Gold prices are rebounding higher on Monday morning. The upcoming week features crucial U.S. economic events, including the Federal Reserve’s policy meeting from Tuesday to Wednesday, the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday, and the comprehensive employment report at week’s end. The price of gold is trading at $2,393.65, up $6.46. The price of silver is trading at $27.98, up 6 cents.
The article “The Bear Case for the Dollar” by Crescat Capital argues that the US dollar is poised for significant depreciation in the coming years due to several macroeconomic factors. The primary concern is the Federal Reserve’s interest rate policy, which is misaligned with the country’s escalating debt levels. The US faces the highest debt servicing costs among developed nations, which may force the Fed to cut interest rates, undermining the dollar’s value. Crescat Capital highlights America’s fiscal exceptionalism, driven by large deficits and the dollar’s role as a reserve currency, but questions the sustainability of this model given the rising debt costs. Historical parallels to the 1940s suggest that measures like interest rate suppression and fiscal adjustments might be necessary. Crescat Capital also notes the potential for a shift in investment towards hard assets and natural resources, as well as the risks of a recession and increased market volatility. Overall, Crescat Capital anticipates a bearish trend for the dollar, which could benefit precious metals and emerging markets.
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