from Birch Gold Group:
This week, Your News to Know rounds up the latest top stories involving precious metals and the overall economy. Stories include: Fed cuts rates as gold goes past $2,620, say no to tokenized gold and the historic opportunity we see in silver.
Did the Fed just send gold over $2,600/oz?
Before we delve into the nitty, gritty and exciting of the gold market, I’d first like to share something with you. This might be the most thrilling time in the gold market since 1971.
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You could argue the 2008-2011 Great Financial Crisis compares, but I beg to differ. The pandemic panic and lockdowns were the much more like the GFC for gold. Besides, if gold’s current run was similar to the GFC, we’d already be two years into a sideways market.
Instead, gold keeps going higher.
Why? Because of systemic risks, of deep-rooted problems for which there is no easy solution – I’ll get to that. That’s why we have to compare today to Nixon’s decision to leave the gold standard back in 1971. Then, gold went up due to a deeply-rooted problem, a massively-inflated dollar only theoretically backed by gold. The solution? End the gold standard. That decision kicked the inevitable reckoning down the road 50+ years – and it’s now come back to haunt the nation.
Explaining why gold hit yet another all-time high can, by this point, be brief. This time, there was one very clear factor: The Federal Reserve lowered interest rates by 0.5% last week, despite inflation significantly above their 2% target. The scale of the cut, 0.5% rather than 0.25%, might have been surprising to many. Maybe not everyone (Paul Krugman wanted a 3% cut in interest rates!).
Regardless of your take on the Fed’s decision, one thing is pretty clear: They’re now more concerned about the economy than about inflation.
But here’s the thing: Gold’s price went up less than 1% since that announcement. Gold’s price broke $2,600 before the Fed’s announcement.
This tells us that the Fed’s rate cut, despite the massive attention it’s getting in mainstream financial and even general-interest news, really isn’t that important. It’s a small piece of a much larger picture.
For a glimpse of this larger picture, we head over to an interview with Lynette Zang and her views on the U.S. dollar. Here’s the full interview; my thoughts below.
Zang points out we might do well to focus less on gold and more on the U.S. dollar, which she believes is nearing zero purchasing power:
“I believe with all my heart and everything that I know that we’ve already begun the transition to hyperinflation. We’re going to see more borrowing, more money printing, more inflation because they have not killed that beast that they created and continue to create. It’ll become very obvious in 2025.”
Zang wants us to remember that untethering the dollar from gold cost us 99% of the dollar’s purchasing power. And they now seem determined to wipe out that last 1%.
As usual with her commentary, Zang is a straight talker not afraid to take bold stances. She says we are going back to “feudal times.”
Here’s the thing: The bad guys here aren’t some shadowy cabal, but rather the very public figures making and changing our monetary policy, including but certainly not limited to money-printing. Zang thinks we’ll see plenty of money-printing quite soon.
She also points out the smoldering crisis in the banking sector. Of course, we know that the phrase “too big to fail” applies immediately and precisely to big banks. (Some of the recent changes to banking regulation include further lowering bank capital requirements by half – but only if you’re already too gib to fail…
