There’s the whole explanation of what the hell is going on right now. The other reason I’m smiling is because silver is supposed to be down when stocks are down, right? But it’s not. So silver is acting of its own accord right now as we’re looking at the market. And that tells me if gold turns around, silver kicks a lot higher. Welcome to the Morning Markets and Metals with Vince Lancy, where each morning Vince brings you the financial and precious metals news. Get you ready for your day. And now, here’s Vince. Good morning, everyone. Now, Vince Lancy.

And this is the Gold Fix Market rundown. The title tentatively is is MicroStrategy a Ponzi scheme? We will be discussing that as well as gold’s path is getting more certain. At least for the next 72 hours, possibly for the next 72 days. Okay, plenty to talk about. Let’s start with the markets themselves. 10 year yields are down 9, almost 10. The dollar is down 34. The S&P 500 is 5968, down 130. The VIX is 2088, up 6 percentage points. Gold is 6 percentage points in volatility, means the index is up 41%. Gold is 2763, down 7 and change.

Almost on its lows. I’m laughing. Silver is 30 53, up 2 cents. Copper is 426, down almost 2 cents. WTI is down 50 at 7505. Natural gas is 367, down 19. Bitcoin is 99. 5 96, 97, 95, 94, whatever, down 2900. Palladium 973, down 7 and change. Platinum 946, down about a half a buck. Gold, silver ratio stable at 90. Soybeans down 7 at 1044. Corn down almost 5 at 473.90. And weed is 549, down 4. Okay, so why so animated? The markets today are discounting everyone’s greatest fear, which coincidentally, this is a little bit extemporaneous.

So bear with me. Which is coincidentally everything that Hartnett’s been saying for the last month or two, right? I’m a fanboy of Hartnett this month. Here we go. Bonds are up. That’s a flight to safety. This is not a war thing. All right? Flight to safety. The dollar is down because the market is saying, holy shit. If we were worried about the Fed not easing before, we’re not worried about it now. Stocks are down because of various reasons. The catalyst or trigger is the China AI platform that has been released into the West. Another propaganda thing, but it’s a good one, which is basically saying, we did this with your throwaway chips while you guys are spending billions on that you don’t need.

Or. Or the flip side is, this is where I am, is they’re spending money because it’s. It’s cool. And the product. Whatever. I’ll talk about some other time. So stocks are down because of that. That’s your catalyst. The second thing is Powell may hike. Right. So stocks have been soft to begin with. The third thing is the data isn’t giving them. Last week’s data was bullish for stocks, yet insiders sold. And we covered this in our. In our weekly report over the weekend. Anyway, all this is weighing on stocks. And, you know, Nvidia’s called down a billion microstrategies called down.

I’m laughing. I’m not short them, but you’ll see where I’m coming in on this. So we’re. We’re on. We’re on Hardnet’s timeline, and that is stocks are a sale. Stocks are overvalued. For whatever reason, stocks are going to drop. And when stocks drop, the dollar will weaken in anticipation of the Fed having to ease. Oh, I remember what the other one was. The other, the other driver was American exceptionalism. Trump under Trump. No, I’m not saying it won’t be exceptional, but I’m saying the concept of higher stocks and a higher dollar and tariffs and everyone else in the world suffering and us not feeling an effect of it.

No, it’s not going to happen. Okay, maybe Colombia, we could do without their coffee. We’ll just buy more tea from India. But we’ve gone into this with 3, 4 posts over the last week that, you know, Trump can’t get tariffs as his leading edge. It’s got to be his, you know, it’s got to be his gun in his pocket. And plan B is really plan A, and plan B is we need oil cheaper, which he talked about all week last week, and we need a weaker dollar, and he’s already fired shots across the bow of pals ship.

So this weakens the dollar and it weakens stocks. Period. End of story. Okay, so there’s the whole explanation of what the hell is going on right now. The other reason I’m smiling is because silver is supposed to be down when stocks are down, right? But it’s not. So Silver is acting of its own accord right now as we’re looking at the market. And that tells me if gold turns around, Silver kicks A lot higher. It also tells me in general, looking at the metals complex, that gold and silver are muted by stocks selling off, but they’re also attracting some inflows now.

