RE: Share price12 May 2019 00:30
Evening - see if I can string a sentence together properly this time :)
We know that the US, on current numbers/trajectory, are incapable of positively affecting the principle of their debt and will be barely capable of paying off the interest alone in five years time.
Clearly, if that situation was to arise then you're looking at a "lost it" scenario with pretty predictable results - total carnage everywhere, expect for PMs.
In that light, getting rates a lot closer to zero than they are now is the only realistic way they can take on substantial amounts of further debt ($2T for starters) and afford those repayments. If that debt arrives in a manner that devalues the Dollar more than QE has in the past then it would seem reasonable to think that they're doing that on purpose because it would also make them more competitive globally via a weaker currency, win-win.
We've never been closer to a 1929 endgame than we are now - the parallels are stark (pumped stock market/massive debt/leverage) and a recession would kaboom everything so they simply won't allow it IMO.
The above may be well wide of the mark but it makes sense to me. Put the case that forced inflation is the name of the game now to make the debt numbers work for at least another five years and a commods/PMs boom over the next five years would fit the bill very nicely.
All we do know is that Basel 3, formulated by CBs themselves, kicked in on March 29th making physical gold the equivalent of cash and government bonds. Clearly, that is a hell of a wake-up call to anyone involved with currencies or bonds and there's talk out there of major players (in London - home of the "gold fix") being "desperate" to dump their Dollars.
What we also don't quite know but there's clear evidence of it recently, is that the regular dumping of billions of dollars of paper gold on the futures market *appears* to be having a diminishing effect with barely a few bucks coming off the gold price when they do it. Whether that continues to be the case is anyone's guess but at the same time, there's also been evidence of gold not appearing to play the Dollar-inverse game anymore when the Dollar has made a significant move upwards.
There's also talk of the physical gold storage BS starting to creak with some hints of actual availability to deliver physical gold (and silver) hitting a wall. Add in many nation's CBs looking to repatriate their physical gold whilst buying vast quantites of it on an ongoing and increasing basis recently and it's a possiby heady cocktail - they're clearly doing this for a reason, likewise Basel 3.
If this is going to play out for us as we hope and the Dollar is indeed involved then that could be paraffin poured on the fire. Imagine a scenario where you don't want Dollars and want to buy gold but the guy selling gold (in Dollars of course) also doesn't want Dollars.
What happens then?
$2,800?
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