Wall Street Elated over Presumptive Yellen Pick for Treasury Secretary

Republican Senate Largely Powerless to Slow Modern Monetary Madness

Mike Gleason Mike Gleason
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November 27th, 2020 Comments

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Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.

As the Dow Jones Industrials surged to the stratospheric 30,000 level during this holiday-shortened trading week, traders continued to unload gold positions.

Gold prices broke below a support line at $1,850 on Monday. The market descended downward to test the $1,800 level – which also happens to be where an uptrending 200-day moving average line comes into play. So perhaps the monetary metal will be due for a bounce heading into December.

But as of this Black Friday recording, gold is below $1,800 now as it’s selling off during this thinly traded day after Thanksgiving, big surprise there. Spot gold currently checks in at $1,791 an ounce, down a healthy 4.6% for the week. Silver is also taking it on the chin today and shows a weekly loss of about $1.50 or 6.1% to trade at $22.78 per ounce.

The platinum group metals are outperforming, with platinum up 2.3% this week to trade at $981. Its sister metal palladium is up about $100 or 4.1% on the week to command $2,448 per ounce.

And finally, on the day the Dow hit 30,000, copper prices hit $3.30 per pound to mark a slight new 7-year high. If the apparent breakout holds, then copper may be headed toward its all-time high of $4.70 in the months ahead.

So, it’s a bit of a mixed picture in the metals space. Industrial metals are gaining momentum while gold and silver are struggling to find footing after spiking this summer.

Wall Street’s post-election exuberance is, for now, stealing precious metals’ thunder. Stock market bulls cheered Joe Biden’s announcement that he intends to make former Federal Reserve chair Janet Yellen his Treasury Secretary.

Over on CNBC, it was a literal love fest for Yellen and current Fed chairman Jerome Powell. Stock market cheerleader Jim Cramer could barely contain himself.

CNBC Anchor #1: The takeaway on Yellen has been someone who is, not just with a deep understanding of unemployment, but obviously, someone who's willing to go a little bit bigger in terms of fiscal stimulus. I even saw a piece this morning, Jim, that argued that Biden's unlikely to replace Powell.

Jim Cramer: Powell really is very much aligned with what Biden was doing. I mean, you could say even last week when Secretary Mnuchin pulled some of these programs. And I didn't think the programs were significant, but I do know that you have Chairman Powell just saying, "Listen, we're not done."

CNBC Anchor #2: And generally, the markets, as we know, yesterday, certainly quite happy with the prospect of a Yellen at (the) Treasury.

Jim Cramer: Look, I love her. I mean, come on. I happen to think Jay Powell's great. I think, look, if you like stocks, you got two great people.

Wall Street’s over the top reverence of central planners may seem strange. It may ultimately be unhealthy for the proper functioning of markets. But all that matters at the moment is that stocks are going higher.

At some point we suspect that all the stimulus being pumped into financial markets will bring negative side effects that most CNBC viewers are unprepared for.

If Joe Biden is ultimately sworn in as President next January, a Treasury Department helmed by central banker Janet Yellen would effectively cement the ongoing merger between the supposedly “independent” Federal Reserve system and the federal government. Whatever the Biden administration wants from the central bank, it will provide.

A narrowly Republican-controlled Senate will be powerless to stop the implication of modern monetary theory or something akin to it. We can expect massive commitments by the Fed to monetize ever-growing trillions worth of government deficits.

When the current euphoria in the stock market fades, precious metals will be one of the few viable places for investors to seek protection from currency debasement and inflation.

If you believe in the fundamental case for owning gold and silver, you might consider giving the gift of hard money to loved ones this holiday season.

With millions more people set to stay at home and shop online for Christmas this year, the Post Office and other package delivery services could become overwhelmed in the days leading up to the holiday. To reduce the risk of delivery delays or mishaps, it’s wise to get your online shopping done sooner rather than later.

Another way it could pay to shop early is that gold and silver spot prices have dipped this month. A Santa Claus rally in December would make bullion items more expensive than they are now.

Money Metals Exchange offers bullion products for all budgets – from copper rounds that can be stuffed into stockings to pure 24-karat gold coins for that special someone.

If you’re looking for affordable bullion gifts that come ready to give, you’ll want to order a handful of our holiday-enhanced Silver Eagles. We are pleased to offer the world's most popular silver coin – the American Eagle – packaged in our exclusive "Merry Christmas" capsule.

This gleaming pure silver coin is a great alternative to cash, gift cards, or other run-of-the mill presents. But the truth is, precious metal in any form is virtually guaranteed to bring bigger smiles to people’s faces than the equivalent value represented in paper or plastic.

If you want to go bigger and make a real impression our 24-karat gold bracelet would be an excellent choice. This stunning 1-ounce pure gold bracelet features a hammered finish and will look great on the wrist of that special someone. And, unlike the price you would pay at the local jewelry store for a similar item, our 1-ounce gold bracelet costs hundreds, if not thousands less.

For other precious metal gift ideas including our unique locking book safe and silver starter kits, visit MoneyMetals.com. For a limited time, if you buy any gift item in conjunction with at least one other item, we’ll ship and insure your entire order for free!

There is nothing like the timeless beauty and tangible weight of a bullion product. It leaves a lasting memory.

The gift of precious metal can be cherished for years or even decades to come. It can help teach children about the value of money, the risks of inflation, and the long-term benefits of saving.

Unlike other popular gifts such as clothing or electronics that will eventually wear out or become obsolete, any quantity of precious metal stands to become more, not less valuable over time.

Well that will do it for this week. Be sure to check back next Friday for our next Weekly Market Wrap Podcast. Until then this has been Mike Gleason with Money Metals Exchange, thanks for listening and have a great weekend everybody.

Mike Gleason

About the Author:

Mike Gleason is a Director with Money Metals Exchange, a precious metals dealer recently named "Best in the USA" by an independent global ratings group. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.