Gold Hits Record High

[BA Deere]

Something to keep a eye on.

https://www.cnn.com/2020/07/27/investing/gold-price-record-high/index.html   

snip:

London (CNN Business)Gold prices have soared to a record high, with investors rushing to find safe places to park their money as concerns grow about a resurgence in the coronavirus and the impact that could have on the global economy.

Gold hit $1,944 per ounce earlier on Monday, beating its previous record of $1,921 set in 2011. It has now gained about 27% so far this year. Silver also got a boost, climbing more than 6% to reach $24.21 an ounce, eclipsing Thursday's seven-year high.

"Gold is the clear beneficiary of safe haven demand," Stephen Innes, chief global markets strategist at AxiCorp, said in a research note.

The main driver behind gold's rally has been falling returns on US government bonds, which reflect the likelihood that the Federal Reserve will have to keep interest rates lower for a prolonged period of time to support the economic recovery, according to Hussein Sayed, chief market strategist at FXTM. That has also served to weaken the US dollar, which is trading at a 22-month low of 0.85 euros and a 4-month low against the Japanese yen.

[sdholloway56]

Yeah, I can live with my decision to not sell the $ or buy gold at this juncture. 

If it eventually falls out of a parabolic rise and retests the breakout I'll look to short, but not before.

Could be wrong about the $ but I can live with being out vs. being wrong.

The world is looking on with horror at the goings on in the US. Fortunately you can still go to Croatia, Haiti, Mexico or Turkey on a US passport.

[BA Deere]

If we get the sniffles, they get full blown pneumonia.  If we don`t have the cash to send them directly or indirectly (through trade imbalances) they go down like a house of cards in a breeze.  Daddy Warbucks might have a bit of a cashflow problem in the near future.  

[illinifarmer]

This sounds all to familiar.  I remember reading something about FDR raising the $ and collecting up all the gold around the country.  Fast forward a year the dollar crashes, he built Fort Knox and  virtually doubled the value of gold over night to extend U.S. value and credit.  One of the biggest scams of all time.  Keep an eye out it’s all about the money.

[rickgthf]

When you pump $10 trillion in "paper" money into the system you better expect some inflation. Not inflation in the traditional sense of too much money chasing too few goods but inflation in the sense that of diluting the value of assets.

  It should be good for the "nominal" price of land but not so good for the price of a bushel of corn or beans.

[wrightcattle]

Gold  headed to an easy 4000 plus.. Maybe 6000 plus it's the USA Zimbabwe play.

[hwr247]

That may be true about FDR but when Nixon took the dollar off the gold standard prices started to rise. For example a new pickup in the 60’s was $2100 by the late 70’s it was $6000. in the same time period 5 cent candy bars went to 25 cents, movie tickets 15 cent to $1.00, gas from $.22 to $.70. Watergate didn’t help any either and middle east fighting between jews and arabs raised oils prices too. But as the value of each dollar declined inveators got the jitters.

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@illinifarmer wrote:

This sounds all to familiar.  I remember reading something about FDR raising the $ and collecting up all the gold around the country.  Fast forward a year the dollar crashes, he built Fort Knox and  virtually doubled the value of gold over night to extend U.S. value and credit.  One of the biggest scams of all time.  Keep an eye out it’s all about the money.

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[BA Deere]

The question is, will the rest of the world allow us to take a few Mulligans (print our way out of the rough)?   I don`t think they have a choice.   Copper is high, Lumber is very high both raw materials for a recovery and foreshadowing the outcome of the fall election?

[BA Deere]

Here`s a interview with Peter Schiff (the good Schiff) .    All these gold bugs have come out of the woodwork lately.  He admits thinking the day of reckoning would`ve happened years ago.  I`ve thought it for 30 yrs now  🙂 days go by slow and the years go by fast.  

https://www.youtube.com/watch?v=fFpAcChNDQo   

Schiff makes very good points that are valid today (nat debt approaching $30 Trillion) as was during the housing collapse cira 2008 .   Basically the Fed will have to tighten money supply driving interest rates higher, I guess being the "cleanest dirty shirt" is still a shirt that will need washing.  It`s a cautionary statement on taking on new individual debt, what`s worked with 3% money isn`t going to work with 10% or 20% money.  

Schiff isn`t in the Trump "cult" category, criticizing him for raising the debt ceiling.  I disagree, we can`t cut/starve our way to a balanced budget, growth was the last hail Mary pass. 

To achieve growth, POTUS had to say "greatest economy in history" and cheerlead, to which Schiff correctly says "greatest bubble in history".  

The interviewer says "lowest unemployment" and that`s true, comparing apples to apples of past administrations.  However unemployment methods to figure are outdated. We have a "gig economy" more than ever these days Uber, Lyft, Air B nB, Door Dash ect.  These are independent contractors not technically counted as unemployed in a slowdown.

[sdholloway56]

One interesting bit of evidence unfolding is whether gold or crypto would be the preferred flight to safety asset.