HUGE Gold News From CHINA! Gold & Silver Prices Are About to CHANGE FOREVER - Andy Schectman
The unexpected resurgence of a strong dollar in 2024 has caught many investors off guard, prompting a reevaluation of their earlier predictions for the currency's decline. This shift has been driven by a robust US economy and persistent inflation pressures, which have deterred the Federal Reserve from implementing interest rate cuts as initially anticipated.
Andy Schectman, CEO of Miles Franklin, expresses concerns about the dollar's strength, especially considering the United States' significant debt and unfunded liabilities. Despite record debt accumulation and fiscal challenges, the dollar's current strength appears unjustified to many observers.
Furthermore, the US's imposition of sanctions on developing countries has prompted them to seek alternatives to the dollar, leading to a growing movement away from dollar dependence. In response, BRICS nations are increasing their efforts to reduce their reliance on the dollar. Given their substantial commodity holdings, they are even exploring the possibility of launching a stablecoin backed by gold.
Schectman emphasizes the growing importance of gold on the global stage, particularly as countries like China shift their reserves away from US treasuries and toward gold as a hedge against counterparty risk, especially in light of increasing scrutiny on the bond market.
The development of a stablecoin by BRICS could not only bolster member nations' economies but also pave the way for creating a native currency for the bloc, further reducing dependence on external currencies like the dollar.
The US budget deficit has reached staggering levels, widening to $1.7 trillion in fiscal year 2023, and is projected to soar to $2.6 trillion by 2034, according to the Congressional Budget Office. Concurrently, US government debt held by the public is on track to hit a record 106% of gross domestic product in 2028, a significant increase from 97% in fiscal year 2023. This surge in debt has been remarkable, skyrocketing from $17 trillion in early 2020 to $27 trillion and from $5 trillion in 2007.
Andy Schectman draws attention to the alarming levels of debt in the US, which encompass various forms, including credit card debt, household debt, and underfunded liabilities in essential programs like Medicare, Medicaid, and Social Security. The substantial interest payments alone underscore the economic strain caused by this debt burden.
Furthermore, China has been steadily reducing its holdings of US debt over the years, with its Treasury holdings declining from approximately $1.1 trillion in 2021. Chinese investment in US debt hit a 14-year low in October.
Schectman raises concerns about the sustainability of US debt financing, particularly as China continues to divest itself of US treasuries. Questions arise regarding who will absorb the substantial volume of bonds that need to be sold in the foreseeable future, underscoring uncertainties about the long-term viability of US debt management.
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