Subnostr

I see some people saying, “it’s not gold going up, it’s the dollar going down” and things like that.

That’s not really the case, and there’s a simple test to see why.

When a currency crashes, it loses value relative to everything. Other currencies, real estate, stocks, precious metals, etc. Prices of normal goods and services skyrocket.

In this bull run, precious metals gained value vs other things. Gold vs oil. Gold vs stocks. Gold vs real estate. Silver vs oil, etc.

The dollar is rangebound vs other major currencies. The supply growth of the dollar this past year was 5%. It’s gold and other precious metals that went up vs everything. Partly based on fundamentals, and now seemingly due to momentum.

Now, where there is some truth to the statement: central banks in aggregate haven’t added to their holding of treasuries in ten years. The only foreign treasury purchases have been in the private sector, and at a rate lower than total US debt growth. But central banks have been buying gold. There is indeed a gradual shift toward neutral reserve assets afoot, ever since around 2009.

But that a very long process. That source of demand didn’t single-handedly drive the huge boom in precious metals over this past year. This was like a volleyball held under water and let go, soaring back up.

BottleTeams 2d ago

I don't think you know what you're talking about

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Discussion

Lyn Alden 1d ago

That move in DXY is nothing compared to the massive move in gold and precious metals. Precious metals are up vs everything, and by a massive magnitude.

Bull market in gold vs oil, gold vs houses, gold vs stocks, gold vs bitcoin, gold vs dollars, gold vs euro, gold vs yen, etc.

DXY is back down to the same level it was at during the 1990s when gold was like $300/oz. That just compares the dollar vs other fiat currencies, and it's like a 13% move this year vs 100% for gold and nearly 300% for silver.

BottleTeams 1d ago

DXY is just a basket of 6 different currencies mostly dominated by the Euro. So the DXY isn't really measuring anything, it's green apples vs yellow apples vs red apples and they are all rotten. The numbers on the screen are fake, they are not measuring anything anymore.

When the dollar is worthless and all other fiats are worthless the DXY will still be sitting at 100 on your screen like nothing is wrong.

All these currencies are devaluing at the same rate - some get ahead/behind each other at times. Especially after 2000 on that chart, the game really changed then. Now that most are up against -close to close enough to- the zero bound their game has ended.

Metals are finally moving for the same reason all commodities will eventually move, decaying fiat globally. It's just a mad grab for hard assets now since we're at the end of the interest rate/fiat game.

The money is so bad we cannot price an inert metal properly. The metals futures markets are permanently broken because they are not a hedge anymore, the fiat contracts do not represent the underlying hard asset. The contract is the same, and the metals are the same but the fiat is not the same.

The DXY is the only thing that says the fiat has not changed.

The metals now, then the softs. We're in for a prolonged bull market across all commodities. The hardest commodities are the most sensitive GC, SI, PL, HG then Oil and softs will really get in their bag late 26 early 27. Then when prices of everything *seriously* rise from commodity inflation people will scratch their heads and buy #bitcoin .

The pernicious part is that prices may rise but the real problem will be supply of goods. You're going to see on the screen gold costs 10k but there won't be an oz for sale anywhere. So it's going to be less costs of goods and more supply of goods. Things just won't be for sale.