Jim’s Mailbox

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This could be a very real “what if” Wolfgang.
Bill

Jim/Bill,

What if……….one day the East says “you want our products?  Pay in gold.”
“The recent increase in gold prices may be set to continue on the strength of a global push for de-dollarization…
Countries increasingly hostile to the US and dollar hegemony, such as Russia and China, are searching for alternatives to the dollar including gold.”
The ensuing global scramble for gold will be unprecedented.
Remember, you can’t print gold.
CIGA Wolfgang Rech

China Curbs Private Gold Imports As It Adds 10 More Tons To Its Own Hoard
August 14, 2019

China continues to escalate its capital controls with headlines today from Reuters that Chinese authorities have curbed private gold imports since May as the trade war escalated in a move that could be aimed at curbing outflows of dollars and bolstering its yuan.

According to sources, China’s gold imports are down 300-500 tonnes, with around $15-$25 billion, since May.

 

 

 

 

 

 

 

 

 

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Wolfgang,

We have termed this as “all roads lead to gold”!

Bill

Jim/Bill,

Essentially, this article is about a “Mind Reset”.

Old timers look at gold as an inflation hedge.  Higher prices = higher gold.

Today’s youngin’s take a different view.  Higher prices = less chance of a rate cut = lower gold.

That is the way the lemmings trade, because according to the conventional wisdom, if inflation is higher, then the Fed will be less likely to cut rates. After all, they’re cutting rates because inflation is too low and if inflation comes in hotter, well, then there’s less of a reason for the Fed to cut rates. So paradoxically, higher inflation is seen as being bad for gold. And the reason I’m saying paradoxically is because gold is an inflation hedge. Normally, the more inflation the more you want to buy gold.

In my eyes, it’s a win/win situation.

-If prices of goods soar, make no mistake, there will be a run for the gold. That will never change. Think hyperinflation.

-If rates go negative, gold will provide a safe haven without any “opportunity cost” being missed.

And no one is even talking about the fiat currency destruction underway!  When paper becomes worth less, or better yet worthless, the fireworks will begin.

Eyes will open soon.  But by then, it may be too late or too costly.  Kind of like buying life insurance on your deathbed.

CIGA Wolfgang Rech

Schiff: The World Will Drown In An Ocean Of Inflation; Gold Is Going Ballistic
August 15, 2019

Via SchiffGold.com,

The gold market took a one-two punch on Tuesday as Trump made some concessions in the trade war and inflation numbers came in a bit higher than expected. Peter Schiff talked about it in his latest podcast, saying gold traders still don’t understand the gold rally.

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