Gold is a monetary metal. As such, it trades in line with the world’s other major currencies. When the US dollar — the global reserve currency — declines, gold will usually rise…and vice versa.
Over the past 100 years, the financial establishment has done its best to remove gold from the financial system. That’s because, in its ultimate representation as debt-free money, gold represents an existential threat to government-controlled fiat currency.
Despite gold no longer being a part of the commercial banking system, it still plays an important role in the larger, central banking system. It represents the ultimate form of trust, and it has no counterparty.
For that reason, The Rum Rebellion strongly advocates that gold should be a part of all investor’s portfolios. However, we are not gold bugs. We believe there is a time to own gold and gold stocks and a time to stay away.
We’ll write on the topic of gold and currencies (including the Aussie dollar) often, and keep you up to date on where we think gold is sitting within the bull/bear cycle.
No surprise gold has been rallying here. But for stocks, the surprise is that they’re holding up as well as they are considering the slow growth foreshadowed by the bond markets and trade impasses…
1999 was also the tail end of the longest economic expansion on record and the greatest stock market boom ever. Did it also mark Peak America, the beginning of the end of America’s great triumph?
Is this the start of the fear? The Dow and S&P both plunged nearly 3% overnight. The NASDAQ sank 3.5%. Yesterday, the ASX 200 fell around 2%. It could lose the same again today.
Negative rates act kind of like a tax on your wealth. Having savings in the bank will lose you money instead of paying your interest. Low interest rates have pushed up asset prices, and punishes…
Trump is clearly concerned about a strong US dollar as we move into a slower growth global environment. The thing is, the US is the best of a bad bunch when it comes to a…
I didn’t intend to go on about central banks and their monetary meddling today. But you have to be aware of what they’re doing in order to give yourself a fair chance of protecting your…
First, fiat currencies are only backed by confidence. Once that confidence is lost it’s hard to regain it. Second, when people see the value of their money erode, they will look for an alternative store…
What I haven’t talked about so much is the silver price. But it’s now starting to get sucked into gold’s orbit. Overnight, the price of silver surged to a 12-month high in US dollars…
If no one else is going to start questioning their motives, then we certainly should. Because you really have to wonder, don’t you? What is the point of ongoing rate cuts? If it’s to revive…
How do you repair an overleveraged balance sheet? You either sell off assets to pay down debt, or do a capital raising to increase equity. The global economy can’t sell assets to itself. So that…