Biden’s Banana Republic

The comments below are an edited and abridged synopsis of an article by Egon von Greyerz

Donald Trump may be the luckiest presidential candidate in history to have lost an election, although he may not realize it at the moment. Nor does Biden realize how unlucky he is to have won. But that will soon change as the presidency goes from crisis to crisis in all areas—monetary, fiscal, social and political. Little will go right during his presidency.

Biden's Banana Republic | BullionBuzz | Nick's Top Six
close in details of money bill de real, effigy of the republic

The next four years could easily be hell for Biden (if he stays the course at all), for the US, and thus for the world.

Up for discussion: Trump obliged, as predicted; debt is up 31x and tax revenue is up 6x; a banana republic; history repeats itself; Biden only has one trick up his sleeve; problems in the financial system, not Covid-19, started the crisis; when the music stops; markets; stocks; gold; and gold’s Maginot line.

In February 2019, von Greyerz wrote about the Gold Maginot Line, which had held as a resistance for gold at $1,350 since 2013. He forecast that the Maginot line would be broken within the following 3 months, and it was.

Looking at the quarterly chart, it seems likely that the BIS had been intervening for six years. Between 2013 and 2018, gold’s highest quarterly closes were five times within $12 of each other.

It can hardly be a coincidence that gold never had a quarterly close above $1,327 between 2013 and 2018 and stopped between $1,315 and $1,327 at five quarter ends. Some invisible hand seems to have been at work.

When the current correction finishes, gold will start the journey to much higher levels.

While it is always interesting to talk about the price of gold, it is really quite meaningless, because physical gold is held for wealth preservation purposes only. To measure its value in fiat money serves little purpose, but the state of the world necessitates holding gold as life insurance.

Whether gold reaches $2,000, $20,000 or $200 trillion has nothing to do with the value of gold, but all to do with a bankrupt financial system and worthless fiat currencies.

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