Last week, the US Dollar Price of Gold slipped significantly. The decline was much more than expected.
The US Dollar Price of Gold slipped by a significant amount, dropping from the high in mid-July to the low of just over half of a dollar in September. In one week, the price of gold went from $1,200 per ounce to under one dollar per ounce.
No one in the media, analysts, or financial speculators would suggest this was the end of the story, but the reality is that no one will be surprised when the US Dollar falls back and the US Dollar Weakens. There will be no policy makers, and no Wall Street analysts scrambling to find more info, this is a trend that has been widely predicted.
The truth is, nobody saw the break in the US Dollar or broke the news, but Wall Street did. And the Fed saw the weakened dollar as a signal to start tightening their monetary policy. And as the Fed is our central bank, and our sovereign currency, the US Dollar is not making any form of press releases about the news.
So, what should they have been talking about when the two currency meltdowns in history have forced people to rethink their Currency Collapse assumptions? Because these were the two situations that eventually led to the World War Two that most people view history as marking the beginning of the fall of the currency.
We all want the dollar peels back, and the dollar is the world’s reserve currency. And it seems we can throw the dollar all over the place, and the dollar keeps coming back. That’s why the government will not let the dollar fall far enough to crush all of their credibility and to cause the rest of the world to start devaluing their currencies.
And, people are worried about how far the dollar has come down in a week. People are worried about the possibility of a slow spiral down in the Dollar, and that it could lead to a sustained low in the USD, and a slow decline.
The media, the financial circles, and the Fed will be saying that the currency falls back in the future, but no one is predicting that the currency will fall below one dollar per ounce. These are the same people who thought the Fed could never lower the funds rate far enough to send the USD heading in the wrong direction.
Wall Street will tell you the same thing, but people will stop listening. They are already so worried about the USA economy that they are screaming at the top of their lungs, they do not want the US Dollar to fall further.
Yet, the Fed cannot lower the funds rate enough to make the USD weaker, and that is a signal to the currency collapse in the long term. And people are getting worried.
The best bet is that the dollar peels back, and the dollar begins to go lower in the future. That is a long way off though, as it has always been, and the Fed and the Treasury are not likely to change their policies any time soon.