The Market Met Jerome Powell’s Warning With Deep Denial

Not all the markets were impervious to Powell’s harassment by DOJ goons. The dollar, which is down 8.3 percent over the past year—that is, more or less since Trump took office—dropped steeply Monday morning before rising a bit in the afternoon. The yield on 30-year Treasury bonds, which has been rising since October, spiked Monday morning. That’s a sign that fewer people wish to buy them. Why purchase dollars or Treasury bonds when the president is so determined to lower their value that he’s willing to throw the Fed chair, who’s been lowering interest rates lately but not fast enough to suit Trump, in jail? Over the course of the afternoon, however, bond yields fell, leaving them about where they closed Friday.

Gold, meanwhile, jumped nearly 3 percent. As I’ve explained previously, the rising price of gold is the surest sign that the United States economy is headed in a terrible direction. It’s a vote of no-confidence in the dollar. As I explained in October, investors call rising gold prices “debasement trade,” which means money is fleeing from assets in which the market is losing faith—in this case, the dollar and Treasury bonds. The higher the price of gold rises, the more debased our currency and our nation’s debt become.

Gold futures contracts now stand at a record high. We really have entered a Gilded Age, figuratively, in the dominance of billionaires in our politics; literally, in the price of gold; and symbolically in Trump’s conversion of the Oval Office into an ersatz pharoah’s tomb. It can’t last, and it won’t, but I’ve given up predicting when it all goes bust.