Gold

Correlate the price of gold (weakness of USD) and the recent tax-cutting legislation and one notices that on the promise the USD grew stronger and on the facts the USD grew weaker. That’s what happens when one has a multiple-bankruptcies-are-smart POTUS… Who needs a war in the middle east to create turmoil when one has a fearless leader who cares nothing about the national debt or even solvency as long as he “wins”? Expect the price of gold to continue to rise as this nut-case keeps adding to the burden of future tax-payers while telling current tax-payers he’s got their back…

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
This entry was posted in investing, politics and tagged , , , , . Bookmark the permalink.

2 Responses to Gold

  1. Grece says:

    Factually, the best chart to review is the US Gross Domestic Product vs. US Total Debt Securities from 1945 to 2016. In simplest terms, the chart reveals that once the US abandoned the Gold Standard completely in 1971, the amount of debt in the US financial system skyrocketed relative to the real economy.

    As a result of this, by the time the mid-1990s rolled around, debt levels in the US financial system had become a systemic risk: with this much leverage in the system, even a brief bout of debt deflation (when debt markets deflate) would induce a systemic crisis.

    If you don’t believe me, consider that the Great Financial Crisis of 2008, the one during which everyone thought the world was ending, even Robert.

  2. Deaf Spy says:

    To start with, why one should correlate the price of gold with weakness of USD? Then, why one should correlate the price of gold with the strength of the US economy?

    Gold, Robert, is a very peculiar asset. It gets influenced by weird stuff like the wheat production in India, for example.

    I am very curious why you think the strong dollar is a requirement to demonstrate the benefits of the new tax reform.

    Actually, the case is exactly the opposite. A weak currency is a blessing for every economy that tries to recover, such as US. Weak USD allows US export to become cheaper which will increase the demand for it and benefit all export-oriented industries and the employees in these. It also makes the import more expensive, turning people into local products. This has two benefits: additional boost to industry and reduced debt.

    Btw, Trump himself stated earlier this year that “our dollar is getting too strong…it is very, very hard to compete when you have a strong dollar and other countries are devaluing their currency”
    (source: International Banker)

    See, Robert? All is good!

Leave a Reply