Goldman Warns “Real Concerns Are Emerging” About The Dollar As Reserve Currency; Goes “All In” Gold
In his morning critique of goldbugs’ resurgent optimism about the future of gold, which has exploded alongside the price of precious metals, which in turn have been tracking the real 10Y rate tick for tick…
… Rabobank’s Michael Every argued from the familiar position of one who views the modern monetary system as immutable, and bounded by the “Venn Diagram” confines of the dollar as a reserve currency and financial assets as a bedrock of modern household wealth, of which as Paul Tudor Jones recently calculated, there is just over $300 trillion worth, compared to just $10 trillion in total gold value.
Indeed, according to Every, the surge in gold is meaningless because “if you buy gold, technically that is going to make you money. And yet that money is still going to be priced in US DOLLARS – and that gives the whole game away.”
Like fans of the England football team, gold fans can dream of the distant past when gold was the centre of the global monetary system; but they can keep dreaming if they think those days are ever going to return. Gold may be an appreciating asset, but all the evidence suggests that it won’t be one that is of any direct relevance to day-to-day life, finance, and business. Your currency won’t be tied to it. You won’t get paid in it. You won’t spend in it or save in it (other than to the switch back to US Dollars). You won’t be doing deals in it or importing in it.”
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