Sive Morten
Special Consultant to the FPA
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- 18,863
Fundamentals
This week is a reflection of the previous one, as we have more political events than economical. Last week was the opposite situation. Politicals events only called as "political". In fact they have direct relation to gold market performance. Additionally to the Fed minutes, that we've discussed yesterday, we've got Iran President death and EU involving in trade war against China. How we could say that these events are neutral for gold?
Market overview
Gold prices rose to an all-time high on Monday as a cocktail of factors from U.S. rate cut expectations, China's stimulus measures to geopolitical tensions lifted demand, with the momentum also carrying silver to a more than 11-year peak. RJO's Pavilonis expects gold to propel to near $2,500 in the short term as there's a fear of missing out from gold's rally. "There's a lot of non-traders that are calling up. Gold has also been supported by increased increased holdings in China's central bank.
Adding to gold's upside was elevated risk aversion as Iranian President Ebrahim Raisi, was killed in a helicopter crash, analysts at Kitco Metals wrote in a note. Gold’s haven status was in the spotlight after news that Iran’s President Ebrahim Raisi, widely seen as a candidate to become the country’s next supreme leader, was killed in a helicopter crash on Sunday. His death, along with that of Foreign Minister Hossein Amirabdollahian, came at a time of turmoil in Middle East due to the Gaza war. The incident adds a sense of rising geopolitical risks across the region after a China-bound oil tanker was hit by a Houthi missile in the Red Sea on Saturday.
Meanwhile, some analysts also pointed out gold's surge to China's announcement of "historic" steps to stabilise its crisis-hit property sector. China is a key consumer of gold and other industrial metals.
Comments from Fed officials have reflected the U.S. central bank's cautious view of its progress in reining in inflation and the timing of interest rate cuts. Fed Vice Chair Philip Jefferson said on Monday it was too early to tell if inflation slowdown is "long lasting," while Vice Chair Michael Barr said restrictive policy needs more time. Atlanta Fed President Raphael Bostic said it will "take a while" for the central bank to be confident that price growth is on a sustainable downward path.
Gold prices cooled near a record peak hit in the previous session on Tuesday as the dollar held ground, but stayed afloat at the $2,400 level on support from safe-haven interest and prospects of U.S. interest rates easing this year. As gold scaled a record high of $2,449.89 on Monday, "the general picture has not really changed (since March) ... which is just the backdrop of very attractive global macroeconomic and geopolitical environment for gold," said Nikos Kavalis, managing director at Metals Focus. Concerns about the rapidly rising U.S. government debt as the Federal Reserve tries to make for a soft landing are drivers for some investors. Recent data suggested that U.S. inflation resumed its downward trend, however several Fed policymakers remained cautious on cutting rates too soon but ruled out the need for a hike.
Global gold physically-backed gold exchange-traded funds (ETFs) saw net inflows of $1 billion last week - the largest weekly inflow since October 2023, according to the World Gold Council.
Gold prices dipped over 1% on Wednesday as the gold rally cooled with investors booking profits, as traders pulled back from bets on Federal Reserve's rate cuts this year. Federal Reserve officials indicated that it would take longer than previously anticipated to gain greater confidence in inflation moving to 2%, according to the minutes of the U.S. central bank's April 30-May 1 session.
Gold fell to more than a week's low on Thursday, extending its decline for a third straight session, as investors grew apprehensive over U.S. rate cut timings and on strength in U.S. business activity. Making gold less attractive, the dollar cut its losses for the day on U.S. business activity accelerating to the highest level in over two years in May, suggesting that economic growth picked up halfway through the second quarter.
UBS raised its gold price forecasts to $2,600/oz for 2024-end and recommended to buy on dips at around $2,300/oz or below, citing a series of softer U.S. data for April, an upwardly revised central bank demand for gold and ongoing geopolitical uncertainties. Traders' bets signalled growing doubts that the Fed will cut rates more than once in 2024, currently pricing in about a 63% chance of a rate cut by November according to the CME FedWatch Tool.
