The Dollar and Gold Are Key to Geopolitical Struggles

My colleagues are quick to point out that scary geopolitical events like the impending war over North Korea and the constant warmongering of the United States are not bullish for gold. In the short term they are absolutely right. In the long term, at that point in time when we have a tectonic shift of global power and the Anglo American Empire is shot down a notch or two, as was the British Empire, or perhaps much worse, gold is likely to be about the only currency left worth anything.

Alasdair Macleod wrote two brilliant articles over the past week that are must reading if you want to understand the intersection of gold, the dollar, and geopolitics. The first article was titled “America’s Financial War Strategy,” which explains the Chinese view of how the U.S. manipulates the value of the dollar to first expand its empire and then trigger financial crises to ensure that savings from around the world flow back to the U.S. Safe Haven Treasury Market. When financial manipulation fails and when various countries try to compete with the dollar as the world’s reserve currency, the U.S. engages in overseas wars to ensure a flight of money into U.S. Treasuries. This is a cycle that the Chinese point to and they believe the U.S. is now provoking all manner of dissension in the South China Sea with the intent of “harvesting” China as it has in the past “harvested” Latin America and then most Asian nations, with the exception of China during the Asian Crisis of the late 1990s. Alasdair, who I expect to have on my radio show on May 16, largely accepts the mechanics of how the U.S. manipulates markets to ensure the Treasury is fundable, though he disagrees with the motives ascribed to the U.S. But this is a very important read that helps explain why the U.S. is constantly engaged in wars and how it is in the interest of our bankrupt nation to ensure that one crisis after another, whether financial or military, is constantly taking place to keep the American economy breathing. Here is the link where you can read the first of two must-reads by Alasdair:

The second article, titled, “End of Empire,” goes more directly to how China and Russia are building their gold reserves to compete against the U.S. and its bankrupt economy and fake fiat currency. Below is a portion of the article, which you can also read in full, here:

“Already, China dominates world trade. Her own economy is already significantly larger than that of the US on the PPP estimates. While being the largest consumer of raw materials, China also exports more finished goods by value than any other country. As the Asian powerhouse, she has lifted the economies of all the countries on the Western side of the Pacific Ocean, which including her own between them have a GDP of $50 trillion. Her exports into Asia now exceed her exports to the US. Yet despite this dominance, most of China’s trade is conducted in US dollars, something China is bound to change, if she is to contain external economic risk and replace America as the dominant global empire. Both objectives can only be achieved by China replacing the dollar as a medium of exchange.

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.