Well it happened last night.
Uncle Ben hit print, the USD crashed against the dollar.
And why wouldn’t it? Gold is money.
When you have Europe and the US both with open-ended commitments to print paper money, what would you rather have in your pocket?
I think a very simple argument – almost Occam’s-Razor-like – is that if I’m not allowed to print money for my (very excellent) clients and hand it to them, why are exceptions made for governments and banks, who can create money LITERALLY out of thin air. (Yes, literally – they do it by computer).
Anyway when you print loads of money and you’re a government, you have – by definition – done inflation. No, not caused. Done it.
And inflation means one thing for sure – you and I lose.
Meanwhile, in China, the currency war continues and they buy more and more… you guessed it, GOLD.
Probably no-one will read this post but in a few years if we’re trading in RMB, then I’ll be able to dig this out and claim amazing powers of analysis and prediction…