Hedge funds trading Comex futures boosted bullish bets on gold to a three-week high in the week ending May 14, according to data from the Commodity Futures Trading Commission. The gains suggest that bullion has broken out of what’s been a fairly narrow trading range in recent weeks amid a lack of clarity over the US rate path. Prices are about 17% higher this year.
Gopinath argues “that gold purchases by some central banks may have been driven by concerns about sanctions risk. This is consistent with a recent IMF study confirming that FX reserve managers tend to increase gold holdings to hedge against economic uncertainty and geopolitical including sanctions risk.”
Since then gold has been off to the races. Why? The inflation rate, while slowing, has been coming in on the warmer-than-expected side. But even given that, it has behaved well enough to allow central banks to continue talking about cutting interest rates. So in essence, you have a perceived bias towards lower “real” (after-inflation) interest rates. That’s classically a good environment for gold — one where somewhat corrosive inflation appears quite possible but policymakers aren’t motivated to do anything about tackling it. As Tim Hayes of Ned Davis Research puts it, “the continuation of current yield trends should perpetuate what remains a strong long-term uptrend in gold.”
China’s bullion imports slowed last month as demand in the world’s biggest consumer begins to buckle in the face of record prices. Overseas purchases of physical gold fell to 136 tons in April, a 30% decline from the previous month and the lowest total for the year, according to the latest customs data.
Citi raises its Gold price target to 3000$ this year. Citigroup Global Research Global Head Max Layton says gold is on track to reach $3,000 in the coming 12 months. He also comments on what he calls “off the charts” demand for gold coming from China, where the market is seeing a “big shift” from property spending into gold retail.
MAJOR EVENTS OF THE WEEK
No doubts this is death of Iran's President and minister of foreign affairs. But we've made a few commentaries about this subject in Telegram. There will be the consequences and they already are - as economical as political. But more to come. The second news is that the European Union, apparently, continues to destroy the world trade system following the example of the United States. As the United States has significantly increased duties on some goods from China. It wasn't just cars that were affected. The duty on chips was doubled to 50%, on batteries from 7.5% to 25%, on solar panels — from 0 to 25%. And now Europe is thinking about imposing similar restrictions on Chinese exports.
Maybe this is understandable due to overall situation in this sphere. But the already breathless old model of financial capitalism in the Bretton Woods is likely to be dealt another hard blow soon.
The US and G7 are coming closer to stealing of Russian frozen reserves. We suggest that possible compromise has not been reached as V. Putin signed the law letting to expropriate western assets in Russia equals to the steps of G7 countries. Sooner or later but J. Yellen will press then down and force to sign this act. This will be the end for the EUR as international reserve currency. It seems that silent decision on destruction of old Bretton-Woods system is already taken and now, until it is still working, the major beneficiaries trying to grab what is still possible to grab.
Other countries understand this also. With the USSR crash, major global reserves were transferred into US Dollar. Now we see the reversal of this process. Take a look how sharp situation with reserves has changed in 1989-1991 - the period when USSR has fallen apart.
This is the third time the Fed has held a conference on the international role of the dollar. The Fed management became concerned with this topic in 2022, and at this level they traditionally discuss what is starting to worry. while the Fed is discussing, China continues to slowly convert its external transactions to the yuan: the share of the yuan in cross-border transactions of the non-financial sector in China grew to record levels by April: 54% in outgoing payments and 52% in incoming payments.
On average, over a 12-month period, the share of transactions in yuan exceeded 50% for the first time, while the share of dollar transactions fell below 45%.
In May, the IMF also spoke out on the topic “ Geopolitics and its Impact on Global Trade and the Dollar”, publishing a rather interesting graph regarding the reserves of the countries of the “Chinese bloc” and the “American bloc”; the former increased the share of gold over 10 years from 2% of reserves to 7 % of reserves. The process is going on... slowly, but it is obvious that fragmentation is only intensifying and the trends here are quite stable.
