US investors had a lot to do on the domestic front this year…
Inflation…recession fears…and banking crises, to name a few.
So I don’t blame anyone for missing out on some important developments involving the US dollar and its coveted status as the world’s reserve currency.
Within the last 6 months:
- The UAE started early talks with India to trade non-oil commodities in Indian rupees.
- China also expressed its desire to transfer dollars for domestic commodity trade.
- Brazil and Argentina, in the president’s words, are “discussing a common South American currency” called “sur”.
- Russia and Iran have advanced the use of gold-backed stablecoins (cryptocurrencies pegged and backed by reserve assets) as an alternative to the dollar.
- French President Emmanuel Macron wants Europe to become less dependent on the United States and avoid getting involved in the U.S.-China dispute over Taiwan. He also raised the idea of Europe becoming a “third superpower” on the world stage.
Seen in isolation, each event seems like a one-off effort that won’t have a big immediate impact…and it might just get off the ground.
But all things considered … it is clear that foreign powers are trying to end their dependence on the United States and, just as importantly, on the US dollar.
It seems impossible to imagine a world that doesn’t revolve around the dollar. The United States is deeply integrated into the global economy. Unless you’re over her 100, the dollar will remain the world’s reserve currency for life.
And, let me be clear, I don’t see its importance as an imminent threat, especially given the strength of our military.
However, the monetary system has changed over its long history. offal It happened many times.
Most recently, in the 1920s, when the dollar overtook the British pound to become the world’s reserve currency.
Before that, the Dutch guilder was replaced by the pound, and before that by the Spanish dollar.
Going further back, we find that the Venetian ducat, the French franc, and the Roman denarius have all alternated as the world’s currency standard.
History shows that changes in the monetary system do occur.So why should anyone have confidence in it won’t Will it happen again?
I don’t The only question is when.
Will this happen next year (very unlikely) or in 10 years (slightly more likely but not certain)…
Now is the perfect time to take a closer look at the new bull market that is forming in gold, with a clear de-dollarization movement outside the US.…
shiny yellow metal
“De-dollarization” is complicated. But its impact on gold is very simple and bullish.
Central banks around the world bought gold at a record pace last year, adding 1,136 tonnes of the shiny yellow metal worth $70 billion to their stockpiles. This is the largest amount of gold they have accumulated in over a decade and is well above that.
They are buying gold, perhaps because it is the oldest and most trusted store of value still in use today. outside Current fiat currency system. Like government bonds, for example, they are not subject to the whims of any particular agency.
Most interesting, however, is the disappearance of 65% (741 tonnes) of gold bullion purchases last year. not reported. Analysts believe China and Russia are responsible for these unreported gold purchases, aimed at reducing the dollar in global trade activity and avoiding Western sanctions.
The vast gold reserves of the world’s largest central banks (outside the US) are key to conducting global trade without the dollar.
And not surprisingly, the surge in central bank demand has pushed gold prices higher.
Since November of last year, yellow metal has risen more than 20% and even set new all-time highs.
In addition to foreign central banks buying gold while selling dollars and Treasuries to finance it, there are a number of other factors that could signal a weaker dollar going forward…
Pandemic “helicopter money”
The pandemic has triggered a large-scale banknote-printing event. The supply of fiat currency surged, triggering the highest level of inflation in 40 years.
Add to that a huge debt-to-GDP ratio, rising government deficits, and a deadlocked debt ceiling, and the dollar clearly faces a number of headwinds.
The early stages of this trend can be seen in the US dollar index. The amount hit a new high at the end of last year and is already down 10% from its all-time high.
A weaker dollar contributed to the rise in gold prices. But that’s not the only factor.
Gold’s new bull run is more than just a “weak dollar” phenomenon, as gold is also hitting new all-time highs when priced in the yen and euro.
If the world’s central banks are hoarding gold to diversify from the US dollar, the US government can’t stop it.but as Investor…
We can participate in a new gold bull market, but at this point the market is strong enough to continue even if the US dollar reserve currency regime lasts for decades.
