Parsing Out Dystopia: Trump in Trouble, A Dark Christmas, and Gold

The number of new COVID-19 cases per day in the US since the beginning of the year.  Notice we have recently moved back up to a consistent 50,000+ cases each day.  This does not bode well for Christmas.  This graph is available from the Johns Hopkins website.

Reality finally caught up with Donald Trump.  He caught COVID-19, spent time at Walter Reed getting aggressive treatment against the virus, and his re-election campaign started falling apart.  His ridiculous activities surrounding his "hospitalization" (which I put in quotes to remark about his joy ride while receiving treatment), his over-the-top unmasking of himself following the visit were political theater of the absurd.

The American people are now finally seeing how absurd it all is.  How do I know?  Not from any public polling, although the latest fivethirtyeight poll gives Biden an 85 percent chance of winning the election (as of this post).  Hillary's margin was never that large in 2016.  But the truly insightful polling comes from inside the Trump campaign itself.  His internal polling in 2016 beat everyone else.  Whoever conducts polling for his campaign delivers the most accurate results.

Now, we are not privy to the campaign's internal numbers, of course, but we can deduce much by the campaign's behavior.  Specifically, its media buys are totally based on its internal polling.  For that reason a recent article in BuzzFeed caught my eye.  I realize BuzzFeed is not a top-tier news source, so keep that in mind.  

Nevertheless, according to the article, the Trump campaign is shifting around millions of dollars in advertising buys in various states.  Specifically, millions of dollars are being cut from advertising in Minnesota, Michigan, and Wisconsin.  Moreover, local media buys in Ohio and Iowa have stopped (regional and PAC ads still run, of course).  Trump needs to free up these funds for more ad buys in Arizona, Florida, and Georgia.

This means the Trump campaign sees these key states as threats to lose.  The fact Trump has to spend more money in Georgia is already sort of a Democratic victory.  Trump did not have to worry about either Georgia or Arizona in 2016.  Now he does.  That is money he can not spend elsewhere and the Biden Campaign continues to raise more right now, a significant sign.  The momentum is clearly against Trump, according to what he is seeing inside his own campaign.

"'I don’t think the spin is in any way congruent with the reality,' Nicholas Everhart, an Ohio-based Republican ad maker, told BuzzFeed News. 'There’s no reason why [Trump] would not be wanting to be on the air in those states, particularly Ohio, at this moment. Clearly there are some unpleasant financial realities impacting the strategic decisions they are making.'

"Biden and the Democratic National Committee outraised Trump and the Republicans by more than $150 million in August."

This is all very hopeful.  Georgia will probably still edge toward Trump.  However, there is a real chance that Trump's very public insulting of former Arizona Senator John McCain might flip that red state blue this time.  Biden and McCain were always on good terms though politically different. 

Now for the bad news.  All of this reality is making Trump desperate.  He will become even more unstable now in how he acts and what he says.  The absurdity of Donald Trump has yet to see its summit.  But, unfortunately, it will be out of desperation that he will implement what he has planned for all along - total Election Day chaos followed by swarms of legal actions.

Trump will spin more chaos between now and November 3 than anyone has imagined.  He has nothing to lose, his polling tells him he is losing BIG.  And around Election Day the Trump campaign will unleash a flood of litigation against every vote that was not made in-person in many states, maybe all of them.  He will attempt to go nuclear on the election results.  It may very well involve white militias.  Do not rule anything out.  This is America's Wiemar moment.

On the pandemic front, I am watching the number of 50,000+ days now.  There was an extended cluster of them in July but then the numbers started dropping, thanks in no small part to corporate America.  With the numbers skyrocketing, Wal-Mart, Target, Home Depot, Kroger, etc. all started mandating face masks inside their stores.  Although not everyone complied almost everyone did, enough to help take a little wind out of the virus.  

Corporate America mandated masks.  What does that say about Trump’s refusal to believe it is necessary?  What does it say about Trump’s flagrant disregard for the science behind a mask mandate?  I don’t normally tip my hat to big corporate initiatives but this deserves sincere salutations.  This is one time when corporations led where government proved too impotent to go.

According to the excellent Johns Hopkins website, the numbers never dropped back to where they were in May - June but there was a clear trend downward.  America reached the daily total "bottom" for this cycle on September 7 with about 24,000 new cases.  We topped 50,000 again on September 21.  Since then we have topped 50,000 seven more times, including four days in a row October 7 through October 10.  The more 50,000+ days we have, the more likely we will see a second wave.

This is consistent with this web site I've been following for months.  It is the only site I have found that gives you daily deaths in the US in an interactive graphic format.  Right now between 675 - 700 Americans die every day from COVID-19.  The projection is for this to dramatically increase in November, with about 1,000 deaths per day starting a few days after the election.  Currently, the site is projecting a total of about 394,000 American deaths by the end of January 2021, hitting a peak of 2,353 deaths on January 17.  I have no idea where this model comes up with these numbers.

In other words, just as it was in March when almost no one seemed to have contracted the virus, we are likely to see a severe ramp-up in American deaths based on current data.  In order for that to happen, we will have to approach 100,000 cases per day, double what we are seeing right now, just in time for Christmas.  But these models have predicted that sort of thing happening since the end of the lock down and, so far, we have avoided it. Unfortunately, the fact the models have cried “wolf!” before means they are not respected by many people now.  In dystopia things are never clear cut and there is a constant danger lurking in the back of everyone's minds (well, except for the Trumpists who think masks don't work and becoming infected is really not that big a deal anyway).

Finally, let’s take a look at the crazy stock markets.  The Federal Reserve has pumped unprecedented trillions of dollars into the economy, going so far as to start buying ETFs for the first time in its history.  That is direct federal acquisition within the stock market.  Everyone screams that they don't want socialism but I don't know how much more socialistic you can get than when the government starts buying private funds and bonds.  I laugh at the Republican claims to "stop socialism" around here when we are already socialist.

All those trillions being created out of thin air are going to be great for the gold universe.  I have already taken profits on gold and silver back at their August highs.  I sold GLD at $192 and SLV at $27.  Now I am leveraging back in with GLD in the $177 - $179 range and SLV around $22.  I think the previous highs will be taken out with the next stimulus package which will likely occur after the election.  But, that's a bet on my part.  No one knows what will happen.

All this hinges not only on the action by the Federal Reserve but also on the strength or weakness of the US dollar.  If the dollar is strong, that will be bad for gold.  But if the dollar is weak, that will propel gold upward.  I'm betting on a weak dollar, at least in the short term.  As Richard Russell used to say, "A strong dollar makes the debt feel heavier."  And with more debt being created than ever before in human history, I see no reason why the Fed would want to strengthen the dollar.  So, coupled with a commitment to absurdly low interest rates, gold should go up.  That's my guess anyway.

Being within dystopia takes on an unmistakable surreal quality.  Trump catches COVID and emerges, apparently, as superman.  A second wave of COVID seems assured even as people attend college football games.  Election Day will transform into Litigation Day.  The stock markets depend upon the government (not investors) to keep values high.  This is all more than slightly absurd.

I saw Brit Hume on Fox News today say that Trump's only hope right now, his campaign floundering with Trump behaving erratically and not "focused," is that Joe Biden will talk more and his obvious (to Hume) senility becomes, well, obvious.  Can party politics get any more dystopian than that?