- US T Bonds tantalizingly close to that major rally
- DOGE USAID cuts just the beginning
- DOGE about to look at Medicaid and Social Security
- Gold just keeps heading higher
- Gold stocks ready to surge much higher
- ASX Gold index to pass through 10,000 today
Key points
US T BONDS
- Sharp fall in yields on bonds
- RHS on TLT looks good
- Will the US have a Budget Surplus by end 2026?
- DOGE cuts USAID theft scam
- Updated computer systems for Medicaid/Medicare and Social Security
- Will cut costs substantially
- Massive fraud also identified here
GOLD
- Heading towards US$3,000 and beyond
- Don’t just look at the short term
- Big picture suggests many US$,000 higher
- Think of this as a market with more short covering
- Then strong buying across the board
- Criminal suppression of gold for decades now ending
GOLD STOCKS
- That move on the 2011 DT was very important
- PERs of 6-7x are far too low
- Expect multiple expansion
- Then think earnings increase
- XAU to 240 (+50%) very quickly now
ASX GOLD INDEX
- MPS universe of gold stocks is still 6-7x EPS as well
- XGD hit alltime high of 9975 yesterday
- 10,000 today
- 12,000 very quickly
- Then 20,000 within two years
US Bonds
There has been considerable focus on the US bond market here for some time.
As you know it is the biggest market outside the currencies and there is US$37tn in US Government debt out there.
There is a big roll over of this debt due in 2025 so the marketplace is acutely aware of the importance of bond prices and yields.
The Elon Musk DOGE has made some important cuts and the recognition of the massive fraud in USAID is certainly making the citizens all the US to stand up and take notice.
There is indeed a criminal mafia involved in the theft of taxpayer money but it seems to be running far deeper than just the US$72bn budget of USAID.
As has been pointed out here numerous times the US constitution makes no provision for a Federal bureaucracy and the United States is still essentially a union or federation of 50 sovereign states and the responsibilities on health, education, environment etc are really individual state issues.
The US FY2024 `Budget’ here shows massive expenditures on health and Social Security:
| US$bn | |
| Medicaid | 558 |
| Medicare | 842 |
| Social Security | 1459 |
| Total | 2,859 |
Commentary abounds about the antiquated computer systems used by these Federal Agencies and DOGE would be the ideal group to upgrade it with remarkable efficiency.
Could it be a 10% efficiency gain coming here?
There are reasons to be believe massive fraud also exists with long dead names still receiving benefits – much the same as with the voter rolls.
Illegal aliens have also been major users of health and medical services.
We live in interesting times.
DOGE has already identified cuts of US$4bn per day to cut the deficit to just US$1tnpa by end 2026.
The numbers on cost reduction are likely to be much higher so maybe a balanced budget or surplus in 2027!
Why is this important?
Lower debt means lower taxes and lower interest rates.
And a stronger economy.
And with massive infrastructure renewal likely, the demand for raw materials will be very strong.
So the action in the bond markets is critical.
GOLD
More new highs and much more to come.
Keep the bigger picture always in mind.
US$1200 so far. US$2500 more to come ?
GOLD STOCKS
These are still massively underowned.
ASX GOLD INDEX
Breaking into all time highs.
10,000
Then 12,000
Then 20,000
Expect the small caps to really start to run now.
XGD Gold Index 2019 -2025