We’ll see how the day goes. But frankly, I think this is just more and more of this stuff that Hartnett’s been saying, you know, sell some oil, buy some gold. He was right about that. You know, it’s time to buy bonds. He was right. I think people are listening to him. All right, so moving on. That’s the long version. You now know why I think things are going on. Here’s the front page. Gold. Something has changed. Gold’s path gets more certain. We’re going to discuss that. That’s a weekly report. It’s a very large report. Used to do in the beginning.

We’re doing it again because, well, frankly, we have to get it all in one place somehow. China has taken gold public. That’s a riff. That’s a report on something that we’ve been talking about for two years. China is taking gold public. China is taking gold public. China has taken gold public. So there you go. They’re encouraging their citizens to own gold even more. There’s some China news to that effect. Spring festival begun in China and for the year the snake. And people can actually take delivery of gold through their phone apps. It’s like Amazon Gold now.

Okay, so let’s get to the discussion. Is MicroStrategy a Ponzi scheme? MicroStrategy owns a small software business but primarily focuses on buying Bitcoin. In effect, it operates as an investment company holding Bitcoin. The stock trades at a significant premium to the value of its bitcoin holdings. The strategy that they run involves raising funds from new investors at a premium and using those proceeds to buy more Bitcoin. The setup results in dilution for new investors, but is accretive for existing ones. MSTR’s promoters have branded the return created for existing investors through this model as the quote, bitcoin yield.

The question that is, is MicroStrategy a Ponzi scheme? This is not a comment on bitcoin, but is MicroStrategy a Ponzi scheme? Now, that’s a question that we asked as we began reading the Green Light Capital founder David Einhorn’s letter to shareholders. And, well, we’re going to find out what his conclusion is and you can go from there. Here’s greenlight capitalist David Einhorn in a letter to his investors. The idea is to raise money from new investors at a premium and use the proceeds to buy more Bitcoin. Since the Bitcoin that MSTR buys costs less than the Bitcoin implied value of MSTR stock, the new investment is dilutive to investors, but a creative to existing investors.

I stopped reading right there when I read this and I went oh, it’s a Ponzi. And then he goes on to actually say that anyway. That if it is correct, is the definition of a Ponzi scheme. While this seems crazy, paraphrasing the newsletter their shareholder letter. While that is crazy, while that seems crazy, there is more leverage. Single stock ETFs such as those with tickers, MSTU and MSTX aim to generate double the daily return of MSTR. The key word is daily but levered ETFs. This is again I’m staying with the letter to shareholders paraphrasing and quoting here and there.

But levered ETFs face a key drawback. To achieve double the daily return, the portfolio requires daily adjustments. That is correct by the way. This typically involves buying at the end of days when the underlying stock rises and selling when it falls. While this strategy works, if the stock moves consistently upward or downward, mixed up and down days erode returns due to the repeated buying high and selling low. All right, in English, if you have an asset that promises two times the performance of the asset next door to it, well, when the market closes on the highs, they have to buy more because when they buy more, they’ve, they’ve rebalanced the portfolio.

That’s what they have to do. And if the market sells off, they have to sell more. So they’re constantly buying the highs and selling the lows. Now that’s known. That’s not a scam. These assets, if you’re going to trade them, you’re going to trade them for one day, anything more than one day. And what you’re doing is you’re creating a risk for you over the long run, your, your returns will be incredibly diluted. Now there’s something else he unveils in here which we’re very familiar with. I’m paraphrasing them again. They do this by literally buying from OTC swap dealers, which is what I just mentioned, and by constantly buying calls, which I did not mention.

Essentially the whole fund represents itself as a two time leverage ETF fund, but it is in reality a call option with negative gamma R phrasing. So you represent a fund. Let’s go to the call option concept. And you own mstr and you say I want to have twice the Performance of mstr. So what do you do? Let’s say we’re not doing the whole swap end of day, beginning of day thing. You buy calls. You buy a shit ton of calls, right? So you own leverage by buying calls. So you buy MSTR and you buy calls on top of it.

