Addressing and solving any issue is complicated, especially when the people in charge are in denial of its very existence. Maybe it’s a lack of empathy for the people who will be affected the most- us.
Although recent comments (or lack thereof) made by Janet Yellen, the recently appointed treasury secretary, acts as a huge red flag for most American citizens, it’s better news for those who are gold investors.
Yellen held no reserves when it came to expressing her views on the dire need to increase state spending to continue fighting the impact of COVDI in a late January interview. However, what was disturbing was her insensible attitude towards the national debt this would cause, as she showed little to no concern or efforts even to address the topic.
Currently, there is another $2.8 trillion of stimulus likely to be passed– $900 billion that was signed into law in December and a proposal by Biden, who is advocating for a new $1.9 trillion stimulus package.
This is a bit concerning, to say the least, as we are on the brink of having approved $5 trillion in stimulus aid in less than a year or 24% of our entire GDP.
Since March of last year, the dollar is down nearly 10 to 12%, re-visiting lows from 2018. Stephen Roach, a former chairman of Morgan Stanley Asia, predicts a crash in the dollar is likely and it could fall by as much as 35% by the end of 2021.
Could you imagine losing 35% of your savings due to the potential volatility that lies ahead?
In a Bloomberg article, Bryan Slusarchuk, chief executive officer of Fosterville South Exploration Ltd. made the following comment: “With Democratic leaders pushing for nearly $2 trillion in stimulus, there are very big signals that the proverbial kitchen sink is about to be thrown at an effort to prop up a fragile economy, an effort that may have short-term impact but in the long term will cause further pain and ultimately will be negative for the U.S. dollar and positive for gold.”
What has historically been our last line of “defense” in times like these, the Fed, as they usually tighten monetary policies, has done anything but that.
In reality, it has been the exact opposite. They continue to make promises to print new money and the result could be detrimental in the further weakening of the dollar.