And there are many good options for doing so…
gold play buffet
Investors today have no shortage of ways to participate in the gold bull market at multiple risk levels…
- physical bullion. It’s hard to argue against keeping gold on hand, the least risky of all trades. It is arguably the most direct way to protect assets from inflation. (If you’re looking for the best place to buy, hardware asset alliance Have we covered it here? )
- Gold mining stocks and ETFs. Mining stocks are sometimes referred to as ‘gold leveraged’ trading because they move both above and below the gold price.For individual companies, based in Canada B2 Gold (BTG) evaluation strong bull 96 Based on Green Zone power rating system. That’s a good place to start your search. As for ETFs, the VanEck Gold Miners ETF (GDX) covers large companies and the VanEck Junior Gold Miners ETF (GDXJ) targets smaller companies, offering a little more of that natural leverage.
- Gold play of “Curveball”. There are some companies that don’t fit the traditional miner description but are still good players in the gold business.
For example, royalty and streaming companies own the mining assets and receive a portion of the miners’ profits, avoiding “dirty work” altogether.
“Slug water” processors are also an unusual undertaking, basically looking for gold in the waste streams of large mining operations.
I recently recommended two such plays. green zone fortune and 10x stock each subscriber. I believe there is a lot to be gained from each company. And thanks to the stocks we choose, it’s a lot less risky than many traditional miners.
Listen, I’m not saying you should bet everything on gold right now. De-dollarization will take years, perhaps a decade or more.
But the data clearly show that gold deserves a bigger spot in the portfolio at this point. And you don’t want to be caught flat-footed by what could soon become the ultimate investment megatrend.
to get a good profit
Adam Odell Editor, 10x stock
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Disney’s stock price has plummeted over the past two years. After peaking at just over $200 a share in early 2021, the stock is now trading in the low $90s.
Despite the reports, the ongoing legal dispute with Florida Governor Ron DeSantis isn’t holding the stock down.
I own some Disney stock, so I might be a little biased here. But to me it looks like Governor DeSantis brought a knife into the shootout.
As one of America’s largest and most powerful corporations, Disney now has access to the biggest, baddest, most nefarious lawyers ever to carry a briefcase. The company sued an elementary school in 2020 over an “unauthorized screening”. The Lion King I won a PTA event…
Good luck Beat them in court.
No, it’s not the legal risks that weigh on Disney stock.
You are streaming. and then inflation.
In Disney’s earnings call this week, the company reported losing four million Disney+ streaming subscribers.
Well, make no mistake. Disney parks are still bankrupt, toys and merchandise are still selling, and only Marvel superhero movies are consistently profitable in theaters.
The company will get through this. Unfortunately, when my daughter is old enough to have the “Disney Princess” experience, I’m sure I’ll be fighting the crowds myself. Like college and a wedding, having a daughter is just one of the expenses she must budget for. But I’m digressing…
Losing 4 million subscribers out of 161 million bases would be acceptable in itself. But Wall Street is betting heavily on streaming being the future of media, so contraction, not growth, is the big issue.
but why Is Disney losing subscribers?
Well, we covered this last week. It is inflation linked to “increase in payments”.
Wages have not kept up with inflation, and the savings rate has already fallen to pre-coronavirus pandemic levels. An extra dollar he spends on necessities means a dollar less money spent on other things.
And if you’re already on Netflix and five other streaming services, a Disney+ subscription suddenly seems like an easy fruit to achieve. You can resubscribe at any time, even if your child is on summer break.
Inflation is declining. However, the falling speed is slow and the damage has already been done. As I jokingly said yesterday, Americans are down or depressed. And this will show up in earnings calls over the next few quarters.
This seems like a good time to focus on short-term tradable trends and stay agile. And this is exactly where Adam excels.
his green zone fortune Financial services are built on AI Green Zone Power Rating Systemhe created to help investors like you find the best deals.
And what’s the best? It is an excellent investment tool for any market as it takes into account the current economic conditions. check it out here — and learn more about how Adam can help you with your investment goals.
nice to meet you,
Charles Sizemore Editor-in-chief, The Banyan Edge