Written by Bryan Lutz, Editor at Dollarcollapse.com:
Every Sunday morning I send out three thoughts.
Sometimes these thoughts are on the economy, life, or hard assets.
If they’re helpful or hopeful to you, that’s great… Sometimes it just comes down to reality. That’s what I’m interested in…
So, here we go.
Here are three Sunday morning thoughts for you:
1. If gold demand is about to increase, will prices be satisfied by supply?
There is only so much gold in the ground.
Scratch that.
Only so much gold is dug out of the ground every year.
The chart below shows gold mining index on the NYSE vs. gold. Both are compared by price performance percentage.
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To set further set this up, gold has gone up in price, yet gold miners are lagging behind.
Miners can only produce so much.
They cannot suddenly increase their production to compensate for higher costs.
It take at least seven to ten years to get a mine operational.
And if gold slowly rises with inflation, miners must bear the burden. That’s because the cost of diesel, labour, and equipment also rises.
The only way miners increase their profit is to see gold prices increase quicker than inflation.
So the miners lag behind in stock prices.
However, this won’t last forever.
As gold demand increases, supply will not automatically become available from gold and silver producers. While at the same time, those who have gold will hold on to it.
The result is higher gold prices for longer.
Maybe a decade or two, or more…
2. California passed on voting for Kamala(she was their AG) at the DNC. Gavin Newsom may have admitted why. There’s a reason for that too.
Kamala Harris was ushered in as the Democratic Presidential nominee last week.
Yet, no one voted for her.
Even her home state, which she was the Attorney General(AG) for, passed on voting for her.
At first glance, it looks like a democrats are united in a plan to simply hand over the Presidential nomination to whomever they select. I don’t think it’s like that.
In reality, individuals have their own reasons for voting the way they do.
A “pass,” in other words, choosing not to vote, could mean many things, but the politicians in California know how bad things are.
They know their state’s debt levels…
They know their state’s crime levels…
And they know their state’s homelessness levels…
They are all growing. That’s NOT a good thing.
Guess who finally admitted it’s because of the policies Kamala now defends and promotes?
Gavin Newsom.
You didn’t hear it in the news this week, but here’s the video.
He admitted this at the DNC in Chicago.
When asked, “How did California get so many homeless?”
He said, “…because of our own policies and neglect. We put up our feet and we rested on our laurels.”
Maybe, Newsom wants to get all apologetic now, and position himself against Kamala as a reformed democrat. Now he wants to be seen as residing in the “center” to claim the Presidential candidacy four years from now.
He has time…
But there it is, he knows his socialist, woke policies are awful, but he could eventually go ahead with them for a “power promotion.”
Maybe what the rest of California is willing to do…
Is admit errors of the past in order to get their pick into Oval Office in the future.
Kamala may not be the pick behind the scenes, but she’s the party’s smiling face while they stare into oblivion.
3. Commercial Property is on fire. This time it’s not a financial error like 2008. It’s demand.
During pandemic lockdowns, employees were forced to work from home.
Then something strange happened.
Employees decided they liked working from home…
Then companies found they could save money on office space.
So they reduced their expenses. They let go of costly cubicles, meeting spaces, and office equipment.
Now corporations, and banks mostly are having trouble pay their loans on commercial real estate – no one needs it!
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This is much different than the sub-prime mortgage crisis of 2008.
During the Great Financial Crisis, commercial real estate flopped because of bad loans. It was an extreme financialization of debt.
Now loans have gone bad because less companies need them.
There’s less demand.
So, it’s only a matter of time before the commercial real estate foreclosures overwhelm corporations, and banks with losses.
Foreclosures are on the way up.
This time, it’s not accounting.
It’s demand.
