The money printing ability by the Federal Reserve was the one obstacle it had to overcome in becoming an entity back in 1913. Having achieved liftoff, it stifled itself on the printing side of the ledger. It concentrated monetary policy through interest rates. This is its favorite weapon. However, incessant use causes collateral damage.
This is what happened in 1929. But, since they are part of the status quo package of government, they get the history books to say that tariffs was the root cause of the Great Depression in 1929.
Those same books never devote a deep discussion on gold. Why did the founding fathers choose it? The first Secretary of the Treasury, Hamilton opposed the solid currency. He favored fiat to which we have today. Thank God, the deeper thinkers persuaded the majority to go with a strong currency to start the nation. The history books never acknowledge this sound thinking because it is in direct opposition to our present government make-up.
Gold as a currency...
forces government to live within its means like the rest of us. If someone has a grand project in mind, it takes years to influence the nation and other legislators to get on the wagon. Then, the biggest hurdle, the cost? The government needs to know that there will be a return on the investment. This is its good and bad points. The government was slow to react, but when it did, it has the ability to pay the price for its action. Why, you ask? Because every dollar the government prints must be backed by a dollar's worth of gold. Gold forces government to be accountable!
We do not have that type of government today. We got egos, greed and corruption like Senator Burr who got caught using inside information on the virus. He tells the public that the government has things under control while at the same time, he unloads his stocks before the effects hit the market. He is not the only one. The others have not been caught as of yet.
This is the true thought behind the so-called label, "Gold Bugs!" As the bulls and bears do battle in the stock market, gold is beginning to see some light, especially with the invisible sickness circulating in the air. It is up 15%. Last Friday, it closed at a new recent high of $1756. A week earlier, it touched a higher level of $1788, but it ended that day lower. This is how markets move. It does not matter the direction of up or down. The momentum or trend will only have so much energy. The price of gold on that previous high was building cause in its ability to climb in price. It achieved that cause last Friday with strong volume.
Personality
Stocks and commodities do have a personality. They do better at different times of the year. Retail generally performs better in the fall. Kids wants new clothes for school. The holiday season has its needs. Thus, we shop. Another example is the summer driving season. Oil does better. On the flip side there are seasons where the entities do not do well. Generally, summer is that time for gold. In addition, the anti-gold fiat powers will time their movements to this season. What I'm saying is two things. If gold does not fall, just follows a consolidation range, it will burst upward after the summer season. If it falls, but not below its uptrend level, and you missed getting on board, this will be your opportunity to buy. With that said, always notice the volume behind the trade / price movement.
Charts and Fibonacci...
are two tools everyone should use. If you look at the recent prices in the continuous contract in gold, the price action began around last Christmas. It was a slow, uptrend. Gold reached $1600, but then, retraced back to $1550.
Gold usually acts as a safe haven. With the word on the virus spreading, gold began to act like its historical value. It rose to $1690. Then, again, it retraced. It ran out of energy, however it was building cause to rise even higher.
Dear Reader, always keep in mind that gold is the enemy of our present government, the Federal Reserve and greedy Wall Street funds. They attacked. They sought to keep gold out of the investment picture. It fell back to $1565, but not for long. The energy behind the metal pushed the price over $1700. Yea, Team!
The opposition forces are strong. They counter-attacked! Gold fell to almost $1450. This is reality. Gold will always be attacked by the powers-to-be. Don't ever be ashamed to take profits. No one can pick the top or bottom. Money in your pocket is better than hoping for a new surge to get even.
Fed Printing
This changed the landscape. Now, they use this policy on a yearly basis in their make-up. The government stimulus gave some money to citizens who got forced out of work. They gave the most like they always do, to corporations. However they spend, all their actions help to protect the banking system. This is why and who pushed for the establishment of the Federal Reserve. The names are different, but the motives are the same. Banking privatizes the profits and socializes the losses!
With that said, the market and people are not stupid. Gold resumed its uptrend after the excessive printing of $3 to $6 trillion. This was the charge by gold to the $1788 level. Fibonacci says that gold will continue towards $1856. If it gets strong volume at that time, it should challenge the all-time high of $1920. There will be counter-attacks. Nevertheless, after the dust settles, sometime in 2021, the global economy will start the discussion to end the dollar as the world's reserve currency. This will be the end of the US as the number one nation in the world. China will slowly take that position. The IMF will seek power and introduce a new basket of currencies to use as a reserve. The problem is it will be fiat. The printing will never stop until the public realizes our debt might not be repayable. The Federal Reserve could push out negative interest rates. People, this declares that money is worthless. It is just paper like they print in Zimbabwe. Gold has already broken out against every foreign currency. When this discussion is in the news, gold should be over $1920.
Look at this picture another way. It took the Federal Reserve 94 years of printing to reach the $1 trillion level. Since the financial crisis of 2008, they have printed another $9 trillion or 10x the amount. They are destroying our currency and standard of living. Still another reason to End the Fed
No matter what is said and done, as a nation, new economic problems will surface in the near future.. This could lead to a negative contagion in society with trust. Trust in our currency. Trust in our government. Trust with our neighbors. We are in dangerous times. Try to be positive and be with His peace.
