Gold Market Wire
News, analysis and commentary for gold traders and investors
The Long View
American Public Grows Exasperated With Washington
March 23, 2020 - (Gold Market Wire) -
The American public is growing increasingly angry and exasperated with the bi-partisan machinations of Washington that seem to take every crisis that comes their way as an opportunity to engage in a wrestling match over taxpayer funds. The unanimous Democrat rejection of the Republican sponsored $1 trillion dollar bailout fund signals that partisanship and polarization remain the primary feature of US Politics.
There is no “coming together over a crisis.” The well-being of citizens is to play second fiddle to the never ending 'grudge match' that is Washington's forte. Citizens are becoming furious that Washington cannot manage to pass a bill that would help the ordinary people before the wrangle over corporate bailouts takes place. What is good for the people of the country no longer counts. Government has outlived its usefulness, it seems, because government sees a crisis as an 'opportunity'.
In this political tangle, knotted together by government ineptitude, gold has a chance to find its role. Gold will respond to the loss of public confidence in government – because that is what gold does. Although beset by mass liquidations across the financial and commodity sectors, Gold may yet be seen by the public as the insurance it so demonstrably is. Little wonder then that rumours are abounding in Europe that Germany and, perhaps, the EU, are going to restrict access and redemption to it. The lowering of Gold anonymity reporting limits to a mere 2,000 euros last month in Germany starts to look like early awareness of an impending crisis. Never has the premium for having physical in your possession seemed so acute.
The idea that a $50 billion rescue package for the Airline industry, where share buy backs have made CEO's wealthy is rankling people. The industry has spent 96% of its cash flow in the past decade on share buy backs that jack prices higher for those whose compensation comes mostly in equity form – the senior management. Packages for some airline execs have gone into the 10s of millions of dollars for a single year. The public wants to know why they never saved any money for a crisis... and why they should be part of any bailout.
The last time a serious crisis happened, in the banking industry, the idea was that the banks would be bailed out so they could start lending again failed. It never happened. They merely hoarded the money at the Fed at rates no citizen could ever hope to get for their savings.
Now, as if things weren't bad enough – four US Senators, across party lines, have been accused of insider trading, by dumping shares at the outset of the crisis. The accused include the Chairman of the Senate Intelligence Agency and long standing politicians like James Inhofe and Diane Feinstein. Members of the Senate Health Committee, no less, have also been found to have dumped stock. One of them is actually married to the Chairman of the New York Stock Exchange.
The politicians are simply incorrigible. They represent only themselves and monied interests. The public is a mere casualty figure to them, to be played for profit.
This is not going to end well. The public confidence in government, still reeling from the 2008 financial crisis, is hitting all-time lows.
This is the environment in which Gold can rise steeply. Unless the 'sheeple' are quickly assuaged.