Jim’s Mailbox

Posted at 1:14 PM (CST) by & filed under Jim's Mailbox.

Jim/Bill,

Yra has summarized the impending Dollar decline perfectly.

“I have cautioned for several years that it is not INFLATION that is the impetus for a GOLD rally but investor fears about central banks losing control of monetary policy in a fiat currency world.”

Inflation, as we have all experienced in the past, brings with it significantly higher prices.

But a loss of faith in fiat currency brings hyperinflation, something we have never experienced.

We will witness an impeding tsunami of rising prices in ALL commodities…gold, silver, copper, nickel, and all the others.

What you won’t see anymore is the trite phrase “Keep the Change”.

That “Pot of Gold” is sitting right under your nose.

 

 

 

 

 

 

 

 

Those coins in your pocket will amaze you.

Unlike paper fiat, it’s not economically feasible to remove coins from circulation and replace them.  Even so, their inherent base value will drive them out of circulation.

Remember Gresham’s Law…bad money drives out good.

CIGA Wolfgang Rech

Notes From Underground: Just When It Couldn’t Get More Volatile
June 6, 2019

The above reference is from the wonderful cult movie, Putney’s Swope. The CEO of a major advertising firm has a heart attack during a board meeting and the sycophants don’t realize it as they continue peppering him with questions. When he’s unable to respond they ask, “How Many Syllables, Mario?”

On Thursday, we will listen as the ECB holds its regular post-meeting press conference. You know, the one where President Mario Draghi pretends to answer questions about ECB policy. There will be NO CHANGE, especially since the EURO has recently rallied in response to a sharp drop in U.S. yields.

Also, on Tuesday the Reserve Bank of Australia lowered its overnight cash rate by 25 basis points to 1.25%, citing trade disputes and the increased uncertainty “affecting investment intentions in a number of countries.” The RBA was actually optimistic about the Aussie economy as they noted that employment has been strong and labor force participation improving but they chose to cut rates regardless of some positive domestic forces.

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Notes From Underground: Trump Has Weaponized The Dollar. Do the Longs Know?
June 12, 2019

Some shots were fired last Friday, but it seems that the markets can only hear the siren song of White House tweets. There was an important story from Bloomberg reporter Saleha Mohsin titled, “Trump’s Currency War Plan Puts Treasury and Commerce at Odds.” The article noted that “a Commerce Department proposal to impose countervailing tariffs on countries that it determines have devalued their currencies has alarmed officials at the Treasury Department.”

It appears that President Trump has grown frustrated by Treasury’s failure to name any country as a “currency manipulator.” It has been Treasury’s bailiwick to monitor the foreign exchange interventions of countries who strive to artificially hold down the value of their currencies in an effort gain a competitive advantage versus any G20 country, especially the U.S. (from the Treasury Department perspective).

Switzerland, Canada, the European Union and recently Australia all invoke their currency values as an important variable in setting monetary policy, but the Treasury has failed to label any of them as manipulators and seek retribution. It was Commerce Secretary Wilbur Ross at Davos in January 2018 who said, “And, unfortunately, every single day there are various parties violating the rules and trying to take unfair advantage. So trade wars have been in place for quite a little while; the difference is the US troops are now coming to the ramparts.”

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