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Gold price $4,488 current COMEX price ... Shanghai $4541.89

Front Month Settlement Price: $4,555.80

Once conflict officially starts:

gold often spikes rapidly

volatility surges

investors flee risk assets

Typical short-term moves:

+5% to +15%

sometimes within days or weeks

Examples:

Gulf War 1990

9/11 attacks

Russia invasion of Ukraine

The World Gold Council and ECB both note that gold tends to outperform equities during periods of elevated geopolitical risk.

great buying

"The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists." — Ernest Hemingway

Thanks to the fiat currency system, governments at war can tap into a nation’s savings by financing conflict through currency debasement. Under a gold standard, governments had to have the gold or impose taxes if they wanted the funds to prosecute a war. When the gold ran out, the war stopped. But not in a fiat currency system. They can continue debasing the currency until they hyperinflate it.

That’s why there’s a simple equation you should sear into your memory:

War = Inflation

The historical pattern is clear.

If the first casualty of war is truth, the second casualty is the currency.

For example, the US money supply (M2) more than doubled during World War I and about tripled during World War II.

During Vietnam, the money supply rose roughly 90%, and during the 2003 Iraq War era, it rose about 65%.

War is expensive. The US government often ends up financing it by going deeper into debt and debasing the currency to service that debt.

How much will the war in Iran cost? Nobody knows the exact amount, but I am confident it will result in meaningful currency debasement.

According to the Iran War Cost Tracker, the conflict has cost at least $74 billion so far. Other estimates, such as those from CSIS, put the cost at around $2 billion per day. But these estimates almost certainly understate the true direct costs, not to mention the indirect costs of the war.

Further, the Pentagon is now asking for an additional $200 billion in emergency war funding. And that is on top of its recent request for a 50% budget increase to $1.5 trillion.

Lastly, it’s worth noting that recently Iran destroyed at least one E-3G "Sentry" Airborne Early Warning & Control aircraft in Saudi Arabia, along with 2 or 3 KC-135 tanker aircraft in the same strike.

This marked the first combat loss of an E-3 in history. Each unit costs at least $540 million.

After the strike, the US likely has only around 8 operational E-3s left, with none currently in production. It remains one of the most important aircraft in the US Air Force.

A cheap Iranian Shahed-136 drone, costing roughly $7,000 per unit, was what took out the $540 million E-3. That works out to a cost asymmetry of roughly 77,286 to 1 in this strike, which has to be a record, or close to it, for the biggest cost asymmetry in a single military strike.

If the war drags on for a few more weeks and Hormuz remains closed, I think we will see an economic collapse far larger than the one caused by the global lockdowns during the Covid mass psychosis. In response to that slowdown, the US government went on its biggest money-printing binge in history and increased the money supply by 40% in a matter of months. I expect significant economic disruption

The Rally in Context (+$10 trillion in 30 days!)

The Nasdaq Composite was under pressure in the first three months of 2026, losing about 7% of its value before staging a strong comeback in April. The tech-heavy Nasdaq-100 surged +15.7% in April alone — its best monthly performance in more than 23 years (since October 2002)... an enormous amount of market value was recovered and added in a very short window.

Is It Based on Current or Future Earnings?

Primarily future earnings — but with unusually strong current earnings providing genuine support.

The 2026 Nasdaq rally reflects a repricing of future earnings, not only a short-term move in technology shares. AI spending must convert into revenue, margins, and free cash flow to support higher valuations.

That said, current earnings have been remarkably good. 50 out of 53 Nasdaq-100 companies that have reported Q1 2026 results beat EPS expectations by an average of 16%, with an index-level earnings growth rate of 51% — versus an expected 22%. That's a massive beat. Nasdaq

The key drivers of current earnings strength: Nvidia is expected to deliver a 74% surge in earnings this year. Broadcom and Micron Technology are also anticipating significant increases in sales driven by AI chip demand. Palantir reported $4.48 billion in revenue in 2025 (+56% over 2024), and is guiding for 61% growth this year.

What Do the P/E Ratios Look Like?

As of January 1, 2026, the Nasdaq-100 had a trailing P/E of 32.32 and a forward P/E of 27.44. After the April rally to new all-time highs, those multiples have expanded. The Nasdaq-100 trailing P/E as of May 8, 2026 sits at 38.15 — near its record high of 38.57, well above the historical median of 24.49. Siblis ResearchGuruFocus

So in simple terms: the price surge has pushed valuations to near-record levels, meaning investors are paying a very high price relative to today's earnings and betting heavily on future growth.