Еhe collapse of the dollar-centric system has begun, and the first to be sacrificed will be the buffer currencies - the yen, and if this is not enough, then the euro (etc.), that is, the Central Banks, which have been carried away by printing money in recent years. A lot of new money was printed, but no goods mass or production complexes were created for it in the USA, Japan and Europe.
The devaluation of the yen will create a powerful flow of capital from Japan to the United States, which will help maintain the dollar pyramid for several more years. But the Japanese will pay for this with a fall in real incomes and living standards. If everything goes well, then the euro will be sacrificed to the dollar, with its epicenter in Greece and Italy.
The US is seriously busy with the China. The House Armed Services Committee on Wednesday backed a provision requiring the Pentagon to submit to Congress a study on how the U.S. military could implement a naval blockade of fossil fuel supplies to China in the event of armed conflict between the two countries. China starts big war games around Taiwan and some US forces already arrived on Island. China's participation in the global trading system has come under fire from G7 finance chiefs in a show of unity accompanied by the threat of further escalation.
Last month, China recorded its largest bank run in history, amounting to just under 4 trillion yuan (~$560 billion):
Money managers became the most bullish on gold in more than four years as prices surged to a fresh record earlier this week. Hedge funds and other large speculators boosted their net-long position in Comex futures and options by 21,030 contracts in the week through May 21, according to US government data. That’s the highest since mid-April 2020.
And gold is not an exception. The embargo on trade in Russian copper, nickel and aluminum imposed by the US and UK is another step towards turning national commodity exchanges into virtual trading venues. The embargo comes at a time when inventories in LME and CME warehouses are at multi-year lows. So, on March 8, 2022, exchange prices for nickel increased 3.5 times due to a margin call from one of the clients. As a result, transactions made that day in the amount of $3.9 billion were cancelled. Many metal traders perceived this as a violation of fundamental principles. As a result, liquidity flows to another exchange – Shanghai. Supplies of Russian metals will apparently be redirected there.
Now China stands under unprecedented pressure from the West, forced to start Real Estate QE to flow domestic economy with money and boost domestic demand. Very soon western markets will be closed to them. The devaluation of yan now looks unavoidable, if even they will burn all US dollar reserved that they have. Recently China has tried to set the bridge with EU, but this initiative has failed under the US pressure. It seems that expropriation of Russian assets is not as act of West against Russia as an the US act against possible China-EU cooperation. Or both.
2 cents about growth and why we do not support idea of any short positions on gold market. The main reason is not about gold's over-extension, but the role of the dollar in world finance is being reconsidered. If the Central Banks of China and India buy gold again, it will be 3000, does anyone there have hopes for the Fed to cut rates, no - that’s not the point. In general, the growth is not as big, compare with copper and food, for example. Against their background, gold is rather behaving moderately (and oil is generally openly slowing down).
There is another reason to be wary - the gold/oil ratio has approached 30 (2450 / 84.5 = 28.9), which means that the world is on the verge of another crisis. Which is exactly what we see from other signs: all the markets seem to have frozen in anticipation of important events, and analysts and gurus on the contrary are going crazy.
Thus, here is what we have in short:
– Gold rose in price to a new record of $2,440 (+4% for the week). The reasons are clear and mentioned many times here.
– The 10-year Treasury yield is returning to growth after hitting a one-month low of 4.33%.
– The dollar index lost 1% last week, but a reversal from the level of 104 is already in sight.
– Large Chinese Real Estate QE to support markets.
– Of course, where would we be without Japan: the guys burned $59 billion to protect the yen exchange rate, lowering it from 160 to 153 yen per dollar. It didn’t help for a long time (and couldn’t): the yen is now trading at 156. Well, GDP fell in the first quarter. Due to import inflation, stagnation has been going on for 3 months, but everything is fine.
And no one is embarrassed by a feast during the plague - American stock indices are updating their next historical highs. Is there something wrong with the global financial system right now? We are waiting for "the Event". For example - Thomas Massie Introduces Bill to Abolish Federal Reserve.
