Economist’s “News and Views” Saturday 9-28-2024
Commodity Culture: BRICS Gold-Backed Currency to be Serious Rival to the Dollar within 2 Years
Friday, 27 September 2024, 22:04 PM
In an enlightening discussion with Commodity Culture, Simon Hunt painted a vivid picture of a world on the brink of significant geopolitical upheaval. As he delves into the complexities of modern power dynamics, he posits that the BRICS nations — Brazil, Russia, India, China, and South Africa — are poised to turn the tables on what has long been considered Western hegemony.
This change, he suggests, won’t just be economic; it will be accompanied by kinetic conflicts in the Middle East and Europe, presenting a multifaceted challenge to the existing world order.
As the dollar faces threats from rival currencies and growing inflationary pressures mount, investors may increasingly turn to gold not merely as an investment but as a protection against potential currency collapse. The perception of gold as a timeless store of value may experience a renaissance, prompting individuals and nations alike to stockpile the precious metal to buffer against future uncertainties.
Simon Hunt’s discussion with Commodity Culture serves as a clarion call to recognize the dynamic changes underway in global politics and economics. With the rise of BRICS, potential currency wars, and the specter of World War 3, we must prepare for a radically different world.
Investors, policymakers, and everyday individuals need to stay informed about these developments, understand the implications of shifting power dynamics, and take proactive steps to protect their economic interests.
As we look to the future, commodities, particularly gold, will likely form the bedrock of a resilient strategy to navigate the choppy waters ahead. It’s an urgent reminder: in a world marked by conflict and uncertainty, preparedness is the key to survival.
A 1930s Economic Crisis is Here: “I’m Going to Be Screaming to Buy Gold”
Daniela Cambone: 9-27-2024
Join Daniela Cambone for an electrifying episode of The Daniela Cambone Show! Today’s guest, Joel Litman of Altimetry, warns us of a potential return to economic conditions similar to the 1930s and 1970s.
With five key policies being discussed in Washington—including raised taxes, capital gains hikes, and price controls—we could be on the brink of significant market shifts.
Joel shares why, for the first time in his career, he believes gold could outperform the S&P 500, and he explains the critical factors investors should be watching now.
Could these economic headwinds signal a gold rush? Or will the stock market prevail?
Tune in as Joel dives into how government policies, potential tax changes, and economic history could impact your investments.
CHAPTERS:
00:00 5 things in economy to watch out
3:50 Harris and Biden’s economic plans
5:52 Gold performance
6:46 Stock market
8:30 Fed rate cuts
10:01 Debt crisis
11:42 Trump’s tariff protection policy
18:42 Joel’s conference
US Economy on Brink of Collapse: Japan ditch US Dollar!
Fastepo: 9-27-2024
Foreign governments heavily invest in U.S. Treasury securities, facing significant risks. Rising U.S. interest rates can decrease the market value of Treasuries, leading to potential losses during sudden rate hikes often triggered by inflation.
Additionally, a weakening U.S. dollar diminishes the value of these investments when converted to other currencies, presenting a risk particularly for nations with volatile or strengthening currencies.
Threats of inflation can also reduce the real returns on U.S. Treasuries if the inflation rate exceeds the yields, which erodes the purchasing power of foreign reserves.
Political and geopolitical tensions, such as U.S. debt ceiling debates, may disrupt market confidence and financial market access, increasing investment risk.
Furthermore, liquidity risks during financial crises can force large holders to sell at lower prices, negatively impacting market values. Countries with substantial holdings, like China and Japan, face concentration risks that could result in significant losses if the U.S. financial system struggles or if the dollar sharply declines, complicating their market exit strategies.
As of September 2024, Japan is the top international investor in U.S. government bonds, despite experiencing noticeable fluctuations in its investment levels over the year. In March 2024, Japan held U.S. Treasuries worth approximately $1.87 trillion.
However, by May, this figure had reduced to about $1.128 trillion following cumulative sales of $59.5 billion, including a significant reduction of $22 billion in May after a $37.5 billion decrease in April.