Gold is getting smacked around hard when priced in dollars.
While Greece contagion (and it will come in the fall) has not bolstered the precious metal, it has strengthen the greenback, which clobbers all dollar-based commodities.
This is the theory behind Janet Yellen’s September rate hike.
Raise rates and weaken the dollar so our international conglomerates can profit off their exports, without bringing that revenue here to be taxed.
Strong dollar policy has been relegated to the trash bin by the Obama Administration since the beginning. Neither Treasury chiefs Tim Geithner or Jack Lew spoke up for the greenback in any meaningful way during their tenure. Lip service at best is what we get from the White House.
The globalist view is to weaken the dollar so our debt is not that costly to overseas buyers, since there is little appetite for the paper here.
My pet peeve with gold has little to do with the metal itself, but the reaction or should I say joy certain business “journalists” derive from its fall.
Bloomberg commentators, because I hesitate to call them journalists — since some only seem to be social media darlings as their credentials — are doing back flips over the price cratering the last month.
My thought is that Mayor Mike may be directing this vitriol towards precious metals since his headshot is in the dictionary under globalist.
Either way, I don’t believe for a second that the price will languish at these levels much longer for two concrete reasons.
There is a commodity price manipulation probe going on, which will show how bulge banks such as JPMorgan and Citibank have pushed prices down in the gold paper market just like Libor charges.
And secondly, this fall will see the global economy take another leg down with no growth in the US and slowing growth from China. Europe is already in a recession, it’s just that you have to know where to look.