The results are in and Donald Trump made a historic comeback to win convincingly by taking control of every level of the Federal government. An implementation of his policies will get quick approvals and actions will need to uphold his words. In reality, the markets have been booming because HOPE in bringing back the success he previously had was restored. Further, the outcome was a complete rejection of the leftist policies. 

It is said that you never stand in front of a speeding train and if you do, somebody will get hurt. The same analogy can be applied in markets depending on which side of the ledger you are on. Many who have the fear of missing out (FOMO) tend to jump on board when markets rally. Unfortunately, these people get caught at the heights of pandemonium, usually buying high and selling low rather than buying low and selling high. 

This morning the Producer Price Index (PPI) mirrored yesterday’s CPI and rose to 2.4% vs expected (2.3%) YoY. Considerably higher than the 1.9% recorded in September. Most revealing was the result of Ex-Food and Energy coming in at 3.1%. On the other hand, Jobless Claims fell to 217k vs the previous (221k). 

As previously mentioned the USD continues its upward trajectory as the Consumer Price Index (CPI) disappointed as well. The October # came in @ 2.6% vs September (2.4%) but the disturbing news was the fact that EX-Food & Energy(most volatile components), the result was higher at (3.3%) YoY. Maybe the spike was the result of money given for celebrity endorsements?  

Consequently, the likelihood of the Federal Reserve continuing to lower rates may have come to a roadblock for the December meeting. As I alluded to many times before, for Canada and America, Inflation will not come under control until government spending is curbed and the printing of money is stopped. You cannot continue printing money without consequences. 

The USD Index continued its explosive rise above the 107.0 level then fell back on profit-taking below the 106.50 level.  The expectations are enormous and changes will be profound especially when it comes to the potential of the Central Banks as guardians of the economy. The discussion of bringing back the gold standard or using Bitcoin as the foundation to make government spending accountable is being discussed. This is possibly the catalyst to its recent explosion in price. 

Lastly, Gold considered an Industrial Metal and the basis of money since the advent of money, has seen its value slide by 7% since its last record high. Presently, it has dipped below the USD$2600/oz level.  while Silver dipped below USD$30/oz for a moment. The Canadian Dollar falls toward the 0.71 cent level as interest rate differentials and central bank policymakers diverge in ideology. The price of Oil remains in the USD$68/barrel vicinity with downward pressure expected to continue keeping the pressure on the weaker CAD$. Currencies have been taking a bath, especially the Euro vs the USD as governments around the world, ponder their approach in new negotiations with equitable balance. All face the risk of closing themselves off to what is considered the best commercial consumer society in the world, presently the #2 economy behind China.