My Views on Gold

1. First, speaking about absolute probabilities, in the long term, under the pressure of U.S. debt and the global capital bubble

combined with most countries' economic recession, debt issuance, and debt resolution needs, gold will inevitably break through

$6,000 an ounce, this is absolute. Because the Federal Reserve and the U.S. government have no

redundant regulatory tools at hand, dollar depreciation is an inevitable trend in the future. But if you ask

when will gold increase? When will the dollar depreciate? My answer is when the U.S. stock bubble

breaks, that will be when gold surges. Using the simplest judgment tool, Warren Buffett's index now shows U.S. stocks are over 2 times, the Shiller PE ratio is around 43, and before the burst of the internet bubble in 2000,

these values were 42. Considering the dollar's purchasing power and Federal Reserve interest rates at that time, this number might have some expected increase, but I personally think

the appreciation is unlikely to break 35%, which is a Shiller PE ratio of 57, and Buffett's index at 310%. Before reaching this number, a stock market crash is inevitable, and

the only tools to buffer the stock bubble are rate cuts and money printing, and currently, U.S. debt is around

$39.5 trillion, with the Federal Reserve interest rate at 3.5-3.75%. The tools used in 2008 were insufficient, Bernanke employed quantitative easing, which is essentially printing money, and

printing money is a form of de facto rate cut. Today, with the data on U.S. debt and interest rates in front of us, the U.S.

has almost no better options, and while the dollar depreciates, it is also resolving U.S. debt. So many say that if U.S. debt rises to 2.1 times GDP, the U.S. will collapse. I think

this is incorrect because this data is calculated based on the current dollar's purchasing power.

Since the departure from the gold standard, through the Bretton Woods system, and Nixon's abolition of that law, everything has followed logical progression because the current global trade and currency system still predominantly uses the dollar, and the dollar hegemony cycle has not ended. Therefore,

devaluation is the best future option to resolve U.S. debt and buffer the bursting of bubbles.

2. The country with the largest gold reserves remains the United States. After leaving the gold standard,

the dollar truly became a paper Federal Reserve note, relying on the Bretton Woods system. The U.S. can easily resolve economic recessions caused by stock market crises through debt printing, rate cuts, and money printing, which is why the U.S. stock market has been continuously rising in the long term. By adjusting debt figures, interest rates, and the invisible buyers' profits from around the world, liquidity in U.S. stocks is constantly promoted, inflating bubbles. But ultimately, the only thing that determines the value of the world's trading medium is gold, which is why the U.S., despite abandoning the gold standard, has always maintained the world's largest gold reserves! The dollar hegemony system may someday collapse, but the trading value medium outside legal tender—gold—will never do so! This has been true for thousands of years!

3. Over the past 20 years, gold prices have tripled, which can also be understood as the dollar's purchasing power depreciating by three times, and the liquidity bubble in U.S. stocks inflating by three times! The marginal dominance of U.S. dollar hegemony in the future is far beyond this. When crises occur, gold prices depend entirely on the liquidity used to solve market crises, which is determined by how much the dollar is printed! But a country with the largest gold reserves, when the dollar becomes as worthless as paper, will still redefine the logic of legal currency, ultimately returning to the logic related to gold. This is a very clever game, and the game rules are set by gold, while the main currency of the world trade system—U.S. dollar—determines gold prices!

4. So, in the long term, gold will inevitably rise, but in the short term, when gold prices are high, they will be highly sensitive to the Federal Reserve's regulatory measures! Short-term volatility is severe! When liquidity tightens, gold falls; when liquidity increases, gold rises. In the short term, the U.S. will likely see gold prices fall due to measures to address the current inflation caused by oil, until the next rate cut occurs, during which gold will decline to a phase bottom and fluctuate. If interest rates rise, gold will continue to fall, but given the current situation with U.S. stocks, rate hikes are unlikely. The moment U.S.-Iran ceasefire begins, it is already decided that rate hikes are impossible. Past experiences show that every time the Fed raises interest rates, the market is tightly squeezed, and rate hikes inevitably lead to crashes! This is also why Powell came to power; if solving inflation was their only goal, they would have raised rates long ago, not waited for future expectations. It’s just a rhetorical game, guiding market expectations toward tightening!

5. So, I conclude that the short-term trend of gold will inevitably be linked to market expectations. Before the effect of rate hike expectations ends, gold will not stop falling. When the effect stops, it marks the end of rate hike expectations, and gold will consolidate, Bitcoin will rebound! If inflation continues, the next step will be to combine rate cuts or adjustments to the Federal Reserve's balance sheet until inflation reaches expectations. The Fed will continue to cut rates, making it possible for the U.S. stock market to avoid collapse during Trump’s presidency!#我的Gate交易时刻 #黄金