Gold & The Weak Dollar
gold coin
What does the weak dollar really mean to an investor? We often read about large, disturbing macro trends, yet rarely think about the micro implications. What does it matter if the budget deficit is $800 billion, or 6.5% of GDP, versus the current estimate of $1.6 trillion, or 13% of GDP? Admittedly, the ramifications over short intervals of time are difficult to discern. This is one of the ways that policymakers sell programs such as stimulus checks or “cash for clunkers.” These programs are all about political posturing and creating the appearance of forging a solution. And while they deliver some semblance of short-term relief to a recession-battered public, crudely put, they are analogous to abetting drug addiction. Give the addict a quick fix and he’s momentarily liberated from his torment and sickness. The real solution, withholding the drug, requires a more painful short-term outcome but gives the addict a chance at recovery and renewal.
gold mining belt buckles
The reality is we are seeing currency and credit DEFLATION.
The central banks can ‘print’ as much money as they want, but when no one will borrow/take it and loan it into circulation it doesn’t matter… You can’t get fiat money into circulation any other way.
Crystalline leaf