It might sound like a joke, but history tells that big epic problems usually are resolving with stupid and crazy solutions. The large the problem of the national debt will be solved in approximately this way. That is, by administrative, not economic methods. In this regard, a colleague also remembered Sir Arthur Conan Doyle and his story “ The Red-Headed Union .” Indeed, there are some similarities. New times are coming: if you are not a citizen or resident of the United States, then you do not need to be in the dollar in any form. Of course, Mr. Massie is a little comical with his initiative, but that’s it for now. Very often happens that somebody was thought like a clown but later everything goes with his/her forecast.
World slowly but stubbornly is dropping into the chaos. "War party" and "Liberal forces" start opening "Overton's window" with killing nationalist politics, such as Fico, Raisi etc. They "test" this on enemies, but very soon this practice could start as in EU (which is already there) as in the US (D. Trump also got warnings). How many MANPADS are in underground floors in EU and US? And they can chose the "correct" plane to shoot down, no doubts. These elites are dying, but they try to resolve two problems. First is - turn to ruins and chaos everything that they could, because it is easier to build the new on ruins and legitimize existed shadow power institutes. And when chaos is everywhere - it easier to hide the footprints and take the control.
But they have to restrict entry of some big and strong player, such as China, Russia or any other. That's why they initiated social and economical problems in China, conflict on the borders for Russia and Middle East escalation for Iran. They do not have a target to defeat big players. They have no resources for that. They just want to tight them in a swamp of problems. For example, they do no not believe that Ukraine wins, but they want Russia to absorb all these problems for 20-30 years and not enter to EU or the US.
As you understand in such a game plans are never realize perfect. Always will be some extra ordinary situations that goes not with the plan, surprising turns etc. Taking in consideration the overall economic environment that envelops these big geopolitical game, it is impossible to find "safe" asset. I do not see what alternative could be to the precious metals and commodities in general. So, let's keep going... big gold rally seems still ahead.
This week is a reflection of the previous one, as we have more political events than economical. Last week was the opposite situation. Politicals events only called as "political". In fact they have direct relation to gold market performance. Additionally to the Fed minutes, that we've discussed yesterday, we've got Iran President death and EU involving in trade war against China. How we could say that these events are neutral for gold?
Market overview
Gold prices rose to an all-time high on Monday as a cocktail of factors from U.S. rate cut expectations, China's stimulus measures to geopolitical tensions lifted demand, with the momentum also carrying silver to a more than 11-year peak. RJO's Pavilonis expects gold to propel to near $2,500 in the short term as there's a fear of missing out from gold's rally. "There's a lot of non-traders that are calling up. Gold has also been supported by increased increased holdings in China's central bank.
Adding to gold's upside was elevated risk aversion as Iranian President Ebrahim Raisi, was killed in a helicopter crash, analysts at Kitco Metals wrote in a note. Gold’s haven status was in the spotlight after news that Iran’s President Ebrahim Raisi, widely seen as a candidate to become the country’s next supreme leader, was killed in a helicopter crash on Sunday. His death, along with that of Foreign Minister Hossein Amirabdollahian, came at a time of turmoil in Middle East due to the Gaza war. The incident adds a sense of rising geopolitical risks across the region after a China-bound oil tanker was hit by a Houthi missile in the Red Sea on Saturday.
Meanwhile, some analysts also pointed out gold's surge to China's announcement of "historic" steps to stabilise its crisis-hit property sector. China is a key consumer of gold and other industrial metals.
Comments from Fed officials have reflected the U.S. central bank's cautious view of its progress in reining in inflation and the timing of interest rate cuts. Fed Vice Chair Philip Jefferson said on Monday it was too early to tell if inflation slowdown is "long lasting," while Vice Chair Michael Barr said restrictive policy needs more time. Atlanta Fed President Raphael Bostic said it will "take a while" for the central bank to be confident that price growth is on a sustainable downward path.
