Where do we go from here? It was a pretty brutal summer for the markets, including gold and silver. Not to mention one of the hottest on record for much of the United States. It seems as though the transition trends are accelerating as the corner that Federal Reserve painted itself into over the last decade finally becomes evident.
Low interest rates are great – until they no longer can be maintained through QE and whatever other methods the financial powers that be dream up. It has been a long held belief here that once the markets took the ten-year treasury above 3% and the Fed was powerless to bring it back down, the financial system would come under extreme stress. Well, here we are.
Rising interest rates along with war in Europe have caused a global flight of capital to the US dollar. A strong dollar has always created headwinds for the price of gold, and this time is no exception. What happens though when everyone finds themselves on the same side of the boat? And the boat starts listing badly? That is the hour when gold and silver will shine.
The world is moving toward a new global financial system. There is a lot of speculation about Central Bank Digital Currencies (CBDCs) and whether or not sovereign nations will allow anything else, including cryptos, to survive. We happen to believe that the free market will eventually find a way to escape that fate. Exactly how that will happen nobody knows for certain. However, we do know that gold will maintain its 5000 year historical position as a store of wealth no matter what else happens.
Until next time,
The OWNx Team
