They Just Keep Boozin' it Up

With a conspicuous lack of adults in the room inside the Beltway these days, the goal of The Fed and White House seems to be to perpetually goose asset prices and stave of recessions forever, or at least during the lifetime of their power. Just today we have the third quarter GDP estimate data release cancelled, while the PCE (The Fed's favored inflation gauge) for September moved to December. With just one sentence on Friday, the New York Fed President Williams was able to flip rate cut expectations to a high probability for December.

I will admit that I am shocked at how long they have been able to get away with it, as markets--particularly the top Nasdaq stocks--have been largely partying alongside The Fed and various Treasury Secretaries over the years.

But there has been a check on this nonstop partying, or at least an acknowledgment of it, by the precious metals and mining markets. Spot gold is back above $4130, holding steady after what appears to be a normal near-term top back in October, as opposed to the major top many were expecting. 

On the GLD ETF daily chart, first below, we have a tight, symmetrical triangle which favors bulls given the prior steep uptrend and narrowing consolidation as opposed to a loose and sloppy one. Silver, on the second SLV ETF daily chart, below, also shows an impressive tightening of price in recent weeks. 

My long-term target for the gold metal has been $5,000 all along. But if the powers that be keep throwing the kitchen sink to avoid a much-needed recession (the only way to get prices down and more affordable for 90% of the country currently struggling) then $10,000 probably becomes a more realistic target, as will the unfortunate fabric of society being, perhaps, irreversibly damaged as the middle class gets wiped out on America's Semiquincentennial next summer.