The USD Is Ready To Get Punished And Help Drive Gold To $3000
Heads gold wins, tails gold wins. The best choice for investors that want to protect their wealth and purchasing power is gold. For those that want to grow their wealth, gold stocks are ideal.
From a technical perspective, the chart on the US dollar (USD) index looks ready for a big correction. It started getting weak well before the Fed cut rates, and since then it looks like it is on a cliff ready to take the elevator down.
The fundamentals are aligning with the bearish chart on the USD. The next president is sure to be a massive spender. Both Harris and Trump have proven they don’t care about the Death Spiral of Debt and have no plans to cut spending. Whichever one wins will become the new record holder for adding to the debt for one term.
Initially, Harris’ economic plans included initiatives that would be economic suicide if implemented. Trump should have let her run with that but seems to want to make some economically questionable plans.
When Harris and her friends ousted Biden with the we can do this the easy way or hard way ultimatum, I believed that due to her assistance with Biden spending like a drunken sailor and her insane economic policies that she was campaigning to lose. But, lately I have been alarmed by some of Trump’s economically troublesome plans.
I still believe that this is a choice of picking the lesser of two evils, and that Trump would be less bad for the economy. It really is shocking that these are the two best candidates that both parties could come up with. The good news for gold bulls is that whichever one wins, they will be amazing for gold.
It is sad to say that the next president will get the debt to $50 trillion in one term. Depending on the interest rates, it is almost a given that $2 trillion in debt servicing costs are getting baked in the cake.
Pushing the debt to $50 trillion and debt servicing toward $2 trillion is a scary conclusion but that is undoubtedly where things are heading. I can’t see how debt buyers outside the Fed can support that much supply of debt.ose levels. Which means the Fed will be on their way to doubling or tripling their balance sheet before most expect it.
A serious correction in the USD is inevitable and it will add fuel to the fire of the gold bull market. The gold stocks only started to come off the canvas in March and since. Really it has been confined to the best gold miners, some gold mine developers, and gold explorers with important discoveries. So far the smaller players have only started to get off the canvas.
Until recently, the gold bull has been fueled by the central bankers in the BRICS nations and hoarding of physical gold by Chinese and Indian retail investors. But, we are seeing the western investors join the party over the past few months as the outflows at gold ETFs have turned into inflows.
By the day more and more investors are being converted into gold bulls. This is very encouraging to see as they put themselves on their personal Gold Standards.
Based on the Death Spiral of Debt in the US and throughout the world, the path to the world returning to the Gold Standard is becoming clearer to many more.
The sooner investors realize that the world is on an unstoppable path to a modern Gold Standard, the better. As it will protect their wealth and purchasing power.
I’ve said in many past reports that for those that want to protect their wealth and purchasing power that gold is the best choice. While those that want to grow their wealth can find incredible opportunities in gold miners, gold mine developers and gold explorers with important discoveries.
The menu of great gold stocks in those categories is small, which also makes the long-term bullish argument for gold even stronger. As the supply chain is broken and it won’t get better for at least a decade or two.
As the world returns to the Gold Standard, it will be because of powerful demand and tight supply. The fact that the menu of gold miners, gold mine developers and gold explorers with important discoveries is so small, means that gold supply will stay tight for decades.
The next big rally in gold will be due to a pummelling of the USD and interest rates getting cut back toward the Free Money Era which was a key cause of the Death Spiral of Gold.
We are in a heads gold wins, and tails gold wins situation, that is getting stronger by the day.
All the best,
Allan Barry Laboucan