You Texas hedge your portfolio. Now it’s a leveraged play by using options. The thing is, the thing is this is like I’m an options person, so this is, this is near and dear to my heart. You are long calls, but when the market drops, you are still selling stock. And when the market rallies, you still need to buy stock. You have for the option people out there, you have theta, meaning every day your options are worth less and less. Right? They just lose time over, they lose money over time. And you have negative gamma, meaning instead of selling when the market rallies and booking profits, you have to buy when the market rallies.

When the market sells off, instead of having to be able, the market dropped, you have to sell. It’s a disaster waiting to happen. Not an overnight disaster, it’s a cancer. Right? So back to David again. Over time they’re likely to bleed out their capital. Bleed is the key word there. During the quarter, the partnership screen Lake Capital established a new arbitrage position by shorting these ETFs, which we partially offset by owning MSTR. The position was a material winner in the quarter. Now, a quick comment about that statement. The partnership believes is running itself on the premise that MicroStrategy operates like a Ponzi scheme.

They’re not calling it a Ponzi scheme, but that’s how a Ponzi scheme operates. But they’re not going to like any good risk manager. They’re not going to get in front of something that’s on fire and simply just short it like all these tough guys are doing. No, they’re going to wait for an arbitrage. And the MSTR arbitrage is you actually literally buy MSTR and you sell the two times performer. And so over time your P and L should be the same, but the calls go to zero because they’re constantly buying calls. They don’t buy calls once.

Anyway, I recognize this approach. We actually, I had the acquaintance of sharing office space with David Einhorn for about a year and a half. And you know, he was a brilliant guy and he was very, he was just starting. So we were passing, you know, I was here and he was there and he was on his way to start. A great, great guy, great analyst and what I knew him back Then I, I knew his wife as well from, from, from journalism. Okay, so the complete analysis on, on David Einhorn’s work, in addition to a deeper explanation, as well as some really good insights that cover gold and other markets are in a post for the founders.

It’s. We consider it a must read. Mstr Ponzi, like Scheme explained and more. Okay, so that’s that. Oh, and what did we do here for you? We did it for us, but we did it for you too. This chart, it’s hard to see here, but you can see in the post, it’s. It’s mstr, right? It’s Bitcoin, it’s mstx, and it’s mstu. Now, the ones that have the bigger spikes, Those are the two time ETFs, right? The is brown, purple, the purple one, the purple1 is MSTR. You can see that it goes up. And the blue one, which actually looks like it’s going nowhere, that’s, that’s bitcoin.

So you basically have Bitcoin, you have mstr, which is trading at a premium to Bitcoin, and then you have these two time leverage ETFs, which are, they’re, they’re cancer on your portfolio. Okay. They’re worse than buying calls if you own them for more than a week. That’s my opinion. All right, so next, moving on to the other topic today, gold’s path gets more certain. Last week we saw Trump’s campaign ambition tariff and a stronger US Dollar run into the reality of a weaker dollar with much cheaper oil. That’s the plan. As an easier path for him to launch his MAGA agenda.

Tariffs remain on the table for sure, especially for China. That’s going to happen and that is why China will keep buying gold. But tariffs are not the first weapon of choice. Beset said as much in Placenta Maga. A weak dollar powers a boom. Quoting Scott percent in January of 24 before he was nominated. We find it unlikely that across the board tariffs as currently reported by the media would be enacted at the same time as he Trump moves to fix the immigration status. The tariff gun will always be loaded and on the table, but rarely discharged.

Of course, strategic and national security’s issue around China will remain in combination. Western players last week finally got a clear signal that Trump was going to back off on tariffs. For now, Colombia is a different story. Universal tariffs we’re talking about while pursuing cheap energy and simultaneously leaning on Powell for lower rates. We explained this in four different posts and the reason we were able to put Those posts out so quickly is because it was in our, was an arrow in our quiver waiting for this to happen and our position being low. Gold was part of that.

Okay. In sum, Western buying stepped up gold collectively after collectively believing the US Dollar path will be lower, as was described in those stories last week, yada, yada, yada. All right, so there’s our weekly report. There’s a lot in there, but we go into that in a little bit more detail. But I think, I think the, the proof, right? The proof in the pudding. The chart proof is in the title. Right? So that is a picture you’re looking at. A picture of. The chart is a picture of gold and the dollar. Gold is the gold line.

