Trump, gold: The ultimate contrarian play

A quick note on Donald Trump. His candidacy is like gold.

All the political pundits hate him. His running for presidency is ruining their private club because he is bypassing their gate keeping role.

Much like the financial journalists’ bias that gold is an ancient relic, which has no economic worth, Trump’s candidacy is lunacy.

Yet, both Trump and gold have a big following on Main Street, where people value its contrarian stance.

It’s interesting that the more Trump and gold gain in popularity — whether at the polls or in price — the gate keepers ramp up the rhetoric.

Perhaps there is something to be garnered from the reaction of the gate keepers.

Perchance, “doth protest too much, methinks.”

So we wait, China has been devaluing the yuan for the past three days, so it’s just a matter of time before we see Russia and other Asian central banks do the same to keep pace with their largest trading partners.

The spectacular recovery in US stocks yesterday, despite violating technical levels and recovering 270 Dow points attests to the Streets belief that China’s move locked Janet Yellen and the Fed in the closet for September rate hike.

A bigger fear on the Street is if Japan tweaks the value of the yen, since that’s the basis for the largest carry trade. Buy yen to buy stocks and bonds and double down your winnings has been the institutional trade for years and that could come crashing down on a reset.


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