Skip to main content

The Future of Gold

For centuries, gold has remained a store of value as fiat currencies have and, if history and modern trends are any revelation, always will fall to asymptotal zero at the hands of the monetary manipulators. The global marketplace is today at the mercy of a currency war which risks savings and the middle class to encourage hasty consumption, speculation, and malinvestment to prop up asset classes and generate the wealth effect in an environment saturated with exorbitant paper gains cloaking real and eventual losses, not to mention the unseen and myriad gross externalities veiled by unsubstantiated optimism. 
As the Federal Reserve has continued to expand its balance sheet, one can observe a strong positive correlation between the dollar price of gold and the extent of the Fed's dollar assets. Of course, the dollar price of gold, in keeping with any other asset, is susceptible to market corrections and speculative buying and selling, as well as geopolitical trends, financial crises, and competing assets or substitutes. Silver is one of these potential substitutes whose properties are both aesthetically appealing and industrially useful. 
Across the globe, central banks, including the People's Bank of China, have begun to hoard undisclosed supplies of gold to conceivably protect their balance sheets from the depreciation of their USD reserves and to potentially compete with the USD for market purchasing power and status as the world's reserve currency. The PBC has probably protected this information to allow for further transactions for gold at the lowest possible prices. Once this information becomes public, the gold price will likely skyrocket in response to an evidenced reduction of supply on the market. 
If the Federal Reserve introduces another dose of quantitative easing, and if interest rates continue to remain low, both of which are highly probable courses for the United States, the dollar price of gold is sure to eventually climb. The timetable for this eventuality is based upon the willingness of the banks of global manufactures, namely China, to vendor finance the insolvent United States. If recent trends are any indication, they will not long endure this process, and China may not even be able to afford this option. Akin to America's Great Depression, the United States is poised to relate to China in the fashion in which Great Britain struggled during the 1930s. Finally, it seems, China may allow its yuan to appreciate to allow its laborers the fruits of their labor instead of propping up the United States markets. With this impending decoupling and the end of exported goods for imported inflation, the dollar price of gold is sure to take flight.

Comments

Post a Comment

Popular posts from this blog

Into the Wild: An Economics Lesson

The Keynesian mantra, in its implications, has its roots in destruction rather than truth: “In the long run, we’re all dead.” If this is your guiding principle, we are destined to differ on matters of principle and timeline. While it is true that our fates intersect in death, that does not mean that we ought to condemn our heirs to that view: the view that our work on this planet ought only to serve ourselves, and that we ought only to bear in mind the consequences within our own lifetimes.  The Keynesians, of course, prefer their outlook, as it serves their interests; it has the further benefit of appealing to other selfish people who have little interest in the future to which they'll ultimately condemn their heirs. After all, they'll be long gone by then. So, in the Keynesian view, the longterm prospects for the common currency, social stability, and personal liberty are not just irrelevant but inconvenient. In their view, regardless of the consequences, those in charge tod
2 comments
Read more

Death by Socialism

This title is available for purchase on Amazon ,  Lulu ,  Barnes & Noble , and Walmart .
1 comment
Read more

There's Always Another Tax: The Tragedy of the Public Park

In the San Francisco Bay Area, many residents work tirelessly throughout the year to pay tens of thousands of dollars in annual property taxes. In addition to this, they are charged an extra 10 percent on all expenses through local sales taxes. It doesn't stop there. In addition to their massive federal tax bill, the busy state of California capitalizes on the opportunity to seize another 10 percent through their own sizable state income taxes. But guess what! It doesn't stop there. No, no, no, no.  In California, there's always another tax. After all of these taxes, which have all the while been reported to cover every nook and cranny of the utopian vision, the Bay Area resident is left to face yet an additional tax at the grocery store, this time on soda. The visionaries within government, and those who champion its warmhearted intentions, label this one the "soda tax," which unbelievably includes Gatorade, the preferred beverage of athletes
Post a Comment
Read more