The gold price is on the rise for many reasons. One of the most important is people losing trust in the current world economic trends. Donald Trump tariffs threaten to start a new trade war or we could say, it started already. Trade war will lead to world war if matters weren’t handled carefully. The reason for WW1 was the trade war between Britain and Germany. And the reason for WW2 was the rise of Nazi Germany not only militarily, but economically.
The story of the Breeton wood agreement is well known to many people. How has the Dollar became the world reserve currency? It was accepted since the U.S promised to exchange Dollar for Gold on the price of 35 Dollar/Ounce. However things change, it can’t continue the same forever. In 1971, American president Richard Nixon declared the temporary suspension of the Gold Standard. But we know, nobody can hold the U.S. accountable for playing with terms. The temporary turned into permanent.
The abandonment of the Gold Standard means that the dollar is now floating in front of other currencies. The exchange rates were decided by many factors, the supply & demand was the main one. The U.S forces the demand on world countries to face the supply. The amount of dollars printed during the Vietnam war and Lyndon Johnson Guns & Butter were huge. The results of (Not) mean that the dollar value in exchange markets will run to the ground, and the U.S will go bankrupt. The meetings in Louvre and Jamaica (1976), the accord signed in Plaza in 1985 was to tune the music of the so strong dollar, but to prevent it from totally collapsing.
In 1975, National security advisor Henry Kissinger was the Godfather of the Petrodollar agreement between the U.S and Arabia Saudi. The U.S will protect the KSA and sell the most advanced weapons in exchange for selling Saudi oil exclusively for U.S.D(The American Dollar). This requires crises and wars to keep the price of Oil high enough to require demand for the high dollar supply. We have 1973 war between Egypt and Syria on one side and Israel on the other, the Iraq-Iran war(1979-1989), Iraq invaded Kuwait(1990-1991), 9/11 terrorist attacks, Afghanistan invasion(2001), Iraq invasion(2003), the war on terrorism which will continue forever, world economic crisis(2008), Arab Spring(2010-2024) and crises will continue.
Trump tariffs aren't the first time the U.S. used that toll to enforce its policies on other countries. Richard Nixon used it in 1971, 10% surtax on imports. The purpose was the devaluation of the dollar. The U.S. treasury secretary Johns Connally threatened the G-10 meeting(1985) at ornate Palazzo Corsini in Rome that the U.S will introduce the 10% surtax again if country members of G-10 didn’t agree on a plan to devalue the dollar. Johns Connally told foreign finance minister in 1971 meeting:”The Dollar is our currency, but it”s your problem>”
Trump's purpose for imposing the tariffs could be negotiating a new world economy order, maybe, i am not sure... I mean even for someone like me with good reading in economy confused about Trump's purpose from introducing the tariffs, 10% mandatory minimum, while some countries' bad luck got like 20% or 30% above that initially 10%. Even if we agree on Trump negotiating a new world economy, what are the headlines that he is looking for? I mean the main points.
Let’s say that Trump is looking for a stronger Dollar. But this is achieved by the rise in the Fed’s interest rates. No need for all this circus. Then we have that Trump is looking for a weaker dollar to help American exports. He is demanding American factories to come back home. In this case, the weak dollar isn’t helping with America's huge national debt problem, around 37 trillion dollars. The Government shut down, the possibility of firing hundreds of thousands of federal employees is on.
So what is it that Donald Trump is looking for?
He is looking for financial chaos to pass his golden trick. The GTA(Grand Theft Auto) of the world. The rise of the gold price is the exit to zero national debt at least on paper. The official numbers for U.S gold reserves are 8,133 tonnes. The current market price exceeds one trillion dollars while the official price is eleven billion dollars at 42 Dollar/ounce. Experts are speculating that Trump will raise the official price of gold in government treasuries to cover the government's debt. However, that would mean a price of $143,000 per ounce. This would make the assets held by the US government equivalent to the national debt, meaning that the debt, at least theoretically, would be worth zero. This goes beyond what analysts and experts have written about, ranging from $10,000 to $50,000 per ounce, but the national debt during that period did not exceed $15 trillion to $18 trillion. Another step could be to confiscate the gold assets of foreign governments in the US and replace them with newly printed dollars. There is even talk of digital dollars or cryptocurrencies.
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