Why Is Gold Rising Now, Where Is It Headed Tomorrow? (An Interesting Observation From A Gold Bull.)
Posted by freedomforall 2 weeks ago to Economics
Excerpt:
"EVEN UNCLE SAM WANTS AND NEEDS A WEAKER DOLLAR.
Why?
Because the only way out of the biggest debt hole the US has ever seen is to inflate its way out of it by debasing the currency to “save” an otherwise rotten system.
We’ve argued this for years, and the facts supporting this historically-repeated pattern (and view) haven’t changed; they’ve just grown worse.
That is why it was easy to foresee that inflation would not be “transitory” despite all the useless commentary (and Fed-speak) arguing to the contrary.
That is also why it was easy to see that Powell’s “war on inflation” was a political ruse—an optics play.
Powell’s real aim was (and remains) inflationary via negative real rates (i.e., inflation higher than 10Y bond yields).
Thus, even while pursuing his “higher-for-longer” and anti-inflationary rate hikes, actual inflation, which Powell needed, was still ripping.
But he (and the BLS) was able get around this embarrassing CPI reality by simply lying about the actual inflation…
In other words: Classic DC fork-tonguing…
China is Not Turning Japanese
But in case you still need further proof that the US wants and needs a weaker USD to fake its way out of their self-created debt disaster via an increasingly diluted USD at YOUR expense, just consider what’s happening with China.
Unbeknownst to many, Yellen has been scurrying off to Asia to convince, cajole or even threaten China into accepting a weaker USD vs the CNY.
Why?
Because the prior, “stronger” 40-year version of the Dollar has rendered expensive US exports (and trade deficits) unable to compete with cheaper Chinese goods.
This floating currency game was a trick the US played on Japan when I was a kid—i.e., weaken the USD to fight the then-rising Sun of Japan’s then rising power.
But China ain’t Japan. It won’t float its currency in dollar terms.
So, what then can the US do to weaken the USD without upsetting China?"
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The writer of this article is positively biased toward gold and likely has a financial interest in more demand for gold.
But his observations are interesting nonetheless.
"EVEN UNCLE SAM WANTS AND NEEDS A WEAKER DOLLAR.
Why?
Because the only way out of the biggest debt hole the US has ever seen is to inflate its way out of it by debasing the currency to “save” an otherwise rotten system.
We’ve argued this for years, and the facts supporting this historically-repeated pattern (and view) haven’t changed; they’ve just grown worse.
That is why it was easy to foresee that inflation would not be “transitory” despite all the useless commentary (and Fed-speak) arguing to the contrary.
That is also why it was easy to see that Powell’s “war on inflation” was a political ruse—an optics play.
Powell’s real aim was (and remains) inflationary via negative real rates (i.e., inflation higher than 10Y bond yields).
Thus, even while pursuing his “higher-for-longer” and anti-inflationary rate hikes, actual inflation, which Powell needed, was still ripping.
But he (and the BLS) was able get around this embarrassing CPI reality by simply lying about the actual inflation…
In other words: Classic DC fork-tonguing…
China is Not Turning Japanese
But in case you still need further proof that the US wants and needs a weaker USD to fake its way out of their self-created debt disaster via an increasingly diluted USD at YOUR expense, just consider what’s happening with China.
Unbeknownst to many, Yellen has been scurrying off to Asia to convince, cajole or even threaten China into accepting a weaker USD vs the CNY.
Why?
Because the prior, “stronger” 40-year version of the Dollar has rendered expensive US exports (and trade deficits) unable to compete with cheaper Chinese goods.
This floating currency game was a trick the US played on Japan when I was a kid—i.e., weaken the USD to fight the then-rising Sun of Japan’s then rising power.
But China ain’t Japan. It won’t float its currency in dollar terms.
So, what then can the US do to weaken the USD without upsetting China?"
---------------------------------------------
The writer of this article is positively biased toward gold and likely has a financial interest in more demand for gold.
But his observations are interesting nonetheless.
