HARD ASSETS VS THE DOLLAR: REASONS TO BUY GOLD NOW

 

The Dollar is currently at a high after the Fed has raised rates from zero to 5.5 percent in record time (about a year).

In spite of this lightening round of tightening that has yet to work its way into the real economy, Gold has dropped only about 6 percent on the COMEX - which is an exchange domininated by FED surrogates like JP Morgan and Citibank.  

Meanwhile the central banks of the world have been loading up on gold at a record pace.

Now the ability of the Fed to keep raising rates is near zero.

Because the effect of this tightening is about to be felt  in an economy where hundreds of billions of dollars financed by commercial real estate, residential real esate,  hundreds of zombie companies (13 percent of all listed firms and countless smaller businesses), and hundreds of businesses that have been loaded up with debt by Private Equity and sold to dupes at a Pension Fund near you (Like Texas and Florida whose pension systems are controlled by political appointees with no financial background) must now REFINANCE this massive debt load at rates closer to 9 and 10 percent than 1 or 2 percent where they first leveraged up.

This is a bug in search of a windsheild.  

WHen the bug smashes - the Fed will have to lower rates and extend another round of massive bailouts = and then the Dollar is cooked.

MEANWHILE:

Fitch has dropped the dollar's AA A credit rating - largely because of an idiot anti-democratic political class intent on destroying faith in the Justice System that protects the reserve status of the dollar.  Fitch cited Jan 6 and the constant wrangling over the debt ceiling as evidence.

So the Dollar that made up 73 percent of global reserves in 2001 now makes up 58 percent of global reserves.  That's still a hell of a lot.  

But on top of the debt problems and the political problems we have weaponized the dollar through sanctions against Russia.

Which means that all those treasuries they bought that help us finance our debt - we default on.  We just seize them and don't pay!

And howsoever they may deserve it, that is something you  just can not do if you expect other countries to keep the dollar as their reserve currency - and keep buying your treasuries.  In an era when your debt is expolding and you need to sell those treasuries. 

Now many countries don't want them because they're afraid if they piss us off we will sanction them too. 

 Especially powerful countries like CHINA.

The BRICS meeting at the end of August has 20 new countries making official application for membership including Saudi Arabia.

Many BRICS countries are already settling commodity purchases in local currencies.  And cutting out the dollar.

The BRICS along with the CHINA led BELT ROAD INITIATIVE nd the Shanghai Cooperation Organization are seeking to build a coalition that circumvents the use of the dollar as a settlement - or reserve currency. And this group represents 85 percent of the worlds population.

Now Saudi will be joining the BRICS - and the BRICS new development Bank.  They will be accepting other currencies for oil.

CHina has brokered a peace between Saudi Arabia and Iran. Sauid, Iran UAE Bahrain Pakistan and INdia are building the BRICS NAVAL ALLIANCE.

And eventually it is certain this BRICS group will announce a competing reserve currency for cross border accounts settelement.

And it will likely be backed  by gold/.

BIS has reclassified gold as a TIER 1 asset - many feel in preparation for this new currency.

Central Banks have bought more gold over the last 18 months than any time in history.

Don't look at the day to day Comex price of gold.  Look at what's happening in the world.

AND PROTECT YOURSELF.