Gold – A perfect storm for 2019
“To summarise the point; far from there being a dollar shortage, as market participants believe, the world is awash with dollars to an extraordinary degree. The great dollar unwind is now overhanging markets, which will remove the principal depressant on the gold price. And when it begins, as a source of supply these hot-money dollars will be seen as the continuation of escalating supply, with the prospect of future US trade and budget deficits to be discounted. These dynamics are a duplication of those that led to the failure of the London gold pool in the late-sixties, which led to the abandonment of the Bretton Woods gold-dollar relationship in 1971. And as I argue later in this article, the supply of physical liquidity in bullion markets to satisfy demand arising from dollar liquidation is extremely tight.”
USAGOLD note: Alasdair Macleod covers much ground in this important essay. For those who would like to establish solid intellectual footing in a contemporary context for what many believe will be the next leg in gold’s secular bull market, Gold – A perfect storm for 2019 is a good place to start. His allusions to the late 1960s struck a chord with me – a time when an upward revaluation of gold was roiling under the placid surface of the global monetary scene. Only a handful noticed. According to Macleod, the revaluation process is scheduled to begin in 2019. His essay is highly recommended. . . . .
Repost from 12-23-2018