Gold prices cooled near a record peak hit in the previous session on Tuesday as the dollar held ground, but stayed afloat at the $2,400 level on support from safe-haven interest and prospects of U.S. interest rates easing this year. As gold scaled a record high of $2,449.89 on Monday, "the general picture has not really changed (since March) ... which is just the backdrop of very attractive global macroeconomic and geopolitical environment for gold," said Nikos Kavalis, managing director at Metals Focus. Concerns about the rapidly rising U.S. government debt as the Federal Reserve tries to make for a soft landing are drivers for some investors. Recent data suggested that U.S. inflation resumed its downward trend, however several Fed policymakers remained cautious on cutting rates too soon but ruled out the need for a hike.
Global gold physically-backed gold exchange-traded funds (ETFs) saw net inflows of $1 billion last week - the largest weekly inflow since October 2023, according to the World Gold Council.
Gold prices dipped over 1% on Wednesday as the gold rally cooled with investors booking profits, as traders pulled back from bets on Federal Reserve's rate cuts this year. Federal Reserve officials indicated that it would take longer than previously anticipated to gain greater confidence in inflation moving to 2%, according to the minutes of the U.S. central bank's April 30-May 1 session.
Gold fell to more than a week's low on Thursday, extending its decline for a third straight session, as investors grew apprehensive over U.S. rate cut timings and on strength in U.S. business activity. Making gold less attractive, the dollar cut its losses for the day on U.S. business activity accelerating to the highest level in over two years in May, suggesting that economic growth picked up halfway through the second quarter.
UBS raised its gold price forecasts to $2,600/oz for 2024-end and recommended to buy on dips at around $2,300/oz or below, citing a series of softer U.S. data for April, an upwardly revised central bank demand for gold and ongoing geopolitical uncertainties. Traders' bets signalled growing doubts that the Fed will cut rates more than once in 2024, currently pricing in about a 63% chance of a rate cut by November according to the CME FedWatch Tool.
Hedge funds trading Comex futures boosted bullish bets on gold to a three-week high in the week ending May 14, according to data from the Commodity Futures Trading Commission. The gains suggest that bullion has broken out of what’s been a fairly narrow trading range in recent weeks amid a lack of clarity over the US rate path. Prices are about 17% higher this year.
Gopinath argues “that gold purchases by some central banks may have been driven by concerns about sanctions risk. This is consistent with a recent IMF study confirming that FX reserve managers tend to increase gold holdings to hedge against economic uncertainty and geopolitical including sanctions risk.”
Since then gold has been off to the races. Why? The inflation rate, while slowing, has been coming in on the warmer-than-expected side. But even given that, it has behaved well enough to allow central banks to continue talking about cutting interest rates. So in essence, you have a perceived bias towards lower “real” (after-inflation) interest rates. That’s classically a good environment for gold — one where somewhat corrosive inflation appears quite possible but policymakers aren’t motivated to do anything about tackling it. As Tim Hayes of Ned Davis Research puts it, “the continuation of current yield trends should perpetuate what remains a strong long-term uptrend in gold.”
China’s bullion imports slowed last month as demand in the world’s biggest consumer begins to buckle in the face of record prices. Overseas purchases of physical gold fell to 136 tons in April, a 30% decline from the previous month and the lowest total for the year, according to the latest customs data.
Citi raises its Gold price target to 3000$ this year. Citigroup Global Research Global Head Max Layton says gold is on track to reach $3,000 in the coming 12 months. He also comments on what he calls “off the charts” demand for gold coming from China, where the market is seeing a “big shift” from property spending into gold retail.
MAJOR EVENTS OF THE WEEK
No doubts this is death of Iran's President and minister of foreign affairs. But we've made a few commentaries about this subject in Telegram. There will be the consequences and they already are - as economical as political. But more to come. The second news is that the European Union, apparently, continues to destroy the world trade system following the example of the United States. As the United States has significantly increased duties on some goods from China. It wasn't just cars that were affected. The duty on chips was doubled to 50%, on batteries from 7.5% to 25%, on solar panels — from 0 to 25%. And now Europe is thinking about imposing similar restrictions on Chinese exports.
