It took a while, but gold is finally starting to move. I must admit I’m surprised it’s taken this long for the market to realize something I have been expecting all along.
The Fed’s hands are tied, something we touched on in our interview three years ago. They are backed into a corner and can’t start hiking rates because the U.S. economy is not that strong. Not to mention the rising federal debt, which can’t withstand higher service costs.
Besides, how can America buck the global trend of super-easy money policy? Japan has negative interest rates and everyone else is also running the currency devaluation race. Consider, expectations of Fed rate hikes just drove the rising U.S. dollar a lot higher. That doesn’t help U.S. exports, which is why I believe we’ve seen the first and last rate hike. The global economy is lacking growth and there is way too much debt. It will be a vicious cycle.