Gold is back near its all time high. Globally this is a big story. Yet nobody in the US has noticed. The story here is all about AI, Big Tech and Bitcoin (which trades exactly in unison with Big Tech).
The current applications for AI and Bitcoin are de minimus. AI, at this point, can create deep fakes, and be used to crunch data more efficiently than humans. That makes it good for basic clerical tasks and fraud. Same with Bitcoin, the Fintech applications to this point are near non existent and it is good at hiding the gains from fraud. Perhaps this is why they trade together.
To be sure, AI is a great story and makes for great print. It is a as Meme Trade. With real earnings it should be said. And over time it may or may not justify its current hyperbolic multiple.
But none of this helps the 90 percent of the US and World population that is lost, angry, unable to cope with virulent sticky inflation, unable to buy a home. unable to feed thier kids or pay for college. And they are becoming inreasingly violent and supportive of authoritarianism. Which is massively destabilizing, both politically and economically.
And none of this will help the 90 percent of the stock market that is currently stagnant. Only 7 stocks account for the entire move in the market. Just as only the top 1 percent of the economy is rich enough that the current inflation is not a perceptible issue.
Gold is back to all time highs because the Central Banks of the world understand the dire situation in the global economy. It's a race to the bottom for global currencies suffering under the very massive debt that has created in the inflation problem.
And the inflation problem can not be solved without higher rates. But as rates go higher delinquencies rise, and defaults rise, and companies can not afford to service their debt and go bankrupt, and banks go bankrupt. And countries can not afford to service their debt. And go bankrupt.
The populations of China and Russia and India are actively encrouraged to buy Gold. And they do. In Europe their is still a tradition of buying gold that was fostered by two world wars.
In the US everybody is chansing the latest meme.
Nobody cares about gold. It's not sexy.
But as it claws its way higher, dollar by dollar, eventually someone will notice here. Some 19 year old influencer will get on board, Then all her fans will follow. And when the US finally participates. The gold price will accelerate.
Traditionally even the US had 3 perent of its portfolio in gold. Now it is 1 perent. If that even doubles. so will the gold price.
And as it becomes clear even to the US citizen that the only real protection against a deflating currency is the only globally stable currency which is gold - they will catch on.
As Churchill once said, "Americans, after having exhausted every other possibility, always do the right thing."
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