Maybe this is understandable due to overall situation in this sphere. But the already breathless old model of financial capitalism in the Bretton Woods is likely to be dealt another hard blow soon.
The US and G7 are coming closer to stealing of Russian frozen reserves. We suggest that possible compromise has not been reached as V. Putin signed the law letting to expropriate western assets in Russia equals to the steps of G7 countries. Sooner or later but J. Yellen will press then down and force to sign this act. This will be the end for the EUR as international reserve currency. It seems that silent decision on destruction of old Bretton-Woods system is already taken and now, until it is still working, the major beneficiaries trying to grab what is still possible to grab.
Other countries understand this also. With the USSR crash, major global reserves were transferred into US Dollar. Now we see the reversal of this process. Take a look how sharp situation with reserves has changed in 1989-1991 - the period when USSR has fallen apart.
This is the third time the Fed has held a conference on the international role of the dollar. The Fed management became concerned with this topic in 2022, and at this level they traditionally discuss what is starting to worry. while the Fed is discussing, China continues to slowly convert its external transactions to the yuan: the share of the yuan in cross-border transactions of the non-financial sector in China grew to record levels by April: 54% in outgoing payments and 52% in incoming payments.
On average, over a 12-month period, the share of transactions in yuan exceeded 50% for the first time, while the share of dollar transactions fell below 45%.
In May, the IMF also spoke out on the topic “ Geopolitics and its Impact on Global Trade and the Dollar”, publishing a rather interesting graph regarding the reserves of the countries of the “Chinese bloc” and the “American bloc”; the former increased the share of gold over 10 years from 2% of reserves to 7 % of reserves. The process is going on... slowly, but it is obvious that fragmentation is only intensifying and the trends here are quite stable.
Еhe collapse of the dollar-centric system has begun, and the first to be sacrificed will be the buffer currencies - the yen, and if this is not enough, then the euro (etc.), that is, the Central Banks, which have been carried away by printing money in recent years. A lot of new money was printed, but no goods mass or production complexes were created for it in the USA, Japan and Europe.
The devaluation of the yen will create a powerful flow of capital from Japan to the United States, which will help maintain the dollar pyramid for several more years. But the Japanese will pay for this with a fall in real incomes and living standards. If everything goes well, then the euro will be sacrificed to the dollar, with its epicenter in Greece and Italy.
The US is seriously busy with the China. The House Armed Services Committee on Wednesday backed a provision requiring the Pentagon to submit to Congress a study on how the U.S. military could implement a naval blockade of fossil fuel supplies to China in the event of armed conflict between the two countries. China starts big war games around Taiwan and some US forces already arrived on Island. China's participation in the global trading system has come under fire from G7 finance chiefs in a show of unity accompanied by the threat of further escalation.
Last month, China recorded its largest bank run in history, amounting to just under 4 trillion yuan (~$560 billion):
Money managers became the most bullish on gold in more than four years as prices surged to a fresh record earlier this week. Hedge funds and other large speculators boosted their net-long position in Comex futures and options by 21,030 contracts in the week through May 21, according to US government data. That’s the highest since mid-April 2020.
And gold is not an exception. The embargo on trade in Russian copper, nickel and aluminum imposed by the US and UK is another step towards turning national commodity exchanges into virtual trading venues. The embargo comes at a time when inventories in LME and CME warehouses are at multi-year lows. So, on March 8, 2022, exchange prices for nickel increased 3.5 times due to a margin call from one of the clients. As a result, transactions made that day in the amount of $3.9 billion were cancelled. Many metal traders perceived this as a violation of fundamental principles. As a result, liquidity flows to another exchange – Shanghai. Supplies of Russian metals will apparently be redirected there.
