It’s been a busy weekend on the geopolitical and economic front.
What will be even more interesting is to see how the Trump-hating media will spin it.
From The Wall Street Journal:
‘SEOUL—President Trump said the U.S. and North Korea had agreed to designate nuclear negotiating teams that will begin work over the next several weeks, an unexpected burst of diplomacy resulting from an impromptu meeting with the North’s leader, Kim Jong Un.
‘The two countries’ leaders convened at the demilitarized zone that divides the two Koreas. Mr. Trump then became the first sitting U.S. president to step inside North Korea, calling it a great honor and stopping for photos. The two walked some 19 steps into the North, then returned to the boundary—where the president posed a question to Mr. Kim.
‘“Would you like to come over?” he asked.
‘Mr. Kim agreed, and made an unexpected visit to the “Freedom House” building on the South Korean side. There he sat down with Mr. Trump and answered several questions, saying he had been surprised by the last-minute U.S. request to meet.’
Trump is doing more than any president before him
Trump is doing more than any president before him to bring peace to the Korean Peninsula. But the anti-Trump media won’t spin it that way. It will be ‘Trump’s love-in with a despot’ that makes the headlines, or some such nonsense.
The thing is, the deep state loves a good enemy. A good enemy incites fear in the population, and holds out the promise of war for those who profit so handsomely from it.
Former President Obama won a Nobel Peace Prize. I’m not sure what for. He oversaw the destruction of Libya and Syria, and loaded Iran — the world’s largest sponsor of terrorism — with cash.
But he did all that after he won the prize in 2009, so I suppose it was already in the bag.
But who wants to bet that Trump won’t hear a whisper from the Norwegian Nobel Committee?
It’s an opaque and dodgy process anyway. From the nobelprize.org site:
‘Neither the names of nominators nor of nominees for the Nobel Peace Prize may be divulged until 50 years have elapsed.
‘Proposals received for the award of a prize, and investigations and opinions concerning the award of a prize, may not be divulged.’
Now you know why Obama won the prize! And Henry Kissinger, for that matter…
Anyway, Trump was also busy at the G20 gathering in Japan. While giving few details, he held out the promise of a resolution on the trade war with China.
As a result, markets are set to start the week on a positive footing, while risk assets are selling off.
I warned you last week that gold was at risk of a correction. And in early trade, you’re seeing that correction kick in. After opening at US$1,410 an ounce, gold immediately plunged to below US$1,390.
Whether that’s something to worry about depends on whether you think trade war fears and tensions with North Korea drove the rally in the first place.
In my view, that has very little to do with it. Instead, I think it’s simply a case of gold being overbought. When that happens, it only needs an excuse for a sell-off to unfold.
And anyway, you could tell something like this was imminent. You just need to read the papers…
Let me explain.
It’s time for a gold correction
But this weekend, the Weekend Wealth section of The Australian ran with this headline: ‘Golden Rally: this time it’s different’.
‘After doing very little for almost five years, suddenly the combination of ever-lower cash deposit rates and ever-increasing fears for global markets have awakened gold investors as the price tops $US1400 an ounce.
‘Keep in mind that for six years between June 2013 and May this year gold traded in a tight range from $US1100 to $US1350.
‘In Australian dollars the story is even better, with the yellow metal crossing an all-time high of $2000 a week ago.
‘Many investors believe gold is now ready to “go for a run” — nothing new there, gold will lift when markets go bad or when things get a little scary, as they are now. The last time gold really went for a run was after the global financial crisis, as confidence evaporated across investment markets.’
The timing couldn’t have been better…or worse, depending on your viewpoint.
The mainstream media is great to follow if you want to know what everyone else thinks. And when gold makes the headlines with ‘this time it’s different’, it tells you that too many people are thinking the same thing.
When that happens, it’s time for a correction to scare a few people off.
Ultimately, that’s all I think this is: a correction.
There is another angle to this gold bull market that no one is talking about. I’ve been researching it for the past few months. To be honest, I can’t believe that this has passed most people by.
I’m not far away from finishing this research. I hope to be able to get it out to you in the next week or so. Keep your eye out for it. I think we’ll be well ahead of the mainstream media on this one too.
Editor, The Rum Rebellion
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