Whoever wins is not going to fix the deficit. I am all in on gold not because I think no US President wants to fix their debt/deficit situation, but because I believe American society is no longer capable of allowing any such President who wants to fix it, do what it is necessary to fix it. The implications for the US dollar and therefore gold
I read an interesting article that I can't remember what it was anymore where some economists wrote to say how easy it was for America to resolve their deficit/debt situation and it didn't even involve anything drastic like introducing VAT.
It was laughable because all their 'easy' steps may have been easy for the CCP. For America? Not one of their proposals would get past their legislative process. Unless they could send America back to the 80s when it was strong, fearless and its people actually understood the concept of the greater good.
So interest rates will go down, the US government will breathe a huge sigh of relief and start quantitative easing again because money is cheap again. That will feed into inflation again, and interest rates will go up again. Rinse, repeat but what they are in is a phugoid cycle with only one possible end result.
And that's assuming China and America don't first enter into outright hostilities in the South China Sea, which is all but certain, It 's just when. This is not the same America that was smart yet careful play a cat and mouse game with the adversary while avoiding war. This America has carelessly started a new Cold War which it has simply assumed it can both keep it Cold and it will surely end the same way as the first one. Neither is true at all, but that is exactly why war is coming.
Why did Russia invade Ukraine? Forget all rational reasoning, the bottom line is they invaded Ukraine because they thought it would be easy. That's the exact same thinking that's infecting American Foreign policy now vis-à-vis China. They talk of deterrence, but if you're not deterring, what are you in fact doing? You're escalating. And there's nothing but more escalation on the horizon. Everywhere now that everybody who has ever disagreed with America smells blood in the water.
There is no safety left but gold in this time of great chaos. So everybody needs gold. Hopefully only after I've bought my fill.
But is my assessment too bleak? Could things go back to normal, and gold back to just being another asset class to be bought with the US dollar? And the world goes back to believing that Treasuries > Gold?
I am long on gold on the assumption that major falls in the price are temporary until the day every one looks left, and right and asks 'where's our gold?'. And that day may be approaching faster than anyone realizes.
(20min delay)