As we approach the end of the third week of trading in January, in what has been an extremely tough environment in the gold and silver markets, a legend in the business that is connected in China at the highest levels just predicted that the price of gold will see a staggering 83 percent spike.

Price Of Gold To Surge More Than 86%!
By John Ing, Maison Placements
January 20 (King World News) – The economic elite exemplified by the Davos participants have done much to undermine their credibility, suffering from the backlash for cheerleading the governments’ experimental monetary programs of quantitative easing, to negative interest rates and of course globalization which neither lifted the world economies nor provided the promised jobs. Weathermen had a better batting percentage. To be sure the rich got richer and the poor, poorer, providing the fodder for President Trump’s victory. Already chastened for failing to predict the 2008 crash and Trump’s election, they have again misread the tea leaves…

It is a mistake to dismiss Trump’s missives or tweets as random missteps which Clinton and Trump’s Republican opponents made consistently. Trump in hindsight was simply posturing, sometimes testing the waters and sometimes obscuring his message, leaving him to negotiate on his terms rather than his opponents’. To be sure governments, pundits and the populace should be prepared for his “bully pulpit” and not the literal message itself. Investors would be wise to take a deep Pranayama (yoga) breath.

The New Year has brought increased volatility with the low interest rate environment fading away replaced by the politics of rage, a hard Brexit and, the Trump trade. But beneath the veneer of Trump optimism lurks high anxiety about a toxic, divided nation and deepening global concerns over multi-lateral trade wars with Europe, Middle East and China. The root causes of the Trump trade are much deeper and, underlying the lofty market optimism are wider deficits, more government intervention and an increase in protectionist measures.

Buy On Mystery, Sell on History
In a classic “buy on mystery, sell on history”, we believe Trump’s inauguration will turn the “Trump bump into the Trump dump.” Investors are anxiously anticipating Trump tax cuts and business friendly policies to spur Trump growth and ultimately more inflation. However, the market has yet to figure out the consequences of this path to growth, particularly when debt is so high. The Federal Reserve has already changed tack with the second of many interest rate increases to come.

Risks abound. Yet spreads in the bond market have not reflected these risks. Key European elections are scheduled this year. China may or may not be in the midst of a currency war that no one wins and the US dollar strength, while illusory has exacerbated the problems in Europe and Mexico. Brexit festers away. And the solutions? Not from the economic elite, to be sure. Nor from the media elite. Voters are right to sense that the answers are not to be found in the old familiar places.

In the eurozone, Italy recently nationalized the world’s oldest bank, Monte de Pesci, with a bail out by Italy’s Resolution Fund which contravened the EU’s edicts and was conveniently overlooked by the regulators. One of the reasons is that Wall Street’s exposure to the EU is a reported $2 trillion exposure and roughly half of that exposure are off balance sheet items according to the US independent financial monitoring unit, the Office of Financial Research (OFR). And, despite promises of, “doing whatever it takes”, the European Central Bank (ECB) is close to the legal constraints on the amount of bonds it can buy. Then there is the two-year experiment of “pump and dump” oil markets ending when OPEC, hurt by lower prices and exploding deficits, reset the first production cut in about 13 years to raise prices, difficult since non-OPEC producers have replaced Saudi Arabia as the swing producer. Still prices have risen 25 percent since the agreement and oil is back from the dead. Investors should therefore not be in much doubt. Elevated risks and uncertainty lies ahead. To the market this is unwelcome. Clearly, though it is the reality.

Mr. Trump’s “Art of the Deal”
Mr. Trump’s complaint about America is really a structural problem. Governments over the past eight years doubled down on deficit spending, money printing and regulations, to revive their economies but those attempts haven’t worked. The American economy is chronically sick. Costs are too high, making exports uncompetitive so that America has become more of a service economy with improvements in productivity difficult to achieve…..More Here