Cryptocurrencies

GOLDman Sachs Criticizes Dollar Status

Goldman Sachs warns that the US dollar could lose its status as an international reserve currency. The sulphurous investment bank recommends buying gold, citing in particular the historic low of real rates. More than ever, Bitcoin is in ambush.

GOLDman Sachs

Real concerns about the continuity of the US dollar as an international reserve currency began to emerge.

GS

Goldman Sachs strategist points to US government debt that has exceeded 80% of GDP and expects the government and Fed let inflation accelerate.

Indeed, states are fond of inflation. Why ? It’s very simple. States collect taxes and, in particular, VAT (by far his primary source of tax revenue). However, VAT is a rate fixed tapped off absolutely everything that is sold so well that when prices go up, VAT revenue automatically increases. CQFD

Inflation is a disguised tax allowing the State to “artificially” increase its tax revenue through spoliation of our purchasing power. We often say “Inflation helps reduce the debt burden” because its repayment is made with a currency that has less value. This is how the state survives despite a gigantic debt and taxes that can hardly increase as they have become confiscatory.

The slaves of Anthropocene, by Nicolas Teterel

$ 2300

GS expects gold to break through the $ 2300 during Next 12 months against $ 2000 previously anticipated.

Gold is the currency of last resort, especially in an environment like the one we are experiencing today where central banks are devaluing their currencies and pushing interest rates to all-time lows.

GS

5-year real rate (treasury) vs Gold
Rate “Gold rush: Precious metal rises as real rates fall”
Source: Bloomberg

Here’s what we wrote earlier this week in this article about real rates:

Bitcoin is lifted by falling real rates. Indeed, with rates at lowest in 4000 years (which is very good), the real rates are now negative, which is the biggest incentive to buy gold.

Explanation. Imagine that you have placed 100 euros in your savings account and the interest rate is 0.50%. At the end of the year, you will have 100.5 euros. But while inflation was 0.50% over the same period, your purchasing power remained the same. Your extra 5 cents does not allow you to buy more because the prices have increased by the same order of magnitude. So your real rate is 0%. “

We keep hammering it on Cryptocurrencies: Protect yourself from inflation! Have this insurance named Bitcoin which has already garnered a 50% increase since the beginning of the year …

JP Morgan was the first major New York bank to talk about the dollar’s end of reserve currency status last October. Guess what, the juggernaut recommended in February to hold cryptocurrency in its portfolio. Our advice, do not get yourself “some” cryptocurrency but “The” cryptocurrency. Bitcoin.

Source: Bloomberg
The slaves of Anthropocene, by Nicolas Teterel
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