More Global Elections and Gold

 

 

 

Trader Scott’s Market Blog

February 17, 2017

There are many elections coming up this year of significance. The one with the most potential for disruption is in France. The disruptor, Marine Le Pen (Le Trump, so to speak) is leading in the polls to win the first round elections in April. Le Pen has stated, among other things, that she wants out of the Euro. But there are also crucial and potentially disruptive Italian and German elections coming up as well. So once again, although the US$ is a piece of crap, currencies are relative, and the Euro is about the crappiest. But has the $ already discounted some of these upcoming situations – very unlikely. And inIndia,another country with a total piece of crap and useless currency, there are elections in several states including Uttar Pradesh. It’s India’s biggest state with 220 million citizens – bigger than Brazil. The globalist Prime Minister Narendra Modi, has been a total disaster with hiscash ban. The citizens of India have dealt with an extremely corrupt government for ages (not that my government is that great). The election will be another chance for citizens to show their contempt and disgust with their globalist leaders. The Indian citizens probably don’t have the same sentiment as the citizens in Europe and the US, but it will be a good test for anti-Modi feelings. But all of these elections are showing the total disgust people have for the entrenched politicians. Whether the new ones will be any better is debatable. But for me, all of the rising tensions around the world adds up to 2017 as finally being the year for a more sustainable rally in gold, especially the shares, and commodities in general. While the $ will also see a lot of buying with all of the turmoil. But the relative currency attractiveness for will slowly seep into gold, especially with a major top in the US$ approaching – we just have to get there first.

 

 

 

About

Trader ScottTrader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day.Scott returned to markets over fifteen years ago where he continues as an independent trader.



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'Trader Scott’s Market Blog – More Global Elections and Gold – February 17, 2017' have 15 comments

  1. February 17, 2017 @ 4:22 pm Easy Al

    The Obama administration and many think tanks were attempting to use India as a important geopolitical chess piece to contain China. So, you often read the articles written by some think tanks praising India as the world’s largest democracy. Well, the real situation appears quite different. The India government, regardless which party is in power, seems did not have much guess to make India great again. Many people live in the environment which lacks basic things such as toilet, Its 35 year old “made in India” jet fighter project has not produce sufficient jets India Air force wants. Since the Modi’s demonetization, I have listened a number interviews given by Jayant Bhandari. Here is his latest one : https://www.youtube.com/watch?v=xTCtOHs3J-Y

    Jayant Bhandari

    Reply

    • February 17, 2017 @ 4:36 pm Easy Al

      oops, got a few typos. It should have been “The India government, regardless which party is in power, did not have much success to make India great again.”

      Reply

    • February 17, 2017 @ 4:39 pm traderscott

      Jayant is a sharp guy, while Modi is another braindead globalist, like Larry Summers. Good link EA, and Maurice is a good interviewer.

      Reply

  2. February 17, 2017 @ 4:30 pm Easy Al

    The lastestCoT gold report shows that speculators REDUCED their net long in gold future and option by 9508 contract. You can see it here : http://news.goldseek.com/COT/1487363564.php

    Reply

  3. February 18, 2017 @ 6:17 am Larry

    Scott,
    You often talk about geo-political situations that would and could affect our nation in general and the markets in particular. This is a link http://phibetaiota.net/, that my son sent to me which completely blew me away (my son spent 6 years in the Army as a Ranger, 2 tours in Iraq and 1 in Afgan, let just say left as a boy came back as an open-eyed man). The story starts at 30:59 into it.

    If it is true and taking into consideration the political situation and the mass media (who is itching for a kill no matter how scortched earth it is) runs with this, you can imaging how upsetting to the markets it would be in the current climate.
    Larry

    Reply

    • February 18, 2017 @ 9:02 am traderscott

      The Alex Jones one? – Robert Steele.

      Reply

      • February 18, 2017 @ 10:07 am Larry

        Yes. It starts at about 30:59 in.

        Reply

  4. February 18, 2017 @ 1:29 pm traderscott

    This “golden cross” stuff is totally useless.

    Reply

  5. February 19, 2017 @ 12:06 am Easy Al

    Hi Scott,

    I am going to offer two possible scenarios that will be negative for the dollar index and friendly to gold. The first is on the strength of euro, which currently hurt by the negative interest rate of ECB and the doubt of the EU project itself. Since euro has the largest weight in the dollar index, if euro strength significantly, the dollar index will go down. As you know, many pollsters, pundits, and so-called experts, got Brexit and election of Trump wrong. Assuming these guys are honest, they must have calibrated their method and shifted their views. So, they now really (and the conventional wisdom too) believe that Marine Le Pen, and Geert Wilders will win the election in France and Netherland and will be able to form their governments, which will then put EU project in serious jeopardy. I am going to take the opposite of the bet. I am betting that neither Le Pen nor Wilders will be able to form their government. They both will get more vote than they got previously for certainly. But it is unlikely either of them will get sufficient majorities that will enable them to control the government. Once this becomes clear, the euro will stage a significant rally.