The dollar is the red line. And they’re moving in tandem. This is about, for, about since the election, since January 1st. We’ll, we’ll say they’re moving in tandem. So as the dollar’s going up, gold is going up. As the dollar’s going down, gold’s going down. So they’re kind of moving in tandem, which is not usual. Usually they move opposite, but now they’re moving opposite as of last week, as of two weeks ago, accelerating last week because as the dollar weakens, gold is going up. Because now we’re back to the good old fashioned dollar gold correlation. And that happens nowadays.

That happens when we think the Fed is going to ease, or in this case, we think Trump’s policy will be to hope for a weaker dollar. Now, if you’re asking yourself, well, how will Powell screw this up, that’s a fair question to ask. So let’s read on that and I’ll give you Powell’s not the, the only part of the weaker dollar. Right. Expect similar behavior, meaning a strong gold market until the FOMC on Wednesday. Then if Powell does not push back on Trump or the stock market typo precludes his desire to push back, expect that correlation to the upside to increase, meaning this acceleration here.

Okay? So today the dollar’s weaker, the gold’s down. It’s noise. You don’t care about that today. Here’s the other thing I want to add in that I didn’t mention, but I should mention now, if Powell doesn’t ease, you’re going to see gold. If Powell talks tough or hawkish, gold’s going to pull back and the dollar is going to strengthen again. And that’s fine. But there are other ways to weaken the dollar outside of the Fed and Trump will do that anyway. Those are the two stories. Okay, news analysis. Gold’s path gets more certain. China News Spring Festival Buying in gold has begun.

We mentioned that Hartnett Part 2 the 10 biggest themes for the next five years. That’s we feel strongly that’s, that’s a piece to be read for investors, not for traders per se. And if you’re a free subscriber we have like a seven minute intro to it explaining why that you can hear. It’s a little voice note, just giving an idea of why we think it’s important. Hardnet sideline cash Next up might be gold and bonds. Well yeah, it’s, it’s going into bonds. He’s saying that there’s a lot of cash on the sidelines and historically that goes into stocks.

He’s saying that a little bit less may go into stocks than we believe. So watch. We can do this the easy way or the hard way. That’s a write up by Robbo on, on Trump’s tariff behavior and then we have an editorial and it’s a lot of, a lot of there’s a video of Trump in there talking before the wef and, and we call it horse trading. So that’s what he’s doing. It’s very dangerous when Trump horse trades. Market news A Chinese artificial intelligence company has Silicon Valley marveling at how its programmers nearly matched American rivals despite using inferior chips.

Okay, that’s the Wall Street Journal marveling. No panicking, okay. This is, this, you know, this is, my goodness. No people are using this product in the little world that I navigate and they’re very smart people and they’re saying yeah, this is better, it’s better now from what it’s sharing is better. But asking something about China and I’m sure it’ll, you know, come and arrest you or blow you up or something like that. Anyway, keeping in mind I’m not anti China. I’m just saying that, you know, every government has their own thing. All right. The other story that I think is important is because America’s biggest gambling companies are making a killing on multi leg bets called parlays.

Personal comment on parlays My first foray into trading and gambling was a parlay bet. My Uncle Tony, literally, that was his name. Uncle Tony Acicello, may he rest in peace, took me to the local taxi stand which had a bookie in the back behind a curtain and I made my first bet on Ohio State. And then I bet the over because I think they’re going to score a lot of points. Uncle Tony and we won money and he bought me a chocolate and cream but that’s, that’s the Bronx, right? So I had family and lived in the Bronx for some time.

Data on deck fomc. Oh, the reason that was important, other than my little story is because we’re a nation of gamblers now. This is not good for us. We have a post on that as well. It’s like, you know, gambling is a tax on poor people. Data on deck, Big Week. Fomc, gdp, pce. We’ve got. You can breathe until Wednesday. Then it’s FOMC on Wednesday, GDP on Thursday and PCE on Friday. Big week. And whatever Powell says on Wednesday, the stock market, current moves notwithstanding, probably because he knows it’s going to come out Thursday and Friday.

