When we look around the world the final say in every election is always the vote of capital – which is international rather than confined to local politics. Biden has already shut down the pipeline from Alberta which will only be symbolic for whatever substitute will mere be brought in by ship and pumped into another pipeline. But politics is never about reality – it is only concerned about appearance.
When we look around the world, we must do so through the eyes of the FX markets for only then will we begin to see the real trends. The German DAX has made a new high in euros, but not in the main global currencies. In both dollars and Japanese yen, the DAX has not yet come close to making new highs.
Then we have the confusing trend in gold. So many have been asking for a Gold Report ASAP because nothing has made sense after all of these years touting gold is a hedge against inflation and the dollar will collapse. There is even the most bizarre analysis claiming that just a few months before Covid appeared, the Fed was busy pouring boat-loads of dollars into the US banks into the inter-lending market known as REPO to prevent bank-runs which were starting to develop. They claimed these were the same “tectonic fissures that developed prior to the 2008 crisis” when banks became so distrustful of each other’s solvency. They concluded: “If unsuppressed the lending rates would continue to rise, laying a path to bank failures and a contagion which would eventually derail the economy and undermine the dollar itself.”
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