Despite the fact that kinteic war in the gulf no longer serves US interests (if it ever did), there is no way of disengaging without ceding the Straight of Hormuz to Iran/China.
As long as ships are paralyzed the pressure on oil remains high and therefor so does the pressure on gold.
THis is very Deflationary. It will lead to a global economic slowdown, shortages of food and energy that will metastasize into famines and recessions, and possibly derpressions.
On the other side of this elquation is the fact that war itself is extraordinarily inflationary. It is tremendously expensive for all participants. This means a ratcheting up of debt levels everywhere. And in the US it means ramping up the printing presses to levels never before seen in history - considering the current debt load and the unprecedented levels current of spending.
The US is already demanding an extra trillion for the war machine. And once the war machine revs up it is insatiable.
Why?
Because in a debt soaked economy the only way to keep the risk markets from crashing is to keep the deficit spending levels soaring. And the trillions for the war machine ends up in the risk markets.
This (money printing) is paid for as a regressive tax on working Americans. And it benefits the billionaire class that controls the Military Industrial complex.
So, on balance, the initial thurst for Gold is down with the initial deflationary pressures but ultimately way up as the inflationary pressure of the war machine kicks in.
So, the trick is look through the initial Gold reaction to the ultimate Gold result.
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