When paper currencies collapse, gold becomes lender of last resort and appreciates humongously because of all the printed
currenies all over the world that failed miserably to recover the world
economy or to generated the GDP levels to pay down the huge world
debts.
From
'What if the Fed lowers instead of hiking interest rates!'
By Gijsbert Groenewegen, April 21, 2017
https://www.321gold.com/editorials/groenewegen/groenewegen042417.pdf "The Fed will have to admit defeat
If is not in
May it will very likely be in
June. When the Fed will finally be
forced to be honest and admit that it is wrong on the economy and
therefore will have to drop its tighter monetary policy with as consequence
that precious metals assets will skyrocket. A U-Turn by the Fed changing
their policy direction from tightening to easing will create a massive market
shock. That day is rapidly approaching.
As Michael Belkin says “financial markets are a case of the blind leading the
blind. The Fed keeps talking economic strength and has broadcast a series
of interest rate hikes and even balance sheet reductions, those consensus
trades have virtually all market participants incorrectly positioned.” This is
in my point of view because almost everybody got drugged for the last 8
years and thus lost perspective of what is real and what isn’t.
......
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"Anyway just see on the chart here above how out of whack the forecast of
the industry analysts are with GDP forecast for the first quarter of between
1%-2% or between 2x-4x more than the Atlanta Fed is forecasting (
of only
.5% or half of a percent for the year). Wall Street is always too late in their
downgrades because of their positive bias, followed for obvious reasons,
Wall Street makes more money with a positive than a negative stance.
In my point of view it all is pretty simple. People just simply don’t want to
further increase their debts in order to buy goods they already have.
The
numerous vacant stores in New York, even not seen in the 2008/2009
period, are a clear testimony to that. I believe the fact that Ralph Lauren, a
popular brand amongst Americans and foreigners, is closing its flagship
store on Fifth Avenue is a clear sign of this trend. People are just fully
saturated with debt and consumer goods, people are maxed out. No room
left!
And just recently the BofA in its almighty wisdom “concluded” that surging
consumer confidence does not result in higher spending hence why
the retail sector is doing so badly. And as we all know consumer-spending
accounts for 70% of GDP in the US. Just draw your own conclusion. You can
bring a horse to the water but you can’t make it drink and especially not
when it doesn’t trust the water!
(Yet incrediblely the) Dallas Fed president is still talking about 3 hikes being
a good baseline! (but impossible to happen, but no one warns the public)"
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"
Although we all know that the Fed, the BIS and the bullion banks have been defending the US dollar by discouraging investors to invest in gold and silver the fundamentals for gold and silver are now catching up (just look at the
tug of war in the futures market) and there is no place to hide anymore for
the scam artists.
And because the central banks will lose their status of lender of last resort
because they have undermined the economies and currencies investors will
resort to the ultimate lender of last resort: physical gold and silver. The
upcoming weakness in the US dollar, which is inversely correlated to gold,
will force deliveries of physical gold on the
Comex instead of the usual
nominal settlements in US dollars which in turn
will force the price of gold
and silver to multiples of their present value."