I’m working on a new project, all about what I perceive to be a currency war – with gold being recentered as the most important form of money.
I’m calling it “America’s Secret Gold War.”
War is a strong word, I realize. But for the past 20+ years we’ve seen gold flows in mostly one direction – from the West to the East. Mostly from America, and mostly to China.
Obviously, there are other players, but that’s the broad stroke. China and the U.S. are running in opposite directions, monetarily. China, stockpiling gold at a record pace, while liquidating its dollar position. America is at best apathetic about our gold holdings, and is trying to manage a house of cards of Treasury debt cycles as best as possible.
One of these things has to give. We won’t wake up one day and find out that something major has changed. It’s a gradual process that’s only typically manifested as a public capitulation of a foregone conclusion. First the thing happens. Then we see the headlines. If we pay attention, we can see that it’s happening now. We don’t need to wait for the headlines!
When we look back at previous monetary revolutions, for instance, the beginning and the end of the Bretton Woods Agreement, it feels like a series of footnotes. But it took decades, and two World Wars to land at the Bretton Woods Agreement in the first place. Then we had 3+ decades of monetary detente under Bretton Woods.
So, we look back at just the past 100 years and it feels like these monetary changes were big, obvious and abrupt phenomena.
However, that’s an abridged and flawed understanding – obscured by our chronological situation.
As Kierkegaard noted, “life can only be understood backwards, but it must be lived forwards.”
We’re in this war right now. There’s likely to be some kind of headline about a new global monetary order, but again: that will come AFTER it can no longer be seriously denied that the war was already fought.
Think about the UK in the 1920s and 1930s. The British people and politicians still considered themselves to be THE premier global superpower, home of every significant financial and monetary power structure.
They weren’t thinking, “it’s been fun to be the empire on which the sun never sets, but in 1944, we’ll decide to let the U.S. have a turn at being the hegemon. We should plan a meeting at a New Hampshire ski resort to hand over the keys.”
But by the 1930s at the latest, it was almost a foregone conclusion that the U.S. would take the reins.
We’re living in a similar period. There’s a new global order coming whether most Americans recognize it or not.
We don’t have to like it. Or dislike it. We don’t have to get mad or scared.
It may be that UK citizens shed a tear when the Bretton Woods Agreement was signed – but imagine if instead, they had shifted assets to benefit from the new monetary order?
Doesn’t that seem like a wiser course of action?
Years from now, there will be a group of clear winners: people who didn’t get personally miffed when the tides of international monetary change. There will be people who saw the tides coming and trimmed their sails to benefit.
That’s what I’m going to be doing. And I’ll be publishing the full details of this new project this Wednesday.
Looking forward to sharing these details with you then.
Best,
Garrett Goggin, CFA, CMT
Lead Analyst and Founder, Golden Portfolio
