Stocks Continue Push Toward All-Time Highs; Gold Rocketing Higher Every Day; Trump, Musk, DOGE Continue Downsizing Government

At the rate Elon Musk and his merry band of disruptors at DOGE are going, the federal budget will be balanced next year.

That may sound like hyperbole, but the reality is that the corruption, fraud, and waste in Washington D.C. is so extensive and well-ingrained into every agency and department that cutting out $1.7 trillion might not be all that difficult. And then, there's clawbacks to consider. And, department closures, buyouts, lower employee headcount.

DOGE is currently inside the offices of the Medicare/Medicaid complex, which accounts for 22% of federal spending, some $1.5 trillion. It's a safe bet that between overpaid staff, fraudulent payments, and associated graft, there will be $500 billion cut right out of the heart of the nation's welfare health system.

When DOGE gets around to the Pentagon, Department of Defense and the other agencies that have been throwing away or giving to special interests and friends billions in taxpayer dollars for the last 40 years, the amounts will stagger the imagination. Americans will likely be calling for the heads of House members and Senators who were all too eager to play along.

It's great entertainment and very satisfying for the American public, but there should be rage that it's gone on for so long. Thanks to President Trump and Elon Musk, the days of handouts, carve-outs, hush money, kickbacks, lobbyists writing bills, and corruption are OVER.

By the middle of summer, heads will be rolling. Congresspeople, lobbyists, corporate types, and high-level government operatives will be getting their passports updated, shredding documents, closing bank accounts. Assuredly, a lot of that is already happening.

In the end, there's going to be a big void in the budget and at least as big a hole in GDP, since government spending accounts for about 40%. The effect on stocks is probably going to be negative, but by how much, nobody is really certain.

For now, Wall Street is content to just accept the carnage as collateral damage and keep pushing stocks higher. The major indices are closing in on all-time highs again.

On the other hand, gold continues to set new highs, day after day. Earlier this morning, gold touched $2,894 on the COMEX. $3,000 within months looks like a done deal. Silver continues to lag, despite widespread reports of shortages. It's trading on the COMEX around $32.50 this morning, but charts indicate a major breakout within months if not weeks.

WTI crude oil is reeling. It hit a low of $70.84 on Tuesday, but has rebounded somewhat, back above $71/barrel.

Enjoy the show.

At the Close, Wednesday, February 5, 2025:
Dow: 44,873.28, +317.24 (+0.71%)
NASDAQ: 19,692.33, +38.31 (+0.19%)
S&P 500: 6,061.48, +23.60 (+0.39%)
NYSE Composite: 20,128.89, +164.29 (+0.82%)