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<\/a><\/p>\nThat logic might have made sense in the past, but I don\u2019t think it does now. Let me explain.<\/p>\n
First of all, gold didn\u2019t even catch up to inflation yet. The commodities such as olive oil went up 2x and I don\u2019t see anybody expecting it to come down. However, the more important reason why people expect it to crash is the expectation that the Americans control the gold price in order to prop up the dollar, and since they are still in power, the expectation is that they will manage to crash the gold just because they always do.<\/p>\n
The problem with this logic is that the dollar, at this point, is the world\u2019s hottest hot potato. Everybody who has it is trying to get rid of it, because America is using it as a weapon.<\/p>\n
China, in particular, invented a very good method of simultaneously getting rid of their dollar reserves and buying all the dumped gold from the West, and it\u2019s so elegant I\u2019m amazed that the Russians didn\u2019t think of it. You see, all the Chinese did was set the gold price on the Shanghai exchange $100 above what they sell it for in London. As a result, everybody wanting to earn a quick profit will buy gold in the West and sell it in China for more money. If the West wants to dump gold to prop up the dollar, they can feel free, but everybody will quickly scoop it up and sell it in China, thus pumping the Western gold to China and Chinese dollar reserves to the West. As a result, this makes China more resistant to Western financial pressures, prepares it for a future where all the currencies are either gold backed or irrelevant, and depletes the Western gold reserves. If the West tries to counter this by raising the price of gold, it will actually increase the buying pressure because the retail buyers might smell the coffee and jump on the hype train. If they prohibit sales of gold for dollars, it\u2019s the end of the dollar. The beauty of the thing is that they can\u2019t even prohibit China from buying up their gold, because formally speaking it\u2019s not China doing it, it\u2019s everybody who wants to make money on the Shanghai exchange.<\/p>\n
So, I guess if you think gold will crash, just because it always did, I would say you don\u2019t understand what\u2019s going on in the world. What\u2019s going in the world is the end of America, the end of Dollar, and the return of gold as money. No, Bitcoin is not the new gold. Gold is the new gold, and the fact that the central banks are the ones buying most of it at this time, and the fact that the retail buyers don\u2019t get it yet, means that you will either have gold, or you will be bankrupt.<\/p>\n
How do I know that this present gold price rise is not a retail phenomenon? Because you can go to your local bullion dealer and buy pretty much whatever you want. When it\u2019s a retail phenomenon, everything instantly vanishes from the shelves, because the supply of retail products is very limited, being tailored for the normal levels of demand.<\/p>\n
Also, according to my estimates, gold is still super cheap considering where it will be soon. That\u2019s why the Chinese can put the price at +$100 over spot; it\u2019s because where spot is. They don\u2019t think they are losing money doing it, they think it\u2019s the best deal ever.<\/p>\n","protected":false},"excerpt":{"rendered":"
Gold has been growing lately, and the question some people ask is whether it\u2019s time to sell because it might crash. That logic might have made sense in the past, but I don\u2019t think it does now. Let me explain. … Continue reading