, they will be happier because their work is easier and…more fun. This follows a report from Anthropic, responsible for the Claude AI, that said AI increases productivity.

I will say I’m skeptical. But we’ve been told the nature of exponential change is that it comes at you faster than you can measure or observe. And if that is true, it will have consequences in 2026 for employees and investors. Big ones.

For employees–those who are not replaced by automated processes and robots–it will mean secure employment and higher wages. A small number of winners getting richer.

American consumers don’t feel – or are at least unaware of – monetary nuance. They’re just getting the bill.

Trump declared last night that “affordability doesn’t mean anything to anybody,” dismissing the term as a “Democrat scam”— this despite recently proclaiming
himself the “Affordability President” on Truth Social.

That’s the current state of political messaging on cost-of-living: part whiplash, part vaudeville. But voters aren’t confused. Grocery prices are still 30% higher than 2020. Tariffs add daily friction. Utilities, rent, houses, tuition, healthcare continue their daily grind upward.