postcards - a debt deal, rate hike speculations, and trying to nap on a Swiss cherry farm.

The debt deal in Congress barely impacts U.S. spending... but I'm busy playing Tic Tac Toe with a 5-year-old out of one bloodshot eye...

Tuesday, May 30, 2023

Dear Old Friend,

Greetings from Zug, Switzerland.

I’m writing to you from the balcony of my friend’s home overlooking the farming community. It’s breathtaking… but I’m simply too tired to take it all in.

That’s what happens when you can’t sleep on planes.

I will be taking a nap after this… But first…

Sell the News? Short the Metals?

We have a tentative debt ceiling deal to avoid the so-called X date. Unfortunately, a I noted over the weekend, it’s a rather weak “deal.” The deal only cuts about $50 billion in government spending (or 0.2% of GDP). The GOP will likely need help from Democrats, as members of the Freedom Caucus could turn the deal upside down.

Regardless, we are not likely going to see a dramatic market reaction until the votes are counted. If the deal passes, we’ll then see if this becomes the ultimate sell-the-news event… or if markets continue the insane AI-driven momentum into June.

Gold is already pulling back – and so is Bitcoin. Any sudden change in dea…