24 Jul


Gold Market Discussion

Most of the biggest banks and financial institutions find very little fault with the monetary status quo.  After all, they are the beneficiaries of it.  Bailouts preferred borrowing at the Fed’s discount window, protection from market competition, and interest on excess reserves are just a few the privileges they enjoy under the Federal Reserve’s monetary regime.

There are policy differences at the margin among some of them from time to time.  Some will prefer one policy option to another one very much like it, one interest rate adjustment more than another, or one quantitative easing or tightening schedule more than an alternative.  But such differences and debates occur within a narrow range of allowable opinions.

But every now and then a development looms so largely, a consequence of monetary malfeasance so certain, that even loyal banking cronies have to say something.

Such is the case with the spreading de-dollarization of the global economy.  

Although we have been warning our clients and friends about the certain ending of the US dollar’s role as the world’s reserve currency, one banking giant has noticed this 800-pound gorilla in our monetary future.

From JPMorgan Chase, the largest US bank:

“We believe the dollar could lose its status as the world’s dominant currency (which could see it depreciate over the medium term) due to structural reasons as well as cyclical impediments.”

The bank even says that diversifying from the dollar with a higher weighting in precious metals “makes sense.”

Indeed, it does.

JPMorgan Chase asks if the dollar’s declining role is already under way? Its answer makes us wonder if they have been reading our blog.  It writes:  

“As a share of overall central bank reserves, the USD’s role has been declining ever since the Great Recession….  

“Central banks across the globe are also adding to gold reserves at their strongest pace on record. 2018 saw the strongest demand for gold from central banks since 1971 and a rolling four-quarter sum of gold purchases is the strongest on record. To us, this makes sense: gold is a stable source of value with thousands of years of trust among humans supporting it.”

The world is beginning to de-dollarize.  If you’d like to know why read our blog posts over the past year. 

Or look instead at the debt ceiling suspension deal working its way through Washington right now with its $320 billion in new spending.  To put it another way, spending in the current fiscal year is already up – before the new debt deal — more than 10 percent over last year, while revenue is up just 3.3 percent.

The deficit this fiscal year looks like it will come in a $1.1 trillion

Time to de-dollarize your investments.

Your RME Gold professional can help you embark on a sensible plan to diversify out of the debt-loaded, debt-backed, decaying dollar.


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