Courtesy of Pam Martens.
By Pam Martens and Russ Martens: February 8, 2017
The price of gold (see above chart) has been rising and its volume spiking since President Donald Trump signed his infamous Executive Order on immigration on January 27. That action ushered in a new U.S. era of uncertainty in which thousands of agreements, such as Lawful Permanent Resident status known as a green card, can be casually broken by one man in the Oval Office signing an Executive Order and setting off pandemonium in lives and airports around the globe. It raises the fear of what other established laws or rights the President might attempt to sign away.
Gold typically rises when there is fear in stock markets. But the stock market has not been following its typical relationship to gold by selling off. Since Trump’s presidential win in early November, the Standard and Poor’s 500 has been on a steady uptrend. We’ll analyze that further in a moment, but first some necessary background.
At the top of the list of what the stock market hates is uncertainty. Thus, one would have suspected that when the United States elected a President who had never before served in public office with a penchant for hurling insults at the country’s largest trading partners, and who promised radical changes in the oversight of Wall Street, there would have been a major selloff in stocks.
That didn’t happen because Trump quickly sent hand signals to the biggest traders on Wall Street: the big Wall Street banks (yes, despite the Volker Rule they’re still major traders) and the hedge funds. Trump quickly placed Goldman Sachs progeny in key spots in his administration. To make sure the SEC didn’t crack down on high frequency trading or Wall Street’s Dark Pools – the magical wings beneath the market’s buoyancy – someone whispered in Trump’s ear that Jay Clayton, an outside lawyer to Goldman Sachs at the powerful law firm, Sullivan & Cromwell, should become the nominee to Chair the Securities and Exchange Commission.
…
