print-icon
print-icon

Behind The Kamala Collapse

Portfolio Armor's Photo
by Portfolio Armor
Tuesday, Oct 22, 2024 - 22:39
Kamala Harris and SNL Alumna Molly Shannon in their ill-fated Al Smith dinner skit.
Kamala Harris and SNL Alumna Molly Shannon in their ill-fated Al Smith dinner skit. 

A Tale Of Two Campaigns 

In our last post ("The Meaning Of Trump's McDonald's Shift"), we noted that Trump 2024 was an expertly-run campaign. 

Kamala Harris's campaign this year has not been well-run, and the X thread below explains why: the people running it are diversity hires. 

Following that thread, we'll look at a (surprising) possible risk of a Trump victory: a decline in gold. 

Who Is Running Kamala's Campaign 

[Skipping the part of this thread that focuses on Cesar Chavez]

Let's hope we get that veto-proof majority. In the meantime, let's consider a possible risk of Trump winning: a decline in gold.

Want To Bet Against Kamala?

Before we do that, if you are looking to bet on the election, there's a new competitor to Predictit and Polymarket: Kalshi. Unlike PredictIt, Kalshi doesn't cap positions at $850, and it doesn't take a 5% fee on the way out (currently, there's no fee). And unlike Polymarket, Kalshi is legal in the U.S., so you can fund an account with cash. 

I already maxed out Trump to win on PredictIt at 44 cents, so my current bets on Kalshi are these: 

  1. Trump to win Wisconsin at 52. 
  2. Republican sweep (White House, Senate, House) at 47. 

Why Gold Could Decline Under Trump 

Conventional wisdom holds that our government would continue to spend beyond its means under Trump, fueling further inflation and extending the record rally in precious metals. That could very well happen. But there are a few proposed Trump policies that could be deflationary: 

  • Tariffs. Critics call this a tax on American consumers, and to the extent that it is one (and a regressive one at that), it would be deflationary, by causing consumers to spend less. 
  • Deportations. If Trump actually deports millions of illegal aliens, that would be deflationary, for two reasons. First, we'd have fewer people competing for the same housing and other resources. And second, it would reduce the enormous government spending, funneled through NGOs, that subsidizes housing and other costs for these aliens. 
  • Drilling. Expanding domestic energy production, as Trump has promised to do, would, all else equal, be deflationary. 
  • Peace. If Trump succeeds in his goals of ending the Ukraine War and the ending the current Mideast war, that should lower the costs of energy and other commodities transiting through the war zones, and if the peace deal is accompanied by a removal of sanctions on Russia and Iran, that would increase the supply of energy too. Peace would also lower the geopolitical risk premium component of gold's current price. 

Hedging Against A Drop In Gold 

If you're long gold (as almost everyone reading this probably is), one thing you can do to lower your risk of a drop in gold is to take some profits now.

We did that ourselves recently, selling half of our calls on IAMGOLD (IAG -1.29%↓), which we had bought in the trade alert below, for a 100% gain. 

Click on the truck full of gold to go to the post. 

Another thing you can do to lower your risk, is to buy optimal put options on a gold-tracking ETF such as SPDR Gold Shares (GLD). For example, as of Tuesday's close, these were the optimal puts to hedge against a greater-than-9% decline in GLD over the next 6 months. 

Screen capture via the Portfolio Armor iPhone app. 

You can download our optimal hedging app by aiming your iPhone camera at the QR code below, or tapping on it, if you are reading this on your iPhone. 

We're also researching trades that might do well in a second Trump term. If you'd like a heads up when we place one of those trades, feel free to subscribe to our trading Substack/occasional email list below. 

 

If you'd like to stay in touch

You can scan for optimal hedges for individual securities, find our current top ten names, and create hedged portfolios on our website. You can also follow Portfolio Armor on X here, or become a free subscriber to our trading Substack using the link below (we're using that for our occasional emails now).

Contributor posts published on Zero Hedge do not necessarily represent the views and opinions of Zero Hedge, and are not selected, edited or screened by Zero Hedge editors.
0
Loading...