Stock markets continue to surge higher on a seemingly endless upward trajectory. On Tuesday, the Dow Jones crossed the 23,000 mark for a time and closed just below that threshold at 22,997.
It almost seems like this can go on forever, but Ron Paul said it would eventually come to an end during an interview on CNBC Futures Now last week. He said it reminds him of “delusions and the madness of crowds.”
We’ve heard a lot about Russian election hacking over the last year. But Jim Rickards said there is only one Russia story that really matters – that is the country’s efforts to break away from the hegemony of the US dollar and the dollar payment system that currently dominates global trade.
Over 60% of global reserves and 80% of the world’s payments are in dollars. But Russia is taking steps to free itself from dollar dominance. And As Rickards points out, the most aggressive weapon in the Russian war against the dollar is gold.
As we reported last month, gold creates a foundation for Russia and China to shift economic power from the West to the East.
Russia and China seem to be betting their monetary futures on gold. Their long-term maneuverings could seriously undermine the dominance of the US dollar and shift the world’s economic center of power from West to East.
Russia and China buy more gold than any other countries in the world, with Russia leading the way. Over the last decade, the the Central Bank of the Russian Federation has added more than 1,250 tons of gold to its reserves, according to the World Gold Council. At 1,700 tons, Russia’s has the sixth largest gold reserves in the world. Russian gold makes up about 17% of the nation’s wealth.
In 2016 alone, the Russian central bank purchased 201 tons of gold, far more than any other central bank in the world. The People’s Bank of China ranked second, adding 80 tons to its reserves.
Peter Schiff has been talking a lot about the weakening dollar. In a recent Schiff Report video, Peter said he sees the “mother of all dollar bear markets” on the horizon. The dollar has already dropped about 12% on the year, and it’s on track for its worst year since 1985. That was the beginning of a decade long bear market for the dollar. Peter says he thinks this one will be worse.
I think this one is going to be the mother of all dollar bear markets, and I think the dollar is going to fall much further than it did in any prior bear market.”
The following article by economist Dr. Daniel Lacalle, published at the Mises Institute FedWatch, provides some further insights into monetary policy by looking at the strength of the euro in relation to the dollar. His analysis sheds light on the relationship between strong and weak currencies, and the cost and benefits of each.
President Trump wants to scrap the debt ceiling. A lot of pundits and politicos think this is a great idea. Just scan through the mainstream media reporting and you’ll see headlines like this one from New York Magazine. “Trump Wants to Eliminate the Debt Ceiling. He’s Right.”
Peter Schiff sees this whole thing in a different light. He believes eliminating the debt ceiling will just push us more quickly down the road to the mother of all dollar bear markets.
Peter built the case for a dollar crash in his most recent Schiff Report video.
Gold hit its highest price in over a year Friday, breaking through the $1,350 barrier.
Friday morning, the spot price of gold was over $1,352, its strongest level since Aug. 2016. The yellow metal was up 2% on the week and was set for its third consecutive weekly gain.
Debt in the US is the mother of all bubbles.
The US government is more than $20 trillion in debt, with actual unfunded liabilities pushing far higher. Meanwhile, American families have amassed more than $1 trillion in credit card debt alone.
During a speech at Cambridge House IMWC earlier this summer, Peter Schiff discussed the massive levels of government, corporate, and personal debt in the US and how it will eventually take the air out of America’s bubble economy.
Peter starts the speech by showing the economy isn’t nearly as great as the mainstream pundits claim. He highlights the massive levels of debt, how the government manipulates employment numbers, and the very real problem of inflation. Then he shows how Federal Reserve policy has gotten us into this predicament and the choice it will ultimately be forced to make. Peter says in the end, the Fed will sacrifice the dollar.
July was a good month for gold.
The yellow metal was up 2.1% on the month, driven in large part by a weakening dollar and political uncertainty in the US. It was the strongest month for gold since February.
The price hit $1,270.98 on July 31, the highest level since mid-June.
Gold advanced 0.05% in May, according to the Financial Times of London, finishing the month at $1,268.92 per ounce
That may not sound terribly significant, but put in a broader context, we find gold is on quite the win-streak.
May marked the fifth consecutive monthly advance for the yellow metal. The last time gold went on such an extended run was six-and-a-half-years ago. Year-to-date, gold has advanced a healthy 10.6%.