We approach 2018 having seen the seeds planted in recent years for a monetary revolution. They include the massive world-wide expansion of credit and debt since the last credit crisis, and the advent of potentially disruptive cryptocurrencies. Geopolitical shifts of tectonic scale have occurred, hardly noticed by the ordinary person. That was until now. We are now on board a train which is gathering speed towards its buffers: the end of dollar hegemony and its potential collapse.
It might take a few years yet to get there, but the speed of our train is dependant to a large degree to how the engine’s boiler is stoked by America through her isolationist plans. It is very hard to see how the dollar cannot decline significantly with America’s autarkic trade policies, benefiting gold.
Geopolitics are likely to become more prominent in 2018, risking an upset of the precarious balance in what amounts to an ongoing financial war. Upset that balance, and chaos results. President Trump threatens to do just that by formally identifying China and Russia as America’s main adversaries in his National Security Strategy, released only this week.[i] The document repeatedly casts China and Russia as geopolitical villains seeking world domination, and America as the world’s saviour.
This post was published at GoldMoney on December 21, 2017.