Author stories Proactiveinvestors Author stories RSS feed en Tue, 17 Oct 2017 05:04:16 +0100 Genera CMS (Proactiveinvestors) (Proactiveinvestors) Vast boosts production in Romania and Zimbabwe Mon, 16 Oct 2017 08:27:00 +0100 Strategic Minerals signs term sheet to acquire copper mine Mon, 16 Oct 2017 14:58:00 +0100 Merrills buys into Base Mon, 16 Oct 2017 07:57:00 +0100 Orosur Mining on target to meet full year guidance, as drill rigs start to turn in Colombia Mon, 16 Oct 2017 07:45:00 +0100 More production underway at Xtract’s Manica gold project in Mozambique Thu, 12 Oct 2017 11:56:00 +0100 Cora Gold targeting a million ounces of gold in oxides, just for starters Thu, 12 Oct 2017 11:05:00 +0100 Tethyan Resources building real value at Suva Ruda copper project in Serbia Tue, 10 Oct 2017 14:55:00 +0100 Tharisa PLC delivers strong chrome and platinum production numbers for 2017 Tue, 10 Oct 2017 09:28:00 +0100 Strategic Minerals delivers record sales from Cobre, anticipates profits of over US$1mln Tue, 10 Oct 2017 11:09:00 +0100 Vedanta Resources boosts metal production, hydrocarbons fall Tue, 10 Oct 2017 07:57:00 +0100 Fed turns hawkish, gold outlook still favourable Fri, 22 Sep 2017 11:42:00 +0100 Technology and information are rendering today’s political structures increasingly obsolete Fri, 29 Sep 2017 14:02:00 +0100 The 19th Chinese Party Congress is coming, and will have an interesting effect on markets Fri, 15 Sep 2017 12:15:00 +0100 Catalonia, gold and bitcoin Fri, 06 Oct 2017 13:13:00 +0100 Civil War, Gold and Donald Trump Fri, 18 Aug 2017 12:24:00 +0100 Gold mining in Tanzania gets riskier, and more attractive too Fri, 08 Sep 2017 13:58:00 +0100 Is big money finally ready to flow towards West African gold juniors? Fri, 13 Oct 2017 13:19:00 +0100 Trump’s threat to shut down the government is no bluff One commentator from one of London’s smaller financial trading institutions used the word “bluff” several times in a note this week analysing the likelihood or not of Donald Trump following through on his threat to shut down the government if funding for his Mexican wall is withheld.

The mechanism for Mr Trump to follow through on his threat is already there: the US has once again hit its “debt ceiling” and has been resorting to what’s known by Washington insiders - and increasingly now by the outsiders that Mr Trump has been bringing in – as “extraordinary measures.”

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But in order for the sprawling edifice of US government to be able to afford to continue to fulfil its manifold functions, this debt ceiling needs to be raised again, and soon: by 29th September, according to the US Treasury Department.

It requires the agreement of the legislative and the executive branches of government, and if Mr Trump wants to make extending the debt ceiling about the wall, he can do.

Is he bluffing?

Maybe, but not for the reasons the far-removed commentator in London gives. Mr Trump doesn’t want to be seen as responsible for failure, runs the simplistic analysis, and certainly not for a failure so huge as the creditworthiness of the US government.

But think again about what Mr Trump has said he stands for, and about what he does. He is no friend of big government. Not at all. Even if he hadn’t been elected on a platform which if it had any coherence at all was about rolling back the state, his own personal circumstances are unlikely to make him well disposed to the technocrats about whose roles he may or may not be bluffing.

The other side of the same coin is the failure itself. If the debt ceiling is not raised and the US government does cease to function effectively it may or may not be the fault of Donald Trump, but who in their right minds thinks he’s going to allow that narrative to dominate?

Not even the Democrats, who must be taking a good, long hard look now at a President using as a bargaining chip a policy he was clear enough about in his manifesto and his campaigning, and which he legitimately won an election on.

To make things worse, though, Republican party in-fighting has seized on the debt ceiling as a bargaining chip to forward other measures. Trump has taken down leading Republicans before, and there is little doubt he’s capable of doing it again, but each time he does it the stakes get a little higher.

In the Presidential primaries, all that was at stake was the global credibility of the Grand Old Party. Now, what’s at stake is the functionality of the US government itself. Small wonder that some in the security industry are beginning to get nervous about what may be next - the nuclear button?

Recent rhetoric

Given some of the recent rhetoric about North Korea, the fears are at least understandable in the form in which they are aired in the media. But hard to know what this President is really thinking.

So, to return to before the beginning, is it likely that there will be a US government shutdown some time in the fourth quarter? It’s not likely, but it’s possible. Mr Trump is grappling with issues as complex and as varied as the US has faced at any time since the end of the Cold War, and not the least of which is the diminishing influence of the US itself at a global level, and the predominant culture within the US at the national level.

Mr Trump says he has the answers to these questions. But if he can’t get enough people to agree with these answers, it may just be that he prefers conflict to resolution in order to keep pushing on with his own agenda.

So, although the wall on the Mexican border may not be the most pressing of all the issues on his agenda, if Mr Trump chooses to use it as the touchstone to set off the next round of his assault on government, then there’s not much anyone can do about it.

Gold has now ticked up to US$1,290. The price is being set by US domestic developments, and little else. For now at least, sell gold at your peril.


Fri, 25 Aug 2017 12:24:00 +0100
Gold punches through US$1,300 as reality of North Korean missile attack is brought home Tue, 29 Aug 2017 17:45:00 +0100 Trump will use North Korea to palliate long-standing domestic tensions in the US Mon, 04 Sep 2017 09:20:00 +0100