The Nasdaq-100's trailing P/E of ~38× is higher than its forward P/E of ~28× — meaning investors are paying a big premium today, betting that AI earnings will grow significantly to justify the price. The market is asking you to trust the future.

AngloGold is the opposite. Its 2024 actual P/E was 26×, but the 2025 estimated P/E drops to ~11.6×, and the 2026 estimated P/E falls further to ~10.9× — a dramatic compression as soaring gold prices feed directly into earnings. The current trailing P/E sits around 21–22×, but the forward P/E is just ~9.65×

future p/e 29 in the AI dream machine or 9.5 at Anglo?

So if its not the pollies trading shares its now the nations trading gold !

Unlike Germany, the Bank of France did not try to raise the issue of withdrawal or transfer of their gold. Instead, they simply sold the older, less pure gold bars in New York for what they were worth in U.S. dollars as gold prices were reaching all-time highs, then pocketed the cash and bought bars that met their updated weight and purity standards in Europe, as prices conveniently pulled back. This exceptional foreign exchange income totalled EUR 11 billion for 2025!!!

This resulted in a win-win-win for France’s central bank: No diplomatic pushback from the U.S. administration during a period of contentious relations over tariffs, Greenland, Ukraine, and now Iran, no fees for transportation and security across the Atlantic, and what worked out to a massive profit on the transactions themselves, boosting the Bank’s overall financial position.

Germany has been trying to get all its gold out of the US vaults (if indeed its there LOL) ...so now they know how to do it...go the French!

Our dopey government sold most of our gold reserves decades ago ...In 1997, then-Treasurer Peter Costello (world greatest treasurer LOL) authorized the Reserve Bank of Australia (RBA) to sell 167 tonnes of Australia's gold reserves—roughly two-thirds of the total—for approximately AUD 2.4 billion! The sale was justified by arguing that gold was a non-yielding asset with a diminished role in the modern financial system. Its only worth $AUD $33.88 billion now...and he knew what?

US$6,000 gold is still on the horizon, according to Chris Mancini, co-portfolio manager of the Gabelli Gold Fund (GLDAX) at Gabelli Funds. JP MOrgan has raised its long-term forecast, specifically targeting US$6,300/oz by year-end 2026. In the short term manipulation maintains its run ... Exchange-traded derivatives in gold typically maintain margin requirements around 5-10% of contract value, creating leverage ratios between 10:1 and 20:1. This means relatively small capital deployments can control substantially larger notional positions...and as gold goes up or down so does Au ...so its an easy way to play the system.

Hard to find an honest man these days?

It was recently pointed out to me by some sharpies"", that it seems to be "Follow the politician" is the way to get ahead in the US stock picking "... LOL

Nancy Pelosi (D-CA): Often considered the most high-profile example, her portfolio (managed by her husband, Paul Pelosi) saw massive gains. In 2024, her portfolio was up 70.9%—nearly tripling the S&P 500’s return. This followed a 65.5% return in 2023. Her gains are heavily attributed to well-timed, leveraged call options on mega-cap tech stocks like Nvidia and Microsoft.

Other Notable Names: Lawmakers like Tommy Tuberville (R-AL), Kevin Hern (R-OK), and Lois Frankel (D-FL) are frequently highlighted for active trading styles, high volumes of transactions, and substantial yearly returns.

and guys with a lot on their plates ...

Rep. Rohit "Ro" Khanna (D-CA)

• The Committee: House Armed Services Committee.

• The Trades: Active trading in major defense contractors, including General Dynamics (GD), Lockheed Martin (LMT), and Raytheon / RTX (RTX).

• The Overlap: The House Armed Services Committee oversees the Department of Defense (DoD) budget, military acquisitions, and major defense contracts.

Sen. Tommy Tuberville (R-AL)

• The Committee: Senate Armed Services Committee.

• The Trades: Extensive trading in defense, cybersecurity, and tech infrastructure companies. Notable trades include options and stock purchases in Microsoft (MSFT) and Humana (HUM).

• The Overlap: Tuberville sits on the committee that directly reviews military infrastructure, cybersecurity contracts (like the multi-billion dollar DoD cloud contracts awarded to Microsoft), and veterans' healthcare.

The most prominent data on this topic comes from the financial tracking platform Unusual Whales, which publishes an annual Congressional Trading Report.

and if you are into AI, this is accessible...

Been going on in the UK reportedly for 110+ years ... Senior ministers (including David Lloyd George and Rufus Isaacs) were accused of buying shares using knowledge of an upcoming government contract. The allegation: they knew the government would award a lucrative deal and traded ahead of it.

It caused a major political crisis, though it did not lead to criminal convictions (never does of course)

I guess its all just happy coincidences ... but the Epstein affair seemed interesting?

Funny ol world eh?

Since 2009, the TMS money supply is now up by more than 206 percent! (M2 has grown by more than 160 percent in that period.) Out of the current money supply of $20.4 trillion, nearly 30 percent of that has been created since January 2020. Since 2009, in the wake of the global financial crisis, more than $14 trillion of the current money supply has been created. In other words, more than two-thirds of the total existing money supply have been created since the Great Recession?

Given current weak economic conditions, it is surprising to see such robust growth in the money supply. For example, the estimate for GDP growth in the fourth quarter of 2025 was recently downgraded to 0.5 percent, which is decidely ugly. And job growth since late 2025 has been either weak or negative, depending on which measure of employment we use (they grow by the day of course). The Fed now concludes that job growth going into 2026 is essentially zero (so of course we need a new Head of the Fed). This is likely reflected in the fact that consumer confidence has apparently fallen to a multi-decade low.

Given all this, we would not expect to see such robust growth in the money supply. Private commercial banks play a large role in growing the money supply in response to loose Fed policy (business is business). When economic conditions are expansive, and as employment grows, lending also grows, further loosening monetary conditions. But when economic conditions are weak, we’d expect to see less lending and bank-fueled monetary growth.

So, we should expect to see downward pressure on money supply growth given current economic conditions. However, in an effort to further pump asset prices and somehow counter our growing economic stagnation, the Fed again ratcheted up Fed Treasury purchases—paid with newly created money—and even lowered the target policy interest rate again in December.

This continuation of accommodative monetary policy—which belies Fed claims of “restrictive” policy—has surely done its part in returning the money supply to growth levels we haven’t seen in years, and on the show goes. The lunatics are having a party.

Its important to realise that the "GOLD discovery" collapse (SUPPLY SIDE) is a permanent structural condition, not a cyclical one subject to technological rescue, by AI or some new technology to be invented sometime in the future.

The reasons are geological, economic, and institutional, and they compound each other!

Geologically, the accessible, high-grade or even low-grade, near-surface gold endowment of the Earth's crust has been systematically found over roughly 150 years of industrial exploration, not to mention 1000's of years of human exploration. What remains are deeper, lower grade, under thick cover sequences, in geologically complex settings, or in politically unstable jurisdictions. No technology changes the geology. The gold that was easy to find has been found.

Economically, the capital structure of the mining industry has permanently shifted away from the long-duration, high-risk, zero-revenue exploration model that produced the great discoveries of the 1980s and 1990s (this was self perpetuating as discoveries led to more money to go out and make more discoveries BUT NOW WE HAVE A DEARTH OF DISOCVERIES). Institutional investors demand returns on 3–5 year horizons. Grassroots exploration produces nothing on that timeline. The junior explorer model — which actually generated most major discoveries historically — depends on equity capital markets that have structurally retreated from early-stage resource risk. Higher gold prices help at the margin, but they have not reversed this since 2020, and there is no reason to think they will. The Junior explorers are mostly intellectually bankrupt, and many are just lifestyle companies.

Institutionally, permitting timelines in virtually every stable jurisdiction have lengthened, not shortened, over the past two decades. Environmental and social licence requirements have become more complex. Indigenous consultation obligations, while entirely legitimate, add years to project timelines. The result is that even the depleted pipeline of known but undeveloped deposits faces a development bottleneck that is entirely separate from the discovery problem.

The 16–21 year discovery-to-production lag means these three structural forces are already baked into supply trajectories through the late 2030s with essentially no possibility of relief. The supply of newly mined gold will begin a structural decline after the current production plateau ends — which S&P Global projects begins around 2026–2028 — and nothing in the current exploration, technology, or capital environment changes that trajectory in any meaningful way.

The honest position is the gold discovery era is effectively over for large, tier-one deposits in accessible settings. What remains will be found slowly, expensively, at depth, with enormous capital requirements and decades-long development timelines. The structural supply constraint is permanent on any horizon that matters to investors, central banks, or policymakers today

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