Recovery in our Current State of "Disunion"

The state of our disunion is strong.

And it’s becoming problematic for the so-called “recovery”.

In a big picture, macro sense, pretty much all of the news is bad. From ongoing supply chain disruptions affecting everything from commodities production and complex manufacturing to worsening geopolitical relations on practically any front to domestic angst, strife, and turmoil, if the markets and the economy ever needed to catch a break, after more than one year of cancellations, lockdowns, shutdowns, travel restrictions, quarantines and worse, which continue sporadically to this very day, then arguably, that break is needed now.

And on the surface, the markets and the economy are catching a huge break. Indeed, Wall Street is being stimulated by the Fed at full throttle, and Main Street is being stimulated by the Federal government at full throttle, and yet, nothing seems to be working. Of course, when no one person, no group, no community, and no institution can come together with one another and find just the most rudimentary of common ground on anything anymore, much less actually accomplish anything even remotely mutually beneficial, the outcome could only be pockets of blooming financial activity that are few and far between.

In other words, in my opinion, from the top down, for better or for worse, we have induced a kind of extreme individual jockeying from the bottom up, for total exploitation of any and all government handouts & legal loopholes, we have given rise to compounding conspiracies galore, and as a consequence, there is a severe lack of trust among one another that is not just absolutely staggering, but seemingly building up to a crescendo of something.

A currency crisis?

A debt crisis?

Either crisis leads to a “Me-Shaped Recovery” because it means we’re nearing the point where extreme defensiveness will be something everybody must engage in, whether we like it or not, and whether we want to engage in it or not because it’s not really a choice, lest we desire to see the fruits of our labor, that is, our dollar-based, paper “savings” and “wealth”, spoil before our very eyes.

That is to say, when it comes to America, this crescendo must take the form of a currency crisis or a debt crisis, because at the root of all of our problems in the markets and in the economy is the simple fact that we’ve disregarded the Constitutional requirement for gold & silver money, and in its Unconstitutional place, we’ve permitted a shift into unbacked, debt-based fiat currency dependent on exponential, unsustainable growth.

I think it will be a currency crisis, in the form of the US dollar hyperinflation, because that is the path of least resistance.

The path of least resistance is for silver to catch down to gold:

Paper Gold to Silver Ratio

Assuming, of course, there is an active gold & silver price suppression policy engaged upon by the Exchange Stabilization Fund, the Fed, and agents acting on behalf of one or both, which is something that I do in fact assume, simply because it's the stated policy (Treasury.gov) that the US Government will manipulate any market, at any time, for any reason.

If the technicals matter, silver's short-term outlook is not looking good for the bulls:

Daily Silver Price

If we're correcting more here, we're a ways away from being extremely oversold.

I do not think there's a whole lot more downside in gold, however:

Daily Gold Price

It's amazing to think that by less than one percent, gold has nearly been in an official "bear market" since almost breaching $2100 several months ago.

Speaking of supply chain disruptions:

Daily Palladium Price

Is palladium signaling there are more disruptions coming?

Platinum is still positive by nearly 10%, year-to-date:

Daily Platinum Price

It's interesting how two precious metals, platinum, and palladium, are up by a respectable amount only a few short months into 2021, yet the other two precious metals, gold & silver, are down significantly.

If the more industrial of the precious metals are signaling inflation, copper agrees:

Daily Copper Price

So far, copper's correction has been over time more than it has been over price.

Crude oil plunged through its 50-day moving average yesterday:

Daily Crude Oil Price

Generally speaking, rising crude oil prices will act as a headwind for the recovery.

Another week, another round of complacency in the markets:

Daily VIX Price

Superficially, it's easy to make things look good on paper, but sadly, most people will not catch on to the putrid rot underneath the surface until it's too late.

Round 3 of the Economic Impact Payments do not seem to be having much effect on the stock market:

Daily Dow Jones Price

Have we reached the point where the effect of more stimulus is detrimental?

The yield on the 10-Year Note has pulled back since breaching 1.75%:

Daily US 10-Year Note Yield (TNX) Price

Is the yield spike scare really over?

It may be over, either overtly or covertly, and If I'm right as to the type of crisis that's developing in the markets and in the economy, it won't be a yield scare anyway:

Daily US Dollar Index ($DXY) Price

It will be a dollar crisis, and there's nothing the so-called "digital dollar" will be able to do about it, with the exception of speeding it up.

Thanks for reading,

Paul Eberhart

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Paul Eberhart
Paul Eberhart
Senior Market Analyst and Columnist

Paul Eberhart has been actively trading and writing about precious metals for more than a decade. A U.S. Army Iraq War Combat Veteran, he holds an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill...