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Created on: 2/28/2023 9:12:21 PM Last Update: 3/1/2023 5:57:28 PM Posted by: RTT
1 POST
Math says Gold is going higher
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If you lend money to some one, your primary concern is will the borrower maintain enough income to ensure interest and principle payments to you. This is banker math 101.
Lending money to a country requires the same logic.
The red line below (Chart 1) has a simple meaning. 1) Rising : Percentage gains of federal tax receipts are greater than percentage gains of federal debt. 2) Falling : Percentage gains of federal tax receipts are less than percentage gains of federal debt. 3) Pivots : Changes in direction. Resulting in trend changes to gold and the Federal Reserve funds rate.
POINT: If the red line is rising the lenders of money to the USA are confident of interest payments, if the red line is falling confidence in receiving interest payments declines, or a sovereign debt crisis!
Lets review major pivot periods.
2001: Tax receipts collapsed going into US recession of 2001/02* 2007: Tax receipts collapsed going into US recession of 2008/09* 2015: Tax receipts collapsed going into the slump of 2016 (China slow down, US Elections)* 2023: Pending: Tax receipts are forecast to collapse in 2023 H2 (see 2s10s yield curve recession forecast)
* In these years US debt to GDP moved higher after initial slow down.
Chart 1
Click for popup. Clear your browser cache if image is not showing. 
The red line in the chart 1 highlights the forecasting of federal tax receipts and debt are very important to the trends of gold and federal funds rate. @LukeGromen (twitter) monitors tax receipts (chart 2), and the trend leader for US tax receipts is California, USA. Forecast is that tax receipts are falling hard.
POINT: This means the red line is about to fall hard starting ion 2023 Q1, just like the other years quoted above. Good for gold, and it will also force the FED to cut the FED Funds rate.
Chart 2

Falling tax receipts with out massive spending cuts results in more debt (chart 3). Just when the rest of the world does not want to buy US debt. This may force the FED to be the buyer of last resort once more.
Chart 3
Click for popup. Clear your browser cache if image is not showing. 

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Investing Quote...
..."There is what I call the behaviour of a stock, actions that enable you to judge whether or not it is going to proceed in accordance with the precedents that your observation has noted. If a stock doesn’t act right don’t touch it, because, being unable to tell precisely what is wrong, you cannot tell which way it is going."...
Jesse Livermore
My experience has been that in successful businesses and fund management companies, which performed well over the long-term, some courageous decisions were taken. Courageous fund managers reduce their positions when markets become frothy and accumulate equities when economic and social conditions are dire. They avoid the most popular sectors, which are therefore over-valued, and invest in neglected sectors because being neglected by investors they are by definition inexpensive. The point is that it is very hard and that it takes a lot of courage for a fund manager to avoid the most popular sectors and stocks and to invest in unloved assets. Finally, every investor understands the principle ‘buy low and sell high’, but when prices are low nobody wants to buy.
Marc Faber
.."When I bet big .. I have a mind to own a position for years .. Yet you must have a ruthless objectiveness and open mindedness as to when the facts change to exit the position, if so within hours or days .. I have not used a stop loss in 40 years"..
Stanley Druckenmiller
.."When a dictatorship is a fact. Revolution becomes a right"..
Victor Hugo
Unless you can watch your stock holding decline by 50 per cent without becoming panic stricken, you should not be in the stock market.
Warren Buffett
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