Trump Euphoria, Bitcoin and Gold

“My hope for bitcoin is that it can improve the efficiency of the information system that we call ‘money.’”

– Elon Musk, appointed to the new Department of Government Efficiency (DOGE)

November 13, 2024—On the Friday before the election, we recommend that you hedge the results of the impending vote with Bitcoin and Gold.

Since Wednesday’s opening, bitcoin has soared 22%… shooting to $92,600 this morning.

Turn Your Images On

The bellwether crypto is up over 150% over the past year. And it’s getting a serious huff of Trump Trade fumes.

Trump’s campaign promise, among many disruptive ones, includes replacing Gary Gensler, the existing SEC chair who was slowly noodling over regulatory changes for crypto.

We speculated all year that backroom deal-making was being organized to support the Fed coin and a new era of highly regulated (manipulated) CBDC coins.

The election results put an end to that fear with some earnest abandon.

Another puff of fumes fueling the Trump pipe dream came yesterday in the form of another campaign promise coming into focus: The “Department of Government Efficiency’ – or DOGE after the crypto coin Elon Musk owns and often discusses.

Musk and entrepreneur-turned-presidential candidate Vivek Ramaswamy will head up the new de-government task, which has a mission—a mandate, rather—to make forceful suggestions on how to remove $2 trillion of wasteful spending from the Deep State bureaucracy.

During this euphoric phase of the so-called Trump Trade, the market doesn’t need a lot of fumes to get high.

Gold hasn’t fared as well. In fact, it’s down nearly $200 (priced in dollars) since its historic high of $2,800 on October 30.

Yep.

But you’re wrong if you think we’re going to apologize for gold. Our friend Dominic Frisby takes a quick review of both alternatives to the U.S. Dollar below. Enjoy – Addison

Bitcoin’s Looking Great. Gold Not So Much.

Dominic Frisby, The Flying Frisby

Today, we are going to look at gold, bitcoin, and our way of playing it.

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 sterlin

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 U.S., but that’s just a guess. You must own some gold (and some bitcoin) in such an environment: non-government money. ~~ Dominic Frisby, The Flying Frisby

Regards,

Addison Wiggin,
Grey Swan

P.S. Just as there has never been a Labour government that hasn’t devalued the British Pound… so there has never been a Republican or Democratic administration in modern times that didn’t devalue the dollar, whether through foreign exchange or a massive run-up in debt and inflation.

Bitcoin enthusiasts point out that cryptocurrency has no “top” price because fiat currencies have no bottom. Gold, to a lesser extent, also fits into that scarcity mold.

That’s why we view both assets performing well throughout Trump’s second term.

Or, as Grey Swan reader Marcus suggested last week:

“Things will go well in 2025 if (and this is a big IF) Elon Musk is successful at cutting the $2 trillion from our government expenditures as he anticipated.

“If that happens, it will reduce the pressure on our government to borrow money to pay our debts. This will set into motion a domino effect of positive results.”

Send your thoughts to: addison@greyswanfraternity.com.

“My hope for bitcoin is that it can improve the efficiency of the information system that we call ‘money.’”

– Elon Musk, appointed to the new Department of Government Efficiency (DOGE)

November 13, 2024—On the Friday before the election, we recommend that you hedge the results of the impending vote with Bitcoin and Gold.

Since Wednesday’s opening, bitcoin has soared 22%… shooting to $92,600 this morning.

Turn Your Images On

The bellwether crypto is up over 150% over the past year. And it’s getting a serious huff of Trump Trade fumes.

Trump’s campaign promise, among many disruptive ones, includes replacing Gary Gensler, the existing SEC chair who was slowly noodling over regulatory changes for crypto.

We speculated all year that backroom deal-making was being organized to support the Fed coin and a new era of highly regulated (manipulated) CBDC coins.

The election results put an end to that fear with some earnest abandon.

During this euphoric phase of the so-called Trump Trade, the market doesn’t need a lot of fumes to get high.

Gold hasn’t fared as well. In fact, it’s down nearly $200 (priced in dollars) since its historic high of $2,800 on October 30.

Yep.

But you’re wrong if you think we’re going to apologize for gold. Our friend Dominic Frisby takes a quick review of both alternatives to the U.S. Dollar below. Enjoy – Addison

Bitcoin’s Looking Great. Gold Not So Much.

Dominic Frisby, The Flying Frisby

Today, we are going to look at gold, bitcoin, and our way of playing it.

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.

Why should this Labour Government be any different? If anything, it is even less competent. Sterling devaluation is coming.

Regards,

Addison Wiggin,
Grey Swan

Bitcoin enthusiasts point out that cryptocurrency has no “top” price because fiat currencies have no bottom. Gold, to a lesser extent, also fits into that scarcity mold.

That’s why we view both assets performing well throughout Trump’s second term.

Or, as Grey Swan reader Marcus suggested last week:

“Things will go well in 2025 if (and this is a big IF) Elon Musk is successful at cutting the $2 trillion from our government expenditures as he anticipated.

“If that happens, it will reduce the pressure on our government to borrow money to pay our debts. This will set into motion a domino effect of positive results.”

Send your thoughts to: addison@greyswanfraternity.com.

So right now, jobless claims are in a sweet spot that coincides with a pretty decent economy, 225,000 plus or minus.

Why are they hovering so low? And the reason I believe has to do with fear of deportation.

I believe that the Hispanic community is not applying for the jobless benefits that they’re entitled to because they are afraid of being deported. There are lots and lots of anecdotes out there of workers showing up at a government agency and being nabbed by ICE and being deported.

So rather than run the risk of deportation, these folks would rather run the risk of just not having as much money in their pocket from being eligible for jobs claims and not filing. Lemme explain by talking about California. In general, nationally right now, jobless claims are up about 10% year over year, except when we talk California, and that’s where everything signals under reporting.

America’s debt service bill is now $1.2 trillion a year. Trump has made no secret of his goal: lower rates to ease the burden.

He admitted yesterday he looks forward to having a majority on the Fed board, which would “save the country hundreds of billions.”

Yet most economists agree the real fix is fiscal discipline — less borrowing, lower spending. The bond market would adjust to those conditions by needing a lower yield for the risk of lending.

Leaning on the Fed to make the cost of debt cheaper is like asking your doctor for whiskey to cure high blood pressure.

The construction industry is contracting. The number of permit applications recently hit a two-year low, meaning builders are not seeing much growth.

In fact, builders are having to add a lot of incentives just to sell the homes they’ve got out there. And in fact, when we talk about building starts, it’s at an 11-month low. In other words, demand for construction workers isn’t booming. It’s quite the opposite.

The Federal Reserve Act of 1913 says governors can only be removed “for cause” — meaning malfeasance, not politics.

Trump cites alleged mortgage fraud (charges Cook denies) as his justification.

But the timing is telling: markets sit at historic highs, tech valuations are stretched to perfection, and even the hint of volatility could topple the indexes.

Trump has spent months berating Jerome Powell for not cutting rates. Now he’s maneuvering to add enough loyal voices to the Board of Governors to outvote him. If successful, the Fed’s independence — already wobbling — could collapse.