Gold and macro environment, page-164

This is a very thought provoking article just in the AFR. I have started leaning towards a hard landing in the US but it’s not yet certain. However, if the unemployment rate rises to over 4.5% in August or September then the probability of a hard landing will go up a lot and then the sharemarket will slump and for a short period it will take gold and gold shares down with it but gold and gold shares will recover quite quickly after a significant fall (this happens all the time with gold).

If a hard landing eventuates having a lot of cash to employ will be very rewarding to put into gold shares and gold when they fall a lot as they will then go into to see major increases in POG and gold shares - this scenario played out significantly in the Dotcom boom, GFC and 2020 pandemic.

I really do not understand the Fed - they get the timing of raising and reducing rates very late - it happens all the time - around the dotcom boom, the GFC and when inflation recently surged and most probably now they will be too late reducing rates. The Fed and other central banks do not seem to understand the 18 months to 2 year lags -eg if the Fed reduces rates in September the economy including the unemployment rate will keep on deteriorating significantly for the next 12-18 months and not start improving for 18-24 months.

And if there is a hard landing the Us budget deficit and debt will balloon to be even more out of control which will only send gold even higher. The deficit figure in the article of 8% may end up doubling and debt in a few years May b over $45tr and may even get to $50tr.