Gold and macro environment, page-1029

Thanks Calm, you post some helpful articles with regard to the macro.

The thing is, I think this is a bit different to the Lehman Brothers and Sub Prime events. Those were Black Swan events brought on by systemic failures and abuses in the financial system. What Trump is doing is deliberate, and I suspect he has a specific purpose in mind. There are some good videos around that explore the possible reasoning behind what he is doing, but I found this one covers most of the basics;

https://m.youtube.com/watch?v=1ts5wJ6OfzA&pp=0gcJCdgAo7VqN5tD

Margin calls are inevitable when the system is stressed, but I suspect they are going to be worse when the triggering event is not under anyone's control. In this case I think Trump is using tariffs to force negotiations regarding balance of trade and currency issues. So I doubt that we are heading into a runaway event just yet, but it may come to that for other reasons.

I am not personally a fan of American Imperialism, and the world has changed dramatically in recent decades. As a result I don't think that Trump's plan is a guaranteed success at this stage, he may end up making things worse than he intended. I've been struggling to understand why the gold price has been so strong over the last year or so. It has felt like something has broken but we were yet to find out what. Trump's tariff masterplan may help bring some clarity.

What if (as others have suggested) all the Central Bank buying and BRICS maneuvering has been about moving away from the $US as the reserve currency? This could have huge ramifications for the US economy, and Trump has clearly stated that he his not happy about this possibility. He has even threatened nations that would head in this direction. It would be difficult to chose one particular fiat currency to be dominant in the new world order over all the others, as we would end up in a similar situation to today, where one nation has an unfair advantage. Gold however acts as a universal store of value which is not tied to one particular nation. Granted the $US does currently impact on the price of gold, but that would change if it was no longer seen as the "reserve currency" globally. A new financial mechanism that is tied to gold rather than fiat currency could dramatically change the global economic landscape. I can't help but wonder if the smart money has seen this coming and therefore been preparing for it, hence the recent spike in gold heading to the US.

It certainly seems to me that Trump's tariff agenda is about reasserting US dominance globally, a kind of reset as the video that I link to above suggests. However, there is also the risk that his current plan could backfire, and force the shift away from the $US to come on more quickly than would have occurred otherwise. I tend to pay attention when themes like this are picked up in mainstream media, as in the article below from the other day;

https://www.reuters.com/markets/wealth/next-up-markets-crisis-confidence-dollar-2025-04-04/

I won't pretend that I know how this will play out, but whatever happens it seems to me that gold will be a key factor and I struggle to see the downside.

I am also not yet convinced that what we are experiencing is a runaway Black Swan event, so I suspect the market will find some equilibrium again once Trump has his pound of flesh.

Interesting days ahead.

Kind regards.