Gold Signals A Reset

McAlvany Weekly Commentary

Bessent: "End Intox With Detox" Anxiety High With Uncertainty Of New Rules Personality Test Identifies Trump With Churchill, LBJ, Castro, & Jack Nicholson "We may or may not be able to grow our way out, but the efforts to shrink the scope of expenditures and drive economic growth via economic expansion instead of government expansion—two very different means of driving the economy—that's being put in motion in one place on the planet today. One place only. The USA. It's something like a corporate turnaround. First, manage your outflows and cut all unnecessary spending. Then drive growth in the areas you have the greatest advantage, building back with a much reduced budget. Turnaround specialists are rarely loved within the organization that has ossified and is in the process of being restructured, but that process can be a matter of survival." —David McAlvany * * * Kevin: Welcome to the McAlvany Weekly Commentary. I'm Kevin Orrick, along with David McAlvany. David, we just met with Morgan Lewis, and he had some interesting statistics to talk about. Are we possibly going to go into a recession? I hate to say, my mind wandered. I mean it was very interesting listening to the statistics coming out of all the economic sources. But I started thinking of the chicken coop meter. I live on five acres and we used to run a chicken coop. We don't now, but every neighbor around me, I was thinking about it while he was talking. Every neighbor around me has started a chicken coop in the last year or two. I hear roosters all around me, and I was thinking, I wonder, yeah, could that be the price of eggs or do you think maybe that's a precursor to people realizing things are going to get tight? David: Yeah, it is obviously partially an egg issue or they just don't want to pay 12 bucks for a dozen, a dollar apiece. All of a sudden your cheap protein source has gone the way of the dodo bird. Well, yeah, I think there is also an adjustment to what may be harder times. This is where we've often talked about a two-tiered economy and what economists will sometimes describe as a K-shaped economy where some are doing very well. One of the legs of the K goes up and to the right and is fine, and the other leg goes down. And I think the middle class, the lower middle class has been under pressure for some time in the continuation of the inflation trend, whether it's in price of a dozen eggs or a gallon of milk, or even just a marginal 2% increase off of a base level which was much, much lower four or five years ago. It's compounded negatively, and their income is not keeping up. Kevin: Well, and Morgan was bringing out, he said, you know, the gold thesis that we've been talking about for so long may really showing itself right now because he quoted Scott Bessent, who was being interviewed on Meet the Press, and Meet the press basically said, "Okay, this period of detox, are we going to go into a recession?" And Scott was like, "I've taught on this and we were going to have a crisis anyway." David: And we may have a crisis, Kevin: We may have a crisis. David: But here's what's different. We're taking steps to do something different versus what we have done in the past, which is intox over and over again in response to crisis after crisis. We've seen credit explode higher as a way to save the system. And we've gotten to a level that that is not in any way sustainable, and we cannot go that way again. So detox versus intox, that is the only way forward. Kevin: So even last year before we knew Trump was going to be president, before Scott Bessent was in— Last year at this time, Dave, our conversation on gold was about price moves. And I'm not going to say that we want to say that we predict prices. I can't at all. But the things you were saying about gold and the price of gold a year ago, and then today, over the last few months, let's go over that because I think it's important to go back and say, "All right,