Terrorism is on the rise. Geopolitical tensions are out of control. Things are so bad with the global economy that even the world’s worst forecaster - the IMF - can’t keep pretending everything’s alright.
There’s a reason why countries stockpile gold. When a currency becomes worthless, gold is can be a payment instead. And boosting gold supplies is one way to ensure a currency is still viable.
Now you may or may not follow gold stocks. But if you do, you may recall the recent jump we’ve seen.
On 14th January this year, one of the biggest ‘battles’ in the long running worldwide currency wars broke out. It took most investors by surprise.
These are the currency wars in action. The US S&P 500 index gained 1.7%. Germany’s DAX index gained 2.5%. And the French CAC 40 index added 2.3%.
If the Fed does raise rates later this month, the US dollar will jump significantly higher. Stocks and gold will get crunched.
What most people don’t realise, is that the value of paper money has already collapsed. The US dollar has lost 98.3% of its value since 1920.
The same force that made the dollar the world’s reserve currency is working to dethrone it.
Governments and central banks may try to take private gold again. They hate gold because it gives individuals a way to protect against the devaluation of paper money — inflation.
Shares in gold miner Newcrest Ltd [ASX:NCM] rose nearly 4.5% today. They strongly outpaced an Aussie market that regained some ground.