Now China stands under unprecedented pressure from the West, forced to start Real Estate QE to flow domestic economy with money and boost domestic demand. Very soon western markets will be closed to them. The devaluation of yan now looks unavoidable, if even they will burn all US dollar reserved that they have. Recently China has tried to set the bridge with EU, but this initiative has failed under the US pressure. It seems that expropriation of Russian assets is not as act of West against Russia as an the US act against possible China-EU cooperation. Or both.
2 cents about growth and why we do not support idea of any short positions on gold market. The main reason is not about gold's over-extension, but the role of the dollar in world finance is being reconsidered. If the Central Banks of China and India buy gold again, it will be 3000, does anyone there have hopes for the Fed to cut rates, no - that’s not the point. In general, the growth is not as big, compare with copper and food, for example. Against their background, gold is rather behaving moderately (and oil is generally openly slowing down).
There is another reason to be wary - the gold/oil ratio has approached 30 (2450 / 84.5 = 28.9), which means that the world is on the verge of another crisis. Which is exactly what we see from other signs: all the markets seem to have frozen in anticipation of important events, and analysts and gurus on the contrary are going crazy.
Thus, here is what we have in short:
– Gold rose in price to a new record of $2,440 (+4% for the week). The reasons are clear and mentioned many times here.
– The 10-year Treasury yield is returning to growth after hitting a one-month low of 4.33%.
– The dollar index lost 1% last week, but a reversal from the level of 104 is already in sight.
– Large Chinese Real Estate QE to support markets.
– Of course, where would we be without Japan: the guys burned $59 billion to protect the yen exchange rate, lowering it from 160 to 153 yen per dollar. It didn’t help for a long time (and couldn’t): the yen is now trading at 156. Well, GDP fell in the first quarter. Due to import inflation, stagnation has been going on for 3 months, but everything is fine.
And no one is embarrassed by a feast during the plague - American stock indices are updating their next historical highs. Is there something wrong with the global financial system right now? We are waiting for "the Event". For example - Thomas Massie Introduces Bill to Abolish Federal Reserve.
It might sound like a joke, but history tells that big epic problems usually are resolving with stupid and crazy solutions. The large the problem of the national debt will be solved in approximately this way. That is, by administrative, not economic methods. In this regard, a colleague also remembered Sir Arthur Conan Doyle and his story “ The Red-Headed Union .” Indeed, there are some similarities. New times are coming: if you are not a citizen or resident of the United States, then you do not need to be in the dollar in any form. Of course, Mr. Massie is a little comical with his initiative, but that’s it for now. Very often happens that somebody was thought like a clown but later everything goes with his/her forecast.
World slowly but stubbornly is dropping into the chaos. "War party" and "Liberal forces" start opening "Overton's window" with killing nationalist politics, such as Fico, Raisi etc. They "test" this on enemies, but very soon this practice could start as in EU (which is already there) as in the US (D. Trump also got warnings). How many MANPADS are in underground floors in EU and US? And they can chose the "correct" plane to shoot down, no doubts. These elites are dying, but they try to resolve two problems. First is - turn to ruins and chaos everything that they could, because it is easier to build the new on ruins and legitimize existed shadow power institutes. And when chaos is everywhere - it easier to hide the footprints and take the control.
But they have to restrict entry of some big and strong player, such as China, Russia or any other. That's why they initiated social and economical problems in China, conflict on the borders for Russia and Middle East escalation for Iran. They do not have a target to defeat big players. They have no resources for that. They just want to tight them in a swamp of problems. For example, they do no not believe that Ukraine wins, but they want Russia to absorb all these problems for 20-30 years and not enter to EU or the US.
As you understand in such a game plans are never realize perfect. Always will be some extra ordinary situations that goes not with the plan, surprising turns etc. Taking in consideration the overall economic environment that envelops these big geopolitical game, it is impossible to find "safe" asset. I do not see what alternative could be to the precious metals and commodities in general. So, let's keep going... big gold rally seems still ahead.
