Prepare for New Gold Highs (Just Don’t Dance)

Gold hit a fresh record high in the wake of Jerome Powell’s dovish comments that the Fed will consider cutting interest rates at its upcoming September FOMC meeting. As the Fed is forced into accommodative policy and possibly even eventual QE, get ready for even more record highs for the yellow metal.

But just don’t dance.

That’s a quote from a famous scene in The Big Short, when Brad Pitt’s character Ben Rickert sternly reminds his younger investing partners that the success of their trade is only possible because of tremendous suffering on the part of Americans who were suckered into bogus mortgages. As they excitedly dance in anticipation of all the money they’re about to make, Pitt’s character says:

“You just bet against the American economy…which means if we’re right, people lose homes, people lose jobs, people lose retirement savings, people lose pensions…every one percent unemployment goes up, 40,000 people die, did you know that?”