“The dollar has been the best horse in the glue factory.”
– Sr. Precious Metals Advisor Steve Rand
Once again, there’s a glaring disconnect between what the American people are hearing from the political class and what they’re experiencing on the ground. Despite all the chatter of a booming dollar rally, the cost of living continues to rise.
Watch this week’s The Gold Spot to hear Sr. Precious Metals Advisor Steve Rand and Information Consultant Sebastian Gonzales explain the truth of the dollar’s performance, the current state of the US economy, and how central banks are responding.
The Phantom Dollar Rally
The US dollar extended its longest growth streak in almost a decade rising for a ninth consecutive week. While a stronger USD is benefitting American travelers abroad, it’s not having the same positive effects at home. This apparent contradiction stems from how the dollar’s performance is gauged.
The dollar index only compares the greenback’s value against other major currencies, ignoring other crucial economic pressures. Stubborn domestic inflation is keeping the cost of living high, effectively negating all dollar gains.
“Everything costs more money. Inflation is clearly going up. [The] cost of living is soaring.”
– Steve Rand
The current inflation rate of 3.7% is down from relative highs in early 2022 yet remains nearly double the Federal Reserve’s target rate of 2%. Until our financial czars can rein in inflation, the dollar’s upward momentum remains moot. Given the globe’s eagerness to pursue de-dollarization, any USD strength is most likely temporary.
The True State of the US Economy
A simplistic view of the US economy might suggest relative strength and stability given the dollar’s recent highs. However, virtually every other indicator spells disaster for markets.
💵 US National Debt Hits $33 Trillion Dollars!
US debt just blew past $33 trillion, and Treasury Secretary Janet Yellen has the audacity to suggest she’s not worried by the towering deficit. The Congressional Budget Office (CBO) estimates mounting US spending will cost American taxpayers $663 billion just to service the debt.
💳 US Consumer Credit Card Debt Jumps Over $1 Trillion Dollars!
Unfortunately, the country’s spending problem isn’t relegated to the political elite. Total credit card debt among American consumers surged to over $1 trillion in Q2 of 2023, marking the highest point since tracking began nearly 25 years ago.
Central Bank Gold Binge Surges
Over the past few years, central banks have been buying up record amounts of gold to stave off the effects of global economic uncertainty and shore up their economies. That trend is expanding as more and more governments seek shelter in precious metals. China, one of the largest consumers of gold, clocked its 10th straight month of gold purchases. Other countries including Poland, India, Uzbekistan, and the Czech Republic are following suit by stacking gold reserves. A gold rush in Japan and Australia, sparked by inflation and currency devaluation, has driven the metal’s domestic prices to new highs. With gold demand surging worldwide, it’s only a matter of time before the gold rally extends across the globe.
The Beckoning Dollar Crunch
The dollar’s privileged position as the world reserve currency protects US investors from feeling the full weight of economic burdens that are currently crushing foreign consumers. However, the dollar’s stronghold can only last for so long as the dollar’s hegemony weakens and domestic fiscal blunders abound. Smart money investors are following in the footsteps of central banks by adding to their gold holdings to protect their wealth from the economic threats ahead.
“Gold has a tremendous amount of upward potential [and] huge fundamentals behind it.”
– Steve Rand
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🛢️ Petrodollar Report – Understand how the US dollar became the world reserve currency, and follow its ongoing challenges from home and abroad.
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