Rick Rule says:
"If the purchasing power of the U.S. dollar declines by 75%, which I believe it will, then the nominal price of #gold will keep pace, and that isn’t a $3,000 number; it’s a much higher number."
Stephen Miran who is now a leading economic adviser to Trump favours a lower dollar in what he describes as a Mars-a-Largo accord to get other major countries to accept a lower dollar. And possibly replacement of their US Treasuries with some form of collateral (gold?) backed zero coupon US bond. A lower dollar deflates away large US debt while replacing UST with zero coupon bond would reduce interest obligations to holders of those bonds.
If you are a Japanese US bond holder reading this, would you not be worried? US could 'threaten' or coerce its allies to accept the swap and the lower dollar or else face the wrath of higher tariffs. Tariffs have become Trump 2.0's weapon to get what he wants.
It is therefore not hard to imagine that the dollar's path is going to be lower, possibly a lot lower in the coming years. They may not be able to do that right away as that would be fueling inflation. But it could be a course of action if the trade wars begin not to go in US direction.
In that context therefore, given the desire for a lower US dollar over time, Gold's ascendancy (love that word? haha) is almost assured. So it is almost a no brainer to load the truck, and a great reason why Australia should hoard its own Gold. We could even have a gold backed currency that would make it a strong currency over time, improving purchasing power of all Australians.
As a major exporter of mineral commodities, we see those precious metals as just another export item. Instead of a valued reserve in our balance sheet. That is how China, Russia looks at it, and the US has recognised this and begun bringing all their Gold back from London vault. Keeping them in foreign vaults could be seized/confiscated just like Russian assets. Because US is about to annoy every country in the world.
That is why I say our Gold produced here should be seriously considered to form a Gold reserve, e.g get our Future Fund to invest in them. And our super has no option to invest in physical Gold too - instead, we are up to the brink on US equities.
Gold does not have to be the asset of choice owned by just the wealthy, if our super can also invest in them. So instead of exporting our Gold to China, US and other countries for current price which would be a fraction of its future price, we could have Australian super accounts, Future Fund to invest and have a bigger stake in our gold producing companies.
And that is exactly what I meant.
What I am telling you is to get on board GOLD. Not Gold stocks.
