6.2.26 - Gold Is Coiled To Surge Above $6,000

6.2.26 - Gold Is Coiled To Surge Above $6,000

Gold last traded at $4,485 an ounce. Silver at $75.11 an ounce.

The Price Of Gold Is Coiled To Surge Above $6,000 -King World News

Independent monitoring body, Global Trade Alert's models found that if the war continues, global trade will collapse by the end of the year, with the biggest hit in the Middle East and Africa. The dangers of war is obvious. Oil reserves have collapsed as 2 billion barrels are lost with buffers and inventories almost depleted. A protracted war would lay bare a financial disaster from spiraling energy costs, gas lines, rationing, forced closures and famine. Today no one sees the chances of recession or even double-digit inflation. After all, things are different, aren't they?

Not surprisingly then we expect a huge inflation fiasco. Inflation this time will not be transitory. The price of oil itself has fed inflationary pressures but the fallout is only just beginning. The risk is great, even after the stalemate, that in a few weeks jet fuel shortages will follow oil shortages, let alone the prospect of food supply shortages. Fast growing Asia is particularly hard hit as supplies of energy and fertilizer are stuck in the Strait, raising prospects of shortages and famine. In response to the crisis, countries are exploring stockpiling and resource pooling as part of their national security issues, underpinning higher inflation in the future.

Today, the surge in velocity and inflation is part of a war psychology with trillions of anticipatory stimuli coming. Prior to the Weimar hyperinflation, there was a comparable golden age when overheated markets gave rise to blind pools, speculation, and gambling that permeated everyday life (hello Polymarket). Back then the German government's printing press ran for nine years eventually causing the dreaded hyperinflation. With government debt above 100% of GDP and an abused monetary policy today, it is disconcerting that the US has started down a similar path today, where spending has become more addictive. At the same time government has run huge deficits not for years but decades and the war has crystallized risks. It is inflation that we should worry about since it happens to any nation that decides that inflation is an acceptable price to pay to achieve their economic goals.