You are here
Alasdair Macleod: Valuing gold in a world awash with dollars
By Alasdair Macleod
GoldMoney.com, St. Helier, Jersey, Channel Islands
Thursday, July 26, 2018
In this article I point to the pressures on the Federal Reserve to moderate monetary policy, but that will only affect the timing of the next cyclical credit crisis. That is going to happen anyway, triggered by the Fed or even a foreign central bank. In the very short term, a tendency to moderate monetary policy might allow the gold price to recover from its recent battering.
Unlike the last credit crisis when the dollar rose sharply in a general panic for safety, on the next crisis, the dollar is likely to fall substantially. The reason is that foreign ownership of dollar investments (typically in U.S. Treasuries) appears greatly overextended, and an additional $4 trillion of liquidity is in the wrong (non-U.S.) hands. This is likely to be unloaded during a general credit crisis, driving the dollar lower.
... Dispatch continues below ...
We Are Amid the Biggest Financial Bubble in History;
When It Bursts, Bullion Owned in the Safest Way Will Protect Wealth
With GoldCore you can own allocated -- and most importantly -- segregated coins and bars in Switzerland, Singapore, and Hong Kong.
Switzerland, Singapore, and Hong Kong remain extremely safe jurisdictions for storing bullion. Avoid exchange-traded funds and digital gold providers where you are a price taker. Ensure that you are outright legal owner of your bullion. If you do not own segregated bullion that you can visit, inspect, and take delivery of, you are exposed.
Crucial guides to storage in Singapore and Switzerland can be read here:
GoldCore does not report transactions to any authority. Safety, privacy, and confidentiality are paramount when we are entrusted with storage of our clients' precious metals.
Email the GoldCore team at firstname.lastname@example.org or call our trading desk:
UK: +44(0)203-086-9200. U.S.: +1-302-635-1160. International: +353(0)1-632-5010.
Visit us at: http://www.goldcore.com
Domestically, in the next credit crisis the Fed is certain to support the banks, provide finance for a runaway government deficit, and stabilize the private sector by injecting further liquidity into an economy already awash with dollars. Therefore, not only will the dollar fall on the foreign exchanges, but its purchasing power in the hands of American citizens seems certain to fall as well.
And finally I demonstrate how fluctuations in the quantity of paper gold makes a nonsense of the conventional supply and demand approach to analyzing and forecasting gold price trends. Futures and forward markets have deflected demand from physical metal, a situation that depends on confidence in the dollar as a stable currency being maintained. Only a marginal shift away from paper towards physical gold will undermine the whole paper-gold system. ...
... For the remainder of the analysis:
Join GATA here:
New Orleans Investment Conference
Hilton New Orleans Riverside Hotel
Thursday-Sunday, November 1-4, 2018
* * *
Help keep GATA going
GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:
To contribute to GATA, please visit: