Demand for Gold increases as gold becomes reserve currency
Demand for gold increases as gold replaces U.S. dollar as the reserve currency. As the Federal Reserves devalues the dollar the price of gold increases.
By: Dr. Steve Johnston, author.com
An increasing amount of world oil purchases have been made in gold. The world oil market is ten times larger then the world gold market. A shift in oil trade from U.S. dollars to gold will dramatically increase the demand for gold.
In the wake of the 2008 crash, the Federal Reserve instituted several emergency measures, such as zero interest rates, and money printing or QE (quantitative easing). The U.S. economy is now hooked on low interest rates, and money printing. If the economy slows in 2020 the Fed will revert to zero interest rates and money printing. The Fed will start with a $4 trillion dollar balance sheet, and may have to raise it to $8 to $10 trillion. This will increase the price of gold.
Socialism is on the rise as millenials favor socialism over capitalism. Millenials are now the largest demographic group in America. Simple arithmetic shows that even if the rich are taxed to the limit, we could not pay for all the free programs proposed. The socialists answer is to just "print money", now referred to as Modern Monetary Theory", or what used to be called "fiat money". Currency debasement will lead to an increase in the price of gold.
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Dr. Steve Johnston
Page Updated Last on: Jul 18, 2019