The great secret of gold is that is it the ultimate hedge against INSTABILITY. And whatever you think about Donald Trump, love him or hate him, you have to admit he is the greatest force for INSTABILITY to hit the western world since Hitler.
When he came into office in 2016 gold was at about $1200 per ounce. When he left office after four of the most unstable years in this nation's history gold had soared to $2000 per ounce. That's a great friend for gold,
But the force of Instability has continued unabated since Trump left office, as more and more politicians embrace the love of instability that is Trumpsim. And perhaps his greatest gift to Gold is stacking the Supreme Court with a group of partisan hacks who have managed in one short year to destroy the credibility of America's Greatest institution of stability.
America's entire competitive edge in the world as an economic power has rested on the respect the entire world has had for the stability of America's Justice system.
Why?
Because the world knows that when you do business in the United States of America your contracts will he honored. That is Stability. That has been our competitive edge.
You can talk all you want about American Innovation and competitive edge blah blah blah, but the one thing that keeps the dollar stable in the face of massive deficits and a massive current account deficit (Both tremendously exacerbated by Trump) is our most stable judicial system.
Investors know worldwide that when they invest in the US their investment is governed by our rock steady judicial system. A judicial system that until now can not be tainted by partisan politics that will dicker with your invesment according to parisan politcal whim.
That is our edge.
Trump rocked that edge by pulling unilatterally out of previously negotisated international contracts. Yet the international business community still had faith in our courts.
It would be premature to say that faith has been lost.
But for the first time in the modern business era that faith is in question. With the Supremd Court being tinted with the stink of partisan politics, the international community has to wonder about how inviolate their conracts in the US will be going fowards. If the party in power decides the courts should abrogate certain contracts - will they do so? How can you be sure? And if you're not sure - why accord the dollar a special status?
And that is Trump's biggest gift yet to Gold.
To be sure, the price of gold reacts slowly to this. But it does react. Over Time, as the loss of faith in our institutions - the hallmark of Trumpism - continues the price of gold rises. But nothing will help the price of gold like the loss of faith in the US Justice system.
Bank on it.
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