Sprott Radio: Showdown – In Gold We Trust 2023
The past year has seen rising political tensions. The fallout from Russia’s invasion of Ukraine has included the company’s expulsion from the global payments system, and a boycott on oil. That in turn led to surging energy prices in Western Europe.
In the meantime, there’s still concern over how central banks have acted over the past few years. In hindsight, central banks over-stimulated economies during the pandemic. The resulting inflation is being felt today, even with interest rates surging.
For the United States, there’s a third issue. That’s dedollarization. The US dollar is losing its demand as a reserve currency. That’s due in part to the power the US has over the global financial system, and the Fed’s handling of monetary policy.
As a result, there may be a potential showdown in the markets.
Part of the showdown would simply mean a reversion to more trade between countries without a reserve currency such as the dollar.
Another part could mean more moves to try and prevent inflation from staying higher for longer. Or, it could also mean more stimulus on the next perceived emergency. That could even include a slight recession from possibly overtightening the economy with the rising interest rates underway now.
Either way, that could bode well for gold prices. The metal is near its highs from the summer of 2020. And any negative outbreak on the geopolitical or monetary front could mean a surge higher.