Clint Siegner
Money Metals Exchange
The rapidly eroding confidence in our institutions gets plenty of news coverage. We expect it will be a dominant theme for investors in the years ahead.
Investing success may require correctly answering the question about what to own in a world where free market forces are taking a back seat to crooked politicians and incompetent central planners.
The guilty verdict against Donald Trump is currently the biggest news story. It would be a mistake to ignore the impact an event like this has on investor psychology.
Kevin O’Leary, of Shark Tank fame, summed it up this way:
"The American brand has been dragged through the mud, sunk to the level of a banana republic where rulers take their political enemies out to the jungle to disappear."
The rule of law is what makes the U.S. much more investable than Zimbabwe. Unfortunately, the Trump story isn’t the only thing shaking confidence. It isn’t even the only one from last week.
On Thursday, Chuck Schumer and 22 other Democrat legislators sent a letter imploring the Department of Justice to investigate and prosecute anticompetitive behavior in the oil and gas industry.
The editorial board at the Wall Street Journal says the evidence supporting allegations of price collusion is flimsy. The Federal Trade Commission is looking to scapegoat the industry for higher fuel prices. Chuck Schumer, Joe Biden, and Democrats generally are certainly eager to avoid the blame.
Regulators always tend to be captured and ineffective, but they now seem to have stopped paying anything more than lip service to the notion of impartiality.
Recent events have been an eye-opener for Americans and they are more nervous by the day.
That has implications for investing.
In decades past, large-cap oil and gas stocks performed as a solid investment and a good hedge against inflation.
Today, investors have other factors to consider before buying shares.
They have to wonder whether or not the company can avoid price controls and/or a politically motivated prosecution by the Department of Justice.
The stories keep coming, and the bull market in uncertainty is beginning to roar.
Picking winners and losers from the universe of conventional assets – stocks, bonds, and money markets – will be a challenge. Oil stocks are a great example. It might make sense to own them, but you definitely can’t ignore the politics.
This is one reason gold and silver bullion have gotten more attention from investors, and it is why even more inflows of investment into the monetary metals are probably coming.
Money Metals Exchange and its staff do not act as personal investment advisors for any specific individual. Nor do we advocate the purchase or sale of any regulated security listed on any exchange for any specific individual. Readers and customers should be aware that, although our track record is excellent, investment markets have inherent risks and there can be no guarantee of future profits. Likewise, our past performance does not assure the same future. You are responsible for your investment decisions, and they should be made in consultation with your own advisors. By purchasing through Money Metals, you understand our company not responsible for any losses caused by your investment decisions, nor do we have any claim to any market gains you may enjoy. This Website is provided “as is,” and Money Metals disclaims all warranties (express or implied) and any and all responsibility or liability for the accuracy, legality, reliability, or availability of any content on the Website.
Editors’ Picks
EUR/USD stays weak near 1.1850 after dismal German ZEW data
EUR/USD remains in the red near 1.1850 in the European session on Tuesday. A broad US Dollar bullish consolidation combined with a softer risk tone keep the pair undermined alongside downbeat German ZEW sentiment readings for February.
GBP/USD holds losees near 1.3600 after weak UK jobs report
GBP/USD is holding moderate losses near the 1.3600 level in Tuesday's European trading. The United Kingdom employment data suggested worsening labor market conditions, bolstering bets for a BoE interest rate cut next month. This narrative keeps the Pound Sterling under bearish pressure.
USD/JPY slides further below 153.00; eyes 200-day EMA amid a firmer JPY
The USD/JPY pair meets with a fresh supply on Tuesday and slides further below the 153.00 mark heading into the European session, reversing a major part of the previous day's positive move. Spot prices, however, manage to hold above the 200-day Exponential Moving Average support, around the 152.50 region, preserving a tentative bullish bias despite a shallow cushion.
Editors’ Picks
EUR/USD stays weak near 1.1850 after dismal German ZEW data
EUR/USD remains in the red near 1.1850 in the European session on Tuesday. A broad US Dollar bullish consolidation combined with a softer risk tone keep the pair undermined alongside downbeat German ZEW sentiment readings for February.
GBP/USD holds losees near 1.3600 after weak UK jobs report
GBP/USD is holding moderate losses near the 1.3600 level in Tuesday's European trading. The United Kingdom employment data suggested worsening labor market conditions, bolstering bets for a BoE interest rate cut next month. This narrative keeps the Pound Sterling under bearish pressure.
Gold pares intraday losses; keeps the red above $4,900 amid receding safe-haven demand
Gold (XAU/USD) attracts some follow-through selling for the second straight day and dives to over a one-week low, around the $4,858 area, heading into the European session on Tuesday.
Canada CPI expected to show sticky inflation in January, still above BoC’s target
Economists see the headline CPI rising by 2.4% in a year to January, still above the BoC’s target and matching December’s increase. On a monthly basis, prices are expected to rise by 0.1%.
The week ahead: Key inflation readings and why the AI trade could be overdone
It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.
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