    The second one is that the Trump administration has made it clear that it does not want a strong dollar. Although it did not say it explicitly, I bet the administration does not like the “high” interest rate (i.e fed fund) too. Traditionally, the Treasury Secretary is the official spokesperson on the strength of the dollar. Even if the fed carries out a series rate hikes, it is still possible for the administration to talk down the dollar (remember John Snow ?). In a few months, Mr. Trump has chance to change the composition of Fed’s board of governor. At the present time, only 5 of the 7 seats of the board governor is filled. Among those 5, only the quiet Mr. Jay Powell is Republican. All other 4 are Democrat. A few days ago, Mr. Daniel Tarullo announced that he would resign in Spring. It means that Mr. Trump can put 3 of this guys on the board in a few months. Once it happens, Janet Yellen may find her out-gunned (by 4-3). Moreover, her term expires next January 2018. Trump has made it known that he does not like her. So, I expect that she is going announce her resignation in late 2017. Once Trump put his guy into the position of the Chair. His administration will have total control of the Fed. If that is not enough, the term of vice Chairman, Stanley Fisher, expires in the middle of 2018. So, Mr. Trump will soon have many levelers to pull to get his wish of weak dollar.

    Since the market looks ahead, I expect it soon (or already started to) discount the possibility of a totally new composition of FOMC. If, as you suggested, we get a rally in dollar in Spring, I believe that it will probably be the high of this cycle. Consequently, the commodities and precious metals, more importantly, the stocks of their producers, are the one to be over-weighted.

    Reply

    • February 19, 2017 @ 12:58 am traderscott

      We’re kind of on the same page EA. My outlook has been for the beginning of the top and maybe THE FINAL TOP in the $ this Spring, and this topping process/distribution to last quite a while. In the 2000 top, it took 21 months, as you can see on the chart. The first arrow is the beginning of the top. I don’t believe we’ve even started the topping process, but above 109.75 would be the first probability of that happening. The second arrow is when the very forgettable John Snow (I forgot him) took over. He was talking down the $ when the top was already well in place, and already on the second leg down. As far as Trump talking the $ down, you know my belief that it is a useless endeavor. The Plaza Accord was in September 1985. It was credited for pushing the $ down, which is untrue. The 164+ top in the $ was in February, so once again they were talking the $ down when it was already back in a downtrend. Another forgettable, Don Regan tried talking the $ down – it was totally useless. All they’re doing now is strengthening the $ with their talk, as they’re shaking out (and shaking in) more weak hands. And I agree about Le Pen and wildman Geert, and it’s in that time frame for a potential solid tradeable bottom in the Euro, possibly breaking par and freaking everyone out.

      Reply

      • February 19, 2017 @ 1:02 am Easy Al

        Scott,

        I got so many typos in my previous post. You need to get your new website working soon.

        Reply

        • February 19, 2017 @ 1:12 am traderscott

          We’re very close. The whole environment with the website is totally different – and I did tell the tech guy about that editing thing.

          Reply

    • February 19, 2017 @ 12:58 am traderscott

      We’re kind of on the same page EA. My outlook has been for the beginning of the top and maybe THE FINAL TOP in the $ this Spring, and this topping process/distribution to last quite a while. In the 2000 top, it took 21 months, as you can see on the chart. The first arrow is the beginning of the top. I don’t believe we’ve even started the topping process, but above 109.75 would be the first probability of that happening. The second arrow is when the very forgettable John Snow (I forgot him) took over. He was talking down the $ when the top was already well in place, and already on the second leg down. As far as Trump talking the $ down, you know my belief that it is a useless endeavor. The Plaza Accord was in September 1985. It was credited for pushing the $ down, which is untrue. The 164+ top in the $ was in February, so once again they were talking the $ down when it was already back in a downtrend. Another forgettable, Don Regan tried talking the $ down – it was totally useless. All they’re doing now is strengthening the $ with their talk, as they’re shaking out (and shaking in) more weak hands. And I agree about Le Pen and wildman Geert, and it’s in that time frame for a potential solid tradeable bottom in the Euro, possibly breaking par and freaking everyone out.

      Reply

  6. February 19, 2017 @ 12:38 pm traderscott

    More problems in Europe. The situation in Italy is very volatile, and the anti-Euro “Five Star Movement” is leading the polls. The bearish focus on govt. bonds should first be on Europe (and Japan), the US Treasury market should paradoxically benefit (for now).

    Reply


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