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I read many articles and newsletters about topics that may affect the gold/silver markets.  The one I never miss is David Stockman’s Contra Corner.  Stockman was Budget Director during Ronald Reagan’s first term.  Below is the start of his blog post for Thursday, December 19,  2019.

“The Turbulent Twenties begin 13 days from now. It will be the decade when the chickens come home to roost and a time when the can of denial and delay can no longer be kicked down the road to tomorrow.

“Instead, the 2020s will mark an era when today’s economic and political fantasies give way to:

• the spectacular failure of Keynesian central banking;
• a violent implosion of America’s fiscal accounts;
• a prolonged, painful reversal of the three-decade long hyper-inflation of financial asset prices that has resulted in the Everything Bubble;
• a ferocious global economic headwind arising from the demise of the Red Ponzi;
• an outbreak of unprecedented partisan acrimony rendering Washington completely dysfunctional and imperiling America’s very constitutional foundation;
• the lapse of Imperial Washington into retreat and failure all around the planet;
• a grinding halt to US economic growth while the Baby Boom retirement tsunami causes entitlement spending to soar and generational conflict to erupt like never before; and
• a virulent outbreak of class warfare and redistributionist political conflict unprecedented in American history owing to a stagnating economic pie.

“These baleful developments are not just possibilities—they are well-nigh certainties.”

The post goes on for six pages.  His website: David Stockman’s Contra Corner.  Cost is $39 a month.

2019 was a solid year for precious metals, with gold up $231 (18.5%) and silver up $2.40 (16.4%) since this time last year.  Still, not much attention has been paid to the metals on the financial networks.

Boosting gold’s price was massive central bank buying of the physical metals.  Also, stimulating interest in gold were announcements that some really successful hedge fund managers who ordinarily don’t buy gold recently started buying gold.

With the US (and the world) facing economic slowdowns, central bank easing is a given.  The Fed is pumping billions of dollars into the money markets via repurchase agreements (repos) and is outright buying $60 billion a month in Treasury bills to finance fedgov’s deficit spending.

However, the Fed denies that it has begun QE4 despite the fact that the Fed balance sheet will increase over the next month by $365 billion (1/3 trillion dollars) to a level of over $4.5 trillion, an all-time high for the Fed’s balance sheet. The Congressional Budget Office projects budget deficits in excess of $1 trillion annually over the next ten years.

Once starting down the road of monetary easing, it must be continued to avert market failure.  By market failure, I mean collapsing stocks and skyrocketing interest rates.

However, the bad news is that eventually the money printing must end.  It will end either by hyperinflation that results in the money being worthless and not worth printing (as during Germany’s Weimar Republic 1919-1923) or by the Fed slamming on the brakes and calling an end to money printing.  Do not look for the latter to happen.

Gold and silver should do very well in the years ahead.  While many readers have positions in the metals, if you do not you need an insurance policy against the insanity in that reigns at the Fed, in Washington, and on Wall Street.