Socio-Economics History Blog

Socio-Economics History Blog

Rickards: A Global Monetary Reset is Coming with Gold at Its Center

by mosesman
Remember the Golden Rule: “He who has the Gold, RULES!”
  • Rickards: A Global Monetary Reset is Coming with Gold at Its Center
    by Jim Rickards, https://dailyreckoning.com/
    Dear Reader,
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    Gold spiked after last Friday’s drone strike that took out a top Iranian military official and is trading at seven-year highs. Yes, the news was dramatic and made a major impact. But geopolitics is just one factor driving gold. Even without the latest geopolitical tensions, gold is poised for a historic run.
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    The first two major gold bull markets were 1971–80 and 1999–2011. Today, gold is in the early stages of its third bull market in 50 years. If we simply average the performance of the past two bull markets and extend the new bull market on that basis, we would expect to see prices peak at $14,000 per ounce by 2026.
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    What’s driving the new gold bull market?
    From both long-term and short-term perspectives, there are three principal drivers: geopolitics, supply and demand and Fed interest rate policy (the dollar price of gold is just the inverse of dollar strength. A strong dollar = a lower dollar price of gold, and a weak dollar = a higher dollar price of gold. Fed rate policy determines if the dollar is strong or weak).
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    The first two factors have been driving the price of gold higher since 2015 and will continue to do so. Geopolitical hot spots like Iran, Korea, Crimea, Venezuela, China and Syria remain unresolved. Some are getting worse. Each flare-up drives a flight to safety that boosts gold along with Treasury notes, as the latest incident shows.
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    The supply/demand situation remains favorable with Russia and China buying over 50 tons per month to build up their reserves while global mining output has been flat for at least five years.
    …
    Of course, they won’t say so on TV because they don’t want to spook retail investors into dumping stocks and bonds. But watch what they do, not what they say. If gold bullion is the go-to asset for billionaires, why don’t small investors have at least a 10% allocation to gold and silver bullion just in case?
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    Some do, but most don’t. They’ll find out the hard way what individuals have learned over centuries and millennia. Gold preserves wealth; paper assets do not. Below, I show you why a global monetary reset is coming, with gold at its center. It can either be an orderly process — or a chaotic one.
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    Which will it likely be? Read on.
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    read more.

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