Gold's Best Friend Ever, hard at work destroying the value of the dollar

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Perhaps the single greatest thing preventing gold from taking off into the stratosphere has been the strength of the safe haven status of the US Dollar.

Since gold is first and foremost a hedge against instability, as long as the US Dollar had also been a hedge against instability, Gold's primary function had serious competition.

The dollar has long had serious debt problems to contend with.  However, it had been backed by the strength of the respect that the US Government has commanded internationally, as well as the respect for the depth of our financial markets.

Until now.

Now the US Government is the laughing stock of the developed world with a President who thinks Science is a hoax, a free press is the enemy of the people, and that brown and black people are inferior.

He has also long believed that a weak dollar benefits real estate - which it does, and since his wealth is held in real estate he is all for destroying the value of the dollar.  Which he is rapidly succeeding in doing.

A Global de-dollarization effort is underway.  Contracts for commodities like metals, food and oil have largely been settled in dollars,  This has given the dollar a special status around the globe.  Every country needed a reserve of dollars.  This has also helped support our massive debt.

But Trump's trade wars, and  his lack of respect of international treaties and institutions have initiated a global move to settle contracts without dollars. Which means countries around the globe do not need a reserve of dollars.

At the same time Trump's historic ineptitude in dealing with a virus is crippling the once vaunted US economy.

So as countries around the globe de-dollarize and our economy sinks, the dollar is quickly losing its special status as the global reserve currency, and its value is sinking.

Whatever other damage this is doing to our economy, it is probably the single greatest thing to happen to gold in the post war era.

Because when investors get nervous now they look away from the dollar.  So where else can they look?  The euro has structural problems.  The Yuan is gaining strength but the Chinese economy is still relatively closed.  The yen is burdened with even more debt than the dollar.

Gold is becoming the currency of choice, as its status as a safe haven currency loses its greatest rival.