Just saying. Tomorrow we break down the World Gold Council’s 2025 Gold Report. We have that luckily and we’re going to share that. And then we have a little bit more at bottom for everyone. And checking back with the markets. Oh, there’s the four stocks. There’s MicroStrategy at 01:00, MSTU at 11:00, MSTX, lower left hand corner and Bitcoin, lower right hand corner. Let’s take a look at gold. I’ll give you some levels there to think about. Well, here’s the most important level. I had an alert on the $107 that went off this morning and that’s where we’re trading.

And that’s an important level for me, I believe. I’m pretty sure Michael Oliver has a level right around there, maybe a little bit higher. Tom. And that’s a sign that the dollar is going to weaken. And historically a weaker dollar is bullish for stocks. But what if the dollar is weakening because it needs to get weaker to stop the stocks from dropping? So the dollar is reacting to stocks or vice versa, who knows? But there you go. That’s, that’s the, that’s the level that mattered to me. In fact, if you’re a technician, you’re like, oh, here’s a shoulder.

This could be a head. You know, we could go down here and then bounce back up. And anyway, it’s becoming an apparent formation, although I don’t know what the formation is. All right, so there’s gold. Let me put up the, let me put up the moving average so you can get an idea of how far, how far we’ve come. All right, there’s the gold daily. There’s 100 day moving average. China buys it, China buys it, China buys it. And the world says, okay, we’ll buy it too. And Now America is buying it. That’s what’s going on.

Silver, by the way, if it wasn’t Fed week, I’d say gold’s going to have a new all time high, definitely. But how about this? I, I think gold’s gonna have a new all time high very soon. The question is what will happen then? If I’m wrong, then we won’t get above this. So here’s the trade. You should be short gold right now and if it gets above this high right there, you reverse, you cover your shorts and you buy the crap out of it and you see how it acts at all time highs. So that’s the trade.

Silver. They love to on silver when they’re buying gold, but it’s getting harder to keep it down. Nice little hammer there on the daily. This is nice. So I think that they’re that the buy between 28, this is, this is like where the UBS level was to buy. I think the buying between 28, between 27 and 20 has moved up to between 28 and 29. And the physical situation is not helping shorts much at all. Okay, remember, by the way, with regards to tariffs, you don’t tariff the silver, you tariff the nation. And so silver could be a carve out, what have you.

But the risk is there and the risk will be there. I believe the risk has gone from acute to chronic and it will be there. And anytime there’s a news item, you’ll have a reaction to it one way or the other. And so therefore, little by little, if the EFP reflects the concerns about tariffs for the next, say 12 months, then little by little, the rest of the world’s silver and gold will make its way into the comex, make its way into gld, will make its way into slv. The US is buying gold and silver. It’s not just Americans, it’s America.

So London has two straws in its milkshake. One is going to China, pulling all the gold out stops in Switzerland goes to China. The other is just going right across the transatlantic straw, right into the US it’s happening, it’s happening now. Europe is just getting looted. All right, enough with that. Have a great day. Let’s see what happens. Well, thanks for watching this morning’s Markets and Metals with Vince Lancy. Sure hope you enjoyed the show. Thanks for being here. Although before we wrap up, there was one thing I had to let you know. And here is the silver chopper.

Ben Bernanke, that is so cool. Can you even see his tie flying in the wind while he throws out $100 bills. Look at him getting ready to throw that money out there. I see that. Because that’s what it looks like. When that even looks like you sorry ass. Look at the size of the bald silvery head. Yeah, it’s enormous. Back propellers spin too. How many ounces is that? That’s 26 ounces of 39 fine silver, homie. As you can see here, some of the key features with your silver Chopper Ben figurine, you can really get the control panel.

Look, there’s a whole dashboard for Ben to fly. He wants to fly onto your desk. Look at the precision. I see that greasy old bastard. He’s got two sets of spinnable propellers. This thing’s great. Dude. You could fly that thing. Whoa. I could. Look how happy he is. I think he’s actually gonna get out there and throw the hundred dollar bills. Jerome. No. There’ll be thousand dollar bills by then. I got this. I like it. Get the history before it’s made. Just click the link below to get your silver chopper bend now. So yes, if you have always dreamed of having a silver minted helicopter Ben Bernanke flying into your kitchen and throwing hundred dollar bills all across your home, well, now is your chance to get your very own silver Chopper Ben.

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