Think Gold has just gone up 15% in US dollars and reached 6-year highs of late?
In many countries gold is at an all-time record high right now.
Australia and Canada are just two countries that mine a lot of gold, and in those currencies gold is not just at a six-year high- gold is at an all-time record high. It’s really only a question of time now and I don’t think it’s gonna be that much time before gold starts making an all-time record high in terms of US dollars as well because we are now in a period of currency weakness.
All currencies are losing value when priced in gold now relative to one another. Right now all currencies are sinking in value -they just sink at different levels and recently the dollar has been sinking more slowly than a lot of other currencies, but it’s about to pick up the pace.
Gold Could See All-Time Highs Soon in the US Dollar
Even though Trump accused China of devaluing their currency, China allowed the market to function correctly. The real problem is not that the Chinese currency is dropping- the problem is gonna be that the Chinese currency is eventually going to be rising and it’s gonna rise a lot.
A lot of people are betting wrong- they think that the trade war is going to exact a big toll on the Chinese economy and everybody thinks America will win a trade war. They think all these tariffs are bad for the Chinese economy and so it makes sense that people who think that believe the tariffs are gonna hurt China, and selling the yuan along with the market.
Is China Really Manipulating Their Currency?
In reality the Chinese did not intervene and they did not manipulate the yuan higher than the market wanted to set it. For years they were manipulating their currency, keeping it artificially low but they’re not really doing that anymore which means that the currency is going to appreciate when market forces start to move it in that direction.
But the reason the Chinese built up these massive forex reserves was because for years they did deliberately undervalue their currency and that was probably a mistake, but lower valued currencies make for increased exports to other countries as the exchange rate favors the importing countries of Chinese goods.
Where Will the World and US Economy Go Next?
I think the recession is coming despite the recent Federal Reserve interest rate cuts which is why we’re going to go all the way back down to zero. In fact, as a result of yesterday’s decline when the Dow Jones Industrial Average is down about eight hundred points, the probability of a 50 basis point rate hike in September shot up to about 60% and now Goldman Sachs was out today they’re now looking for 75 basis points of cuts between now and the end of the year.
Goldman Sachs finally came out and says there’s not going to be a trade deal this year or before the 2020 US Presidential election. With Donald Trump putting constant pressure on the Fed to cut rates even more, it would appear he wants to keep markets inflated until after he starts his 2nd term, because he likely knows what will happen if the central bank doesn’t provide more easy money to Wall St and to the government to service the 22 Trillion national debt.