JAN 31, 2018
The Trump administration is a big fan of a weak US dollar. Steve Mnuchin described the trade benefits of such in Davos just last week.
If history is any indication, [the Trump administration’s weak-dollar policy] will inevitably lead to higher prices for all hard commodities like oil and precious metals, like gold, silver. Gold is the perfect hedge against Dollar devaluation.
It’s no secret that global US economic rivals such as Russia and China have been adding aggressively to their gold holdings; in fact those two alone have combined for a 300%+ increase in just the past decade.
Since 2015 the Russian Central Bank has added over 558 tons of gold to its vaults. The US gold reserves that are never properly audited or even shown to journalists or members of the Congress, triggering speculation that the US gold reserves are gone. The only recent “proof” of the US gold reserves existence is a photo of Steven Mnuchin holding a single gold bar.
The Trump administration should be careful what it wishes for. Overtly signaling the desire for a weak dollar is one thing. Getting it is likely. But it isn’t as if you then get to flip a switch down the road when you want it strong again. Especially when your trading adversaries are loading themselves to the gills with gold.
The Russian gold reserve, accumulated during Vladimir Putin’s terms in office, is definitely real and it will experience a parabolic increase in value, if the US decides to radically devalue its currency. The best advice that can be given to anyone interested in surviving the global currency wars is to buy gold.