Gold could literally double overnight, especially if President Donald Trump uses it as a secret weapon in his current fight against the Federal Reserve.
In my recent three-part series published for Newsmax Finance in November, I focused on the Federal Reserve, its policies and the massive impact of this "independent" institution on global asset risk. In short, the Fed controls the dollar, the dollar is the world's commercial currency and, by virtue of that, the Fed controls the world. A stronger dollar is hurting the world's growth prospects. It also hurts Trump's growth initiative.
We were the first witnesses when the Fed raised rates in the fourth quarter and tightened monetary policy through its balance sheet. Global markets were foreclosed and US stock markets dropped 15%. What the Fed kept at 0% for eight years under President Barack Obama, she raised it six times under Trump. The federal funds rate is now around 2.4%. This action killed Trump's growth program.
Trump spoke about all this and intensified his attacks on Jerome Powell. He calls him "crazy," "his biggest threat" and in a recent tweet said: "If the Fed had not raised its interest rates wrongly, especially because of the very low inflation, and if it had not proceeded with the ridiculous quantitative tightening, the GDP and the stock market at 3.0% would have been much higher and global markets would be up. " a better place! "
Never before in history, have we had such a blatantly critical chairman of the Fed. The Wall Street Journal announced last week that Trump personally telephoned Fed Chairman Powell on three separate occasions in March to complain that his interest rate hikes and balance sheet had hurt growth he was trying to achieve. He said hiring Powell "was one of the worst decisions I ever made," and said directly to Powell, "I guess I'm stuck with you."
This open and increased aggression against the Fed was coordinated with three other key events last week. The first is the appointment of "lost money" Stephen Moore for the governor of the Fed. Moore, who wrote a book called "Trumponomics, " is very close to the president and has called for an immediate reduction of interest rates by 50 basis points.
The second is that Larry Kudlow, the president's economic advisor, is also asking for the same 50 basis point reduction. Finally, there is the proposal to appoint Herman Cain to the last free seat of the Fed. Cain is a big supporter of returning to the gold standard.
Taken individually, these movements are interesting. Taken together, they scream at a planned attack. I spent years studying the Federal Reserve. Much of my book "Gold is a better solution" is dedicated to Fed officials, their policies and the upcoming devaluation of the US dollar. This explains why the US dollar must be massively devalued over the next decade. This first step by Trump to reduce the Fed marks the beginning of the devaluation.
What Trump and his team are doing openly is unprecedented and aims to undermine the credibility of the Fed. Remember that every dollar has three words in mind: Federal Reserve. When Trump and his team aggressively attack the Fed and weaken it, they are actually trying to attack and weaken the US dollar. While the Fed is publicly challenged, changes course, and then goes to bed, the institution is damaged. The result means a much weaker dollar.
The more I study this recent progression, the more I am convinced that Trump and his company require a more in-depth plan that works. They managed to rotate Powell. Now he "stays patient". The next step is to make him lie down. I think it will mean a "controlled devaluation" of the dollar and a much higher price of gold overnight.
What's really interesting is that Trump could use gold effectively to devalue the dollar and double it overnight with a simple executive action. He could ask Treasury Secretary Steve Mnuchin to change the way gold is valued in books.
Currently, gold is valued at $ 42 an ounce, which was the price of gold in 1971 when President Richard Nixon closed the gold window. By ordering Mnuchin to "mark the gold at the market price," Trump would ensure that the balance of the Fed is strengthened by $ 350 billion. As a result, gold could skyrocket immediately.
Nixon accomplished this by a simple action of the executive and outside the Congress or by any agreement of the "independent" Fed. Trump could literally do the same thing. I unveil this secret in my 22-minute documentary titled "How Trump Can Defeat the Fed"
Trump understands that a weaker US dollar is the key to unlocking the US economy. Until now, the plan has worked. The next step is a revaluation of the gold price on the Fed's balance sheet that could double the price of gold around the world.
Adam Baratta is the author of the national bestseller "Gold Is A Better Way". He is one of the dominant voices in the field of investments and precious metals today. Adam is the co-owner of Advantage Gold, the country's highest rated precious metals company, and the creator of an educational member site. To receive a free copy of his book, go to: https://goldisabetterway.com/
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